Malaysia-listed mixed industrial and office REIT, Axis REIT, announced on 5 August that it has achieved a distribution per unit (DPU) of 2.05 sen for its 2Q 2016, a fall of some 4.65% from the 2.15 sen recorded for 2Q 2015, after adjusting for a one to two unit split.

Gross revenue for the period increased marginally by 0.98% but net property income slipped by 1.5% on higher property expenses, said the REIT in a statement on the results.

“Second half of 2016 remains challenging for the office leasing market with new supply continuing to outstrip demand as well as impact from the soft economic condition”, it added.

Axis REIT’s aggregate portfolio occupancy for the period was 92%, with 26.5% due for renewal in 2016. Of these, 48% have committed to renew their leases while 23% have expressed a commitment to do likewise.

The REIT’s gearing as at 2Q 2016 was at 34.1% with 49% of its borrowings on a fixed interest rate.

On its outlook for the quarters ahead, Axis REIT has indicated that it is optimistic on the demand for industrial space in Malaysia.

“The industrial portfolio continues to perform very well and has excellent growth prospects in the coming years”, said the REIT.

"Demand for industrial and warehousing space are rising and we are working with our new and current tenants on their space expansion to meet this new demand”, it added.

Units of Axis REIT last changed hands on the Bursa Malaysia at MYR1.80.