Axis Real Estate Investment Trust · MYX:AXREIT
Axis Real Estate Investment Trust — Q2 2011 Earnings Presentation
82 slides from Axis Real Estate Investment Trust's earnings presentation, July 2011
Slide 1: Axis-REIT Results Presentation 2Q 2011
Axis‐REIT Results Presentation 2Q 2011
Slide 2: An Overview
Als REAL ESTATE INVESTMENT TRUST An Overview
Slide 3: Milestones 2011
Milestones 2011 Unitholders have approved to increase the Approved Fund Size from 375,901,000 units to 451,081,200 units Market Cap increased from to Completed the acquisition of RM891million to RM 921 million properties worth RM 81.25 million Closing price 22 July 2011 was at in 1H 2011 an all time
Slide 4: Highlights - YTD Unit Price Performance
Highlights ‐ YTD Unit Price Performance AXIS vs KLCI (12 month) Price & Volume Statistic 130 AXIS KLCI Index NAV per unit (RHS) 2.05 Current : RM2.55 Price 125 2 52 Week Hi : RM2.55 120 1.95 Rebased to 100% 52 Week Lo : RM2.05 Price (RM) 115 1.9 1‐Mth Daily : 65,104 110 1.85 Avg Volume 105 1.8 3‐Mth
Slide 5: Highlights - Yield Comparison FY 2011 (Annualised)
Highlights ‐ Yield Comparison FY 2011 (Annualised) 16.00% 14.00% 12.00% 10.00% 7.00% % 8.00% Return 6.00% Capital Gain Dividend 4.00% 6.82% 5.80% 2.00% 4.00% 3.15% 3.00% 2.10% 0.00% 5
Slide 6: Total return to shareholders – 166% since IPO
Total return to shareholders – 166% since IPO Axis REIT Total Return 180% 166% 160% 140% 120% 100% 80% 67% 65% 60% 40% 31% 20% 0% IPO ‐ RM1.25 Placement '08 ‐ RM1.80 Placement '09 ‐ RM1.66 Placement '10 ‐ RM1.97 Movement in Market Price Distribution Return 6
Slide 7: Unit Price Performance continues to improve
Unit Price Performance continues to improve Closing Prices Jun 2010 ‐ Jun 2011 RM2.60 RM2.55 2.55 RM2.50 RM2.45 2.45 RM2.40 2.40 2.37 2.37 2.36 RM2.35 2.33 2.32 2.33 RM2.30 RM2.25 2.22 RM2.20 RM2.15 2.16 2.12 RM2.10 2.09 RM2.05 2.02 RM2.00 RM1.95 RM1.90 RM1.85 RM1.80 Jun Jul Aug Sep Oct Nov Dec Jan
Slide 8: Second Quarter 2011 Results
Als REAL ESTATE INVESTMENT TRUST Second Quarter 2011 Results
Slide 9: Snapshot
Snapshot Approved Fund Size 375,901,000 units Manager Axis REIT Managers Bhd Investment Properties 1,250.00 million (as at 30 June 2011 – Unaudited) Market Capitalisation RM920.96 million (as at 30 June 2011) Unit Price RM2.45 (as at 30 June 2011) Gearing RM475.47 million (37.52% of Tota
Slide 10: Financial Results – Income Statement
Financial Results – Income Statement Net Property Income exceeds 2Q2010 by 34.84% Changes / 2Q2011 2Q2010 Movement No. of Properties 27 23 +4 Property Income (RM’000) 28,362 20,978 + 35.20% Net Property Income (RM’000) 23,938 17,753 + 34.84% Profit before Taxation (RM’000) 15,584 12,116 + 28.62% Dis
Slide 11: Financial Results – Balance Sheet
Financial Results – Balance Sheet Trading at premium to NAV of 22.50% 2H 2011 31 DEC 2010 (RM ‘000) (RM’000) Total Assets 1,267,208 1,208,897 Investment Properties 1,250,042 1,178,682 Borrowings 475,474 416,609 Net Asset Value 752,507 755,230 Unitholders’ Capital 540,281 540,281 Gearing 37.52% 34.46
Slide 12: 30 June 2011 Financial Results
30 June 2011 Financial Results
Slide 13: Financial Results – Income Statement
Financial Results – Income Statement 2Q 2011 2Q 2010 Changes / (RM ‘000) (RM’000) Movement No. of Properties 27 23 +4 Property Income 28,362 20,978 + 35.20% Property Expenses (4,424) (3,225) + 37.18% Net Property Income 23,938 17,753 + 34.84% Accounting Loss on Disposal (258) ‐ Interest Income 74 43
Slide 14: Financial Results – Income Statement
Financial Results – Income Statement 1H 2011 1H 2010 Changes / (RM ‘000) (RM’000) Movement No. of Properties 27 23 +4 Property Income – Note 1 55,610 40,775 +36.38% Property Expenses – Note 2 (8,158) (6,300) + 29.49% Net Property Income 47,452 34,475 + 37.64% Accounting loss on disposal – Note 3 (25
Slide 15: Notes to Financial Results – Income Statement
Notes to Financial Results – Income Statement Note 1 – Property Income Property income has increased by 36% as compared to last preceding half year due to : a) Rental income from the 5 new properties completed since the 2nd half of last year ie Tesco Bukit Indah, Axis PDI Centre, Axis Technology Cen
Slide 16: Notes to Financial Results – Income Statement
