KUALA LUMPUR: Axis Real Estate Investment Trust's (Axis-REIT) trustee, RHB Trustees Bhd has acquired a freehold property in Bukit Raja Selatan Industrial Area, Shah Alam FIW Steel Sdn Bhd (FIW) for RM120 million.
The real estate investment trust said it has entered into a sale and purchase agreement with FIW to acquire the property with a 20.75-acre freehold land with a total lettable area of 326,231 square feet.
Axis REIT Managers Bhd chief executive officer and executive director Leong Kit May said the acquisition was strategically located in an established industrial area with close proximity to Port Klang and good highway accessibility.
"This property is also situated directly across Axis-REIT's Bukit Raja Distribution Centre.
"The current lettable area of the property only represents 36 per cent of the total land area and we are of the view that the property has a good redevelopment potential for a warehouse, after taking into consideration, amongst others, the location of the property and the increasing demand for warehousing within Klang Valley," she said in a statement today.
The property is equipped with a single-storey detached warehouse building, two single-storey detached factory buildings, a single storey detached store together with a three-storey office building and ancillary buildings.
The acquisition is expected to complete by the first-half of 2021.
Axis-REIT said the acquisition will be funded by bank financing, which will increase the company's gearing ratio to 35.4 per cent of its audited total assets as at December 31, 2020.
Upon completion, the acquisition will contribute positively to Axis-REIT's earnings.
FIW will be the property's sole tenant with a tenancy for one year with an option to renew for another four terms of three months each.
The monthly rental for the first year will be RM416,666.67 and RM608,333.34 for the renewed terms.
Axis-REIT said Bukit Raja Selatan Industrial Area was one of the established industrial areas in Shah Alam, where some notable landmarks are located within this area, including Central I-City, Hospital Shah Alam and Universiti Teknologi Mara Shah Alam (UiTM).
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