4 August 2025
Axis REIT (AXRB MK): Makes First Acquisition In FY25; Still BUY
Malaysia Company Update | Property | REITS
- Still BUY and MYR2.23 TP, 11% upside with 5% FY25F dividend yield. Axis REIT has entered into a conditional sale and purchase agreement to acquire a logistics warehouse in Port Klang for MYR80m. We remain positive on the stock – it is a proxy to the resilient and growing industrial property segment. With ample debt headroom, a more favourable interest rate environment, and a solid track record in executing yield-accretive acquisitions, we believe this REIT is well-positioned to continue expanding its industrial portfolio.
- Acquisition details. AXRB is acquiring the property from TS Worldwide Warehousing for MYR80m, which will be fully funded via borrowings. This will raise the REIT’s gearing to 34.3%, from 32.7% in 2Q25 – which still puts it comfortably below the 50% threshold, with an estimated debt headroom of MYR823m post acquisition. The transaction is expected to be completed by 4Q26.
- Property details. Built in 2014, the asset comprises a single-storey detached warehouse with an annexed double-storey office and a 1.5-storey detached warehouse, offering a total NLA of 259k sq ft. It sits on a leasehold industrial land parcel of approximately 10.2 acres. Strategically located in Telok Gong, Port Klang, the site benefits from excellent connectivity via the Pulau Indah Highway, Shah Alam Expressway (KESAS), and the West Coast Expressway. The property is fully leased to Tuck Sun Logistics (occupancy: 100%) on a 6-year term (3+3 years) at a monthly rental of MYR425.8k.
- We are mildly positive on the acquisition. While relatively small in scale (1.5% of AXRB’s total assets), the acquisition supports the REIT’s ongoing strategy of delivering consistent inorganic growth. The purchase price implies a decent gross yield of 6.4% – which is reasonable, since the asset is fully leased under a 6-year term, and is strategically located within a key logistics hub. It is also slightly higher than AXRB’s current dividend yield.
- Forecast and ratings. We raise our FY27F earnings by 1% to reflect the new rental contribution, while also adjusting for additional financing costs. Given the minor earnings adjustment, we maintain our TP of MYR2.23 (including a 2% ESG premium). Our TP implies a FY26F yield of 4.6%, which we think is fair, given the stable outlook for the REIT’s industrial assets offering a spread of 120bps over the 10-year Malaysian Government Bond yield.
- Downside risks include non-renewal of the REIT’s expiring leases, lower-than-expected rental reversions, and cancellation of proposed acquisitions.
| Target Price (Return): | MYR2.23 (+11%) |
| Price (Market Cap): | MYR2.01 (USD949m) |
| ESG score: | 3.1 (out of 4) |
| Avg Daily Turnover (MYR/USD) | 3.20m/0.75m |
Analysts
Tai Yu Jie
+603 2302 8132
tai.yu.jie@rhbgroup.com
Loong Kok Wen, CFA
+603 2302 8116
loong.kok.wen@rhbgroup.com
Share Performance (%)
| YTD | 1m | 3m | 6m | 12m | |
|---|---|---|---|---|---|
| Absolute | 16.2 | 2.6 | 5.2 | 12.9 | 11.0 |
| Relative | 22.8 | 3.1 | 5.7 | 14.4 | 16.6 |
52-wk Price low/high (MYR): 1.71 – 2.05
Axis REIT (AXRB MK) Share Price Chart
Source: Bloomberg. Chart data presented below.
| Date Range | Price Close | Relative to FBM KLCI (RHS) |
|---|---|---|
| Aug-24 to Jul-25 | Fluctuating between ~1.70 to ~2.10 | Fluctuating between ~94 to ~121 |
Forecasts and Valuation
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Total turnover (MYRm) | 288 | 320 | 362 | 371 | 383 |
| Net property income (MYRm) | 245 | 277 | 315 | 323 | 334 |
| Reported net profit (MYRm) | 145 | 166 | 205 | 211 | 219 |
| Total distributable income (MYRm) | 145 | 166 | 205 | 211 | 219 |
| DPS (MYR) | 0.09 | 0.09 | 0.10 | 0.10 | 0.11 |
| DPS growth (%) | (7.2) | 4.8 | 8.4 | 2.9 | 3.1 |
| P/B (x) | 1.17 | 1.06 | 1.07 | 1.08 | 1.08 |
| Dividend Yield (%) | 4.4 | 4.6 | 5.0 | 5.2 | 5.3 |
| Return on average equity (%) | 5.4 | 5.4 | 5.8 | 5.6 | 5.8 |
| Return on average assets (%) | 3.3 | 3.4 | 3.7 | 3.7 | 3.8 |
Overall ESG Score: 3.1 (out of 4)
E Score: 3.0 (GOOD)
S Score: 3.0 (GOOD)
G Score: 3.3 (EXCELLENT)
Please refer to the ESG analysis on the next page
Source: Company data, RHB
Emissions And ESG
Trend analysis
In 2024, Axis REIT reduced its total energy consumption by 15.6%, achieved a 20% decrease in building energy intensity, and cut greenhouse gas (GHG) emissions by 14% compared to the baseline set in 2019.
