Axis Real Estate Investment Trust · MYX:AXREIT
Axis Real Estate Investment Trust — Q1 2017 Earnings Presentation
69 slides from Axis Real Estate Investment Trust's earnings presentation, Apr 25, 2017
Slide 1: 1Q 2017 Results Presentation
1Q Axis REIT Managers Berhad Results Presentation 2017 25 April 2017
Slide 2: Our Milestones
Our Milestones Assets Under Management RM296 million RM2.21 billion Space Under Management 978,000 sq ft 7,432,036 sq ft Properties 5 38 Fund Size RM206 million RM1.39 billion Valuation Gain since listing RM301,000,000 First REIT to be listed on Bursa Malaysia First REIT to convert int
Slide 3: 1Q2017 Highlights
1Q2017 HIGHLIGHTS
Slide 4: 1Q2017 Highlights
1Q2017 Highlights Investment properties currently stands at RM 2,165,147,000. Completion of disposal of Axis Eureka on 8 March 2017 for RM56.1 million, resulting in a gain of RM1.35 million. Declared 1st interim 2017 DPU of 2.15 sen, which comprises 2.10 sen per unit from operations and 0.05 s
Slide 5: 1Q2017 Return Comparatives
1Q2017 Return Comparatives 8.00% 7.78% 7.00% 6.00% 5.70% 5.16% 5.00% 3.90% 4.00% 3.28% 3.00% 3.00% 2.00% 1.00% 0.00% Axis-REIT Total Axis-REIT EPF Dividend 10-yr MGS 12 Months FD OPR Return * Distribution Yield Return Rate * (Based on annualised DPU from operations + movement in market price)/openin
Slide 6: 1Q2017 Finance Report
1Q2017 FINANCE REPORT
Slide 7: 1Q2017 Summary
1Q2017 Summary 1Q2017 Total Net Income (“Realised”)(RM' 000) 22,802 Income Available for Distribution ("Realised") (RM' 000) 24,608 Earnings per Unit ("EPU") ("Realised") (Sen) 2.06 Income Distribution Declared (RM'000) 23,761 Distribution per Unit ("DPU") (Sen) * 2.15 Number of Investment Propertie
Slide 8: Income Statement 1Q2017 vs 1Q2016
Income Statement 1Q2017 vs 1Q2016 1Q2017 1Q2016 Changes (RM ‘000) (RM’000) No. of Properties 38 38 - Property Income - Note 1 42,515 41,075 + 3.5% Property Expenses - Note 2 (6,541) (6,537) + 0.1% Net Property Income 35,974 34,538 + 4.2% Profit Income / other income 178 140 Loss on disposal of prope
Slide 9: Income Statement 1Q2017 vs 1Q2016 – Notes
Income Statement 1Q2017 vs 1Q2016 Note 1 – Property Income Increase in property income as compared to last preceding year corresponding quarter is due to contribution of rental proceeds from Scomi Facility@Rawang coupled with positive rental revision of 5.8% and rental of 17.6 acres land at Axis PDI
Slide 10: Income Statement – Gain on Disposal
Income Statement 1Q2017 vs 1Q2016 Note 3 – Net gain on disposal of property Computation of distributable gain on disposal on Axis Eureka: RM'000 Disposal price 56,132 Less: Carrying value (latest market value in Axis-REIT’s book) (55,000) 1,132 Less : Incidental cost Legal fees - SPA (106) Valuation
Slide 11: Income Statement – Notes
Income Statement 1Q2017 vs 1Q2016 Note 4 – Non-Property Expenses The MER of the Fund for both corresponding quarters is 1.27%. Note 5 – Islamic Financing Cost Increase in financing cost due to additional financing facilities utilised to fund the new acquisition. Note 6 – No. of Units in Issuance Inc
