MBSB Investment Bank Bhd (MBSB Research) has maintained its BUY call on Axis REIT with an unchanged target price of RM2.17, saying the trust’s continued industrial asset expansion, stable earnings outlook, attractive gross distribution yield of 5.3% and positive rental reversion trajectory will support near to medium term growth.
Analysts noted that a recent engagement with Axis REIT management reinforced their positive view, with no changes made to earnings forecasts as prospects remain steady.
The research house said Axis REIT’s growth is being underpinned by an ongoing push into industrial developments aimed at unlocking value across its existing landbank. Among key projects is the refurbishment of Axis Industrial Facility 1 at Northport spanning nine acres, where one building is expected to be leased in the second half of 2026 while another is targeted for the first half of calendar year 2027, mainly catering to manufacturing tenants.
Another project, Axis Facility 4 at Bukit Raja, is scheduled for completion in the first half of 2027 with leasing expected by the second half of 2027. In addition, a built-to-suit facility in Senai, Johor for FCI Connectors Malaysia Sdn Bhd is targeted for completion in the fourth quarter of financial year 2027, offering an estimated gross yield of around 7%.
MBSB Research highlighted improving occupancy trends at the Bukit Raja distribution centre, which has risen to about 77% following earlier weakness, with rental rates now around RM1.80 per square foot, reflecting a 25% to 30% uplift from the previous lease. It added that lease expiries have enabled management to reprice assets closer to market levels.
The outlook for rental reversion remains positive, with Axis REIT recording a 3.5% increase in financial year 2025 and expectations of mid-single digit gains in financial year 2026. Analysts also noted that tenants in logistics and manufacturing have largely been able to pass on higher costs, including fuel, helping sustain demand stability.
On the environmental, social and governance front, Axis REIT continues to target at least one Green Building Certification annually to enhance property appeal and support sustainability-linked financing, although analysts noted that certification does not directly translate into higher rental rates.
As of 11.11 am, the stock price rose 1.04% to RM1.95.
