Malaysia REIT

Axis REIT eyes RM1b assets

Axis REIT Managers Bhd, the manager of Axis Real Estate Investment Trust (REIT), targets to manage RM1 billion worth of assets by the end of this year.

It plans to buy five properties, valued at about RM180 million, this year. It is now assessing two new warehouses in Port of Tanjung Pelepas in Johor, a factory or a warehouse in Puchong, Selangor, and an office building in Cyberjaya.

“We are targeting another capital raising in early 2010,” said chief executive officer Stewart LaBrooy during a media briefing yesterday.

Axis REIT plans to place out another 61.4 million units or about 20 per cent of its current fund size, which will raise some RM113 million.

As at December 31 2009, it managed 21 properties ranging from offices and warehouses to logistic centres, with a total asset value of RM907.74 million.

For 2009, Axis REIT’s revenue rose 13.4 per cent to RM71.9 million, while net income stood at RM42.9 million against RM39 million in 2008. It has borrowings of RM308.9 million.

The manager is optimistic of maintaining this performance despite a soft property market outlook this year. LaBrooy said he is confident of the property trust’s growth strategy to actively pursue quality acquisitions.

“When we buy, we look for a property with strong yield and possibly a locked-in tenant. We also continuously innovate our existing buildings to attract and retain tenants,” he said.

Axis REIT is spending RM10 million to refurbish two buildings this year, namely Nestle House, which is now known as Quanttro West, and Crystal Plaza in Petaling Jaya.

Nestle Products Sdn Bhd moved out of Nestle House in November last year. The group is spending some RM7 million to upgrade Quanttro and it should be ready by April 2010.

“We have anchor tenants for 50 per cent of the space and are currently undergoing talks with another MNC (multinational company) for another 25 per cent of the space. We hope to have the building fully occupied by April,” said LaBrooy.

Axis REIT plans new acquisitions

Axis Real Estate Investment Trust (REIT) plans to acquire another three to five properties in 2010 and raise RM113 million in the early part of the year.

Its target was expand the total assets to at least RM1 billion from RM907.7 million as at December last year, said Axis REIT Managers Bhd Chief Executive Officer Stewart LaBrooy.

Axis REIT Managers is the promoter of Axis REIT. LaBrooy said the potential acquisition targets included two units of brand new logistics warehouses in Johor, a factory or warehouse in Puchong and an office building in Cyberjaya.

The acquisitions will total RM180 million.

As at Dec 31, 2009, Axis REIT had 21 properties in Malaysia.

In a media briefing on Axis REIT’s financial performance for last year and its future growth prospects, he said: “We are positive about our financial results this year despite the soft property market.

“Our strategy is to maintain occupancy rates and make new acquisitions.”

He said the trust also planned another capital raising exercise in early 2010. “There is potential to place out another 61.4 million units and raise a war chest of RM113 million for future acquisitions,” he disclosed.

LaBrooy said that among other developments for this year would be on its corporate property in Petaling Jaya called Quattro West which was formerly known as Nestle House.

“We are undergoing a complete refurbishment of the building to reposition the asset and increase revenue,” he said.

He said Quattro West would be taken up by another listed company that had committed to a 15-year lease of 50 per cent of the space commencing July.

Another property that would provide unitholders with opportunities for capital gain was the proposed acquisition of two logistics warehouses in Seberang Perai, Penang which was expected to be completed by March.

The Seberang Perai warehouse acquisition at RM24.25 million, he said, was at a 9.2 per cent discount to market value and would provide unitholders with a cpaital gain of approximately RM1.78 million.

“The acquisition will increase gearing level from 34.03 per cent to 35.61 per cent,” he added.

LaBrooy said 35 per cent would be the trigger point for gearing level and should it touch above this level, Axis REIT would a undertake private placement to bring it down.

Axis REIT’s unit price, he pointed out, saw an improvement at the end of 2009 as compared to end of 2008. “It closed at RM1.93, a 72 per cent increase from the 2008 closing price,” he added. — BERNAMA