PETALING JAYA, August 2, 2023 -- Axis Real Estate Investment Trust (“Axis-REIT”) today announced that the development of its Bukit Raja Distribution Centre 2 ("BRDC 2"), a warehouse facility, located at Bukit Raja Selatan Industrial Area, Shah Alam, Selangor Darul Ehsan, has been completed upon obtaining the Certificate of Completion and Compliance (“CCC”) on 1 August 2023.
With the CCC in hand, Axis-REIT will be able to hand over BRDC 2 to the e-commerce operator, SPX Xpress (Malaysia) Sdn Bhd (formerly known as Shopee Express Malaysia Sdn Bhd) ahead of the targeted handover date of 31 August 2023. The property has been fully leased by the latter for a period of 15 years while rental shall commence from 1 August 2023.
The development of BRDC 2 involves the construction of a single storey warehouse and ancillary buildings, enhancement of an existing 3-storey office block with a total gross built-up area of approximately 620,096 sq ft, located on a 20-acre freehold land. The Certificate of Practical Completion for BRDC 2 was obtained earlier on 26 June 2023.
Questions around this news
What does a Certificate of Completion and Compliance confirm?
A Certificate of Completion and Compliance is a formal document issued under Malaysia’s building-control framework. It confirms that a building has been completed in accordance with approved plans and relevant requirements, allowing it to be occupied or used. It is distinct from a certificate marking practical completion, which generally concerns completion under a construction contract.
What are the lease terms for Bukit Raja Distribution Centre 2?
The release says the warehouse is fully leased to SPX Xpress (Malaysia) Sdn Bhd for 15 years. Rental is due to commence on 1 August 2023. The certificate was obtained on 1 August, enabling handover ahead of the targeted date of 31 August 2023.
How is the project expected to affect the portfolio’s occupancy rate?
The release says the centre’s completion, together with a new tenancy at Shah Alam DC 3, is expected to raise the portfolio occupancy rate to 92%. It reports that the rate stood at 89% as at 30 June 2023. The stated increase is an expectation, not a reported occupancy figure following the handover.
What is a real estate investment trust?
A real estate investment trust is a structure that pools investors’ capital to own or finance income-producing real estate. Investors can gain exposure to a portfolio of properties through trust units rather than owning each property directly. The trust is managed under rules that vary by jurisdiction, including rules on assets, income and distributions.
Axis REIT Managers Berhad chief executive officer/executive director Leong Kit May says, “We are certainly pleased that the development of BRDC 2 has officially been completed. Coupled with the new tenancy at Shah Alam DC 3 by August 2023, BRDC 2’s completion will enhance the portfolio occupancy rate to 92% where the higher rate will undoubtedly contribute positively to Axis-REIT’s income in the coming quarters.”
Bukit Raja Distribution Centre 2
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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At a glance
- Company
- Axis Real Estate Investment Trust (Axis-REIT)
- Announcement
- Expansion
- Location
- Shah Alam, Selangor Darul Ehsan
Key figures
- Portfolio occupancy rate expected after BRDC 2 completion and new Shah Alam DC 3 tenancy
- 92%
- Lease term
- 15 years
- Gross built-up area
- approximately 620,096 sq ft
- Land area
- 20-acre
- Portfolio occupancy as at 30 June 2023
- 89%
People
- Leong Kit MayChief executive officer/executive director of Axis REIT Managers Berhad
