Axis Reit Plans To Dispose Of Axis Plaza For RM34 Million

Last update: 26/12/2013KUALA LUMPUR, Dec 26 (Bernama) -- Axis Reit Managers Bhd (ARMB), the manager of Axis Real Estate Investment Trust (Axis-REIT), has proposed to dispose of Axis Plaza for RM34 million to Collective Developers Sdn Bhd.

Located at Glenmarie, Shah Alam, the freehold five-storey office/warehouse with a two-storey basement car park was one of the public initial offering properties purchased eight years ago for a lump sum price of RM22 million.

ARMB confirmed that RHB Trustees Bhd, the trustee of Axis-REIT, has entered into a sales and purchase agreement for the disposal of Axis Plaza.

The disposal price for Axis Plaza was derived on a willing-buyer willing-seller basis after taking into account the current market value of Axis Plaza of RM32 million, it said in a statement here Thursday.

ARMB Chief Executive Officer Datuk Stewart Labrooy said: "We expect the gain of approximately RM11 million from the proposed disposal of Axis Plaza to contribute positively to the earnings of Axis-REIT for the financial year ending Dec 31, 2014."

Labrooy said that ARMB intends to fully distribute the approximate RM11 million net gain on the disposal, which translates into an additional income distribution of 2.35 sen per unit to unitholders in the 2014 second quarter by way of tax-exempt income distribution.

The proposed disposal of Axis Plaza is in line with the investment objectives of Axis-REIT and ARMB believes that with more than eight years of ownership of the property it has fully optimised the potential of Axis Plaza.

"ARMB is of the view that as there is limited upside for future rental growth at Axis Plaza and given the current favourable market condition for property sales it is a strategic time to dispose of this asset and re-deploy the capital for other yield accretive properties," he said.

The proposed disposal of Axis Plaza will not have any effect on the total units of Axis-REIT in issue and substantial unitholders' unitholding of Axis-REIT as the disposal price will be paid to Axis-REIT entirely in cash and will also have no impact or changes to the unaudited net asset value of Axis-REIT at the time of completion.

"The proposed disposal of Axis Plaza is expected to be completed by April 2014," it added.