Axis-REIT plans RM350 million property acquisition next year

KUALA LUMPUR (Dec 13): Axis-REIT Managers Bhd is planning to acquire about RM350 million worth of properties next year, and is setting its sight on industrial properties in Iskandar Malaysia, the Klang Valley and Seberang Prai, Penang.

Chief executive officer Datuk George Stewart LaBrooy said with properties in Nusajaya valued much lower than Singapore’s, there will be many international enterprises interested to have their operations based in Johor.

“It’s costly to open up a factory in Singapore. Thus, Nusajaya is going to attract more investors, and we would love to have a presence there because it has a lot of potential,” he said at a press conference after the company’s annual general meeting (AGM).

“The property value in Iskandar Malaysia will go up, and it might be even higher than in KL. Condominiums are going to be sold at RM700 to RM900 per square foot (psf). That’s valued far higher than the condominiums in Mont Kiara.”

Axis-REIT, said LaBrooy, is primarily interested in acquiring logistics warehouses as the outlook of the said property type is positive.

“The current environment for growth for real estate investment trust (REIT) industry is going to be challenging next year, because the yield has dropped so far.

Besides, mall owners are not willing to sell for now. Fortunately, it’s easier in the industrial properties,” he opined.

Apart from Iskandar Malaysia, Axis-REIT has targeted industrial properties in the Klang Valley and Seberang Prai, specifically the Batu Kawan Industrial Park.

“The area is doing well. The Penang Second Bridge is right around the corner and should be completed next year. When it opens, it’s going to be a game-changer for the whole area,” said LaBrooy.

While he said the approximate value of the acquisitions to be around RM350 million, he does not have a tentative date when the acquisitions can be completed.

“Depending on the case, an acquisition process can be completed quickly or it will take a while. For now, we have only targeted some key assets which will be beneficial to us,” he told the press.

A substantial amount of Axis-REIT’s acquisition next year will be financed by placement of 90 million new shares.

“There is no confirmed date for the placement. We will do so when we have a cluster (of investors) ready to buy,” he said.

The company expects to gain about RM270 million, assuming that its stock is valued at RM3 per share.

At the AGM, the company received a unanimous vote from its shareholders in favour of disposing its Kayangan Depot warehouse in Shah Alam. The company will sell the property for RM23.6 million, and is set to gain RM6.19 million off the purchase price of RM16.1 million.

The capital gains will be returned to shareholders, while it will put the RM16.1 million into the pool of fund for its upcoming acquisitions.