Stable occupancy rates to back Axis-REIT’s profits

PETALING JAYA: Axis Real Estate Investment Trust (Axis-REIT) is expected to report similar earnings profile in the coming fourth quarter of its financial year 2025 (4Q25).

The trust also has two ongoing industrial property acquisitions in Bandar Sultan Suleiman, Port Klang; and a warehouse facility in Telok Gong, Klang – with a combined value of RM130mil.

According to CIMB Securities, the acquisitions would help with the longer term growth while stable occupancy rates and operating costs would support the following quarter’s performance.

Commenting on the trust’s ongoing acquisitions, CIMB Securities said this represents about 30% of its FY25 expected acquisition target of RM430mil.

“The industrial property in Bandar Sultan Suleiman is targeted for completion by 1Q26. Although currently unoccupied, we are confident Axis-REIT will secure a tenant upon completion, backed by its strong leasing track record.

“Meanwhile, the Telok Gong warehouse, slated for completion in 4Q26, will be fully leased to Tuck Sun Logistics Sdn Bhd, generating an initial yield of 6.4%,” it said.

Once completed, these acquisitions is expected to lift FY27 forecast core net profits by approximately 1%, it said.

CIMB Securities maintained its “buy” call on Axis-REIT with a higher dividend discount model-based target price of RM2.33 per unit as it rolled forward its valuation base year to FY26. It noted the REIT’s current 12-month forward distribution yield spread over the 10-year Malaysian Government Securities is at 1.4% which is broadly in line with its 10-year historical average.

Meanwhile, Hong Leong Investment Bank Research points out of Axis-REIT’s near-full occupancy noting that organic growth will come mainly from rental uplifts.

“Its low gearing and the more accommodative interest rate environment post-July 2025 overnight policy rate cut provides capacity for strategic, yield-accretive acquisitions,” it said.