Axis REIT to dispose of Axis Steel Centre @ SiLC in Johor for RM162m cash

• Axis Steel Centre @ SiLC is sprawled over 26.96 acres (10.91 hectares) of industrial land. There are two single-storey detached factories, a two-storey office building, a two-storey canteen and maintenance office, a single-storey training centre, a three-storey worker hostel, and other ancillary buildings sited on it.

KUALA LUMPUR (April 24): Axis Real Estate Investment Trust (Axis REIT), which focuses on industrial assets, is disposing of its property in Nusajaya, Johor, for RM162 million cash to a data centre operator. It did not disclose the identity of the purchaser.

In a bourse filing on Wednesday, Axis REIT said the proposed disposal is in line with the trust’s investment objectives.

"Axis REIT Managers Bhd (the REIT's manager) believes that in the nine years of owning this property, it has maximised the income-generating potential of this asset, and there is limited upside to future rental growth in the asset's current capacity as a manufacturing facility.

"Given the favourable price of this asset sale and leveraging on the best and highest use of the property as a data centre development, this is an opportune time to dispose of the property, and to redeploy the capital towards potential yield-accretive properties," it added.

Axis Steel Centre @ SiLC is sprawled over 26.96 acres (10.91 hectares) of industrial land. There are two single-storey detached factories, a two-storey office building, a two-storey canteen and maintenance office, a single-storey training centre, a three-storey worker hostel, and other ancillary buildings sited on it.

Axis REIT said the original cost of investment of the property was RM153.5 million, and it had an audited net book value/carrying value of RM159 million as at end-December 2023.

The disposal, which is slated to be completed by the second half of this year, is expected to rake a disposal gain of RM500,000. It will have no material impact on the trust’s earnings for the financial year ending Dec 31, 2024.

Net proceeds of the proposed disposal will be utilised to repay existing financing, the REIT added. 

Axis REIT units settled one sen or 0.5% higher at RM1.87 on Wednesday, giving the REIT a market capitalisation of RM3.27 billion. The units have risen 5% so far this year.

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