KUALA LUMPUR: Axis Real Estate Investment Trust (Axis-REIT) is disposing of its property in Nusajaya, Johor, for RM162 million cash to a data centre operator.

In a filing with Bursa Malaysia today, Axis-REIT said it could not disclose the purchaser's identity due to confidentiality clauses in the sale and purchase agreement.

"Axis-REIT will provide the details of the purchaser upon the completion of the proposed disposal which is anticipated to be finalised by the second half of 2024," it said.

The industrial property, which covers an area of 10.91 hectares, is to be disposed of free from encumbrances but subject to the terms and conditions stipulated in the agreement entered into between RHB Trustees Bhd, as the trustee for Axis-REIT, and the purchaser, said the filing.

Axis-REIT said the transaction aligns with the fund's investment objectives, with the manager believing that over the nine years of owning the property, it has maximised its income-generating potential.

Moreover, there is limited potential for future rental growth in its current capacity as a manufacturing facility, it said.

"Given the favourable pricing of this asset sale and leveraging on the property's best and highest use as a data centre development, this is an opportune time to dispose and redeploy capital towards potentially yield-accretive properties," it said.

Axis-REIT also highlighted that the expected net gain from the proposed disposal will be approximately RM500,000 million and will not materially impact earnings for the financial year ending Dec 31, 2024.

"The net proceeds from the proposed disposal, after deducting all fees and related expenses, will be utilised to repay existing financings.

"These proceeds are expected to be utilised within 12 months from the completion date," it said.

The proposed disposal is expected to reduce Axis-REIT's financing ratio to 31.94 per cent of audited total assets as of Dec 31, 2023," it added.

 - Bernama