Axis Real Estate Investment Trust is planning to acquire two industrial properties for a total of RM55.8 million in Taman Teknologi Nusajaya, Johor.
The trustee of the REIT, RHB Trustees Bhd, has inked sale and purchase agreements Nusajaya Tech Park Sdn Bhd to buy the properties, comprising two plots of freehold land and all the buildings erected on them, the REIT's stock exchange filing yesterday showed.
The first property, which has a price tag of RM42 million, has a land area of 1.4674 hectares, with a lettable area of 104,694 sq ft. It is currently leased to global engineering leader GKN Aerospace, which uses the space for advanced aero-engine component repair and research for the commercial aerospace market. The current lease will expire on July 15, 2024, with an option to renew for another two terms of three years each.
The second property, which will cost the REIT RM13.8 million, has a land area of 0.6585 hectares and a lettable area of 42,067 sq ft. It is now leased to Sternmaid Asia Pacific Sdn Bhd, which is involved in the manufacturing and development of ingredients and additives for the food and nutritional supplements industry. The current lease will expire on Aug 14, 2022, with an option to renew for another five years.
The REIT said the acquisitions will be funded using existing bank financing. It added that the proposed acquisitions would strengthen its portfolio of industrial properties, which is expected to benefit the REIT in the long term, due to economies of scale.
“The proposed acquisition (of the properties) is undoubtedly in line with our investment objectives and growth strategy to provide our unitholders with stable income distribution,” said Axis REIT Managers Bhd chief executive officer Leong Kit May, who is also the executive director, in a statement yesterday.
“Similar to our recent acquisition in Bayan Lepas Industrial Park, the plus point of this acquisition is the strategic location of the said properties, which is just a short drive from Singapore via the Malaysia-Singapore Second Link. Such connectivity is important to both our lessees who operate regional businesses,” she added.
The proposed acquisition is expected to contribute positively to the fund’s earnings for the financial year ending Dec 31, 2019 (FY19) upon completion, which is targeted to be by end-2019, Axis REIT said.
Axis REIT’s units closed up two sen or 1.09% at RM1.86 yesterday, valuing the REIT at RM2.3 billion. In the past one year, the REIT's unit price has climbed near 40%.