Slide 12: Gross Yield of Investment Properties
Gross Yield of Investment Properties Properties Gross yield (%) Average YTD gross yield = 9.8% 1 Wisma Kemajuan 17.95% 21 Quattro West 8.90% 2 FCI Senai 14.85% 22 Tesco Bukit Indah 8.85% 3 Crystal Plaza 14.61% 23 Axis Steel Centre 8.82% 4 Menara Axis 14.14% 24 Axis Technology Centre 8.27% 5 BMW Cent
Slide 13: Net Yield of Investment Properties
Net Yield of Investment Properties Properties Net yield (%) Average YTD net yield = 8.5% 1 Wisma Kemajuan 14.13% 21 Wisma Academy Parcel 7.39% 2 FCI Senai 13.50% 22 Axis MRO Hub 7.19% 3 BMW Centre PTP 12.53% 23 Axis Steel Centre@ SiLC 7.13% 4 Crystal Plaza 12.44% 24 Axis Business Park 7.08% 5 Menara
Slide 14: Income Available for Distribution
Income Available for Distribution 25 Adjusted Income Before Taxation/ Income Available For Distribution: 20 15 RM' million 24.61 22.58 22.69 22.62 23.23 10 5 0 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 14
Slide 15: 1Q2017 Income Distribution
1Q2017 Income Distribution Proposed : 2.15 sen DPU 2.15 sen DPU is based on 99.80% income available for distribution from performance of properties for the period from 1 January 2017 to 31 March 2017 and a 41% on gain of disposal of Axis Eureka (1st tranche). Important dates: Ex-date : 8 May 2017 En
Slide 16: 1Q2017 Income Distribution
1Q2017 Income Distribution Distribution of net gain on disposal of Axis Eureka The disposal of Axis Eureka has resulted in a total realised gain on disposal of RM1.35 million which comprises the realization of unrealised income of RM1.76 million less loss on disposal of RM413,000 (as recognised in i
Slide 17: Summary of Realised EPU and DPU
Summary of Realised EPU and DPU 10.00 9.30 0.65 9.23 9.25 1.18 9.00 8.64 0.10 8.40 8.35 8.19 8.25 8.01 8.00 8.50 8.65 8.71 8.70 8.00 7.73 7.89 7.90 7.64 7.00 6.80 6.82 6.00 5.00 4.00 3.00 0.05 2.00 2.06 2.10 1.00 - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Gain on disposal DPU EPU (real
Slide 18: Statement of Financial Position
Statement of Financial Position 31/03/17 31/12/16 (RM’000) (RM’000) Changes Investment Properties – Note 1 2,165,147 2,198,149 - 33,002 Fixed Assets 2,794 2,899 - 105 Other Assets – Note 2 45,407 43,226 + 2,181 TOTAL ASSETS 2,213,348 2,244,274 - 30,926 Borrowings – Note 3 751,239 780,665 - 29,426 Ot
Slide 19: Statement of Financial Position – Notes
Statement of Financial Position Note 1 – Investment Properties Disposal of Axis Eureka was completed on 8 March 2017. During the year, a total of RM2.6 million was spent on enhancement works of the properties in the portfolio and RM19.4 million has been incurred for development cost for the Nestle D
Slide 20: Statement of Financial Position – Borrowings
Statement of Financial Position – Note 3 Borrowings 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total Borrowings (RM’000) 230,456 308,932 416,609 311,338 548,920 528,004 683,769 731,814 780,665 751,239 Total Assets (RM’000) 726,371 907,745 1,208,897 1,298,431 1,589,408 1,616,523 2,085,883 2,14
