Malaysia REIT

Axis to list world’s largest Syariah Reit

Valued at more than RM3b, it will manage 33 properties in 3 Asian countries

Malaysia’s Axis Reit Management Sdn Bhd is set to list the world’s largest Syariah real estate investment trust (Reit) valued at over RM3 billion (S$1.26 billion) to meet demand for new Islamic finance products, three sources with direct knowledge of the deal said.

Axis Reit Management, which also manages Axis Reit, is conducting preliminary book-building for the Axis Global Industrial Reit, said the sources who asked not to be identified as they are not authorised to speak to the media.

The Reit, which is expected to be listed in the second quarter of this year, would manage 33 properties located in three Asian countries including Australia and Hong Kong.

‘Axis Global’s mandate is to invest in high-quality industrial and business parks outside Malaysia,’ one source told Reuters. ‘The size of the IPO will be larger than the listing of Capitamalls Malaysia Trust, which raised RM852 million.’

Axis Reit’s chief executive officer Stewart LaBrooy declined to comment when contacted by Reuters.

The upcoming Reit’s investment mandate would be similar to Axis Reit’s existing mandate, which is to invest in logistics-related properties such as warehouses and showrooms.

The investment banking arm of CIMB Group is the principal adviser for the initial public offering and Standard Chartered is also involved, one of the sources said.

The source said some of the Reit’s properties were bought and leased back to Australia’s Goodman Group, which is looking to buy the ING Industrial Fund.

The Goodman Group will remain property managers of those assets, he added.

Reits are a relatively new asset class in emerging Asia, although they are well-established in mature markets such as Singapore and Australia. Singapore Reits were badly hit by the 2008 financial crisis, but the market has since recovered.

Reits have regained some popularity in Malaysia, which saw a number of large-cap listings last year including Sunway Reit and the Capitamalls Malaysia Trust, which raised US$459 million and US$281 million respectively.

A property analyst who tracks Axis said the Reit was likely to carry between 30 and 36 per cent of debt, which implied a net asset value close to RM2 billion.

‘Axis generally places out more units when it hits the 35 per cent gearing mark, that is, as a function of total assets,’she said.

A handful of Islamic Reits have been launched recently, including Emirates Tarian’s Sabana Reit in Singapore and Dubai Islamic Bank’s Emirates Reit, as investors demanding Syariah-compliant assets seek to broaden their portfolio beyond traditional offerings such as sukuk. — Reuters

Axis REIT IPO said to be at RM1-RM1.05

The initial public offering for Malaysia’s Axis Global Industrial REIT has been set at an indicative price range of RM1.00-1.05 (US$0.329-US$0.345) a unit, two sources who have seen the information memorandum told Reuters.

The share base of about 2 billion units prices the IPO at between RM2 billion-2.1 billion (US$658-$691 million), making it the second largest REIT in Malaysia after Sunway REIT’s RM2.4 billion IPO last year. – Reuters