Axis REIT Proposes RM3 Billion Sukuk Programme to Fund Growth and Sustainability Goals
Axis Real Estate Investment Trust (KL:AXREIT) has unveiled plans to establish a sukuk programme worth up to RM3 billion in nominal value. The multi-purpose funding initiative is aimed at supporting the REIT’s long-term capital needs, with the flexibility to issue sustainability and sustainability-linked sukuk as part of its ongoing ESG strategy.
The programme comprises the issuance of:
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Senior Islamic Medium-Term Notes (IMTNs)
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Subordinated Perpetual Islamic Notes
According to a filing by Axis REIT Managers Bhd, the sukuk programme has been officially lodged with the Securities Commission Malaysia (SC).
Proceeds to Support Strategic Financing and Growth
The proceeds will be channelled through RHB Trustees Bhd, the appointed trustee for Axis REIT. The funds raised will be used for:
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Capital expenditures and development projects
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Working capital requirements
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General corporate purposes
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Refinancing of existing Islamic financings or borrowings
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Funding for future Islamic financing initiatives
“The sukuk programme will give the company the flexibility to issue sustainability sukuk and/or sustainability-linked sukuk, supporting its ESG goals,” Axis REIT stated.
Credit Ratings Assigned by RAM Ratings
In its assessment, RAM Rating Services Bhd assigned:
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AA2(s) rating with a stable outlook for the senior sukuk
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A1(s) rating with a stable outlook for the perpetual sukuk
These ratings reflect Axis REIT’s:
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Strong portfolio of income-generating assets
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Proven track record in asset management and leasing
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Stable cash flow backed by long-term tenant agreements
Market Response and Current Valuation
On the announcement date, Axis REIT units rose two sen (1.06%) to RM1.90, giving the trust a market capitalisation of RM3.84 billion.
This positive reaction indicates investor confidence in Axis REIT’s ability to leverage the sukuk structure to:
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Strengthen its capital structure
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Reduce reliance on conventional financing
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Advance its sustainability-linked investment objectives
Why This Matters: Sukuk as a Strategic Capital Tool
The proposed sukuk programme provides financial agility while aligning with the growing demand for Shariah-compliant and ESG-friendly investment instruments. It offers:
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Long-term funding options with competitive Islamic structures
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Access to sustainability-conscious capital markets
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A means to support Axis REIT’s property development pipeline and asset enhancement initiatives (AEIs)
This move is especially timely as real estate players adopt green financing and sustainable development frameworks to meet both investor expectations and regulatory standards.
About Axis REIT: A Resilient Industrial REIT in Malaysia
Axis REIT remains one of Malaysia’s leading industrial-focused real estate investment trusts, with a portfolio that includes:
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Logistics and distribution centres
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Manufacturing facilities
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Warehouses and business parks
The REIT’s defensive tenant mix and focus on industrial and logistics assets have allowed it to weather economic cycles, including challenges during the pandemic and rising interest rate environments.
Outlook: Funding Future Expansion with Sustainable Capital
With the RM3 billion sukuk programme in place, Axis REIT is well-positioned to:
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Expand its logistics and industrial asset base
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Fund redevelopments and value-enhancing upgrades
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Continue aligning with Malaysia’s Islamic capital market growth and global ESG investing trends
Final Thoughts: A Strategic Move with Long-Term Vision
Axis REIT’s sukuk initiative is more than just a funding mechanism—it’s a forward-looking strategy to support expansion while offering sustainability-linked instruments to today’s discerning investors.
As Malaysia continues to develop its Islamic finance ecosystem and prioritise green and sustainable investments, Axis REIT’s RM3 billion sukuk programme represents a milestone in REIT innovation and capital efficiency.
Investors and stakeholders should watch for how Axis REIT deploys this new financial capability to reinforce its market leadership and unlock long-term value in the Malaysian REIT space.
