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Friday, November 20, 2009

Axis REIT plans to buy seven warehouses for RM96mil cash

PETALING JAYA: Axis REIT Managers Bhd (ARMB) has proposed to buy seven warehouses in Klang and Seberang Prai for RM96mil from IDS Logistics Services (M) Sdn Bhd.

ARMB said in a statement the sale and leaseback deal comprised five warehouse buildings located in Bukit Raja, Klang, on two pieces of freehold land, while two more were in Seberang Prai, Penang, on separate pieces of leasehold land.

The acquisition was for a total cash consideration of RM71.75mil and RM24.25mil respectively, it said.

The Klang property is located in Bukit Raja Industrial Estate, a premier industrial zone in that area.

The Penang properties are located within the largest industrial estate in northern Peninsular Malaysia, the Prai Industrial Estate Phase 4, about 15km from the Butterworth Ferry Terminal and Railway Station.

The deal comes with a 15-year fixed lease agreement with an option to renew for a further 15 years with IDS Logistics, the current owner and operator.

IDS Logistics is a wholly-owned subsidiary of Hong Kong-based Integrated Distribution Services Group Ltd, a logistics services provider and a member of the Li & Fung Group.

The lease agreements come with an agreed step-up in rental every three years over the 15-year period.

On completion of the acquisition, the fund will, for the first term of the lease, receive RM8mil a year in gross income.

ARMB chief executive office and executive director Stewart Labrooy said the acquisitions would provide a steady income and contribute positively to its earnings next year.

These new acquisitions will also see the company’s assets under management rise to over RM900mil.

By The Star

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