Axis REIT plans new acquisitions

Axis Real Estate Investment Trust (REIT) plans to acquire another three to five properties in 2010 and raise RM113 million in the early part of the year.

Its target was expand the total assets to at least RM1 billion from RM907.7 million as at December last year, said Axis REIT Managers Bhd Chief Executive Officer Stewart LaBrooy.

Axis REIT Managers is the promoter of Axis REIT. LaBrooy said the potential acquisition targets included two units of brand new logistics warehouses in Johor, a factory or warehouse in Puchong and an office building in Cyberjaya.

The acquisitions will total RM180 million.
As at Dec 31, 2009, Axis REIT had 21 properties in Malaysia.

In a media briefing on Axis REIT's financial performance for last year and its future growth prospects, he said: "We are positive about our financial results this year despite the soft property market.

"Our strategy is to maintain occupancy rates and make new acquisitions."

He said the trust also planned another capital raising exercise in early 2010. "There is potential to place out another 61.4 million units and raise a war chest of RM113 million for future acquisitions," he disclosed.

LaBrooy said that among other developments for this year would be on its corporate property in Petaling Jaya called Quattro West which was formerly known as Nestle House.

"We are undergoing a complete refurbishment of the building to reposition the asset and increase revenue," he said.

He said Quattro West would be taken up by another listed company that had committed to a 15-year lease of 50 per cent of the space commencing July.

Another property that would provide unitholders with opportunities for capital gain was the proposed acquisition of two logistics warehouses in Seberang Perai, Penang which was expected to be completed by March.

The Seberang Perai warehouse acquisition at RM24.25 million, he said, was at a 9.2 per cent discount to market value and would provide unitholders with a cpaital gain of approximately RM1.78 million.

"The acquisition will increase gearing level from 34.03 per cent to 35.61 per cent," he added.

LaBrooy said 35 per cent would be the trigger point for gearing level and should it touch above this level, Axis REIT would a undertake private placement to bring it down.

Axis REIT's unit price, he pointed out, saw an improvement at the end of 2009 as compared to end of 2008. "It closed at RM1.93, a 72 per cent increase from the 2008 closing price," he added.

By Bernama