Malaysia-listed office and industrial REIT, Axis REIT, has entered into a sale and purchase agreement to acquire a single-storey warehouse property in Johor Bahru for MYR33 million (USD 8 million).
The property, located at Jalan Nikel 2 in Zone 12C of the Pasir Gudang industrial area, will be acquired from Orientant International Sdn Bhd, according to a filing lodged with the Bursa Malaysia.
The building is approximately 2.5 years old and sits on a 60-year land lease that expires in March 2073.
The property is located approximately 23 kilometres to the east of Johor Bahru City centre and features 163,000 square feet of net lettable area. It is currently tenanted to Kerry Ingredients Sdn Bhd on a monthly rental of MYR228,200. The tenancy agreement runs till January 2021.
“The proposed acquisition of the property will be accretive to Axis REIT’s distributable income”, said the REIT in the filing with Bursa Malaysia on 23 May.
“Furthermore, the proposed acquisition of the property would enable Axis REIT to diversify and enlarge its portfolio of properties and is expected to benefit the fund in the long-term as a result of economies of scale”, it added.
The acquisition, which is expected to be completed in 3Q 2016, will be funded with bank borrowings.
Units of Axis REIT finished the trading day about 1.2% higher from its previous close on the Bursa Malaysia to end at MYR1.67.