Going for syariah-compliant investors

Axis REIT Managers Bhd aims to attract syariah-compliant investors following its reclassification as an Islamic real estate investment trust (REIT) from a conventional REIT.

Axis REIT Managers chief executive officer Stewart LaBrooy said many syariah-compliant investors had shown interest to take positions in Axis REIT in view of its good performance over the past few years.

“We can now attract the sector of the market that was previously close to us including Lembaga Tabung Haji, Lembaga Tabung Angkatan Tentera and Federal Land Development Authority,” he told reporters after a meeting with unit holders yesterday.

Unit holders have approved the reclassification exercise as well as a proposed placement exercise to increase Axis REIT’s existing fund size to a maximum of 307.1 million units from 255.9 million units.

The reclassification, which was expected to be completed by mid-December, would increase its investor base and attract a larger pool of funds for Axis REIT to grow, said LaBrooy, adding that the fund’s retail investor base had increased by 55% to 1,455 investors now compared with 941 investors in 2006.

“REITs have finally started to appeal to retail investors, which we think will be the main market,” said LaBrooy.

Meanwhile, the proposed placement exercise would also improve its liquidity in the Malaysian market as well as enable Axis REIT to pare down its borrowings, he said.

Axis REIT anticipates its bank borrowings to exceed 40% of its total assets from its future acquisitions

“Acquisition of high-quality yield accretive properties has been the focus in growing our portfolio,” said LaBrooy, noting that its seven acquisitions earlier this year would provide an average net yield of 4.13%.

Additionally, the acquisitions would contribute an additional dividend per unit (DPU) of 1.318 sen for 2008 and 2.474 sen for 2009, he said.

Axis REIT has forecasted a DPU of 15.18 sen for FY2008 and 16.59 sen for FY2009.

By The Star