PETALING JAYA: Axis Real Estate Investment Trust’s (Axis-REIT) current proposal to purchase an industrial facility is yield accretive at 6.6% internet property earnings (NPI).
This is at par with its present NPI yields of 6.7% and that’s a constructive improvement, because it continues to look into increasing its asset portfolio.
HLIB Research mentioned with the brand new asset, Axis-REIT’s monetary 12 months 2022 (FY22) to FY23 earnings will enhance by roughly 0.3% to 0.6%.
However, it retained its earnings forecast pending the completion of the acquisition.
The analysis home additionally maintains its “purchase’’ name with an unchanged goal value of RM2.32 a share. This is predicated on a targetted yield of 4.6% on the FY22 distribution per unit (DPU).
Axis-REIT has proposed to purchase a property from Axis AME IP Sdn Bhd for RM16.3mil.
The acquisition value works out to about RM271 per sq ft, which is affordable for an industrial area in Kulai (about RM260 to RM350 per sq ft based mostly on numerous web sites) based mostly on the valuation made by the unbiased valuer, HLIB mentioned.
It mentioned the property is situated inside Kawasan Perindustrian i-Park, Bandar Indahpura, Kulai, Johor. The location is well-connected through the Second Link Expressway and the North-South Expressway.
It consists of a single-storey indifferent manufacturing facility with an annexed double-storey workplace constructing and ancillary constructing with a complete lettable space of 60,000 sq ft.
The acquisition is predicted to be funded by an present debt facility and is predicted to be accomplished by the primary half of FY22.
With that, its gearing ratio is predicted to extend to 33% from 31% (FY21).
But that is nonetheless under the gearing restrict of 60% (non permanent increment from 50% until Dec 31, 2022) prescribed by the Securities Commission.
Furthermore, the property is at present 100% tenanted by HQPack Sdn Bhd, which manufactures industrial packaging for the high-end semiconductor business.
The lease time period is for a fastened interval of 10 years and one month with an choice to renew for one more time period of three years. The first three years could be at a month-to-month rental of RM90,000.
It added that Axis-REIT already owned 9 properties inside this industrial park, and this property will improve Axis’ footprint throughout the space.
