Axis Real Estate Investment Trust’s (Axis REIT) trustee, RHB Trustees Berhad has entered into a sale and purchase agreement with Amal Mewah Development Sdn Bhd to acquire a hypermarket in Temerloh for RM25.75 million.
The REIT said that the hypermarket, built upon an 80,590 sq ft freehold land in Temerloh, Pahang, has a gross floor area of 115,967 sq ft and located 1.8 kilometres to the south-west of Temerloh town centre and 10.4 kilometres to the south-east of Mentakab.
Temerloh is well-connected to Kuala Lumpur and Kuantan via the East Coast Expressway and Karak Expressway.
“This acquisition comes with a 20-year fixed lease signed with TF Value-Mart Sdn Bhd which is currently Axis REIT’s existing tenant at Axis Hypermarket in Sungai Petani,” it said in a statement today (Dec 8).
The purchase price was based on a market value of RM27 million, as appraised by PA International Property Consultants (KL) Sdn Bhd, in its valuation report dated 28 November 2023.
The acquisition will be funded by existing bank financing, which will increase Axis-REIT’s financing ratio to 36.71% of the audited total assets as at 31 December 2022, the REIT added.
“This is still below the gearing limit of 50%, as prescribed by the Guidelines on Listed Real Estate Investment Trusts issued by the Securities
Commission Malaysia.”
On the proposed acquisition, Axis REIT Managers Berhad chief executive officer and executive director Leong Kit May said the Axis REIT is pleased with this acquisition that adds on to our existing portfolio of hypermarket assets, especially given the long lease of 20 years.
“We are confident that this acquisition will contribute positively to Axis-REIT’s earnings from 2024 and beyond once the acquisition is completed which is targeted to be by the first quarter of 2024.
“While we remain steadfast to acquire Grade A logistics facilities and manufacturing facilities, we have the flexibility to diversify into alternative asset types that come with long leases and strong tenant covenants,” she said.
