Malaysia REIT

Axis-REIT targets RM66m rental income

AXIS Real Estate Estate Investment Trust (Axis-REIT) expects to increase its rental income to RM66 million from RM60 million annually with its latest acquisition of the Axis Steel Centre.

To date, the company has about 20 asset properties worth RM800 million.

Chief executive officer Stewart LaBrooy said the company had acquired the Axis Steel Centre, an industrial complex in Klang, from Maximum Icon Sdn Bhd for RM65 million.

“We expect better income growth with the purchase of this new property,” he told reporters after Axis-REIT unitholders” meeting in Kuala Lumpur today.

“The acquisition is in line with the manager’s objective which is to provide the unitholders with a stable income distribution and to achieve growth in net asset value per unit of Axis-REIT,” he said.

Axis-REIT’s net asset value is currently trading at 9.04 per cent.
LaBrooy said the company was in negotiations to acquire more assets such as logistics warehouse, offices, industrial building and factory which are estimated to be worth RM220 million.

“Axis-REIT is typically looking at places in Section 14 in Petaling Jaya, Shah Alam And Johor Baru,” he said.

According to him, the company’s REIT looks more appealing in the current gloomy economic climate due to its diversified tenancy portfolio.

In its second quarter ended June 30, 2009, the company recorded a revenue of RM17.36 million, up from RM15.67 million in the same quarter of last year.

Islamic REITs can perform better globally with standardised regulations, forum told

KUALA LUMPUR: Islamic real estate investment trusts (IREITs) can perform much better in global markets if there are standard syariah regulations among the countries involved in Islamic finance, a global conference on Islamic finance here was told.

Axis REIT Managers Bhd chief executive officer Stewart LaBrooy said there were lots of properties globally that could be tapped if the international Islamic finance regulatory environment could be standardised.

“Malaysia is the only country that comes out with syariah rules and guidelines for IREITs but for the global market, there is no proper regulation yet,” he said yesterday during a session on IREITs at the IFN 2009 Issuers & Investors Asia Forum.

IREITs had the potential to attract big Islamic institutional investors such as Tabung Haji, he added.

“We at Axis REIT Managers have converted our REITs to IREITs and we managed to do that as our investment focus is the commercial office space that comply with syariah law,” Labrooy said, adding that he hoped to see standard syariah rules governing IREITs globally.

Another panelist, Abdul Raman Saad & Associates partner Zain Azra’i Abd Samad, noted that to convert conventional properties into IREITs, a lot of work needed to be done to comply with syariah rules.

“Hotels for example must not serve liquor as this is against syariah compliance,” he said.