Thursday, 12 April 2012

Axis REIT buys industrial building facility in Nilai for RM26.5m

KUALA LUMPUR (April 12): Axis Real Estate Investment Trust Bhd's manager Axix REIT Managers Bhd (ARMB) is acquiring an industrial building facility in Nilai for a total lump sum of RM26.5 million.

In statement on Thursday, ARMB said it had entered into a proposed acquisition of the building facility — Emerson Industrial Facility Nilai, which had a a gross built up of approximately 192,677 sq ft, located on two parcels of adjoining industrial land at the Nilai Industrial Area 1 — with LRS Property Sdn Bhd (LRS).

It said the the first parcel of industrial land (first land) was an industrial facility with a single storey detached factory, an annexed three storey office building, a double storey canteen/storage annexe with ancilliary buildings with a land area of 144,890.2 sq ft.

The second parcel of the industrial land (second land) has a single storey warehouse building with a three storey office, and ancillary buildings with a land area of 171,973.1 sq ft, it said.

It said both parcels of the land came with a 99 year leasehold title which would expire in September, 2095 and was presently tenanted by Emerson Process Management Manufacturing (M) Sdn Bhd ("Emerson"), and K-Plastics Industry Sdn Bhd.

"Emerson is a diversified global manufacturing and TECHNOLOGY [] company with annual sales of US$24 billion (RM73.68 billion).

"Recognised widely for their engineering capabilities and management excellence, Emerson has approximately 133,000 employees and 235 manufacturing locations worldwide," it said.

AMRB said Emerson Process Management Manufacturing (Malaysia) operated a world-class valve manufacturing plant in Nilai.

"This plant manufactures and assembles a wide variety of Fisher valve products, including globe valves, butterfly valves, angle valves, V-ball valves, and actuators for both the Malaysian and export markets.

"The plant is now Emerson's largest valve manufacturing facility in Asia by shipment volume," it said.

AMRB said Emerson's tenancy agreement for the First Land and part of the buildings built on the Second Land was for a term of three years expiring in stages on May 31, 2013 and June 30, 2013, with an option to renew for another period of three (3) years.

Emerson had on Feb 10, 2012 exercised the Option for Renewal, it said.

AMRB said the remainder of the space on the Second Land was rented to K-Plastics Industries Sdn Bhd for a term of two years expiring on 14 July 2012 with an option to renew for a period of one year.

K-Plastics are manufacturers of plastic and packaging products.

"The acquisition is accretive and will provide the Trust with a combined gross income of RM 2.65 million annually and this translates to a net yield before financing cost of 9%.," it said.

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