Axis-REIT to acquire two industrial properties in Selangor

KUALA LUMPUR: Axis Real Estate Investment Trust (Axis-REIT) has entered into conditional agreements to acquire two parcels of land with the buildings erected on thme in Teluk Panglima Garang and Petaling Jaya, both in Selangor.

Axis-REIT, in a filing to Bursa Malaysia on June 3 said it has entered into a sale and purchase agreement with Corporate Landmarks Sdn Bhd to buy a piece of leasehold land of about 202,343 sq m in Teluk Panglima Garang in Kuala Langat with all the industrial buildings erected on it namely the Axis PDI Centre, for a total cash consideration of RM85 million.

The Trust has also entered a sale and purchase agreement with Dazzling Township Sdn Bhd for the acquisition of a leasehold tract pf about 16,713 sq m in Petaling Jaya with all the industrial buildings erected on it, namely Axis Technology Centre with a cash consideration of RM49 million.

The proposed acquisitions of both properties were in line with Axis-REIT’s investment objectives and the growth strategy of the REIT manager to provide the unit holders with stable income distribution

It was also to achieve growth in the net asset value per unit, by acquiring high quality earnings accretive properties with strong recurring rental income.

“The proposed acquisitions will be accretive to Axis-REIT’s distributable income. Furthermore, the Proposed Acquisitions would enable Axis-REIT to diversify and enlarge its portfolio of properties and is expected to benefit the Fund in the long-term as a result of economies of scale,” it added.

Axis-REIT said the proposed acquisitions are not expected to have any material effect on Axis-REIT’s distributable policy as determined by the Board.

Axis-REIT also proposed placement of up to 68,819,800 new units in Axis-REIT, representing about 22.4% of the existing units in Axis-REIT in circulation, at a price to be determined later.

It said an application would be made to Bursa Securities for the listing of and quotation for the Final Tranche Placement Units on the Main Market of Bursa Securities.

“In order to accommodate the issuance of the Final Tranche Placement Units, Axis-REIT is proposing to increase the existing fund size of Axis-REIT of 307,081,200 units up to a maximum of 375,901,000 units,” it said.

Barring any unforeseen circumstances and subject to all approvals being obtained, the acquisitions are expected to be completed by the fourth quarter of 2010.

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