| Emissions (tCO2e) | Dec-22 | Dec-23 | Dec-24 | Dec-25 |
|---|---|---|---|---|
| Scope 1 | 3 | 29 | 30 | – |
| Scope 2 | 3,141 | 2,929 | 2,867 | – |
| Scope 3 | – | 211 | 182 | – |
| Total emissions | 3,144 | 3,169 | 3,079 | na |
Source: Company data, RHB
Latest ESG-Related Developments
It has obtained green building certifications for six buildings as at Dec 2024.
AXRB began reporting its Scope 3 GHG emissions, as well as emissions from company vehicles as part of Scope 1 emissions, starting from FY23.
It continues to work towards efficient energy management via initiatives such as installing efficient lighting, solar panels, and upgrading air-conditioning systems.
The REIT manager has also negotiated three new green leases in 2024 for Axis Mega Distribution Centre Phase 2.
ESG Unbundled
Overall ESG Score: 3.1 (out of 4)
Last Updated: 23 Apr 2025
E Score: 3.0 (GOOD)
AXRB sources energy-saving products and renewable energy components for new developments and asset enhancement initiatives. Its electricity consumption and GHG emissions decreased by 0.16% in FY21, while emphasis is placed on the continuation of waste reduction and green initiatives.
S Score: 3.0 (GOOD)
926 parties benefited from its community engagement initiatives in FY19. Key CSR programmes include the provision of space for blood donation drives, as well as donations to the Fire & Rescue Department and SMK(P) Pudu Building Fund – benefitting 619 students.
G Score: 3.3 (EXCELLENT)
The Board engaged a third-party consultant to facilitate the independent assessment of the former. It also implemented anti-corruption framework for the REIT manager. 30% of its board directors are women.
ESG Rating History
The ESG rating has remained consistent at 3.1 from August 2023 to August 2025.
| Date | Rating |
|---|---|
| Aug-23 | 3.1 |
| Oct-23 | 3.1 |
| Dec-23 | 3.1 |
| Feb-24 | 3.1 |
| Apr-24 | 3.1 |
| Jun-24 | 3.1 |
| Aug-24 | 3.1 |
| Oct-24 | 3.1 |
| Dec-24 | 3.1 |
| Feb-25 | 3.1 |
| Apr-25 | 3.1 |
| Jun-25 | 3.1 |
| Aug-25 | 3.1 |
Source: RHB
Financial Exhibits
Asia
Malaysia
Property
Axis REIT
AXRB MK
Buy
Valuation basis
DDM
Key drivers
Growing demand for industrial properties due to e-commerce growth.
Key risks
i. Non-renewal of its expiring leases;
ii. Lower-than-expected rental reversions;
iii. Cancellation of proposed acquisitions.
Company Profile
Axis REIT is a diversified REIT specialising in commercial and industrial properties.
| Financial summary | Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F |
|---|---|---|---|---|---|
| Recurring EPS (MYR) | 0.09 | 0.09 | 0.10 | 0.10 | 0.11 |
| EPS (MYR) | 0.09 | 0.10 | 0.10 | 0.10 | 0.11 |
| DPS (MYR) | 0.09 | 0.09 | 0.10 | 0.10 | 0.11 |
| BVPS (MYR) | 1.72 | 1.89 | 1.88 | 1.87 | 1.86 |
| Return on average equity (%) | 5.4 | 5.4 | 5.8 | 5.6 | 5.8 |
| Weighted avg adjusted shares (m) | 1,641.05 | 1,742.03 | 2,018.53 | 2,028.63 | 2,038.77 |
| Valuation metrics | Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F |
|---|---|---|---|---|---|
| Recurring P/E (x) | 22.55 | 21.51 | 19.84 | 19.29 | 18.70 |
| P/E (x) | 22.68 | 21.12 | 19.84 | 19.29 | 18.70 |
| P/B (x) | 1.2 | 1.1 | 1.1 | 1.1 | 1.1 |
| FCF Yield (%) | 0.7 | 0.8 | 5.5 | 5.6 | 5.8 |
| Dividend Yield (%) | 4.4 | 4.6 | 5.0 | 5.2 | 5.3 |
| EV/EBITDA (x) | 1.72 | 0.07 | 0.33 | 0.39 | 0.44 |
| EV/EBIT (x) | 1.72 | 0.07 | 0.33 | 0.39 | 0.44 |
| Income statement (MYRm) | Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F |
|---|---|---|---|---|---|
| Total turnover | 288 | 320 | 362 | 371 | 383 |
| EBITDA | 208 | 241 | 274 | 281 | 291 |
| Operating profit | 208 | 241 | 274 | 281 | 291 |
