Axis Real Estate Investment Trust · MYX:AXREIT
Axis Real Estate Investment Trust — Q1 2014 Earnings Presentation
81 slides from Axis Real Estate Investment Trust's earnings presentation, Apr 21, 2014
Slide 1: Axis REIT Managers Berhad 1Q 2014 Results
Axis REIT Managers Berhad 1Q 2014 Results 21 April 2014
Slide 2: Highlights for 1Q 2014
a Highlights for 1Q 2014
Slide 3: Highlights 1Q 2014
a vs 1Q 2013 Highlights 1Q 2014 Finance Report Realized Gain on Unitholders Funds DPU > RM 1 billion 5.3 sen Disposal of +17.8% Axis Plaza RM 10.951 Million Implementation of the IDRP Programme Premium to Net Property in conjunction with NAV Income the 1st Interim 2014 51.45% DPU 3
Slide 4: Milestones
Milestones a Finance Report Declared a 1st interim 2014 DPU of 5.30 sen , which comprises 0.80 sen per unit from the gain on disposal of Axis Plaza and 4.50 sen per unit from performance. Strong rent reversions in a difficult market. Axis Business Campus ready for leasing after enhancement.
Slide 5: Return Comparatives
a Return Comparatives Finance Report 25.0% 22.3% 20.0% 15.0% 10.0% 6.0% 6.0% 5.0% 4.1% 3.2% 3.0% 2.5% 0.0% Axis-REIT Total Axis-REIT EPF Dividend 10-yr MGS 12 Months FD Saving Deposit OPR Return * Distribution Yield Return Rate Rate * (based on DPU from operations + gain on disposal + movement in ma
Slide 6: Our strategy
Our strategy a Finance Report Targeting Growth in our asset class To build on our SUKUK presence in the market. To continue to improve on our capital management. Continue to enhance existing assets to drive value and income Trading of assets to reward our Unitholders Best Practices & Corpo
Slide 7: Income Statement 1Q 2014 vs 1Q 2013
Income Statement 1Qa 2014 vs 1Q 2013 1Q2014 1Q2013 RM’000 RM’000 Gross revenue - realised 35,412 34,893 - unrealised (in relation to unbilled lease income receivable) 629 568 36,041 35,461 Property operating expenses (5,840) (5,105) Non property income 30,201 30,356 Profit income 184 114 Gain on dis
Slide 8: Income Statement 1Q 2014 vs 1Q 2013
Income Statement 1Qa 2014 vs 1Q 2013 Finance Report 1Q2014 1Q2013 RM’000 RM’000 Other non-operating expenses 3,481 3,142 Islamic financing cost 5,589 6,212 Total expenses 9,070 9,354 Net income before tax 22,391 20,875 Income tax benefit - - Net income for the year attributable to unitholders 22,391
Slide 9: Income Statement: Realised gross revenue
Income Statement 1Qa 2014 vs 1Q 2013 i) Realised gross revenue - RM35,412,000 1Q2014 1Q2013 RM'000 RM'000 Changes Rental income 33,219 33,152 + 67 Car park income 1,688 1,205 + 483 Other income 505 536 - (31) 35,412 34,893 + 519 No. of properties 30 31 Gross revenue is RM519k higher than 1st quarter
Slide 10: Gross Yield Of Investment Properties
a Gross Yield Of Investment Properties Finance Report 18.00% 17.46% 17.50% 16.00% 14.99% 14.00% 12.95% Average gross yield: 10.85% 12.05% 12.32% 12.25% 11.93% 12.00% 11.32% 11.50% 11.22% 10.86% 11.03% 10.76% 10.66% 10.69% 10.37% 9.99% 9.88% 10.00% 9.49% 8.78%9.04% 8.95% 9.02% 8.65% 8.43% 8.26% 8.00%
Slide 11: Income Statement: Property operating expenses
Income Statement a1Q 2014 vs 1Q 2013 Finance Report ii) Property operating expenses - RM5,840,000 1Q2014 1Q2013 RM'000 RM'000 Changes Assessment & Quit Rent 1,004 1,051 - 47 Property Manager's Fee & On-site Personnel Cost 1,426 1,365 + 61 Security 478 475 + 3 Insurance 233 241 - 8 Utilities 1,001 97