Slide 21: Gearing Levels
Statement of Financial Position – Note 3 Gearing Levels Placements Undertaken 40.0% 37.5% 38.2% 35.4% 36.0% 36.0% 34.5% 34.1% 34.8% 34.0% 32.8% 34.2% 35.0% 33.0% 34.5% 34.2% 33.9% 34.5% 34.0% 33.9% 32.7% 32.5% 33.1% 33.4% 32.5% 32.5% 31.3% 32.6% 32.7% 32.5% 31.8% 31.7% 31.7% 30.0% 30.0% 29.1% 28.8%
Slide 22: Unitholders' Capital
Unitholders’ Capital – Note 4 2,500.0 2,244.0 2,213.3 2,141.5 2,085.7 2,000.0 1,589.4 1,616.5 1,500.0 1,298.4 1,208.9 RM mil 1,044.7 1,052.3 1,060.0 1,060.3 1,000.0 907.7 726.4 735.4 751.0 728.2 581.8 540.3 500.0 406.9 323.3 234.9 - 31-Dec-07 31-Dec-08 31-Dec-09 31-Dec-10 31-Dec-11 31-Dec-12 31-Dec-
Slide 23: Unitholders' Capital – Total Returns on Placements
Unitholders’ Capital – Note 4 … resulting in good total returns to unitholders. 360% Total returns on placements 314% 320% 280% 240% 150% 200% 178% 170% 160% 79% 126% 120% 87% 58% 73% 80% 164% 99% 38% 40% 83% 68% 7% 35% 0% 11% -4% IPO @ RM1.25 Placement '08 @ Placement '09 @ Placement '10 @ Placemen
Slide 24: Non-distributable Reserve
Statement of Financial Position – Note 5 Non-distributable Reserve Non-distributable reserve mainly comprises the favorable gain in fair value of approximately RM301 million to date. Property Gain/(loss) RM’000 Property Gain/(loss) RM’000 Crystal Plaza 44,754 Seberang Prai Logistic Warehouse 3 3,183
Slide 25: 1Q2017 Property Report
1Q2017 PROPERTY REPORT
Slide 26: Overview
Overview As at 31 March 2017, the occupancy rate of Axis-REIT’s portfolio of properties stands at 91.86% with a stable weighted average lease expiry period of 4.46 years (based on rental). In 1Q2017, the Manager achieved positive rental reversion of 5.8% from renewals. For 2017, 1,299,012 sq. ft. of
Slide 27: Key Metrics
Key Metrics As at 31 March 2017, the portfolio has 38 assets comprising 7,432,036 sq. ft. and 135 tenants. 1Q2017 4Q2016 Movement No of properties 38 39 1 Property Income (RM’000) 42,515 42,230 0.68% Property Expenses (RM’000) 6,541 6,625 1.27% Net Property Income (RM’000) 35,974 35,605 1.04% Occupa
Slide 28: Key Metrics – Average Rental Rates
Key Metrics Average Rental Rates: Type of Properties 1Q2017 4Q2016 Movement Office (RM/sq. ft.) 4.74 4.80 0.06 Office Industrial (RM/sq. ft.) 2.73 2.73 - Manufacturing Facilities (RM/sq. ft.) 1.29 1.29 - Warehouse Logistics (RM/sq. ft.) 1.55 1.53 0.02 Hypermarket (RM/sq. ft.) 2.36 2.36 - 28
Slide 29: Space Under Management
Space Under Management (sq. ft.) Space Under Management (sq ft) 8,000,000 7,606,863 7,432,036 7,015,242 7,000,000 6,859,474 6,000,000 5,463,599 5,464,124 5,000,000 4,449,580 4,288,054 ( sq ft) 4,000,000 3,679,796 3,000,000 2,858,121 2,175,522 2,000,000 1,656,943 1,186,052 1,000,000 - 2005 2006 2007
Slide 30: Portfolio Occupancy Rate
