October 25, 2023 -- Axis Real Estate Investment Trust’s (“Axis-REIT”) trustee, RHB Trustees Berhad has entered into a sale and purchase agreement to acquire an industrial premise, presently built upon a 637,331 sq. ft. freehold land, from BSS Development Sdn. Bhd. (“BSS”) and Matrix IBS Sdn. Bhd. (“Matrix IBS”) for a cash consideration of RM48.0 million. Both BSS and Matrix IBS are wholly owned subsidiaries of Matrix Concepts Holdings Berhad.
The industrial premise, located in Sendayan Techvalley Industrial Park, Seremban; comprises a single storey detached factory, a single storey detached office, one double storey detached office, single storey canteen building, and other ancillary structures, with a net lettable area of 105,311 sq. ft.. The Sendayan Techvalley Industrial Park is well-connected to several major highways such as the North-South Expressway, KLIA Linkage Seremban-Bukit Nenas Highway, and Seremban-Port Dickson Highway.
An international company, involved in the manufacturing of machineries for mining, quarrying and construction, is currently leasing the said premise until February 2029, with an option to renew for four further terms of three years. The current rental is RM250,000 per month where the rental rate shall increase by 8% for the period between 1 March 2026 to 28 February 2029.
The purchase price was based on the market value of RM48.0 million, as appraised by independent registered valuer, First Pacific Valuers Property Consultants Sdn. Bhd., in its valuation report dated 23 August 2023. The acquisition will be funded by existing bank financing, which will increase AxisREIT’s financing ratio to 37.04% of the audited total assets as at 31 December 2022 which is still below the gearing limit of 50%, as prescribed by the Guidelines on Listed Real Estate Investment Trusts issued by the Securities Commission Malaysia.
At a glance
- Company
- Axis Real Estate Investment Trust
- Announcement
- Acquisition
- Location
- Sendayan Techvalley Industrial Park, Seremban
Key figures
- Purchase price
- RM48.0 million
- Freehold land area
- 637,331 sq. ft.
- Net lettable area
- 105,311 sq. ft.
- Current monthly rent
- RM250,000 per month
- Scheduled rental increase
- 8%
- Financing ratio after acquisition
- 37.04%
People
- Leong Kit MayChief executive officer/executive director of Axis-REIT Managers Berhad
Products and programs
Commenting on the proposed acquisition, Axis-REIT Managers Berhad chief executive officer/executive director Leong Kit May said, “We are pleased with this proposed acquisition as it checks all our investment objective boxes of high-quality accretive properties with strong recurring rental income. The long lease of approximately 6 years will improve our portfolio’s weighted average lease expiry. Upon completion of this acquisition by the first half of 2024, we will be able to add on another facility to our existing portfolio.”
About Axis Real Estate Investment Trust
Axis Real Estate Investment Trust (“Axis-REIT”), Malaysia’s first real estate investment trust, was listed on Bursa Securities on 3 August 2005. Having been reclassified as an Islamic REIT on 11 December 2008, all acquisitions by Axis-REIT are Shariah compliant. It currently has a diverse portfolio of 62 properties strategically located in the Klang Valley, Johor, Penang, Pahang, Negeri Sembilan and Kedah. Axis REIT Managers Berhad is the Manager of Axis-REIT while RHB Trustees Berhad is the latter’s trustee.
Axis-REIT has a solid industrial space portfolio where 93% of the properties are on industrial titles. As at 30 June 2023, the occupancy rate of Axis-REIT’s portfolio stood at 89% with a weighted average lease expiry period of 5 years, based on rental.
As at 30 June 2023, the space under management is 12.7 million square feet and total asset value of RM4.4 billion.
For more information, please log on to http://www.axis-reit.com.my.
Issued by Imej Jiwa Communications Sdn. Bhd. on behalf of Axis-REIT.
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In brief
Axis Real Estate Investment Trust says its trustee has signed an agreement to buy an industrial property in Sendayan Techvalley Industrial Park, Seremban, for RM48.0 million in cash. The site comprises 637,331 sq. ft. of freehold land and buildings with a net lettable area of 105,311 sq. ft. An international machinery manufacturer currently leases the premises through February 2029, with options to renew. The current rent is RM250,000 per month, and the release states that rent is scheduled to rise by 8% for the period from 1 March 2026 to 28 February 2029. Axis-REIT says it will fund the acquisition through existing bank financing. Completion is expected in the first half of 2024, subject to the proposed transaction proceeding.
Key takeaways
- Axis-REIT’s trustee signed an agreement to acquire the Seremban industrial property for RM48.0 million.
- The property includes freehold land and buildings with a net lettable area of 105,311 sq. ft.
- The current tenant leases the premises through February 2029 and has options to renew.
- The company says it plans to use existing bank financing and expects completion in the first half of 2024.
