KUALA LUMPUR (Jan 20): Axis Real Estate Investment Trust's (Axis Reit) assets under management has surpassed the RM2 billion mark for the first time and the group is now targeting RM3 billion, according to its chief.
Datuk Stewart LaBrooy, CEO and executive director of Axis-REIT Managers Bhd, which manages Axis Reit (fundamental score: 1.3; valuation score: 0.5), said the RM3 billion target was to be achieved via acquisitions within the next three years.
“Having a size like this does help us a lot in terms of capital raising. We can now build bigger pools of cash to work with and we could acquire more successfully.
“We see value deals coming into the market, so, we think there is going to be lots of opportunities to buy this year, in the second half,” said Labrooy.
Axis Reit already owned 33 properties, both commercial and industrial, across Malaysia.
According to LaBrooy, the group is capable of raising up to RM450 million through private placements of new shares in the property trust to finance more property purchases.
For now, the funds are expected to partially finance planned acquisitions of three industrial properties in Penang this year. The deals have a collective estimated value of RM160 million.
LaBrooy said the Penang acquisitions comprise two industrial facilities, one each in Seberang Prai and Bayan Lepas, and a warehouse in Seberang Prai.
“There is a lot of investment coming into Penang and the whole place is going to really sparkle. Taking positions in Penang is really the smart thing to do,” he said.
When asked on plans for the remaining RM290 million, Labrooy said the acquisition targets disclosed for now are what the company is focusing on at the moment.
The group is also waiting for the Securities Commission's approval to expand its existing Islamic bond or sukuk programme, said Axis-REIT Managers chief opperating officer Leong Kit May.
Axis Reit plans to expand its 15-year RM300 million sukuk programme into a RM3 billion perpetual scheme.
“We’ve taken the opportunity to upsize the program instead of issuing a fresh sukuk,” said Leong.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)