PETALING JAYA: Axis Real Estate Investment Trust’s (Axis-REIT) trustee, RHB Trustees Bhd, has entered into a sale and purchase agreement to acquire an industrial complex from Amsteel Mills Sdn Bhd (AMSB) for a cash consideration of RM49 million.
AMSB will lease back the industrial complex from Axis-REIT for six years at a starting rental of RM285,833.33 per month. The industrial complex, located in the Bukit Raja industrial area, is currently occupied by AMSB, which is involved in the manufacturing and marketing of steel bars and wire rods.
The purchase price was based on the market value of RM50 million as appraised by independent registered valuer Savills (Malaysia) Sdn Bhd, in its valuation report dated Feb 22. The acquisition will be funded by existing bank financing, which will increase Axis-REIT’s financing ratio to 37.05% of audited assets as at Dec 31, 2022. This is still below the gearing limit of 50%, as prescribed by the Guidelines on Listed Real Estate Investment Trusts issued by Securities Commission Malaysia.
Axis REIT Managers Bhd CEO/executive director Leong Kit May said the acquisition adds to three existing properties that they already own in Bukit Raja, a prominent industrial area that is well connected to major highways.
“This property is also adjoining Axis-REIT’s existing property, Axis Facility 2 @ Bukit Raja. We are confident this acquisition will contribute positively to Axis-REIT’s earnings once it is completed, which is targeted to be by third quarter of 2024,” she added.