Slide 12: Net Yield Of Investment Properties
a Properties/ Cost Net Yield Of Investment Average Net Yield per Property = 9.06% Finance Report The Annex 5.74% Wisma Academy parcel 8.27% Emerson Industrial Facility Nilai 8.85% Seberang Prai Logistic Warehouse 3 10.24% Bayan Lepas Distribution Centre 8.41% Axis Eureka 7.76% D8 Logistics Warehouse
Slide 13: Income Statement: Non-property expenses
a 2014 vs 1Q 2013 Income Statement 1Q Finance Report 1Q2014 1Q2013 RM'000 RM'000 Changes Non- property expenses Manager’s fees 2,567 2,485 + 82 Trustee’s fees 151 131 + 20 Depreciation 68 13 + 55 Auditors’ fees 29 26 + 3 Tax agent’s fee 4 4 - Allowance for doubtful/bad debts 37 (15) + 52 Administrat
Slide 14: Other expenses (cont'd)
a 2014 vs 1Q 2013 Income Statement 1Q Finance Report iv) Other expenses - RM9,070,000 (cont'd.) Non-property Expenses The MER of the Fund as at 31 March 2014 is 1.30% of NAV as compared to 1.25% for 2013. The increase is due to increase in the Manager’s and Trustee’s fees which resulted from the inc
Slide 15: Gain on disposal of Axis Plaza
a 2014 vs 1Q 2013 Income Statement 1Q Finance Report Gain on disposal of Axis Plaza The disposal of Axis Plaza, which was completed on the 25 March 2014, has resulted in a total realized gain on disposal of RM10,952,000 (“Gain on disposal”) which is represented by the gain on disposal of RM1,614,000
Slide 16: Gain on disposal of Axis Plaza
a of Axis Plaza Gain on disposal Finance Report RM'000 Disposal price 34,000 Less: Current book value (32,034) 1,966 Less : Incidential cost Legal fees - SPA (85) Valuation fees (8) Disposal fee (180) Defect repair works (79) (352) Gain on Disposal recognized in profit or loss 1,614 Add: Realization
Slide 17: Adjusted Income Before Taxation / Income Available For Distribution
a Income Statement Finance Report Adjusted Income Before Taxation/ Income Available For Distribution: 35.00 30.00 Gain on disposal RM10.952 mil 25.00 Gain on disposal RM5.9 mil 20.00 RM' million 15.00 20.54 21.21 21.32 21.45 31.78 10.00 19.86 19.81 19.21 25.69 5.00 - 1Q 2012 2Q 2012 3Q 2012 4Q 2012
Slide 18: First 2014 Interim Income Distribution
a First 2014 Interim Income Distribution Finance Report The 5.30 sen DPU is based on 99.6% income available for distribution from performance of properties and a 34% gain on disposal of Axis Plaza. In aggregate this represents an 76.92% payout ratio on Income Available for Distribution for the 1st q
Slide 19: Summary of EPU (Realized) and DPU
a Summary of EPU (Realized) and DPU Finance Report 20.00 18.60 18.6018.46 18.50 18.00 Increasing DPU y-o-y 17.28 17.20 since listing 15.77 15.80 16.01 16.00 16.00 15.46 15.27 14.00 13.60 13.63 12.82 12.95 12.00 sen per unit 10.00 8.00 6.00 5.30 4.87 4.70 4.84 4.00 2.00 - 2005 2006 2007 2008 2009 201
Slide 20: Statement of Financial Positions
a Statement of Financial Positions Finance Report 31.03.14 31.12.13 RM’000 RM’000 Changes Non-current Assets Investment Properties 1,546,207 1,543,248 + 2,959 Equipment 2,451 2,407 + 44 1,548,658 1,545,655 + 3,003 Current Assets Receivables, deposits and 19,696 4,045 + 15,651 prepayments Cash and ca
Slide 21: Statement of Financial Positions
a Statement of Financial Positions Finance Report 31.03.14 31.12.13 RM’000 RM’000 Changes Non-current liabilities Tenants’ deposits 24,946 24,936 + 10 Financing 263,761 263,857 - 96 288,707 288,793 - 86 Current liabilities Payables and accruals 25,349 34,943 - 9,594 Financing 257,191 264,147 - 6,956
