KUALA LUMPUR (Oct 29): Axis Real Estate Investment Trust (KL:AXREIT) reported a 2.8% year-on-year decline in third-quarter net property income (NPI) as property income weakened while operating expenses increased.

NPI fell to RM77.99 million for the three months ended Sept 30, 2026 (3QFY2026) from RM80.23 million a year earlier, while revenue slipped 2.1% to RM90.78 million from RM92.77 million, according to its filing with Bursa Malaysia on Thursday.

Despite the weaker property performance, net profit rose 5.1% to RM54.8 million from RM52.12 million, largely supported by an unrealised gain of RM6.38 million from changes in the value of financial derivatives, compared with a loss of RM118,000 in 3QFY2025.

The industrial property-focused REIT declared a third interim distribution of 2.35 sen per unit, down from 2.65 sen a year earlier. The distribution will be paid on Nov 30 to unitholders registered as at Nov 13.

For the first nine months of FY2026, NPI declined 2.6% to RM231.31 million from RM237.57 million in the previous corresponding period, while revenue edged down 1% to RM270.13 million from RM272.89 million.

Net profit for the nine-month period, however, increased 4.1% to RM154.3 million from RM148.2 million, supported by unrealised gains from financial derivatives.

Total income distribution for the nine-month period stood at 7.15 sen per unit, compared with 7.80 sen a year earlier.

On a quarter-on-quarter basis, property income grew 2.9% to RM90.51 million from RM87.94 million, mainly driven by contributions from newly acquired properties, new tenants and higher rental rates from existing properties.

Property expenses declined 1.9%, while non-property expenses rose 5.7%, mainly due to provisions for doubtful debts and financing costs associated with newly acquired properties.

During the quarter, Axis REIT completed the acquisitions of Axis Distribution Centre 1 @ Saujana Putra for RM128 million and Axis Industrial Facility 3 @ Shah Alam for RM38 million.

The acquisitions increased its property portfolio to 72 properties as at end-September from 70 previously.

The REIT also has several acquisitions pending completion, including a RM113 million industrial complex in Kedah, a RM80 million warehouse facility in Port Klang and a RM34.61 million industrial facility in Senai, Johor.

Looking ahead, Axis REIT's manager said it remains optimistic about maintaining its performance for FY2026, supported by its existing property portfolio and strategy of acquiring quality properties that generate recurring rental income.