PETALING JAYA: Axis Real Estate Investment Trust (Axis-REIT) is expected to remain focused on seeking industrial-type properties, while continuing to impute environmental, social and governance (ESG) elements into its operations.

       Hong Leong Investment Bank (HLIB) Research said the group, which has 60 properties, has an acquisition target of RM400mil for the financial year 2022 (FY22).

       “We expect more to come as Axis-REIT has been active in acquiring assets – five properties in 2021 and two properties so far in 2022,” the research house said in its latest report.

       Axis-REIT’s acquisitive strategy had focused on industrial type properties. The acquisitions concluded in FY21 involved office/industrial, manufacturing facilities and logistics warehouse properties.As of FY21, HLIB Research said the geographical focus of Axis-REIT’s portfolio remains on prime industrial areas in Peninsular Malaysia, namely Johor (29%), Shah Alam (22%) and Petaling Jaya (17%).

       “The areas enjoyed healthy rental growth in the past quarters and are expected to continue their momentum,” it added.

       HLIB Research pointed out that the five acquired properties in 2021 would see full-year contributions and drive up the group’s FY22 revenue. Furthermore, prime industrial areas with healthy rental growth are expected to persist, thanks to strong demand.

       The research house has also updated its financial model with annual report figures and incorporated contributions from Axis-REIT’s new asset acquisitions.

       The FY22 and FY23 profits are bumped up by 1% to 2%, but due to its placement exercise, the FY22 and FY23 earnings per unit is cut by 7%.

       Meanwhile, Axis-REIT has been incorporating more ESG considerations into its operations and portfolio. They include the installation of rainwater harvesting, upgrading to LEDs, air-conditioning systems, and water storage tanks to mitigate the impact of water rationing, especially in Selangor.

       Additionally, Axis-REIT’s expansion of digital marketing campaigns has aided in increasing virtual property viewings while minimising the need for face-to-face meetings.Going into FY22, HLIB Research said Axis-REIT would be looking at initiatives to recycle and reuse building materials for brownfield development projects. This will potentially reduce a considerable amount of construction waste produced during the construction phase, thus further minimising Axis-REIT’s waste footprint,.