Slide 22: Investment properties
a Statement of Financial Positions Finance Report i) Investment properties 31.03.2014 31.12.2013 RM'000 RM'000 Changes As at 1 January 1,543,248 1,519,519 + 23,729 Enhancement cost incurred 2,959 28,523 - 25,564 Change in fair value - 27,206 - 27,206 Reclassification of Axis Plaza - (32,000) + 32,00
Slide 23: Receivables, deposits and prepayments
a Statement of Financial Positions Finance Report ii) Receivables, deposits and prepayments 31.03.2014 31.12.2013 RM'000 RM'000 Changes Trade Trade receivables 970 1,072 - 102 Non-trade Other receivables 14,387 718 + 13,669 Deposits and prepayments 4,339 2,255 + 2,084 19,696 4,045 + 15,651 Included
Slide 24: Receivables, deposits and prepayments
a Statement of Financial Positions Finance Report ii) Receivables, deposits and prepayments The increase in deposits and prepayments is mainly due to payment for assessment, quit rent and insurance, which will be amortised over the current financial year. Trade receivables – RM970,000 (drop by 9.5%)
Slide 25: Cash and cash equivalents
a Statement of Financial Positions Finance Report iii) Cash and cash equivalents 31.03.2014 31.12.2013 RM'000 RM'000 Changes Cash and bank balances 7,244 10,617 - 3,373 Islamic deposits placed with licensed banks 25,002 24,206 + 796 32,246 34,823 - 2,577 25
Slide 26: Total Assets and Unitholders' Funds
a Total Assets and Unitholders’ Funds Finance Report 1,800.0 1,616.5 1,600.6 1,589.4 1,585.4 1,600.0 The funds raised from equity 1,411.1 1,434.8 1,400.0 placements are being injected 1,281.6 1,208.9 1,200.0 into acquiring good quality properties….. 1,028.6 1,029.4 989.7 1,013.0 1,000.0 952.6 959.3
Slide 27: Unitholders' Capital
a Statement of Financial Positions Finance Report iv) Unitholders’ Capital – RM750,966,000 (cont’d.) … resulting in good total returns to unitholders . 320% 280% 280% 240% 110% 200% 147% 153% 160% 49% 105% 120% 59% 170% 33% 80% 56% 40% 88% 104% 18% 72% 38% 0% IPO @ RM1.25 Placement '08 @ RM1.80 Plac
Slide 28: Reserves
a Statement of Financial Positions Finance Report v) Reserves – RM278,387,000 31.03.2014 31.12.2013 RM’000 RM’000 Realised reserves available for distribution * 31,315 21,355 Unrealised reserves 247,072 256,319 278,387 277,674 * This includes the 1st interim 2014 income distribution which is payable
Slide 29: Reserves: Revaluation reserve by property
a Statement of Financial Positions Finance Report v) Reserves – RM278,387,000 (cont’d.) Overall the Portfolio has recorded a favorable gain in fair value of approx. RM241 million to date. 45 Revaluation Reserve to date (on individual property) 40 35 30 RM' Millions 25 20 15 10 5 0 -5 29
Slide 30: Financing
a Statement of Financial Positions Finance Report vi) Financing – RM520,952,000 2006 2007 2008 2009 2010 2011 2012 2013 1Q 2014 Total Borrowings (RM’000) 88,089 209,816 230,456 308,932 416,609 311,338 548,920 528,004 520,952 Total Assets (RM’000) 411,781 581,857 726,371 907,745 1,208,897 1,298,431 1
Slide 31: Gearing Levels
a Statement of Financial Positions Finance Report Gearing Levels Placements Undertaken 40.0% 38.2% 37.5% 36.1% 36.0% 36.0% 35.4% 34.0% 34.5% 34.2% 33.9% 35.0% 33.1% 32.7% 33.0% 34.5% 32.6% 31.2% 31.8%31.7% 31.3% 30.0% 32.7% 32.5% 30.0% 29.1% 28.8% 26.8% 27.3% 25.0% 25.0% 23.7% 23.5% 24.0% 22.4% 21.4
