Axis Reit buys industrial property for RM37mil

PETALING JAYA : Axis Real Estate Investment Trust (Axis-REIT) has entered into a sale and purchase agreement to buy a RM37 million  industrial property from Lion Steelworks Sdn Bhd.

The property is located within the Bukit Raja industrial area. 

“The property comprises a leasehold industrial land, measuring 22,528 square metres, with two blocks of detached factory and a double-storey office building annexed plus other ancillary structures. 

“The gross floor area or net lettable area is 149,605 square feet. The land’s 99-year leasehold will only expire in 2088,” Axis-REIT said.

As of December 24, the property is fully occupied where the factory is being used by Lion Steelworks to manufacture and distribute office equipment, security equipment and steel related products. 

“Upon the completion of the acquisition, the property will be leased by Lion Steelworks. The tenancy is for a fixed period of two years and five months (initial term) from the tenancy agreement’s commencement date with an option to renew for another two terms of one year each. 

“Upon commencement of the tenancy, Lion Steelworks will pay the rental for the first 24 months of the initial term amounting to RM5.4 million (RM225,000 per month) to Axis-REIT,” it said. 

The acquisition will be funded via Axis-REIT’s existing bank financing. This will increase Axis-REIT’s gearing ratio to 38.1 per cent of its audited total assets. 

“The acquisition is expected to be completed by the first quarter of 2020

“The property’s market value is RM39.0 million, as appraised by PA International Property Consultants Sdn Bhd, an independent firm of registered valuers, in its valuation report dated 28 October 2019,” it added.