PETALING JAYA: Analysts are optimistic about Axis Actual Property Funding Belief’s (Axis-REIT) portfolio following the acquisition deal of a logistics warehouse below a 10-year sublease settlement for RM390mil, its largest acquisition up to now.
The analysis homes stated the most recent inexperienced constructing acquisition would contribute actively to the corporate’s property earnings and monetary 12 months earnings whereas enlarging its asset portfolio.
In CGS-CIMB Analysis’s view, the group continued to ship on its asset portfolio development technique specializing in the area of interest logistics warehouse area whereas enhancing its environmental, social and governance (ESG) visibility with inexperienced constructing belongings.
It famous the whole variety of belongings below Axis-REIT’s portfolio at 58 with a median occupancy fee of 96% on the finish of economic 12 months 2021 (FY21).
The analysis home estimated the web property earnings (NPI) at RM22.9mil every year for the acquisition and there’s development through a ramp-up in asset acquisition in FY22.
The estimated NPI works out to 7.1% of FY22 earnings-per-share (EPS) as a result of half 12 months’s contribution and 13.1% of FY23 to FY24 EPS on a full-year foundation, in response to the analysis home.
Axis-REIT is among the many two most well-liked REIT sector picks for the analysis home primarily based on the estimated dividend yield of 5.2% to five.9% within the coming years.
The analysis home retained its “add” name with a goal value of RM2.34 per share whereas noting the draw back danger to be the damaging rental reversions for the renewal of expiring leases in FY22.
In the meantime, Hong Leong Funding Financial institution (HLIB) Analysis stated the brand new asset would enhance Axis-REIT’s coming monetary 12 months earnings by 2% to 2.8%.
“We’re constructive on the acquisition as it’s accretive at NPI yield of 6.7%, comparable with its present NPI portfolio yield,” stated HLIB Analysis.
The analysis home stated the acquisition value of RM339 per sq ft is cheap on account of its strategic location.
HLIB Analysis maintained its “purchase” name with a goal value of RM2.10 per share primarily based on a focused yield of 4.6% on FY23 distribution per unit (DPU).
Maybank Funding Financial institution (Maybank IB) Analysis is mildly constructive on the proposed acquisition. Axis-REIT remained as its high decide on account of its resilient rental earnings from industrial belongings and energetic acquisition methods.
“Assuming a 95% internet property margin, we’ve got derived internet property yields of 6.3% to six.8%, primarily based on lease time period of 10 years. These are greater than our estimated weighted common value of capital of 5.3% (debt:fairness 40:60),” it stated in a analysis report.
“To recap, 12 months up to now (ytd) for FY22, Axis-REIT has accomplished two industrial properties purchases in Johor in March,” it identified.
The analysis home maintained its “purchase” name with a goal value of RM2.30 per share whereas noting the dangers to be modifications in rental charges, occupancy charges, working bills and rates of interest which will result in decrease earnings for Axis-REIT.
Axis-REIT has entered right into a sale and buy settlement with Equalbase PTP Sdn Bhd to amass a logistics warehouse facility with a complete internet lettable space of about 1.15 million sq ft.