RHB Research has maintained a “Buy” recommendation for Axis-Reit with a target price of RM2.32. Its TP incorporates a 4% ESG premium after considering Axis REIT’s excellent governance score and commendable efforts in reducing greenhouse gas emissions.
RHB said that earnings were within expectations, thanks to contributions from newly acquired assets and positive rental reversions.
“Axis REIT is our preferred pick for the sector as a key player in the industrial segment, leveraging on the eCommerce boom. With an RM120million acquisition target value, it remains on track for stable earnings growth, making it a robust defensive play going forward,” it said.
The stockbroking firm said that the REIT’s blended occupancy rate remains stable at 96%, considering the single-tenanted nature of industrial assets. (making up 93% of its portfolio).
“Out of c.22% of total NLA due for renewal this year, 54% has been renewed to date. Recall that leases up for expiry in FY21 were renewed at a +5.6% reversion rate. We believe rental reversion rate this year will be just as attractive this year owing to the encouraging demand for warehouse and logistics assets in light of the e-commerce boom,” It said
