Axis REIT purchase of building brings it closer to asset target

The Star, 18, 2007

By SHANNEN WONG

PETALING JAYA: Axis REIT Managers Bhd’s proposed acquisition of a five-storey building for RM37mil will boost its asset size to RM618mil, bringing it closer to its target size of RM800mil by year’s end, Aseambankers Malaysia Bhd said.

In an announcement on Friday, Axis REIT proposed the buy of its 16th property, an office and factory in Petaling Jaya, from Wah Seong Industrial Holdings Sdn Bhd.

“The acquisition price appears fair at RM353 per sq ft with rising capital values,” said Aseambankers analyst C.T. Ong in a report. “The price compares well with recent office property transactions in the vicinity, like Nestle House at RM375 per sq ft and Menara Merais at RM358 per sq ft.”

The acquisition was expected to record a net property income of about RM2.6mil a year, or a net property yield of about 7%, he said, noting that it would increase Axis REIT’s net profit by 3.3% for the financial year ending Dec 31, 2008.

The acquisition, expected to be completed by February next year, was anticipated to generate income of some RM960,000 a year for the trust, Ong said.

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