KUALA LUMPUR, Sept 8, 2025 — Axis Real Estate Investment Trust (Axis REIT) has announced its second acquisition of the year, purchasing a RM50 million industrial facility in Bandar Sultan Suleiman, Port Klang—a move that has sparked differing reactions among research houses.
RHB Investment Bank Bhd reaffirmed its BUY recommendation on Axis REIT, with a target price of RM2.23, implying a 9% upside potential and a forecast dividend yield of 5% for FY2025. In contrast, MBSB Investment Bank Bhd maintained a NEUTRAL stance with an unchanged target price of RM2.07, citing concerns over tenant risks and modest earnings contributions.
RHB: A Strategic, Balanced Expansion
RHB Research described the purchase as a reinforcement of Axis REIT’s positioning as a “proxy” to Malaysia’s resilient industrial property market. The brokerage cited the trust’s steady inorganic growth, strong execution capabilities, and prudent balance sheet management.
The acquisition will be financed entirely through bank borrowings, nudging Axis REIT’s gearing ratio to 33.6% from 32.7% in 2Q25. RHB said this remains comfortably below the 50% regulatory limit, leaving an estimated debt headroom of RM853 million post-acquisition. The transaction is expected to be completed in 1Q26.
The asset, purchased from Barry Callebaut Malaysia, spans a gross floor area of 240,600 square feet and sits on a 9-acre leasehold plot valid until 2104. It consists of a single-storey detached factory, office annexes, a standalone office and canteen block, and a detached warehouse with office space. Although built between 1993 and 1998, RHB believes the property’s strategic location near North Port and connectivity to key highways offers strong leasing potential.
At RM50 million, the purchase price is aligned with the property’s independent valuation of RM50.3 million. Once tenanted, the asset could generate a gross yield of around 7%, based on prevailing rental benchmarks in the Port Klang industrial corridor.
Still, RHB cautioned that the absence of an existing tenant means income contributions could be delayed—unlike Axis REIT’s usual sale-and-leaseback transactions that ensure immediate cash flow. Nevertheless, the research house kept its earnings forecasts unchanged, arguing that the stable demand for industrial properties, coupled with a spread of 120 basis points over the 10-year Malaysian Government Bond yield, underpins its bullish view.
MBSB: Tenant Risk Clouds Upside
MBSB Research, however, took a more cautious approach. While acknowledging that the acquisition aligns with Axis REIT’s growth strategy, analysts highlighted the absence of a secured tenant as a key risk. Historically, Axis REIT has focused on acquiring assets with long-term tenants and secured yields above 6%.
MBSB estimated that even if a tenant is secured, the asset would contribute only around RM1 million annually, or less than 1% of FY2026 earnings, translating into minimal earnings impact.
The research house also flagged potential governance concerns, noting that the transaction involved a related party—as the sale agent is linked to Axis REIT’s Non-Independent Non-Executive Deputy Chairman, Tew Peng Hwee. Despite this, MBSB acknowledged that the pricing was fair, in line with the property’s independent market valuation.
Ultimately, MBSB reiterated its NEUTRAL rating, pointing to limited upside potential and a less attractive dividend yield of 4.4% compared to peers in the sector.
Sector Outlook
The contrasting views reflect broader market sentiment around Malaysia’s industrial property sector, which has proven resilient amid global supply chain reconfigurations and the growth of logistics and e-commerce. Axis REIT, as one of the country’s largest and most active industrial REITs, remains a bellwether for investor confidence in the segment.
The Port Klang facility may test Axis REIT’s ability to quickly secure tenants for vacant properties, but if successfully leased, the acquisition could reinforce its reputation as a long-term industrial asset consolidator.
