Too busy to run through the announcements made by Malaysia REITs? In this segment of Malaysia REITs Happenings, we will be summing up some of the key happenings in Malaysia REITs in March 2021.
1) Axis REIT completed its acquisition of the last remaining property within Kawasan Perindustrian i-Park in Johor
On 3rd March 2021, Axis REIT has announced that they have completed their final property acquisition within Kawasan Perindustrian i-Park in Johor. This is part of the 3 properties which was proposed to be acquired back in November 2020.
2 out of the 3 property was acquired separately back in 12 January 2021 and 26 February 2021 respectively. The favorable aspect of these 3 acquisitions is that they are already tenanted.
- Property 1 is currently leased by Perodua Sales Sdn Bhd with the lease expiring on 30 November 2024. There is an option to renew for another 2 terms of 3 years.
- The second property is leased by KES International Sdn. Bhd with lease expiring on 5 January 2024. Similarly, there is an option to renew for another 5 years.
- Property 3 is currently leased by Beyonics Precision (Malaysia) Sdn. Bhd with lease expiring on 7 July 2027. There is a built-in option to renew for another 2 term
2) Proposed acquisition by Axis REIT of a property located within Kawasan Perindustrian Bukit Raja
On 5th March 2021, Axis REIT has announced its proposed acquisition of another property which is located within the industrial area in Bukit Raja. The property is located on a prime industrial land within close proximity to Port Klang and with good highway accessibility. This would be acquired from FIW Steel Sdn Bhd for a purchase price of MYR 120 million. The property is currently 100% occupied by FIW Steel Sdn Bhd. and will remain tenanted for 1 year from the tenancy term. There is an option to renew for another 4 terms of 3 months each.
This acquisition will be financed through Axis REIT existing credit lines and is expected to be completed by first half of 2021.
3) Proposed acquisition by Axis REIT of a property located within Kawasan Perindustrian Pasir Gudang
On 15 March 2021, Axis REIT further announced on its proposed acquisition of a property located within the industrial area in Pasir Gudang. Approximately 2 weeks ago, they have just announced its proposed acquisition of a property in an industrial area in Selangor. This time around, the proposed acquisition is located in Johor. The property will be acquired from Xin Hwa Trading & Transport for a purchase price of MYR 75 million. Similar to the previously proposed acquisition, the property is currently 100% occupied by Xin Hwa Trading & Transport. They will continue to lease the property for a fixed period of 10 years with an option to renew for a further term of 5 years.
The proposed acquisition will be financed via Axis REIT existing credit lines. Based on the management, they expect this proposed acquisition to be completed by first half of 2021.
4) Extension of time in regards to the proposed private placement by Al-Salam REIT
To help you grasp the announcement by Al-Salam REIT, let us us bring you back to the announcement which was dated more than a year ago. Back in 28 February 2020, Al-Salam REIT has made a proposal for a private placement of 116 million units with an issue price of MYR 0.80 in Al-Salam REIT. This would raise a total additional financing of MYR 92.8 million. Refer below for the breakdown of the funds intended utilization.
| Details of utilization | MYR in mil |
| Repayment of Islamic financing | 65.0 |
| Working capital and capital expenditure | 25.8 |
| Estimated expenses in relation to the Proposed Private Placement | 2.0 |
| Total | 92.8 |
Upon the completion of this proposed private placement, it would further enlarged the shareholders base from 580 million to 696 million. Throughout the past 1 year since its initial announcement, the private placement exercise has yet to taken place. There have been a couple of extension in the past. Likewise, this time round, Al-Salam REIT has further announced that Bursa Malaysia has granted them another extension of time to 13 September 2021 to complete the implementation of the Proposed Private Placement.
Summary
We hope our new segment of Malaysia REITs Happenings will be value adding to your REITs investment journey. Do let us know if we miss out any key Malaysia REITs Happenings in March 2021.
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