KUALA LUMPUR (Aug 28): Axis Real Estate Investment Trust (Axis REIT) (KL: AXREIT), which mainly focuses on industrial assets, has proposed to acquire two adjoining pieces of land together with buildings near Port Klang for RM158.64 million.

The acquisition, Axis REIT said, will be funded by its existing bank financing.

The REIT's trustee, RHB Trustees Bhd, has entered into agreements to buy the assets located in the Pulau Indah Industrial Park from Malconrep Depot (M) Sdn Bhd and Dayang Mewah Sdn Bhd, according to a bourse filing on Wednesday.

Under the agreements, the trust will then lease both properties back to Malconrep Depot. The first property, measuring 44,095.78 sq metres and comprising two blocks of individual detached industrial premises, will be leased for nine years with a starting monthly rental of RM570,179.

The second property, measuring 18,261.18 sq metres and consisting of a block of single-storey warehouse annexed with a double-storey office building and other ancillary buildings, will be leased for five years with a starting monthly rental of RM251,207.

Axis REIT said the acquisition of the properties will be accretive to its distributable income and adds to the portfolio of properties that will benefit the fund in the long term.

The properties, it said, are fully-occupied warehousing facilities "with strong revenue-producing potential and accessibility to major highways through the Shah Alam Expressway (Kesas) within reach of Klang City Centre, Shah Alam, Petaling Jaya and Kuala Lumpur".

Furthermore, the properties are located near Westport, one of three major shipping terminals making up Port Klang, the group noted.

The acquisition of the properties is expected to be completed by the fourth quarter of 2024.

Axis REIT on a shopping spree

Axis REIT has been seen to be on a shopping spree to expand its portfolio since the beginning of the year. In May, the trust said it was acquiring two automotive service centres worth RM125 million from Cycle & Carriage Bintang Bhd, to be leased back to the same company.

In April, Axis announced that it will buy an industrial complex and open storage yard in the Bukit Raja Industrial Park from Amsteel Mills Sdn Bhd, which is 99%-owned by Lion Industries Corp Bhd (KL:LIONIND) for RM351.8 million, following the planned acquisition of another industrial complex for RM49 million, also from Amsteel, that was announced in February.

It is worth noting that the REIT also announced the disposal of its Axis Steel Centre @ SiLC in Nusajaya, Johor for RM162 million, cash, to a data centre operator to redeploy the capital toward other potential-yield accretive properties.

Axis REIT's net property income for the first half of the year increased 11.55% year-on-year to RM130.92 million from RM117.37 million, as revenue rose 9.7% to RM152.07 million from RM138.63 million.

It declared a second interim income distribution of 2.25 sen per unit in the second quarter, bringing total income distribution to 4.55 sen per share year to date, up 11% compared to 4.10 sen paid in the same period last year.

The REIT's units closed one sen or 0.55% lower at RM1.80, valuing the group at a market capitalisation of RM3.15 billion.