KUALA LUMPUR (April 30): Axis Real Estate Investment Trust (Axis REIT) is targeting to acquire RM200 million worth of property assets in the industrial space, mainly under the warehouse and manufacturing facility segment, by end-2019.
Axis REIT Managers Bhd chief executive officer and executive director Leong Kit May said the company was aggressively focusing its strategy on grade ‘A’ logistics facilities and manufacturing facilities with long leases from tenants with strong covenants.
“We want to find well-located retail warehousing in locations ideal for last-mile distribution, as well as office, business parks and industrial properties with potential for future enhancement,” she told Bernama.
Leong said currently, the REIT has accepted a few offer letters, namely to acquire two freehold manufacturing facilities in Nusajaya, Johor for RM55.8 million and a leasehold manufacturing facility in Bayan Lepas, Penang which will be announced later.
She said Axis REIT is currently undertaking due diligence for the acquisition of the properties and the three acquisitions are targeted to be completed by the first half of 2019.
As at the first quarter ended March 31, 2019, Axis REIT has 45 properties in its portfolio, with 34 properties having a 100% occupancy rate.
Total asset under management stood at RM2.9 billion and gearing at 38%, which is deemed healthy given that the maximum gearing allowed is at 50%.
All of its portfolios are in Malaysia, with Selangor having the biggest exposure at 55.6%, followed by Johor (24.8%), Penang (8.0%), Pahang (5.4%), Negeri Sembilan (4.7%) and Kedah (1.5%).
Last year, Axis-REIT added five properties to its portfolio, which are industry properties located in Johor and Selangor.
“We see exposure in both manufacturing and warehousing will increase in the future because the sectors are growing very fast. We see a huge potential for these type of assets driven by e-commerce businesses and an increase in manufacturing activities,” she said.
Leong said build-to-lease, where a development is built according to the tenant’s specification, is another segment that Axis REIT is looking to further grow.
She said the company has been approached by multi-national companies on proposals for build-to-lease, after it completed projects for Nestle Distribution Centre @ Axis Mega Distribution Centre (Phase 1) in February 2018 and Axis Aerotech Centre @ Subang in February 2019.
“This was backed by our good track record of delivery on time. We build the assets with a view to holding them for the long term, thus the infrastructure built is of good quality to minimise maintenance,” she added.