Axis-REIT to acquire land, buildings for RM155m

PETALING JAYA: Axis Real Estate Investment Trust (Axis-REIT), which saw its net profit for the second quarter ended June 30, 2017, fall 36.17%, announced yesterday that it is adding buildings and two parcels of land in an industrial park near Kuantan Port to its portfolio for RM155 million.

The buildings and land at Kawasan Perindustrian MIEL, about 4km from Kuantan Port, are owned by Wasco Resources Sdn Bhd, Wasco Coatings Services Sdn Bhd, Wasco Coatings Insulation Sdn Bhd, Wasco Lindung Sdn Bhd and Wasco Coatings Malaysia Sdn Bhd.

The purchase will be done with existing and new bank borrowings.

The trustees said the acquisition is in line with its growth strategy and plan to diversify and enlarge its portfolio of properties.

“Given the location of the property and long tenure of the lease, the proposed acquisition will be accretive to Axis-REIT’s distributable income,” its trustees said in a filing with the exchange.

The lease is for 15 years with an option to renew it for five years. It has a starting net yield before Islamic financing cost of 7% per annum.

Axis-REIT’s shares were untraded yesterday.

In a separate filing with Bursa Malaysia, Axis-REIT said net profit for the second quarter fell to RM23.27 million from RM36.45 million a year ago. This was on marginally lower revenue of RM41.64 million, from RM41.78 million a year ago.

For the six months ended June 30, 2017, net profit fell 25.43% to RM45.91 million from RM61.57 million a year ago while revenue rose 1.62% to RM84.33 million from RM82.99 million a year ago.

The manager has proposed to distribute 99.56% from realised income available for distribution generated from operations for the second quarter and balance net gain on disposal of Axis Eureka of 0.07 sen per unit (final tranche).

Together, it results in a 2017 second interim income distribution of 2.17 sen per unit in respect of the period from April 1, 2017 till June 30, 2017, payable on Aug 30, 2017.