Axis-REIT Aims To Double Asset Size

REITS in the US and Singapore have continuously increased their earnings by purchasing every year properties that offer income yields higher than the REITS’ own.  

However, it seemed that in Malaysia, there are quite a number of REITs established for the purpose of cashing out purposes.

However, as for Axis–REIT, it has been increasing its size of its property portfolio by 35% since its listing.

Reported in The Star (31/1/07), Axis-REIT also plans to double that expanded base this year.  

Some details of Axis-REIT :

·      Axis-REIT executive director is George LaBrooy

·      Listed in August 2005 with initial five investment properties

·      Since then, it has acquired four more properties, bringing its total portfolio to nine properties.

·      The expansion led it to post a net profit of RM26.4mil for the year ended Dec 31, 2006, exceeding by 15.3% the forecast it made in its listing prospectus. 

·      In 2006, purchased two properties – Axis North Port Logistics Centre in Port Klang and Cycle & Carriage Bintang’s head office in Petaling Jaya – for a total of RM42.8mil, adding 12% to its asset size of RM408mil.

·      The two properties acquired in 2006 were financed with additional borrowings hence there was no dilution of earnings for unitholders  

·      Presently Axis-REITs’ gearing is #21%

·      For year 2007, Axis-Reit management is working towards 100% expansion of its asset base. Several properties have been identified and discussions are being held, and unitholders would be informed when negotiations are concluded.  

·      The trust would adopt a two-pronged policy this year of raising more borrowings as well as issuing new units in the acquisition plan.

·      Axis-REIT reported on Monday a net trust income of RM6.7mil for its fourth quarter last year, which would translate into an annualised net income of RM26.8mil this year. That would enable it to pay a dividend of 13 sen a unit, or a yield of 7%, at its price of RM1.85 yesterday.    

·      Refer below table for the location of its properties