| Net interest | (59) | (73) | (70) | (70) | (72) |
| Pre-tax profit | 149 | 168 | 205 | 211 | 219 |
| Taxation | (4) | (3) | 0 | 0 | 0 |
| Recurring net profit | 146 | 163 | 205 | 211 | 219 |
| Cash flow (MYRm) | Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F |
|---|---|---|---|---|---|
| Change in working capital | (10) | (10) | (12) | (14) | (17) |
| Cash flow from operations | 195 | 201 | 273 | 279 | 287 |
| Capex | (173) | (173) | (50) | (50) | (50) |
| Cash flow from investing activities | (175) | (175) | (87) | (48) | (48) |
| Dividends paid | (147) | (147) | (202) | (209) | (217) |
| Cash flow from financing activities | (15) | (15) | (51) | (96) | (25) |
| Cash at beginning of period | 44 | 52 | 144 | 627 | 628 |
| Net change in cash | 4 | 11 | 134 | 134 | 214 |
| Ending balance cash | 48 | 62 | 277 | 761 | 842 |
| Balance sheet (MYRm) | Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F |
|---|---|---|---|---|---|
| Total cash and equivalents | 52 | 144 | 627 | 628 | 709 |
| Tangible fixed assets | 1 | 1 | 1 | 0 | 0 |
| Total investments | 4,444 | 5,091 | 5,130 | 5,130 | 5,130 |
| Total other assets | 0 | 0 | 0 | 0 | 0 |
| Total assets | 4,523 | 5,259 | 5,784 | 5,786 | 5,869 |
| Short-term debt | 815 | 816 | 855 | 855 | 935 |
| Total long-term debt | 740 | 935 | 935 | 935 | 935 |
| Total liabilities | 1,697 | 1,959 | 1,998 | 1,998 | 2,078 |
| Shareholders’ equity | 2,826 | 3,299 | 3,785 | 3,787 | 3,790 |
| Total equity | 2,826 | 3,299 | 3,785 | 3,787 | 3,790 |
| Net debt | 1,503 | 1,607 | 1,162 | 1,161 | 1,160 |
| Total liabilities & equity | 4,523 | 5,259 | 5,784 | 5,786 | 5,869 |
| Key metrics | Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F |
|---|---|---|---|---|---|
| Revenue growth (%) | 1.4 | 11.0 | 13.1 | 2.5 | 3.3 |
| Recurrent EPS growth (%) | (7.2) | 4.8 | 8.4 | 2.9 | 3.1 |
| Operating EBITDA margin (%) | 72.2 | 75.3 | 75.8 | 75.8 | 75.8 |
| Net profit margin (%) | 50.4 | 51.8 | 56.5 | 57.0 | 57.1 |
| Dividend payout ratio (%) | 100.6 | 98.2 | 100.0 | 100.0 | 100.0 |
| Capex/sales (%) | 59.9 | 54.0 | 13.8 | 13.5 | 13.0 |
| Interest cover (x) | 3.44 | 3.24 | 3.83 | 3.93 | 3.97 |
Source: Company data, RHB
Figure 1: View of warehouse facility in Telok Gong, Klang
An aerial view of a large, modern warehouse facility with a green roof section, solar panels, and surrounding truck loading bays and parking areas. (Image not displayed). Source: Company data.
Recommendation Chart
Source: RHB, Bloomberg
| Date | Recommendation | Target Price | Price |
|---|---|---|---|
| 2025-07-31 | Buy | 2.23 | 1.99 |
| 2025-04-24 | Buy | 2.08 | 1.87 |
| 2025-01-24 | Buy | 2.08 | 1.76 |
| 2024-10-29 | Buy | 2.08 | 1.80 |
| 2024-08-29 | Buy | 2.11 | 1.80 |
| 2024-07-24 | Buy | 2.09 | 1.85 |
| 2024-05-24 | Buy | 2.09 | 1.87 |
| 2024-04-25 | Buy | 2.08 | 1.90 |
| 2024-04-24 | Buy | 2.11 | 1.87 |
| 2024-04-23 | Buy | 2.11 | 1.86 |
| 2024-01-24 | Buy | 2.04 | 1.78 |
| 2023-10-29 | Buy | 2.04 | 1.80 |
| 2023-10-26 | Buy | 2.08 | 1.79 |
| 2023-07-27 | Buy | 2.08 | 1.81 |
| 2023-04-19 | Buy | 2.14 | 1.91 |
RHB Guide to Investment Ratings
Buy: Share price may exceed 10% over the next 12 months
Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain
Neutral: Share price may fall within the range of +/- 10% over the next 12 months
Take Profit: Target price has been attained. Look to accumulate at lower levels
Sell: Share price may fall by more than 10% over the next 12 months
Not Rated: Stock is not within regular research coverage
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| Analyst | Company |
|---|---|
| – | – |
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