Axis – BT

Axis REIT buys RM59m Penang properties from Apex

Axis Real Estate Investment Trust (Axis-REIT) is buying two parcels of leasehold industrial land, together with a warehouse and office building in Seberang Perai, Pulau Pinang, from Apex Properties Sdn Bhd for RM59 million.

The acquisition will see Axis-REIT portfolio increase to 28 properties with an asset size of over RM1.33 billion.

CB Richard Ellis has valued the property at RM62 million.

Axis-REIT Managers Bhd chief executive officer Steward LaBrooy described the asset as high yielding. ” It will provide a stable income stream and is consistent with the investment objectives and strategy of the fund and will be accretive to Axis-REIT’s distributable income.”

Gross annual rental income from the tenant – transport and freight forwarding Schenker Logistic (Malaysia) Sdn Bhd – is RM6.88 million.

Schenker has an agreement that will end in 2014, with an option to renew every two years.

Both parcels of land are adjoining and are located in Bukit Tengah Industrial Park. The land measuring 589,593 sq ft has a tenure expiring in 2052, while the other piece, measuring 8,859 sq ft, has a lease expiring in May 2068.

The purchase will be funded by an existing bank borrowings of Axis-REIT. The proposed debt financing will increase Axis REIT’s gearing ratio to 39 per cent of audited total assets.

The acquisition is expected to be completed before December 31 2011.