Wah Seong selling Gebeng property to Axis REIT for RM155m

Excluding Pavilion REIT and Axis REIT, which will continue to be driven by asset acquisitions in the niche industrial segment for the latter and asset injections from its sponsor for the former, CIMB said the pipeline for retail REITS remains dry for the second half of the year. (Menara Axis in Petaling Jaya)

KUALA LUMPUR: Wah Seong Corporation Bhd is selling its Gebeng property in Pahang to Axis Real Estate Investment Trust  (REIT) for RM155mil cash consideration, which will see it recording a one-off net gain of nearly RM98mil..

Wah Seong, which is involved in the oil and gas services sector, said on Monday its indirect subsidiaries had signed a sale and purchase agreement with Axis REIT to dispose of 126.55 acres and the buildings.

The subsidiaries are Wasco Resources Sdn Bhd, Wasco Coatings Services Sdn Bhd, Wasco Coatings Insulation Sdn Bhd, Wasco Lindung Sdn Bhd and Wasco Coatings Malaysia Sdn Bhd.

“The disposal will result in a one-off net gain of approximately RM97.70mil,” it said. Of the RM155mil proceeds received from the sale, Wah Seong said RM105mil would be used to repay debts and RM50mil as working capital.

In a separate statement. Axis REIT said the proposed purchase of the property was to provide the unitholders with stable income distribution and to achieve growth in the net asset value by acquiring high quality, earnings accretive property with strong recurring rental income.

Axis REIT said the property was within the MIEL Gebeng industrial estate in Kuantan, 4km from the Kuantan Port. -- is a multi-cargo deep seaport facing the South China Sea. 

Located in the heartland of petrochemical industries, it said Kuantan Port has developed into a major container terminal for the east coast region. 

“Supported with excellent port facilities and services, a vast market outreach and a strong network of global shipping connections, Kuantan Port will be a catalyst for the rapid expansion of the industrial and manufacturing activities in the East Coast Industrial Corridor. 

“Upon completion of the new deep water terminal, Kuantan Port is envisaged to be the main gateaway to China and the Far East and shall act as a transhipment hub for minor ports in the region,” it said.