KUALA LUMPUR (Jan 20): Axis Real Estate Investment Trust (REIT) will be developing a 620,096 sq ft distribution centre at a cost of RM130 million in Shah Alam, Selangor, which will be leased to Shopee's logistics arm, Shopee Express Malaysia Sdn Bhd, for 15 years upon completion.

In a bourse filing on Thursday (Jan 20), Axis REIT said it has entered into a 15-year lease agreement with Shopee Express. The proposed development is expected to commence in the first quarter of 2022 and to be completed for handover to Shopee Express by Aug 31, 2023.

The proposed development involves Axis REIT's existing property called Bukit Raja Distribution Centre 2, which it acquired in March last year.

"The development cost excluding the land is approximately RM130 million or 3.86% of Axis REIT's total asset value of RM3.36 billion based on its latest audited financial statements for the year ended Dec 31, 2020 (FY20) and is below the 15% threshold imposed under the Securities Commission Malaysia's REIT guidelines," said the REIT.

Axis REIT units closed two sen or 1.1% higher at RM1.84, valuing the REIT at RM2.66 billion.