Axis REIT is an industrial and business space focused REIT with 58 properties across Malaysia as at 31 December 2021. In one of our post, we have discussed on how industrial REIT segment has outperformed other REITs sector and in this post, we will look into Axis REIT FY21 performance to see how it has performed.
Read more:
- 7 Key Things You Need To Know of Axis REIT FY20 Performance
- Investing in Malaysia REITs: Is it an attractive proposition?
- 5 REITs in Malaysia with industrial properties exposure
1. Continuous expansion of portfolio
| MYR in 000s | FY17 | FY18 | FY19 | FY20 | FY21 |
| No. of Properties | 40 | 45 | 48 | 53 | 58 |
| Properties Valuation | 2,482,200 | 2,798,500 | 2,990,610 | 3,280,240 | 3,614,230 |
One of Axis REIT key growth drivers is the proactive acquisition of new properties throughout the years. Axis REIT has grown from 40 properties with MYR 2.5 billion in property valuation to 58 properties with MYR 3.6 billion in properties valuation. During the year, Axis REIT has completed 5 new acquisitions as follows:
- Indahpura Facility 2
- Indahpura Facility 3
- Beyonics i-Park Campus Block F
- Bukit Raja Distribution Centre 2
- Xin Hwa Warehouse
2. Improvement in overall operational performance
| FY17 | FY18 | FY19 | FY20 | FY21 | |
| Occupancy Rate | 91% | 94% | 92% | 91% | 96% |
Amidst the uncertainty of COVID-19 pandemic, Axis REIT has managed to report an overall increase in occupancy rate from 91% in FY20 to 96% in FY21. Not only that, they have managed to secured tenancy renewal for 1.75 million square feet of space with a 5.6% positive rental reversion. A positive aspect which is worth calling out is the tremendous achievement throughout the year in sustaining overall occupancy rate above 90%.
As at 31 December 2021, its overall portfolio has a weighted average lease expiry of 5 years.
3. Year on year improvement in overall financial performance
| MYR in 000s | FY17 | FY18 | FY19 | FY20 | FY21 |
| Revenue | 172,715 | 210,588 | 222,464 | 232,234 | 246,195 |
| Net Property Income | 146,203 | 182,761 | 191,708 | 198,518 | 212,881 |
With the overall improvement operationally, it comes to no surprise that its financial performance would likewise be commendable. From a 5 year horizon, Axis REIT has been reporting a year on year increase in both revenue and net property income. Revenue grown from MYR 172.7 million in FY17 to MYR 246.2 million in FY21 while net property income grew from MYR 146.2 million in FY17 to MYR 212.9 million in FY21. This growth is mainly driven by the proactive acquisition which is evident from the increase in number of properties from just 40 in FY17 to 58 in FY21.
4. Increase in distribution per unit in FY21
| MYR in cents | FY17 | FY18 | FY19 | FY20 | FY21 |
| Distribution Per Unit (DPU) | 8.26 | 8.74 | 9.26 | 8.75 | 9.49 |
During the year, Axis REIT reported its highest distribution per unit over the last 5 years. Its distribution per unit increase from 8.75 cents in FY20 to 9.49 cents in FY21. This improvement is mainly due to the continuous expansion of its portfolio coupled with the overall improvement in occupancy rate and growth in rental reversion.
Based on its closing traded price on 31 December 2021, this would give investors a yield of 4.9%.
5. Healthy gearing level with a slight drop in FY21
| FY17 | FY18 | FY19 | FY20 | FY21 | |
| Gearing | 33% | 37% | 29% | 33% | 31% |
As at 31 December 2021, Axis REIT has a total borrowings of MYR1.2 billion which translates to a gearing level of 31%. This is a decline from 33% in FY20 to 31% in FY21 and is well below the permissible limit of 50% giving them ample debt headroom for future acquisition and asset enhancement initiatives. This is no doubt a plus given the managers ongoing proactive acquisition initiatives in growing the REIT.
Summary
From REIT Pulse perspective, Axis REIT has been performing tremendously well over the past few year. In FY21 itself, they continue to grow favorably despite the uncertainty of the COVID-19 pandemic. A key aspect of their growth is the management proactive acquisition and with the healthy gearing level, this would no doubt continue to drive growth for Axis REIT.
Based on its 31 December 2021 net asset value per unit of MYR 1.52 and closing price of MYR 1.94, this translates to a price to book ratio of 1.3.
What are you thoughts on Axis REIT FY21 performance? If you are just getting started, feel free to read more of our REIT Guide and REIT Analysis. You can also read more about what REITs are if you are new to REITs.