Portfolio Occupancy Rate As at 31 March 2017, Axis-REIT has only 11 out of 38 properties that carry vacancy, while 1 is undergoing development. 26 properties enjoy 100% occupancy. Occupancy Occupancy Rate As at 31 March 2016 91.86 % Vacant 8.14% Vacancy As at 31 March 2017 8.14 % Space to be let out
Slide 31: Occupancy Rates by Property
Occupancy Rates by Property as at 31 March 2017 1 Menara Axis 90% 20 Axis Steel Centre 100% 2 Crystal Plaza 81% 21 Bukit Raja Distribution Centre 100% 3 Quattro West 74% 22 Seberang Prai Logistic Warehouse 1 100% 4 Axis Business Park 69% 23 Seberang Prai Logistic Warehouse 2 100% 5 Infinite Centre 5
Slide 32: Properties Below 90% Occupancy
Properties Below 90% Occupancy Occupancy rates of properties below 90% as at 31 March 2017 Axis Tech Centre 86% Fonterra HQ 85% Wisma Academy 82% Crystal Plaza 81% Quattro West 74% Axis Business Park 69% Infinite Centre 58% Axis Business Campus 12% Delfi Warehouse - Axis PDI Centre Under development
Slide 33: Diversified Portfolio
Diversified Portfolio Portfolio Diversification by Type and NLA 7% 25% 21% 5% 42% Office Office/ Industrial Hypermarkets Warehouse Logistic Manufacturing Facilities - Light Industrial 33
Slide 34: Diversified Portfolio – NLA by Industry Sector
Diversified Portfolio NLA by Industry Sector Services Healthcare & Consumer Others 5% Lifestyle Products 1% 3% 4% Vacant 8% Retail 6% Engineering/ Building Materials IT/Electronics 21% 10% Automotive 6% Financial Services 1% Logistics 35% 34
Slide 35: Portfolio Location
Portfolio Location Portfolio Diversification by Geographical Location Petaling Jaya 26.82% Johor 26.60% Shah Alam 21.72% Penang 10.07% Klang 4.94% Rawang 4.07% Nilai 3.92% Kedah 1.86% 35
Slide 36: Tenancy Mix
Tenancy Mix Single Tenant vs Multi-Tenants 4% 37% 59% Single Tenant Multi Tenants Vacant 36
Slide 37: Lease Expiry Profile
Lease Expiry Profile % of Rental Year Area Up for Renewal % of Total NLA Income 2017 1,299,012 sq. ft. 17.48% 21.20% 2018 1,109,518 sq. ft. 14.93% 14.48% 2019 1,261,354 sq. ft. 16.97% 20.94% 37
Slide 38: Lease Expiry Profile
Lease Expiry Profile 5.8% positive rental reversion for 1Q2017 By Location Year % of % of Rental Year % of % of Rental Year % of % of Rental Location Income/ Income/ Income/ 2017 Total NLA month 2018 Total NLA month 2019 Total NLA month Petaling Jaya 565,548 7.61 12.30 275,332 3.70 5.08 574,487 7.73
Slide 39: Weighted Average Lease Expiry (WALE)
Weighted Average Lease Expiry (WALE) The WALE for the portfolio is: By Year 1Q2017 4Q2016 By NLA 4.36 4.33 By Rental 4.46 4.45 39
Slide 40: Portfolio Efficiency (PE)
Portfolio Efficiency (PE) The Portfolio Efficiency Ratio = Operating Cost for the Portfolio / Gross Property Income YTD 31 Mar 2017 2016 15.39% 16.23% 40
Slide 41: Top 10 Tenants – Strong Rental Covenants
Top 10 Tenants – Strong Rental Covenants 1. LF Logistics Services (M) Sdn Bhd 2. POS Logistics Berhad (formerly known as Konsortium Logistik Berhad) 3. Yongnam Engineering Sdn Bhd 4. Tenaga Nasional Berhad 5. Tesco Stores (M) Sdn Bhd 6. Schenker Logistics (M) Sdn Bhd 7. DHL Properties (M) Sdn Bhd 8.
