Axis REIT's 3Q NPI falls 3% on higher opex

KUALA LUMPUR (Oct 24): Axis Real Estate Investment Trust (REIT) saw its net property income (NPI) fall 3% to RM35.8 million for the third quarter ended Sept 30, 2016, from RM37.05 million in the previous year.

Revenue was slightly higher at RM41.98 million, compared with RM41.86 million a year earlier, Axis REIT said in a filing today.

The trust saw higher other operating expenditure for the quarter, at RM5.81 million versus the previous year’s RM4.66 million.

The trust said it is distributing RM22.66 million — representing 99.95% of total income available for distribution for the period of July 1 to Sept 30, 2016 — translating into 2.05 sen per unit, payable on Nov 30.

During the quarter, it had carried out a revaluation exercise on nine of its properties, resulting in a revaluation gain of RM13.44 million, increasing its net asset value per unit to RM1.2590, from RM1.2468.

For the cumulative nine months ended Sept 30 (9MFY16), NPI fell 2% to RM107.27 million, from RM109.18 million in 9MFY15; while revenue climbed slightly to RM124.46 million, from RM123.81 million.

During the nine-month period, Axis REIT incurred about RM9.5 million on asset enhancement initiatives.

Meanwhile, the REIT announced the disposal of Axis Eureka for RM56.13 million, following the inking of a sale and purchase agreement with Malaysian Qualifications Agency.

It said the disposal will result in a gain of RM1.2 million, translating into an additional dividend per unit of 0.11 sen upon completion. It expects to complete the disposal by end 2016 or early 2017.

“The disposal of Axis Eureka is strategic to our investment objectives. Axis Eureka has been owned by the trust for the last five years and when an opportunity arose for the disposal, we felt it was the correct time for the trust to redeploy the capital towards other potential yield accretive acquisitions.

“The disposal price is above the market value of the property, as appraised by Savills (Malaysia) Sdn Bhd,” said Axis REIT Managers Bhd CEO and finance director Leong Kit May.

Axis REIT’s share price rose 1 sen or 0.57% to close at RM1.75 today, giving it a market capitalisation of RM1.93 billion. — theedgemarkets.com