Axis-REIT 1Q net income rises 8.3% to RM49.9m on larger portfolio, lower financing costs

PETALING JAYA (April 29): Axis Real Estate Investment Trust (Axis-REIT) posted a stronger first quarter, with net income rising 8.3% to RM49.87 million for the quarter ended March 31, this year from RM50.19 million on a like-for-like basis — or RM53.21 million profit before tax compared with RM49.13 million a year ago — supported by a larger portfolio and lower financing costs, according to its announcements on Bursa Malaysia.

Revenue edged up 0.5% to RM90.56 million from RM89.87 million in the same quarter last year, while net property income came in at RM77.22 million.

Basic earnings per unit stood at 2.63 sen, up from 2.44 sen previously.

The quarter's income growth would have been higher but was partially offset by two headwinds: a rental suspension at Wisma Kemajuan following a fire incident in February, this year — though the property carries adequate fire takaful and fire consequential loss coverage — and the expiry of a lease at Bukit Raja Distribution Centre in the fourth quarter of 2025, with new tenancies secured commencing the first half of this year.

On the financing front, Islamic financing costs fell 2.6% year-on-year to RM17.3 million, following the redemption of the third Sukuk in January, this year, using proceeds from a new RM240 million rated Senior Sukuk at a lower coupon rate of 3.95% per annum with a seven-year tenor, securing lower long-term funding costs.

Non-property expenses, however, rose 13.3% mainly due to higher manager and trustee fees following a higher net asset value (NAV) after the Income Distribution Reinvestment Plan completion in December 2025, and the introduction of Sales and Service Tax on manager and trustee fees effective October 1, 2025.

Portfolio at a glance

Axis-REIT's portfolio expanded to 70 properties with 15.3 million sq ft of space under management as at March 31, this year, following the completed acquisition of Axis Industrial Facility 1 @ Northport, Kawasan Industri Bandar Sultan Suleiman, Port Klang for RM50 million on January 27, this year.

Portfolio occupancy stood at 94% with a weighted average lease expiry of 4.3 years, and 57 out of 70 properties are at full occupancy.

Total assets under management grew to RM5.45 billion from RM5.36 billion at end-2025, with a NAV per unit of RM1.6895 and a financing ratio of 33.88% — well within the regulatory limit.

The fund trades at a 14% premium to NAV.

Two acquisitions remain in the pipeline: a warehouse facility in Telok Gong, Port Klang (259,310 sq ft, 100% occupied, RM80 million, targeted for completion in 4Q2026) and an industrial facility in Senai, Johor (approximately 115,363 sq ft, 100% occupied, RM34.6 million, targeted for Q4 2027).

Two development projects are also underway — an expansion at Pasir Gudang Logistics Warehouse 2 and a manufacturing facility at Axis Facility 4 @ Bukit Raja — with the manager maintaining a pipeline of RM350 million in acquisition targets.

Distribution

Axis-REIT declared a first interim income distribution of 2.50 sen per unit for the period January 1 to March 31, this year, comprising 2.49 sen taxable and 0.01 sen non-taxable.

The distribution is payable on May 29, with an ex-date of May 13 and book closure date of May 14.

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