Axis REIT records steady 1H, outlook to remain stable
KUCHING: Axis Real Estate Investment Trust’s (Axis REIT) first half of 2021 (1H21) financial performance came within expectations and analysts expect the REIT to continue recording stable earnings as its industrial assets are relatively shielded from effects of the Covid-19 pandemic.
MIDF Amanah Investment Bank Bhd’s research team (MIDF Research) noted that Axis REIT’s 1HFY21 core net income of RM63.3 million were generally within expectations.
The stable earnings growth in 1HFY21 was in line with higher topline (+6.9 per cent year-onyear) which were mainly driven by rental contribution from newly acquired industrial assets.
Nevertheless, it pointed out that earnings growth was partly offset by higher financing cost and higher property expenditure. Note that Islamic financing cost was higher (11 per cent y-o-y) due to additional financing facilities to fund the new acquisitions.
“We remain positive on earnings outlook for Axis REIT as its asset portfolio was mainly consists of industrial assets whereby tenants are still operating amid Covid-19 pandemic.
“Besides, earnings growth is also expected to contribute by earnings contribution from potential asset acquisitions targets with total estimated value of RM135 million,” it opined.
Meanwhile, the research team at Public Investment Bank Bhd (PublicInvest Research) noted that the group’s portfolio size has increased by four to a total of 57 properties year to date with the completion of the acquisition of Indahpura Facility 2, Johor for
RM8.5 million in January 2021, Indahpura Facility 3, Johor for RM6.7 million in February 2021, Beyonics i-Park Campus Block F, Johor for RM13 million in March 2021 and Bukit Raja Distribution Centre 2, Shah Alam for RM120 million in March 2021.
“All in, it has 57 assets comprising 10.9msf and 152 tenants with average occupancy of 91 per cent,” it added.
It pointed out that Axis REIT is now targeting RM135 million worth of properties.
“New assets in the pipeline is estimated to be worth circa RM135 million with focus on Grade A logistics facilities/manufacturing facilities with long leases from tenants with strong covenants, well-located retail warehousing in locations ideal for last-mile distribution and office, business parks and industrial properties with potential for future enhancement,” it added.