AXREIT: Strong Earnings Beat Expectations on Portfolio Growth

A leading real estate investment trust (REIT) has announced a robust financial performance, with its realized net profit for the fourth quarter of fiscal year 2025 (4QFY25) coming in at RM50.8 million. This figure marks a significant 19.8% year-on-year increase and was well within both the investment bank’s and consensus expectations. For the full fiscal year 2025 (FY25), the REIT’s realized net profit soared by 25.9% year-on-year to RM205.0 million, comfortably surpassing the investment bank’s and consensus full-year estimates by approximately 101% and 99.5%, respectively.

Drivers of Performance

The impressive financial results were primarily propelled by a 15.2% year-on-year improvement in property income, reaching RM316 million. Key factors contributing to this growth include substantial gains from the disposal of investment properties, notably an RM8.8 million net gain from The Annex after its completion in April 2025. Additionally, new asset contributions played a crucial role, particularly from the newly developed Axis Mega Distribution Centre (Phase 2), which achieved full occupancy in January 2025. Positive rental reversions across the existing portfolio further bolstered income streams.

In terms of portfolio expansion, the REIT successfully executed three sale and purchase agreements during FY25 and entered into a conditional letter of offer for acquiring several strategically located industrial properties across key growth corridors. Most recently, the acquisition of an industrial property within Kawasan Industri Bandar Sultan Suleiman, Port Klang, on January 27, 2026, has expanded its total portfolio to 70 properties, up from 68 properties in FY24.

Future Outlook

Looking ahead, analysts have made slight upward adjustments to the REIT’s FY26 and FY27 earnings estimates, increasing them by 2% and 1% respectively, driven by the anticipated contributions from new asset additions. The REIT is expected to continue its focus on acquiring and managing Grade A logistics facilities and manufacturing facilities that feature long leases from strong covenants. Emphasis will also be placed on well-located logistics warehousing designed for last-mile distribution, as well as office, business parks, and industrial properties with potential for future enhancement.

Analyst View

Despite the strong performance and ongoing growth initiatives, the investment bank has maintained its “Neutral” recommendation for the REIT. The target price remains unchanged at RM1.96, based on an estimated dividend yield of approximately 5.5%.