Axis REIT Managers Bhd is targeting Syariah-compliant investors on the back of its reclassification as an Islamic real estate investment trust (REIT) from a conventional REIT.

According to Axis REIT Managers chief executive officer, Stewart LaBrooy, many Syariah-compliant investors had shown interest in Axis REIT due to its good performance over the past few years.

“We can now attract the sector of the market that was previously close to us, including Lembaga Tabung Haji, Lembaga Tabung Angkatan Tentera and Federal Land Development Authority,” said LaBrooy.

Unit holders approved the reclassification exercise and proposed a placement exercise to increase Axis REIT’s existing fund size to a maximum of 307.1 million units from 255.9 million units.

The reclassification, upon completion by mid-December, would increase its investor base and attract a larger pool of funds for Axis REIT to grow, said LaBrooy. He added that the fund’s retail investor base had grown by 55 per cent to 1,455 investors now compared with 941 investors in 2006.

According to LaBrooy, REITs are starting to attract retail investors, which could be the main market.

Meanwhile, the proposed placement exercise is expected to improve its liquidity in the Malaysian market and enable Axis REIT to pare down its borrowings. Axis REIT anticipates its bank borrowings to exceed 40 per cent of its total assets from its future acquisitions.

LaBrooy said that acquisition of high-quality yield accretive properties has been the focus in growing its portfolio, adding that its seven acquisitions in early 2008 would provide an average net yield of 4.13 per cent.