MORNING CALL:27/10/23

A new purchase in Seremban has MIDF mildly positive on Axis REIT

Transcript

00:00 At the end of the week, we take a look at Axis Read where MIDF has kept its buy call

00:05 and tweaked its target price a bit higher from RM2.06 to RM2.07 after it announced an

00:11 asset acquisition in Seremban.

00:14 Based on its last close, this implies a possible upside of around 16%.

00:19 Axis Read announced that trustee for Axis Read has entered into a sale and purchase

00:23 agreement in relation to the proposed acquisition of an industrial asset in Sedayan, Tech Valley,

00:29 Seremban for RM48 million.

00:32 The property is an industrial complex consisting of a single-storey detached factory, a single-storey

00:37 detached office and a double-storey detached office.

00:41 The asset acquisition is expected to be completed in the first half of FY24.

00:46 Lease of the buildings is actually for six years, commencing on the 1st of March 2023

00:50 with a rental rate of RM250,000 per month and that rental rate shall increase by 8%

00:57 after a period of three years.

00:59 The asset acquisition is expected to be earnings and yield accretive with gross acquisition

01:04 yield of 6.3%.

01:06 Meanwhile, earnings impact from the asset acquisition is minimal, estimated at less

01:11 than 1% of earnings according to MIDF.

01:14 Latest from Bloomberg shows nine updated calls where five are buys and three are holds and

01:18 there is one sell that is from Hockananga.

01:21 The average price shakes out to RM2.03 where most of the calls are actually at the moment

01:26 and this is 24 cent more than its last close.

01:29 [Music]