MBSB Investment Bank Bhd (MBSB Research) said Axis REIT remains a BUY with an unchanged target price of RM2.17 as analysts highlighted the acquisition of a Jenjarom distribution centre as a yield-accretive move that strengthens its industrial portfolio and supports stable income visibility.
Axis REIT has entered into a sale and purchase agreement to acquire a distribution centre in Jenjarom, Selangor from City-Link for RM128 million, the research house said. The asset has a gross floor area of 355,023 square feet and is currently fully occupied by City-Link Express (M) Sdn Bhd under a 15-year lease.
Analysts noted that the agreed monthly rental of RM661,900 translates into annual rental income of RM7.9 million, implying a gross yield of 6.2% which is broadly in line with its previous acquisitions. The purchase price is also consistent with the asset’s estimated market value of RM129 million.
MBSB said the acquisition is expected to be completed in 4QFY26 and will be funded via existing bank borrowings. As a result, gearing is expected to edge up slightly to 0.35 times from 0.34 times previously, reflecting only a marginal impact on the balance sheet.
Earnings contribution from the asset is expected to be modest at around 1% of total income, with analysts leaving forecasts unchanged pending completion of the deal.
The research house said the transaction supports Axis REIT’s strategy of expanding its industrial asset base while maintaining income stability through long-term leases. It added that the group continues to benefit from positive rental reversion in the industrial segment and an active acquisition pipeline.
As of 11.57 am, Axis REIT’s stock slips 0.50% to RM2.01.
