Malaysia REIT

Axis-REIT records higher Q3 pre-tax profit

Axis Real Estate Investment Trust (Axis-REIT) recorded a higher pre-tax profit of RM24.26 million in its third quarter ended Sept 30, 2010, compared to RM10.25 million in the same period last year.

Revenue increased to RM22.39 million from RM17.67 million previously, said Axis REIT Managers Bhd (ARMB), the manager of Axis-REIT, in a statement today.

ARMB said the trust's current quarter earnings per unit which included unrealised income stood at 7.60 sen. Of this, the realisable income of RM12.589 million translated to a declared distribution per unit of four sen for the third quarter.

On Sept 5, Axis-REIT declared a third interim income distribution of 3.05 sen per unit, amounting to RM9.365 million, in respect of the realised income from the July 1 to Sept 5 period. 

ARMB said the total number of units issued had increased from 307,081,200 to 375,901,000, increasing the liquidity and market capitalisation of the trust to RM811.95 million.

It said that seven of the trust's properties were subjected to comprehensive valuation in the third quarter as part of the requirement of the Securities Commission (SC) guidelines on REITs.

This has resulted in an unrealised fair value gain of RM11.702 million, thus bringing the total fair value gain for year-to-date to RM22.58 million, resulting in the increase of the net asset value per unit of the trust to RM1.8891.

ARMB said the balance of the nine properties which are not subjected to the SC guidelines for comprehensive valuation will be revalued by the last quarter of this year via update valuation to be conducted by independent valuers. — Bernama

Axis-REIT in talks to buy stake in Philippine firm

AXIS-REIT Managers Bhd is looking into expanding its real estate investment trust (REIT) business by acquiring a stake in a future REIT manager in the Philippines.

“We are in discussions with a party in Manila to take an equity position and assist in the management of its future listed REIT,” Axis-REIT chief executive officer Stewart LaBrooy told Business Times.

LaBrooy was asked to comment on online reports in the Philippines last month that Axis-REIT is scouting for investment opportunities in the Philippines.

According to reports, overseas REIT investment firms, including Axis-REIT, are turning their radar to the Philippines following the recent approval of the respective REIT rules by the Securities Exchange Commission and the Philippine Stock Exchange.
Unfortunately, LaBrooy said there are delays in publishing the implementing rules, which will prolong the launch of any new REITS in the Philippines.

He maintained that Axis-REIT has always taken the stand that it will focus on Malaysian assets and not take on cross-border acquisitions due to the possible risks the strategies present.

Labrooy also confirmed that he was in Manila as one of the speakers during the REIT Asia Pacific Philippines Summit 2010 held from July 27 to 28.

A REIT is a fund that mainly owns income-producing real estate such as shopping centres, offices, warehouses and hotels. The units of many REITs are traded on major stock exchanges.

To qualify as a REIT, a fund must have most of its assets and income tied to real estate investment and must distribute at least 90 per cent of its total income to unitholders annually.

Asked on the potential of REIT market in the Philippines, LaBrooy said the country has a large cluster of excellent shopping malls, offices and BPO properties that are REIT-able and an emerging logistics market as well.

“These are owned by well-known property companies like Alaya, Robinsons and S&M. They should have a successful REIT industry with good growth opportunities,” he added.

Axis-REIT private placement oversubscribed

The private placement of 68.82 millionnew units of Axis Real Estate Investment Trust (Axis-REIT) has been oversubscribed.

In a statement here today, Axis REIT Managers Bhd said the private placement represented 22.4 per cent of the existing approved fund size of 307.08 million units and would increase the approved fund size to a maximum of 375.90 million units.

"The private placement is to be issued at RM1.97 per unit, representing a discount of approximately 4.37 per cent to the five-day volume weighted average market price up to Aug 26," it said.

It said the gross proceeds of about RM136 million from the exercise would be used to pare down the borrowings of Axis-REIT for the financial year to-date.

Trading of the new units is expected to commence at 9am on Sept 15. Axis REIT Managers Bhd is the management company of Axis REIT. — Bernama

Axis-REIT to acquire Tesco JB for RM75m

Axis Real Estate Investment Trust (Axis-REIT) proposed to acquire the Tesco JB Hypermarket Complex for a total lump sum cash consideration of RM75.6 million from Bukit Indah (Johor) Sdn Bhd.

The latest acquisition will increase the assets under management to over RM1.2 billion, Axis-REIT said in a filing to Bursa Malaysia today.

Axis-REIT trustee, OSK Trustees Bhd, has entered into a sale and purchase agreement with Bukit Indah Johor for the proposed acquisition.

The proposed acquisition will be funded by existing bank borrowings of Axis-REIT.

Axis REIT Managers Bhd, the management company of Axis-REIT, intends to utilise a debt facility of RM75.60 million from Axis-REIT’s existing credit lines.

The proposed debt financing will increase Axis-REIT”s gearing ratio to 39 per cent of audited total assets as at December 31, 2009, which is below the gearing limit of 50 per cent prescribed by the REIT guidelines.

Axis REIT Managers expects the proposed acquisition to contribute positively to the fund’s earnings for the financial year ending December 31, 2010.

The proposed acquisition is expected to be completed on or before October 31, 2010.

The Tesco JB Hypermarket Complex is located within the main commercial precinct of Setia EcoCity in Taman Bukit Indah, a comprehensive mixed development project. — Bernama