Snippets
Axis-REIT to acquire 2 properties in Johor
Focus Malaysia 14 Aug 2019 12:26

Axis Real Estate Investment Trust’s (“Axis-REIT”) trustee, RHB Trustees Berhad has entered into two sale and purchase agreements, for and on behalf of Axis-REIT with Nusajaya Tech Park Sdn Bhd in relation to the proposed acquisitions of 2 properties for a total cash consideration of RM55.8 million.

Both properties are strategically located within the Iskandar Malaysia development region, 25 kilometres west of Johor Bahru. The said properties are freehold land, with buildings erected on them.

The first property, which costs RM42.0 million, has a land area of 1.4674 hectares with lettable area of 104,694 sq ft. and is currently being leased to global engineering leader GKN Aerospace. The site focuses on advanced aero-engine component repair and research for the commercial aerospace market. GKN Aerospace has 50 sites around the world and this is its first in Malaysia. The current lease will expire on 15 July 2024 with an option to renew for another 2 terms of 3 years each.

The second property, which costs RM13.8 million, has a land area of 0.6585 hectares and a lettable area of 42,067 sq ft. This second property is leased to Sternmaid Asia Pacific Sdn Bhd, involved in the manufacturing and product development of ingredients and additives for the food and nutritional supplements industry. The current lease will expire on 14 August 2022 with an option to renew for another 5 years.

The market value of the two properties are RM42.0 million and RM15.5 million respectively, as appraised by C H Williams Talhar & Wong Sdn Bhd. The proposed acquisition will be funded by bank financing, which will increase Axis-REIT’s gearing ratio to 38.5% of its audited total assets as at 31 December 2018. The acquisition of the two properties is expected to contribute positively to Axis-REIT’s earnings upon the completion of the acquisition exercise which is expected to be by end of 2019.

Axis REIT Managers Berhad Chief Executive Officer/Executive Director Leong Kit May says, “The proposed acquisition (of the properties) is undoubtedly in line with our investment objectives and growth strategy to provide our unitholders with stable income distribution.

Similar to our recent acquisition in Bayan Lepas Industrial Park, the plus point of this acquisition is the strategic location of the said properties which is just a short drive from Singapore via the Malaysia-Singapore Second Link. Such connectivity is important to both our lessees who operate regional businesses.”



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