Axis-REIT buys industrial properties in Johor

June 7, 2018 | By | Reply More

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PETALING JAYA: Axis REIT Managers Bhd (ARMB), the manager of Axis Real Estate Investment Trust (Axis-REIT), is acquiring two industrial properties at i-Park, Indahpura in Iskandar Malaysia, Johor for RM38.7 million cash.

In a filing with Bursa Malaysia today, Axis-REIT said its trustee, RHB Trustees Bhd, has entered into a sale and purchase agreement with Axis AME IP Sdn Bhd for the proposed acquisition.

ARMB CEO and executive director Leong Kit May said the acquisitions made or completed this year will provide the fund with a stable income stream and contribute positively towards its earnings.

“This is the second acquisition for the year after our recent completion of our (42nd) acquisition of the RM87 million Shah Alam industrial property having completed its acquisition and leaseback from Teraju Sinar Sdn Bhd.

“We are also pleased that unitholders and stakeholders will stand to gain from the earnings made from our maiden development project of the Nestle Distribution Centre, come June 1, which will be reflected in our balance sheets,” she said in a statement.

The two industrial properties are freehold and located at i-Park, a gated and guarded industrial park. Both properties comprise a single-storey detached factory, a mezzanine office and ancillary buildings.

Property 1, with a land area of 1.83ha, is tenanted by Beyonics Precision Malaysia Sdn Bhd, a Singapore-based manufacturer and provider of precision engineering services, under a fixed 10-year lease till June 2027.

Meanwhile Property 2, with a land area of 0.49ha, is tenanted by Oerlikon Balzers Coating Malaysia Sdn Bhd, a manufacturer of physical vapour deposition coating services under a seven-year fixed lease with option to renew for a further term of seven years.

The starting net yields before Islamic financing cost for Property 1 and Property 2 is at 6.8% and 6.9% respectively.

The transactions are expected to be completed by the third quarter this year, which will increase the number of properties from 42 to 44 properties.

ARMB intends to utilise its debt facility from Axis-REIT’s existing credit lines for the purchase. The move will increase Axis-REIT’s gearing ratio to 34.05% of audited total assets as at Dec 31, 2017, which is below the gearing limit of 50%.

Axis-REIT’s share price closed unchanged at RM1.54 today with a total of 896,500 shares traded.

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