Slide 42: 1Q2017 Asset Enhancements
1Q2017 ASSET ENHANCEMENTS
Slide 43: Enhancement Works
Enhancement Works Menara Axis Lifts upgrading Status : Completed Axis Shah Alam DC 3 Upgrading fire fighting system in the property to comply with Authority Code of Compliance. Status: Completed Axis Business Park – Block C Upgrading air conditioning system on Ground and Level 1 occupied by Fuji Xer
Slide 44: Property Development
2017 PROPERTY DEVELOPMENT
Slide 45: Axis PDI Centre – Proposed Nestle Development
Axis PDI Centreof–Nestle Development Proposed DC at Axis PDI Centre Development The Manager is pleased to announced that on 19 August 2016, RHB Trustees Berhad signed an Agreement to Build and Lease with Nestle Products Sdn Bhd to develop a 515,000 sq. ft. distribution warehouse facility for Nestle
Slide 46: Axis PDI Centre – Details of Nestle DC Development
Axis PDIof Details Centre – Proposed of Nestle DC the development Development NLA : 515,000 sf Rental : Starting RM19.22 million per annum Tenure : 10 years with option of 2 terms of 3 years each Rent step-up : 10% every 3 years Handover date : 31 January 2018 Lease Commencement : 1 June 2018 Estima
Slide 47: Axis PDI Centre (Before)
Axis PDI Axis PDI Centre Centre –(Before) Proposed Development (Before) 50 acre site 47
Slide 48: Axis PDI Centre (After)
Axis PDI Centre (After) Nestle DC development Future phase 2 development 48
Slide 49: Nestle Distribution Centre
Nestle Distribution Centre 49
Slide 50: Nestle DC (Current development progress)
Nestle DC (Current development progress) Future phase 2 development Nestle DC development Phase 2 land – Rented as Phase vehicle storage yard2 land – Rented as vehicle storage yard 50
Slide 51: Nestle DC (Current development progress)
Nestle DC (Current development progress) 51
Slide 52: Sustainability Initiatives
SUSTAINABILITY INITIATIVES
Slide 53: Sustainability Initiatives
Sustainability Initiatives Axis-REIT’s inaugural sustainability report 2016 will be published in February 2017 and has been prepared in accordance with the Global Reporting Initiative (“GRI”) G4 guidelines – core, and the GRI Construction and Real Estate Sector Supplement (“CRESS”). Going forward,
Slide 54: 1Q2017 Investments Report
1Q2017 INVESTMENTS REPORT
Slide 55: Ongoing Acquisitions – Kerry Warehouse
Ongoing Acquisitions Kerry Warehouse – Pasir Gudang, Johor Target Completion Date : 3Q2017 Land Area : Approx. 6 acres Land Tenure : Leasehold Occupancy : 100% Purchase Price : RM33 million Projected Net Property Yield : 7.5% WALE : 4 years 55
Slide 56: Ongoing Acquisitions – Kuantan Industrial Facility
Ongoing Acquisitions Industrial Facility – Kuantan, Pahang Target Completion Date : 3Q2017 Land Area : Approx. 120 acres Land Tenure : Leasehold Occupancy : 100% Purchase Price : RM155 million WALE : 21 years 56
Slide 57: Ongoing Acquisitions – Iskandar Puteri Industrial Facility
Ongoing Acquisitions Industrial Facility – Iskandar Puteri, Johor Target Completion Date : 2Q2017 Land Area : Approx. 9.0 acres Land Tenure : Freehold Occupancy : 100% Purchase Price : RM50 million WALE : 21 years 57
Slide 58: Prospective Acquisition Targets