Slide 32: Payables & accruals
a Statement of Financial Positions Finance Report vii) Payables & accruals - RM25,349,000 31.03.2014 31.12.2013 RM'000 RM'000 Changes Trade Trade payables 4,912 4,422 + 490 Non-trade Tenants' deposits-payable within 12 months 13,244 15,861 - 2,617 Other payables and accruals 6,968 14,294 - 7,326 Der
Slide 33: Report on Revaluation of properties
a Report on Revaluation of properties
Slide 34: Revaluation of properties
a Revaluation of properties Finance Report There were no revaluations conducted in 1Q 2014 34
Slide 35: Property Report
a Property Report
Slide 36: Key Metrics
Key Metrics a Portfolio Size: As at 31st March 2014 the Portfolio have 30 assets comprising 5,325,337 sq. ft. and 126 tenants Portfolio Performance: Type 1Q2014 4Q2013 Movement Gross Income (RM'000) 35,412 36,007 -1.65% Property Expenses (RM'000) 5,840 5,387 + 8.41% Net Operating Income (RM'000) 29,
Slide 37: Space Under Management (Sq Ft)
a Space Under Management (Sq Ft) 6,000,000 5,463,599 5,464,124 5,325,337 5,000,000 4,449,580 4,288,054 4,000,000 3,679,796 ( sq ft) 3,000,000 2,858,121 2,175,522 2,000,000 1,656,943 1,186,052 1,000,000 - 2005 2006 2007 2008 2009 2010 2011 2012 2013 1Q 2014
Slide 38: Income Growth – Rental Reversions
Income Growth – aRental Reversions Space Renegotiated % Rent Movement Properties (Sq. Ft.) As at 4Q 2013 MENARA AXIS * No Change CRYSTAL PLAZA 7,746 +9.84% AXIS BUSINESS PARK 85,935 +14.08% WISMA KEMAJUAN ** +9.09% AXIS EUREKA 54,212 +32.27% SPLW 3 64,500 -19.04% QUATTRO WEST 8,073 +5.00% NIRO 167,1
Slide 39: Portfolio Occupancy
a Rate Portfolio Occupancy As at 31st March 2014 Axis REIT has only 9 Vacancy Rate out of 30 properties that carry vacancy. 6.77% 21 properties enjoy 100% occupancy. Occupancy As at 31st Dec, 2013 94.87% As at 31st March 2014 93.23% Occupancy Rate 93.23% Vacancy As at 31st March 2014 6.77% For Axis
Slide 40: Occupancy Rates by Property
a As at 31st March 2014 Occupancy Rates by Property 120.00 100.00 93.23% 80.00 60.00 Completed. Pending CCC 40.00 20.00 -
Slide 41: Diversified Portfolio
Diversified Portfolioa Portfolio Diversification by Type and NLA Manufacturing 8.04% Facilities Warehouse / 44.51% Logistic 6.98% Hypermarket Office / 29.02% Industrial Office 11.45% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00%
Slide 42: Portfolio Location
Portfolio Location a Portfolio Analysis by Geographical Location and NLA Nilai 5.48% Cyberjaya 2.21% Penang 14.05% Kedah 2.59% Johor 18.79% Klang 7.98% Shah Alam 11.33% Petaling Jaya 37.58% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00%
Slide 43: Tenancy Mix
Tenancy Mix a Single Tenant Vs Multi-Tenants 35% 65% Single Tenant Multi Tenants
Slide 44: Occupancy: Properties Below 90%
a Occupancy Properties Below 90% Occupancy rates of properties below 90% as of 31st March 2014 Occupancy % Axis Tech Centre 88.29 Axis Vista 85.87 Fonterra HQ 84.96 Axis Business Campus - Just Completed. Pending CCC Axis Business Park 65.03 Note: Vacant space Fontera HQ is built for their future e
Slide 45: Lease Expiry Profile
Lease Expiry Profilea Year % of % of Rental Year % of % of Rental Year % of % of Rental Property 2014 Total NLA Income/month 2015 Total NLA Income/month 2016 Total NLA Income/month Menara Axis 54,587 1.03 2.24 - - 0.03 91,514 1.72 3.35 Crystal Plaza 81,339 1.53 2.85 3,407 0.06 0.08 120,358 2.26 4.41
