KUALA LUMPUR (March 5): Axis Real Estate Investment Trust (REIT) has acquired a freehold land measuring 20.75-acre in Bukit Raja Selatan Industrial Area, Shah Alam for RM120 million, which it says has good redevelopment potential for a warehouse.
The plot comes with a single-storey detached warehouse building, two single-storey detached factory buildings, a single storey detached store, a three-storey office building, and ancillary buildings. The current gross floor area of the property is 326,231 sq ft, which represents 36% of the total land area. It is situated directly across Axis-REIT’s Bukit Raja Distribution Centre, Axis REIT said in a bourse filing.
The property is being acquired from FIW Steel Sdn Bhd (“FIW”). Upon completion of the acquisition, which is expected to be by the first half of 2021, FIW will be the Property’s sole tenant with a tenancy for one year, with an option to renew for another 4 terms of 3 months each. The monthly rental for the 1st year will be RM 416,666.67 and RM608,333.34 for the renewed terms, according to Axis REIT in a statement.
"We are pleased to announce this acquisition as the property is strategically located in an established industrial area with close proximity to Port Klang and good highway accessibility. This property is also situated directly across Axis-REIT’s Bukit Raja Distribution Centre," said Axis REIT Managers Bhd chief executive officer Leong Kit May.
"The current lettable area of the property only represents 36% of the total land area and we are of the view that the property has a good redevelopment potential for a warehouse, after taking into consideration, amongst others, the location of the property and the increasing demand for warehousing within Klang Valley. Any such proposed redevelopment will only be considered post completion of the SPA and after the expiry of tenancy with FIW and its renewal thereof, subject to a further assessment and a detailed feasibility study on the site/proposed redevelopment plan,” she added.
The REIT plans to fund the acquisition by bank financing, which will increase the REIT's gearing ratio to 35.4% of its audited total assets as at Dec 31, 2020.
Upon completion of the acquisition – which is expected to be sometime in the first half of this year – the acquisition will contribute positively to Axis-REIT’s earnings, REIT said.
Units in Axis REIT closed 1.11% or two sen higher at RM1.83 today, valuing the REIT at RM2.64 billion. It saw 1.52 million units traded.