Axis REIT to buy Shah Alam warehouse for RM11.87 million

Sep 3, 2020

Axis Real Estate Investment Trust (Axis REIT) has proposed to acquire a warehouse located in Shah Alam, Selangor, for RM11.87 million to strengthen its portfolio of industrial properties.
In a filing with the bourse, the REIT said its trustee RHB Trustees Bhd has entered into a sale and purchase agreement with Melewar Steel Services Sdn Bhd for the acquisition of a parcel of leasehold industrial land measuring 8,732.6 square metres on which the single-storey warehouse is situated.

Melewar Steel Services is a subsidiary of the Main Market-listed Melewar Industrial Group.

Axis REIT said the proposed acquisition is in line with the fund’s investment objectives and its growth strategy to provide unitholders with stable income distribution and to achieve growth in its net asset value per unit.

“The property sits on prime industrial land as Seksyen 15, Shah Alam, is one of the established industrial areas in Shah Alam. Due to its proximity to Port Klang and good all-round accessibility coupled with good infrastructure in place, Seksyen 15 has become an attractive industrial locality in this part of Selangor for medium and heavy industries,” it said.

It expects the proposed acquisition to contribute positively to its earnings for the financial year ending Dec 31, 2021, upon its completion date which is targeted to be by the first quarter of 2021.

It said that Axis REIT Managers Bhd, the management company of Axis REIT, intends to utilise a financing facility of approximately RM11.87 million from its existing credit lines.

“The proposed debt financing will increase Axis-REIT’s gearing ratio to 28.98% of audited total assets as at Dec 31, 2019, which is below the gearing limit of 50% prescribed by the Guidelines on Listed Real Estate Investment Trusts issued by the Securities Commission Malaysia on March 15, 2018 (updated on June 18, 2019),” said the REIT.

Axis REIT rose two sen to RM2.14, giving it a market capitalisation of RM3.09 billion.

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Source: EdgeProp.my