Axis-REIT confident of its portfolio performance

PETALING JAYA: Axis Real Estate Investment Trust (Axis-REIT) is optimistic of growth for the current financial year underpinned by the performance of its existing property portfolio and its strategy to actively pursue quality investments.

For the second quarter ended June 30, 2023 (2Q23), Axis-REIT’s total trust income fell 6% year-on-year (y-o-y) to RM68.5mil while net trust income declined by 26% y-o-y to RM34.7mil or earnings per unit of 1.99 sen.

In a filing with Bursa Malaysia, Axis-REIT stated that its property income of RM67.9mil was 2.5% lower quarter-on-quarter (q-o-q) due to lower occupancy arising from the termination of lease agreement with Yongnam Engineering Sdn Bhd, the lessee of Axis Steel Centre @ SiLC in Johor, vacant possession of which was on June 7.

Property expenses were down by 10.9% q-o-q to RM10.3mil due to lower maintenance cost. Non-property expenses also decreased by 6.4% q-o-q to RM24.4mil mainly due to higher provision for doubtful debts made in 1Q23.

Axis-REIT Managers Bhd chief executive officer and executive director Leong Kit May said 2Q23 was a challenging period for the trust with issues related to the shortfall in contribution from Axis Steel Centre@ SiLC.

“Some challenges are undeniably beyond our control but on our part, as we move forward, we will continue with our proactive leasing strategy and our strategy of pursuing high-quality accretive properties with strong recurring rental income to optimise our earnings.

“We are also pleased to reveal that of the 1.57 million sq ft of space expiring in 2023, 78% has been renewed from 64% as at March 2023. That is an additional 220,000 sq ft of space renewed,” he said in a statement yesterday.

Axis-REIT noted the development of Bukit Raja Distribution Centre 2 (BRDC 2) has obtained certificate of practical completion on June 26, 2023 and anticipates to obtain the certificate of compliance and completion (CCC) in August 2023.

“With the CCC in hand, Axis-REIT will be able to hand over BRDC 2 to the eCommerce operator, SPX Xpress (M) Sdn Bhd (formerly known as Shopee Express Malaysia Sdn). The property has been fully tenanted by the latter for a period of 15 years.