Axis Real Estate Investment Trust (Axis REIT) is targeting to grow its assets under management (AUM) to MYR3 billion ($830 million); it recently surpassed the target of MYR2 billion ($550 million).
CEO and executive director Stewart LaBrooy said the new target will be achieved via acquisitions within the next three years.
LaBrooy said in a press conference that its current AUM size enables the REIT to raise capital. “We can now build bigger pools of cash to work with and we could acquire more successfully,” he said, adding: “We see value deals coming into the market, with lots of opportunities to buy assets in the second half of this year.”
Axis-REIT now owns 33 properties, both commercial and industrial, around Malaysia.
The group is looking to raise up to MYR450 million ($124.2 million) through private placements of new shares in the REIT, to finance more property purchases. This is expected to partially finance planned acquisitions of three industrial properties in Penang this year, estimated to be worth MYR160 million ($44.2 million), collectively.
LaBrooy said the acquisitions in Penang comprise two industrial facilities, one each in Seberang Prai and Bayan Lepas, as well as a warehouse in Seberang Prai.
“There are a lot of investments going into Penang ,” he said, “Taking positions in Penang is really the smart thing to do.”
The group will announce its strategy to raise the remaining MYR290 million ($80 million) at a later day as “right now, they are focused on the plans in Penang.”
The group has also received the Securities Commission’s approval to expand its existing Islamic bond (sukuk) programme. The group increased its 15-year MYR300 million ($83 million) sukuk programme into a MYR3 billion ($830 million) perpetual scheme.
“We are taking the opportunity to upsize the programme instead of issuing a fresh sukuk,” COO Leong Kit May said.
Axis REIT announced its financial year 2014 fourth quarter results earlier this week, showing a core net profit of MYR21 million for the quarter and MYR82.9 million for the full-year.
The results came in below CIMB Research’s expectations, at 80 per cent and 85 per cent of the consensus full-year forecasts, respectively.
Axis REIT’s results fell below expectations due to the lower-than-expected topline, given that most of its acquisitions were made at the end of the year.
Revenue was 3.2 per cent lower, year-on -year, at MYR35 million ($9.66 million) due to the disposal of Axis Plaza. Net property income went down 4.8 per cent quarter-on-quarter, and 3.7 per cent year-on-year mainly due to loss of rental in Axis Plaza.
CIMB Research remains optimistic about the REIT’s outlook, as it carries out its aggressive acquisition drive to expand its asset portfolio.
Axis REIT’s distribution per unit (DPU) of 4.15 sen brings its full-year DPU to 19.75 sen, which also fell below CIMB Research’s full-year expectation of 21 sen DPU. The earnings per unit for the year was 17.41 sen. The REIT’s total return, calculated by adding up DPU from operations, gain on disposal and movement in market price, was 30.3 per cent for 2014.
The group completed three acquisitions worth MYR389 million and made a revaluation gain of MYR25.97 million.
It was traded at a premium of 49.4 per cent to its net asset value as of December 31, 2014. Its net yield per property was 8.82 per cent.