Slide 46: Weighted Average Lease Expiry (WALE)
a Expiry (“WALE”) Weighted Average Lease The Average “WALE” For the Portfolio is: By Year Q1 2014 Q4 2013 By NLA 3.94 3.89 By Rental 3.99 3.99
Slide 47: Portfolio Efficiency (PE)
Portfolio Efficiency a(“PE”) The Efficiency Ratio = The Operating Cost for the Portfolio / Gross Property Income 1Q2014 4Q2013 16.49% 14.73%
Slide 48: Rental Covenants: Top Tenants
a Rental Covenants Top 10 Tenants - Strong 1. Konsortium Logistik Bhd 2. LF Logistics Services (M) Sdn Bhd 3. Schenker Logistics (M) Sdn Bhd 4. Tenaga Nasional Berhad 5. Tesco Stores (M) Sdn Bhd 6. DHL Properties (M) Sdn Bhd 7. Strateq Data Center Sdn Bhd 8. Fuji Xerox Asia Pacific Pte Ltd 9. Scope
Slide 49: Information Technology - YARDI
a Information Technology - YARDI Phase 1 Property Management Procurement Financial Status: Gone live in 2013 and in full operation Upgrading to Version 7.08 from 7.06 is complete Phase 2 Job Costing Advance Budgeting Forecast Status: Gone live in Jan 2014 and in operation The System is GST Comp
Slide 50: Asset Enhancement Initiatives
a Asset Enhancement Initiatives
Slide 51: Axis Business Campus West Block (Before)
a Axis Business Campus West Block (Before)
Slide 52: Axis Business Campus West Block (After)
a Axis Business Campus West Block (After )
Slide 53: Axis Business Campus South Block (Before)
a Axis Business Campus South Block (Before)
Slide 54: Axis Business Campus South Block (After)
a Axis Business Campus South Block (After)
Slide 55: Axis Business Campus Overall (Before)
a Axis Business Campus Overall (Before)
Slide 56: Refurbishment Axis Business Campus Overall (After)
a Refurbishment Axis Busienss Campus Overall (After)
Slide 57: West Block Axis Business Campus
a West Block Axis Business Campus Drop off New Ramp for Handicapped Persons New Lift Lobbies New Common Toilets
Slide 58: South Block Axis Business Campus
a South Block Axis Business Campus New Patio Drop Off Cargo Loading Bay New Cargo Lift
Slide 59: Axis Business Campus Project Analysis
a – Estimated ROI Axis Business Campus Project Analysis Axis Business Initial Cost : RM 34,173,526.21 Campus (ABC) Redevelopment : RM 23,639,326.00 Total cost : RM 57,812,852.21 NLA : 155,401 sq. ft. Property Income : RM 7,533,402 (office @ RM 3.50 psf + car park) Projected Gross Yield: 13%
Slide 60: Refurbishment Axis Business Park Block C
a C Refurbishment Axis Business Park Block
Slide 61: Refurbishment Axis Business Park Block C
a C Refurbishment Axis Business Park Block
Slide 62: Refurbishment Axis Business Park Block C
a C Refurbishment Axis Business Park Block
Slide 63: Refurbishment Axis Business Park Block C
a C Refurbishment Axis Business Park Block
Slide 64: Refurbishment Axis Business Park Block C
a C Refurbishment Axis Business Park Block
Slide 65: Refurbishment Axis Business Park Block C
a C Refurbishment Axis Business Park Block
Slide 66: Refurbishment Axis Business Park Block C
a C Refurbishment Axis Business Park Block
Slide 67: Axis Business Park Block C Project Analysis
a C – Projected ROI Axis Business Park Block Project Analysis ABP Block C Initial Cost : RM 46,393,274.93 Refurbishment Redevelopment : RM 9,450,000.00 (est.) Total cost : RM 55,843,274.93 NLA : 182,187 sq. ft. Number of Car parks: 466 Estimated Property Income : RM 6,953,610.00 Projected Gross Yiel
