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KUALA LUMPUR: Axis REIT Managers Bhd (ARMB), the manager of Axis Real Estate Investment Trust (Axis REIT), has declared the highest first quarter income distribution of 5.3 sen per unit following strong results in the REIT’s financial results for the quarter ended March 31 boosted by the disposal of Axis Plaza.
“The manager has proposed to distribute 99.6% from realised income available for distribution generated from operations and 34% from the gain on disposal of Axis Plaza; which when combined gives 5.3 sen per unit as the first interim 2014 income distribution. This is the Trust’s highest first quarter distribution on record,” said ARMB in a statement yesterday.
For the quarter under review, Axis REIT recorded total revenue of RM35.6 million, more than half a million higher than the same period in the preceding financial year. On a yearly basis, The
REIT’s income and profit increased to RM31.5 million and RM22.4 million from RM30.2 million and RM20.9 million respectively.
Axis REIT’s realised net income from operations for the quarter was RM20.69 million after the deduction of total expenditure of RM14.91 million, of which RM5.84 million was attributed to property expenses and the remainder for non-property expenses.
The quarter under review also saw the disposal of Axis Plaza, which was completed on March 25 this year, raking in a realised gain on disposal of RM10.95 million. The gain on disposal translates to additional income distribution of 2.37 sen per unit. The gain on disposal of Axis Plaza will be distributed in three tranches of 0.8 sen, 0.8 sen and 0.77 sen over the next three quarters.
Despite the encouraging results in the first quarter of 2014, ARMB chief executive officer Datuk Stewart LaBrooy warned that 2014 will remain “challenging” as a large part of the REIT’s portfolio is up for renewal for leases.
The move to tranche the gain on disposal of Axis Plaza to three payments is part of Axis REIT’s strategy to “smoothen out the returns” to unit holders.
Further, ARMB announced the implementation of the Trust’s fifth round of Income Distribution Reinvestment Plan (IDRP).
This means that of the 5.3 sen of the first interim 2014 income distribution, 2.2 sen will be allowed to be reinvested in new Axis REIT units under the IDRP. These units will be offered at RM3.20 per unit; representing a discount of 5.88% to the five-day volume-weighted average market price.
LaBrooy also announced that Axis REIT will be increasing the size of its portfolio through acquisitions to build up the size of the trust and to increase its returns to investors.
“The manager has identified several target acquisitions of a value of RM670 million and work is proceeding to finalise the transactions. All acquisitions will be yield accretive to the Trust,” said LaBrooy.
This article first appeared in The Edge Financial Daily, on April 22, 2014.
