AXIS-REIT TO BUILD FACILITY FOR U.K.-BASED UPECA

KUALA LUMPUR: Axis Real Estate Investment Trust (AxisREIT) is set to build an industrial manufacturing facility for Upeca Aerotech Sdn Bhd with a total development cost of RM74.16 million.

This follows the signing of a sub-lease agreement with Malaysia Airports Holdings Bhd (MAHB) via its trustee, RHB Trustees Bhd, to lease 2.8ha of vacant land in the proposed Malaysia International Aerospace Centre Technology Park for RM19.9 million.

The sub-lease is expected to be finalised by the end of this year, while the development of the manufacturing facility is expected to take a year and will be ready for handover to Upeca by December 15 next year.

The facility will be for Upeca’s manufacturing, storage and distribution of aerospace parts.

Upeca, whose parent company Senior Plc is listed on the London Stock Exchange, has also committed to a lease of 20 years plus an option to renew for a further two terms of six years each.

The deal is part of Axis-REIT’s overall organic growth strategy to develop “build-tosuit” industrial facilities.

As such, the land will be used for the development of a singlestorey manufacturing plantcum-office building with a gross built-up area of 178,978.60 sq ft, including ancillary buildings and external elements.

“Our skills to undertake ‘buildto-suit’ development will enable the REIT to generate positive investment returns and create the pipeline of growth for the fund,” said Axis REIT Managers Bhd chief executive officer Leong Kit May in a statement.

The gearing ratio of Axis-REIT after the proposed development is expected to increase to 36.87 per cent from 34.78 per cent (as at December 31 last year), which will be below the permissible threshold of 50 per cent.

The lease tenure from MAHB will run for 49 years.