Slide 68: Wisma Academy Annex Redevelopment
a Wisma Academy Annex Redevelopment
Slide 69: Wisma Academy Annex Redevelopment
a Wisma Academy Annex Redevelopment
Slide 70: Wisma Academy Annex Redevelopment – Projected ROI
a Wisma Academy Annex Redevelopment – Projected ROI Project Analysis Annex Initial Cost : RM 12,289,272.25 Redevelopment Redevelopment : RM 30,000,000.00 (est.) Total cost : RM 42,289,272.25 NLA : 127,133 sq. ft. (30% office & 70% warehouse) Number of Car Parks: 266 Estimated Gross Property Income :
Slide 71: Sustainability Initiatives
a Sustainability Initiatives Axis REIT Sustainability Committee had agreed to initiate the followings: • APREA Sustainability Handbook used as framework for practices and disclosure; • Join the Malaysia Green Building Confederation and work with APREA members who are engaged with sustainability prog
Slide 72: Investor Relations Report
Investor Relations Report AtslS REAL ESTATE INVESTMENT TRUST
Slide 73: Price Performance
a Price Performance • Prices rose steadily in 1Q 2014 after the 4Q 2013 sell down when investors switched their portfolios to Equities and foreign selling persisted. • Prices are now at RM 3.40 (Friday 18th April 2014) • Unit Price appreciation from Dec 31 Q4 2013 to 18 April 2014 is 16 % 73
Slide 74: KLCI vs AXREIT
KLCI vs AXREIT a 1 Jan 2013 – 31 Mar 2014 Price & Volume Statistics 140% Unit Price 18th April 14 RM 3.40 130% Unit Price @ 31 Dec 2013 RM 2.93 Unit Price @ 31 March 2014 RM 3.38 120% Highest Price 1Q 2014 RM 3.46 (March 2014) 110% Lowest Price 1Q 2014 RM 2.80 100% (January 2014) Average Monthly Vol
Slide 75: Top 10 Unitholders
a Top 10 Unitholders 1 EMPLOYEES PROVIDENT FUND BOARD 2 SKIM AMANAH SAHAM BUMIPUTERA 3 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 4 TEW PENG HWEE @ TEOH PENG HWEE 5 ALEX LEE LAO 6 EXEMPT AN FOR AIA BHD. 7 DATO’ CARL GUNNAR MYHRE 8 AS 1 MALAYSIA 9 AMANAH SAHAM DIDIK 10 PUBLIC SMALLCAP FUND 75
Slide 76: ROD Analysis
ROD Analysis a Top Unitholders’Percentage Holdings 1. Top 5 CDS accounts hold 39.3% of total units 2. Top 10 Unitholders hold 56.7% of total units 3. > 1 million Unitholders’total unitholding = 85.0% Top Increases in Unitholdings % of Total UNITHOLDERS > 1MILLION UNITS @29 Mar ‘13 @28 Jun '13 @30 Se
Slide 77: Number of CDS Accounts & Liquidity
a & Liquidity Improving Investor Visibility 3,500 No. of CDS Accounts 3,242 3,009 3,000 2,850 2,702 Number of CDS Accounts 2,500 2,420 2,080 2,000 1,652 1,500 1,000 500 0 2008 2009 2010 2011 2012 2013 1Q 2014 Quarter-on-quarter, total number of CDS accounts increased by 233 to 3242 an increase of
Slide 78: Trading Volume
Volume a 18 16.91 16 13.96 13.9 14 12.96 12.09 12 11.06 Million Units 9.67 10 9.3 8.25 8.23 7.92 8 7.24 7.05 6 4 3.07 2.24 2.46 2 0 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 April (16th) 14 Highest trading volume of 40.1 million units
Slide 79: Business Development Report
a Business Development Report
Slide 80: Summary of Potential Acquisitions 2014
a Acquisitions 2014 Summary of Potential Finance Report The Manager has identified several potential acquisition targets for 2014 in our three core areas of investment – Selangor, Johor and Penang. They are 7 industrial facilities in Johor Industrial facility in Penang 3 Industrial facilities
Slide 81: Thank you
a Thank you
Axis Real Estate Investment Trust — Q1 2014 Earnings Presentation on 6ix