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KUALA LUMPUR, July 22 -- RHB Investment Bank Bhd has maintained its 'Buy' rating for Axis Real Estate Investment Trust (REIT) with an unchanged target price (TP) of RM2.30.
Axis REIT's results were broadly in line with expectations as its newly completed acquisitions and commencement of new tenancies supported earnings growth, the investment bank said.
"We continue to like the company for its key positioning as an industrial player that leverages on the e-commerce boom, and its strong management team which is experienced in aggressive acquisitions, allowing it to remain a key defensive play going forward," RHB Investment Bank said in a research note.
Axist REIT currently has two ongoing acquisitions namely two warehouses in Pasir Gudang, Johor.
"Although the acquisition momentum saw a slight slowdown in the first half of 2021 (H1), we expect its acquisition spree to pick up again following the gradual reopening of the economy in H2 2021 (acquisition target value: RM135 million), especially given the steady increase in demand for warehousing of late.
"Axis REIT also has ample debt headroom before breaching the 60 per cent gearing limit, with gearing as of the second quarter of 2021 standing at 36 per cent," it said.
Risks on its rating would be on the oversupply of office properties, which might affect the portfolio's office properties occupancy and rental rates.
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