Prospective Acquisition Targets The Manager continues to aggressively source and evaluate potential acquisition targets that are deemed investable by Axis-REIT. The selection of properties will continue to focus on: • Grade A logistics facilities and manufacturing facilities with long leases from te
Slide 59: Property Disposal
PROPERTY DISPOSAL
Slide 60: Property Disposal – Axis Eureka
Property Disposal Axis Eureka – Cyberjaya, Selangor SPA Signing Date: 24 October 2016 Price: RM56,132,075.00 Buyer: Malaysia Qualifications Agency (Agensi Kelayakan Malaysia) Occupancy Rate: 59.6% as at 31 December 2016 Net Yield: 4.8% for 2016 Completion Date: 8 March 2017 Gain on Disposal: RM1.35
Slide 61: 1Q2017 Investor Relations Report
1Q2017 INVESTOR RELATIONS REPORT
Slide 62: Unit Price Performance 1Q2017
Unit Price Performance 1Q2017 AXREIT: 1 Jan 2014 – 31 Mar 2017 4.00 3.69 3.69 3.62 3.62 3.62 3.55 3.54 3.55 3.58 3.50 3.53 3.53 3.45 3.50 3.38 3.37 3.31 3.34 3.27 3.09 3.00 2.85 2.50 2.00 1.77 1.80 1.75 1.69 1.70 1.70 1.72 1.65 1.66 1.68 1.68 1.61 1.64 1.61 1.61 1.63 1.65 1.55 1.55 1.50 1.00 Jan Feb
Slide 63: Unit Price Movement 1Q2017
80% 85% 90% 95% 100% 105% 110% 115% 120% 125% 1/1/2014 1/2/2014 1/3/2014 1/4/2014 1/5/2014 1/6/2014 1/7/2014 1/8/2014 1/9/2014 1/10/2014 1/11/2014 1Q2017: Unit Price @ 31 Mar 2016 4Q2016: Unit Price @ 30 Dec 2016 1/12/2014 1/1/2015 1/2/2015 1/3/2015 RM1.61 RM1.65 1/4/2015 1/5/2015 1/6/2015 1/7/2015
Slide 64: Volume Movement 1Q2017
Volume Movement 1Q2017 45,000,000 AXREIT: 1 Jan 2014 – 31 Mar 2017 40,208,000 39,783,200 40,000,000 35,000,00033,826,000 32,708,200 30,000,000 27,806,000 27,347,800 25,000,000 23,451,400 23,438,700 22,491,600 21,092,600 21,028,800 20,000,000 18,616,000 15,849,600 16,046,400 15,009,300 15,000,000 13,
Slide 65: Top 10 Unitholders 1Q2017
Top 10 Unitholders 1Q2017 1 EMPLOYEES PROVIDENT FUND 9.67% 2 AMANAH SAHAM BUMIPUTERA 9.05% 3 LEMBAGA TABUNG HAJI 5.43% 4 TEW PENG HWEE @ TEOH PENG HWEE 5.04% 5 ALEX LEE LAO 4.53% KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 3.96% 6 PERMODALAN NASIONAL BERHAD 3.95% 7 AMANAH SAHAM MALAYSIA 2.84% 8 AMANAH S
Slide 66: Analysis of >2 million Unitholders
Analysis of >2 million Unitholders Top 5 increases in unitholdings: Last Quarter Increase KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 1.6% AMANAH SAHAM GEMILANG FOR AMANAH SAHAM KESIHATAN 1.1% AMANAH SAHAM GEMILANG FOR AMANAH SAHAM PENDIDIKAN 0.4% PUBLIC STRATEGIC SMALLCAP FUND 0.2% RHB TRUSTEES BERHAD
Slide 67: Investor Visibility and Liquidity 1Q2017
Investor Visibility and Liquidity 1Q2017 4,500 No. of CDS Accounts 3,891 3,934 4,000 3,790 3,718 3,776 3,611 3,500 3,200 3,219 3,309 3,176 3,009 3,000 2,850 2,702 2,420 2,500 2,080 2,000 1,652 1,500 1,000 500 - 2008 2009 2010 2011 2012 2013 2014 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q201
Slide 68: Analyst Coverage 1Q2017
Analyst Coverage 1Q2017 Coverage Rating Target Price (RM) Published Date 20-Jan-17 Alliance DBS Hold 1.80 20-Jan-17 Hong Leong IB Hold 1.72 20-Jan-17 KAF Hold 1.65 20-Jan-17 Kenanga Hold 1.58 20-Jan-17 Maybank Hold 1.70 20-Jan-17 MIDF Hold 1.68 20-Jan-17 UOBKayHian Hold 1.65 20-Jan-17 RHB Hold 1.70
Slide 69: Thank You
THANK YOU 69
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