Malaysia-listed industrial real estate investment trust Axis REIT (AXRB) has on 5 August announced plans to purchase five industrial assets across Malaysia in what would be the its largest acquisition yet.

Three of the properties located in Shah Alam have been confirmed for acquisition while two other assets, described as industrial facilities in Johore and Prai, are still undergoing due diligence by the trust.

The acquisitions are expected to cost the REIT some MYR472 million and brings its total asset size across the MYR2 billion mark.

Of this sum, MYR280.5 million will be paid for the Shah Alam properties while MYR153.5 million and MYR38 million have been set aside for the Johore and Prai industrial facilities respectively.

The acquisitions are expected to be yield accretive and estimated to enhance unitholders' distribution per unit (DPU) by an annualised value of 2.1 sen per unit.

The acquisition plans were announced on the back of the REIT's 2Q 2014 results in which it reported a DPU of 5.3 sen, a 15.2% increase over the 4.6 sen recorded for the corresponding financial period in 2013.

The increase in DPU was given despite the REIT seeing a 1.7% fall in net property income (NPI) for the quarter which came in at MYR29.4 million. REITsWeek understands that the DPU included one-off gains from the divestment of Axis Plaza in March 2014 which brought in MYR10.9 million.

Units of Axis REIT are currently trading about 1.6% higher on the Bursa Malaysia at MYR3.50.

Axis REIT is set to make its biggest acquisition yet in 2014.
Axis REIT is set to make its biggest acquisition yet in 2014.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.