Axis REIT expands industrial pipeline with RM113 mil Kedah acquisition as growth strategy gathers pace

PETALING JAYA (July 31): Axis Real Estate Investment Trust (Axis REIT) is expanding its industrial portfolio with a RM113 million acquisition in Kedah, the latest in a series of acquisitions and development projects that strengthen its presence across Malaysia's manufacturing and logistics corridors.

Axis REIT Managers Bhd said RHB Trustees Bhd, as trustee for Axis REIT, has entered into a sale and purchase agreement with WH Union Development Sdn Bhd to acquire a fully occupied freehold industrial complex at Lot Nos 8 and 9, Kawasan Industri Padang Meha, 09400 Padang Meha, Kedah, for RM113 million in cash.

Axis REIT said in a Bursa Malaysia filing on Thursday (July 30) that the complex sits on about 13.28 acres and comprises six industrial premises with a net lettable area of 340,047 sq ft, and will be acquired together with a six-year leaseback arrangement under which the vendor will remain as master lessee.

Upon completion, targeted in the first quarter of 2027, the property will be leased back to the vendor for a fixed term of six years at an initial monthly rental of RM620,452.80, with a contractual rental step-up during the second three-year term. The acquisition will be funded through existing bank facilities and is expected to increase Axis REIT's financing ratio to approximately 33.8% of its audited total assets as at Dec 31, 2025.

Axis REIT said the acquisition supports its strategy of acquiring high-quality, earnings-accretive industrial properties with recurring rental income while delivering stable income distributions and long-term growth in net asset value per unit. CEO and executive director Leong Kit May said the deal strengthens the REIT's presence in Kedah's established industrial ecosystem, particularly around Kulim.

Completion remains subject to the vendor obtaining the Certificate of Completion and Compliance (CCC) for a newly erected single-storey factory forming part of the property.

The Kedah asset deepens Axis REIT's exposure to the Kulim-Padang Meha industrial belt. It fronts the Butterworth-Kulim Expressway, providing connectivity to Kulim town centre, Kulim Hi-Tech Park, the North Butterworth Container Terminal (NBCT) and Penang Bridge. The surrounding area accommodates a range of manufacturing, automotive, energy and green technology industries.

The acquisition forms part of a broader expansion programme spanning completed acquisitions, pending purchases and development projects across Selangor, Johor and other industrial markets, reflecting Axis REIT's continued focus on growing its industrial and logistics platform. Earlier this year, the trust completed the RM50 million acquisition of Axis Industrial Facility 1 @ Northport in Port Klang, Selangor. It has also signed agreements to acquire an industrial property in Seksyen 16, Shah Alam for RM38 million, a distribution centre in Bandar Saujana Putra for RM128 million, a warehouse facility in Telok Gong, Port Klang for RM80 million, and an industrial facility under construction in Senai, Johor for RM34.61 million, with several of these transactions still pending completion.

Alongside acquisitions, Axis REIT is expanding its portfolio through development projects. At Axis Facility 4 @ Bukit Raja in Selangor, the trust has commenced development of a manufacturing facility with an estimated gross built-up area of about 180,000 sq ft after appointing the main contractor in June 2026. It has also begun developing Pasir Gudang Logistics Warehouse 2 in Johor, which will add approximately 74,000 sq ft of logistics space on the remaining vacant land of an existing property.

Axis REIT incurred RM4.77 million in major capital expenditure during the first half of 2026, comprising RM3.56 million for enhancement of its properties and RM1.21 million for development projects. The manager said these investments are intended to maintain asset quality and support tenant requirements across the REIT's industrial and logistics portfolio.

As at June 30, Axis REIT's portfolio comprised 70 industrial and logistics-related properties with total assets under management of RM5.42 billion. The portfolio had 15.3 million sq ft of space under management, an occupancy rate of 93%, and a weighted average lease expiry (WALE) of 4.2 years, with 57 properties fully occupied.

With the Kedah acquisition underway, several industrial transactions pending completion and development projects progressing in Bukit Raja and Pasir Gudang, Axis REIT continues to expand its industrial portfolio across Malaysia's key manufacturing and logistics locations.

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