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Monday, January 17, 2011

Axis REIT to grow 19.6pc in 2011: ECM

ECM Libra expects a 19.6 per cent earnings growth in Axis Real Estate Investment Trust (REIT) Financial Year 11 (FY11) due to contributions from four recently acquired properties.

Axis REIT has completed acquisition of PTP D8 in Johor, Axis Technology Centre in Petaling Jaya, Axis PDI centre in Kuala Langat, Selangor and Tesco Johor as well as its proposal to acquire an office building in Cyberjaya for RM51.3 million which will be completed in the first quarter of this year.

In its research note on Axis REIT, ECM Libra said it expects more acquisitions going forward.

"We understand that the management is working on the acquisition of an office warehouse in Petaling Jaya, a logistics warehouse in Johor and a warehouse/logistics and manufacturing facility in Shah Alam/Klang," ECM Libra said..

ECM Libra is recommending a "BUY" on Axis Real Estate Investment Trust (REIT) with a target price of RM2.90.

"Despite its defensive quality, Axis’ average annual total return of 23 per cent since its listing in 2005 outperforms the equity market as represented by the total return of the benchmark FBMKLCI over the corresponding period," the research house said.

ECM Libra said another plus point is its distribution visibility as Axis commits to distribute 99 per cent of its earnings on quarterly basis.

Axis has the most enviable acquisition track record among M-REITs as it has grown its asset under management (AUM) from five properties with AUM of RM260.4 million to 27 properties with AUM of RM1.4 billion now.

By Bernama

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