Axis REIT recorded positive rental reversion of 5.8% in FY23, MIDF said the positive rental reversion was underpinned by healthy demand for industrial space. Note that portfolio occupancy rate of Axis REIT was decent at 97% as of end FY23, higher than occupancy rate of 95% as of end FY22.
The higher portfolio occupancy rates were driven partly by lease commencement for Axis Shah Alam Distribution Centre 3 and Bukit Raja Distribution Centre 2. Greenfield and brownfield development as part of growth plan.
The group continues to embark greenfield and brownfield development as part of its strategy to expand its industrial asset portfolio. Notably, Axis REIT redeveloped its site at Bukit Raja into Bukit Raja Distribution Centre. The asset was handed over to Shopee in August.
Meanwhile, it is constructing Axis Mega Distribution Centre phase 2 with Certificate of Completion and Compliance of the property is expected to be obtained in 1QFY24 and is actively looking for tenants for the property.
It has also been actively growing its portfolio via asset acquisition, notably, in October 2023 it announced industrial asset acquisition in Sendayan Tech Valley for RM48m. Besides, the realtor has recently completed acquisition of a shopping mall in Termeloh, Pahang for RM26m. Note that hypermarket makes up 3% of its asset portfolio. Meanwhile, MIDF notes that Axis REIT remains on active acquisition trail to expand its portfolio with acquisition targets of RM229m.
The house gathers that Axis REIT remains focused on growing its industrial assets in Klang Valley and Penang. Maintain BUY with an unchanged TP of RM1.97.
MIDF remains positive on Axis REIT as it sees that long term growth for its industrial asset portfolio will remain positive amid healthy demand for industrial space. Meanwhile, distribution yield is estimated at 4.4%.
