Axis REIT plans bond sale to refinance debt

By BUSINESS TIMES

AXIS Real Estate Investment Trust, the world’s only Islamic office and industrial REIT, plans a bond sale in the first half of this year to help refinance debt as it prepares for potential acquisitions this year.

“There’s nothing worse than having the sale of the century if you haven’t got any money to buy anything,” Stewart LaBrooy, chief executive officer of Axis REIT Managers Bhd, manager of the property trust, said in an interview in Kuala Lumpur on Monday.

“The-re’s a lot of opportunities and fat pickings,” he added.

Axis REIT, which is eyeing RM100 million of property assets, may sell Islamic bonds under a seven-year programme to refinance about RM220 million of debt, he said. It may also sell new stock to private investors.

Axis REIT owns RM726.4 million of assets in Malaysia, from offices and warehouses to logistic centres. It is taking advantage of a global recession to snap up properties at cheaper prices and ride on an eventual rebound when economies recover.

The company was reclassified as an Islamic REIT from a conventional property trust in December, allowing it to attract a wider pool of funds, LaBrooy said.

Axis REIT may raise about RM70 million selling new units to private investors to help fund any acquisitions, LaBrooy said. It raised RM90 million last year from a placement of 50 million units and will consider the fund-raising plan once it refinances its existing debt, he said.

Still, it won’t be easy to acquire high-yielding properties amid the economic decline, said Terence Wong, an analyst at CIMB Investment Bank Bhd.

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