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PETALING JAYA (May 14): Axis Real Estate Investment Trust (Axis-REIT) is acquiring an industrial complex in Seksyen 16, Shah Alam, Selangor for RM38.0 million from Rubicon Assets Sdn Bhd (RASB) — a transaction classified as a related party deal given the vendor's links to directors of the REIT's management company.
According to its Bursa announcement, the sale and purchase agreement (SPA) was executed yesterday, between RHB Trustees Berhad, as trustee for Axis-REIT, and RASB. The acquisition will be funded entirely through Axis-REIT's existing credit lines.
The property
The property at No 2, Jalan Halba 16/16, Seksyen 16, Shah Alam is a corner industrial complex comprising a single-storey detached factory integrated with a double-storey office block and a four-storey factory/store block, together with ancillary buildings.
Key details:
(1) Land tenure: 99-year leasehold expiring July 20, 2094
(2) Land area: approximately 3.03 acres (131,976 sq ft)
(3) Gross floor area: approximately 125,821 sq ft
(4) Net lettable area (NLA): approximately 120,177 sq ft
(5) Age of buildings: approximately 31 to 36 years
(6) Occupancy: 100%
The property fronts Jalan Halba 16/16 with Persiaran Selangor to its east and the Federal Highway running directly to the rear, providing strong logistics connectivity. It is also served by the North Klang Valley Expressway and Persiaran Kemajuan.
The property is currently subject to a Registrar Caveat lodged by Jabatan Insolvensi Malaysia, arising from insolvency proceedings involving a previous registered proprietor. Removal of the caveat by the vendor is a condition precedent of the SPA.
Three existing tenants
The property is fully occupied by three tenants, whose tenancies will be novated to Axis-REIT upon completion:
(a) OCK Telco Infra Sdn Bhd — telco tower installed on part of the rooftop; three-year tenancy from June 1, 2023
(b) Tamura Electronics (M) Sdn Bhd — office and storage of electronic and electrical components; three-year tenancy from January 1, 2026
(c) Seng Hup Lightings & Decor Sdn Bhd — storage of lighting products; three-year tenancy from Jan 1, 2026
Combined monthly rental income from all three tenants is RM210,476.75.
Notably, Seng Hup Lightings & Decor is a company related to the Interested Directors, adding a further layer to the related party nature of the transaction.
Related party dimension
The transaction is classified as a related party transaction under Chapter 10 of Bursa Malaysia's Listing Requirements. RASB is owned more than 99% by Tew Peng Hwee @ Teoh Peng Hwee (Stephen Tew), who serves as Axis REIT Managers Bhd (ARMB) non-independent non-executive deputy chairman.
His alternate director, Maxine Teoh Sui Vern, holds less than 1% of RASB.
Both Interested Directors have abstained and will continue to abstain from board deliberation and voting on the transaction.
The audit committee has reviewed the terms and concluded the acquisition is fair, reasonable, on normal commercial terms and not detrimental to minority unitholders.
Valuation and pricing
The purchase price of RM38.0 million is based on an independent valuation by First Pacific Valuers Property Consultants Sdn Bhd dated March 27, 2026, using the investment method with the cost method as a check.
The net book value of the property in RASB's audited accounts as at Dec 31, 2024 was RM27.2 million, against an original cost of RM15.8 million when acquired in January 2014.
Payment is structured as a 2% earnest deposit (RM760,000), an 8% balance deposit (RM3.04 million) and a balance purchase price of RM34.2 million payable within 45 days of the unconditional date.
Impact on Axis-REIT
The acquisition is expected to contribute positively to distributable income for the financial year ending Dec 31, 2026, with completion targeted by the second half of 2026.
Post-acquisition, Axis-REIT's financing ratio will rise to 32.84% of audited total assets as at Dec 31, 2025 — remaining well below the 50% gearing limit prescribed by the Securities Commission Malaysia's Guidelines on Listed Real Estate Investment Trusts.
The transaction does not require unitholder approval under Bursa's Listing Requirements. The percentage ratio applicable to the transaction is 0.71%.
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