Axis-REIT proposes RM61m acquisition of Pulau Indah warehouse properties

PETALING JAYA (Aug 26): Axis Real Estate Investment Trust (Axis-REIT) has proposed to acquire three adjoining industrial land parcels with warehouse properties in Taman Perindustrian Pulau Indah, Selangor, from Megalift Sdn Bhd for RM61 million cash.

RHB Trustees Bhd, acting as trustee for Axis-REIT, entered into a sale and purchase agreement (SPA) with Megalift on Wednesday, according to a Bursa Malaysia filing on Wednesday (Aug 28) by Axis REIT Managers Bhd, the manager of the real estate investment trust.

The assets comprise three warehouse blocks and ancillary buildings at Units 13, 11 and 9, Jalan Sungai Chandong 20/KS11, Taman Perindustrian Pulau Indah.

They have a combined provisional land area of 29,101.59 sq m, or 7.19 acres, and gross floor area and net lettable area of approximately 16,856.05 sq m, or 181,436 sq ft.

Upon completion, the properties are to be leased to Megalift for a fixed five-year term at an agreed monthly rental of RM316,826.90, subject to an agreed step-up.

The facilities are approximately one to three years old and are currently fully owner-occupied by Megalift. The three industrial parcels are held under 99-year leasehold titles expiring on Oct 30, 2116.

Megalift provides heavy transportation, lifting and installation, erection, barging and freight-forwarding services, as well as open-yard and covered-warehouse storage services.

The RM61 million consideration is based on the property's market value, as appraised by CBRE WTW Valuation & Advisory Sdn Bhd in a valuation report dated Aug 20, 2026. The valuation was derived using the investment approach, with the cost approach used as a check.

Axis-REIT plans to fund the acquisition through existing bank financing.

The manager said drawing approximately RM61 million from Axis-REIT's existing credit lines would raise the REIT's financing ratio to 33.12% of audited total assets as at Dec 31, 2025. This remains below the 50% gearing limit prescribed under the Securities Commission Malaysia's guidelines for listed REITs.

Completion targeted for 1Q2027

Completion is conditional on, among other matters, approval from the Equity Development Division of the Ministry of Economy, consent from the relevant state authority for the transfer, consent from OCBC Bank (Malaysia) Bhd as chargee, and a Tenaga Nasional Bhd consent letter relating to the transfer of one of the parcels.

The conditions must be fulfilled within six months from the SPA date, or such extended period as stipulated in the SPA. Completion is targeted by the first quarter of 2027.

Axis-REIT said the acquisition is in line with its growth strategy of acquiring high-quality, income-producing properties and is expected to contribute positively to earnings for the financial year ending Dec 31, 2027 upon completion.

It also cited the facility's access to the Pulau Indah Highway, New Klang Valley Expressway, Shah Alam Expressway, South Klang Valley Expressway and North-South Expressway, as well as its proximity to North Port, West Port and South Port in Port Klang.

The transaction carries a percentage ratio of 1.14% under Paragraph 10.02(g)(ix) of Bursa Malaysia's Main Market Listing Requirements. As this is below 5%, Axis-REIT said the announcement was made voluntarily under Paragraph 10.05(2).

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