KUALA LUMPUR (Feb 23): Axis Real Estate Investment Trust (Axis REIT) announced that the group has entered into a sales and purchase agreement (SPA) with Amsteel Mills Sdn Bhd (AMSB) for the acquisition of a leasehold industrial complex in Klang for RM49 million, cash.

Following the acquisition, AMSB will lease the property back from Axis REIT for six years, with a starting monthly rental of RM285,833.33.

The purchase price is based on the property’s market value of RM50 million, as independently appraised by Savills (Malaysia) Sdn Bhd, according to Axis REIT in an announcement with Bursa Malaysia.

The acquisition will be financed through Axis REIT’s existing banking facilities, raising its financing ratio to 37.05% of total assets as of Dec 31, 2022. In its financial report for the quarter and year ended Dec 31, 2023, Axis REIT stated that its financing ratio stood at 34.38% of its assets.

AMSB, a subsidiary of Lion Industries Corporation Bhd, is engaged in the manufacture and marketing of steel bars and wire rods.

The property is a prominent corner lot fronting the western and northern sides of Jalan Waja and Solok Waja 2 within Kawasan Perindustrian Bukit Raja, Klang. It spans 374,491 sq ft with a net lettable area of 199,500 sq ft.

According to the REIT, the property is strategically located in the established Bukit Raja industrial area, adjacent to Axis Facility 2 @ Bukit Raja, and is well-connected to major highways, including the Federal Highway and North Klang Valley Expressway.

Axis REIT Managers Berhad chief executive officer/executive director Leong Kit May said the acquisition is expected to contribute positively to Axis REITs earnings, with completion targeted by the third quarter of 2024.

“We are pleased with this acquisition as it complements our existing portfolio in Bukit Raja, enhancing our presence in this prime industrial location,” added Leong.

Axis REIT's shares closed unchanged at RM1.77 on Friday, with a market capitalisation of RM3.09 billion.