Notes to Financial Results – Income Statement Note 3 – Accounting loss on disposal and Realisation of revaluation gain on disposal The disposal of Axis North Port LC 1 on 18 April 2011 (“the Disposal”), has resulted in a net gain of RM785,000 which can be calculated as follow: Simple mathematical co
Slide 17: Notes to Financial Results – Income Statement
Notes to Financial Results – Income Statement Note 3 – Accounting loss on disposal and Realisation of revaluation gain on disposal (cont’d) Due to the compliance requirement with the FRS 140 accounting standard, the Accounting loss on disposal of (RM258,000) needs to be offset against the Realisatio
Slide 18: Notes to Financial Results – Income Statement
Notes to Financial Results – Income Statement Note 4 – Non‐Property Expenses Non‐Property Expenses has increased due to the increase in the NAV of the Fund. The Management Expense Ratio (“MER”) for the 1st half year is at 1.22% of Net Asset Value. Note 5 – Islamic financing cost The increase in Isla
Slide 19: Summary of EPU (Realised) and DPU
Summary of EPU (Realised) and DPU 18.00 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 10.00 8.74* 8.70 8.00 6.00 4.87 4.70 4.00 2.00 ‐ 2005 2006 2007 2008 2009 2010 1H2011 DPU * Based on Adjusted EPU EPU Realised 19
Slide 20: Detailed Property Performance Analysis (RM’000)
Detailed Property Performance Analysis (RM’000) Book Value Fair Value Acq Cost + Annualised Gross Yield (a) Adjust (b) Enhancement (c) Revenue (d) (d) / (c) 1 ABP 107,313 21,883 85,430 11,154 13.06% 2 Axis Plaza 31,037 8,498 22,539 2,826 12.54% 3 Crystal Plaza 96,597 39,458 57,140 10,324 18.07% 4 In
Slide 21: Balance Sheet Highlights (RM’000)
Balance Sheet Highlights (RM’000) 30/6/11 31/12/10 Changes Investment Properties 1,250,042 1,178,682 + 71,360 Other Assets 17,166 30,215 ‐ 13,049 TOTAL ASSETS 1,267,208 1,208,897 + 58,311 Borrowings 475,474 416,609 + 58,865 Other Payables 39,227 37,058 + 2,169 TOTAL LIABILITIES 514,701 453,667 + 61,
Slide 22: Management Expense Ratio (“MER”)
Management Expense Ratio (“MER”) MER= Total administrative expenses incl. Manager and Trustee’s fees Average net asset value of the Fund. 1.60% 1.47% 1.38% 1.37% 1.35% 1.40% 1.29% 1.22% 1.21% 1.22% 1.20% 1.14% 1.00% % of NAV 0.80% 0.60% 0.40% 0.20% 0.00% Jun‐07 Oct‐07 Dec‐07 Feb‐08 Jun‐08 Oct‐08 Dec
Slide 23: Total Assets and Unitholders’ Funds
Total Assets and Unitholders’ Funds 1,400.0 Rapid increase in both Total Assets & 1,208.9 1,267.2 1,200.0 Unitholders’ Funds 1,000.0 952.6 907.7 800.0 732.9 755.2 752.5 726.4 RM mil 658.2 581.8 565.2 600.0 550.0 447.9 450.3 402.3 411.8 416.8 423.2 400.0 339.6 334.7 277.9 286.5 294.1 294.2 200.0 ‐ 31
Slide 24: Borrowings
Borrowings 2006 2007 2008 2009 2010 1H2011 Total Borrowings (RM’000) 88,089 209,816 230,456 308,932 416,609 475,474 Total Assets (RM’000) 411,781 581,857 726,371 907,745 1,208,897 1,267,208 Gearings 21.39% 36.06% 31.73% 34.03% 34.46% 37.52% Effective Interest Rate 4.38% 4.39% 4.28% 4.11% 4.48% 4.56%
Slide 25: Gearing Levels
Gearing Levels 40.0% Placements Undertaken 37.5% 38.0% 36.1% 36.0% 35.4% 34.5% 35.0% 34.0% 33.0% 33.1% 31.8% 31.7% 31.3% 31.2% 30.0% 29.1% 26.8% 27.3% 25.0% 25.0% 23.7% 23.5% 22.4% 21.4% 20.0% 15.0% 14.0% 11.8% 10.8% 10.0% 5.0% 0.0% 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q
Slide 26: Summary of Fair Value movement in 2Q 2010
Summary of Fair Value movement in 2Q 2010 There has been no movement in the fair value of the portfolio in 2Q 2011 26
Slide 27: Summary of Resolutions
Summary of Resolutions
Slide 28: 1. Proposed Placement
7 1. Proposed Placement
Slide 29: Capital Placement – A Historical Perspective
Capital Placement – A Historical Perspective 2.60 Premium A total 170.0 million new units had been placed out since IPO of 22.5% 2.45 2.40 2.37 2.34 2.20 2.16 2.00 2.00 2.02 2.01 2.00 2.00 1.93 1.85 1.84 1.86 1.80 1.78 1.79 1.79 1.75 1.75 1.76 1.74 1.70 1.68 1.65 1.65 1.65 1.60 1.63 1.62 1.50 1.40 1
Slide 30: Proposed Placement
Proposed Placement What is the Proposed Placement size? Up to 75,180,200 new Units; representing 20% of the existing approved size. The proposed placement is expected to raise RM170.0 million. Rationale for the Proposed Placement? The Proposed Placement will enable Axis‐REIT to pare down the bor
Slide 31: Proposed Placement (cont’d)
Proposed Placement (cont’d) Will the Proposed Placement Be Dilutive to Unitholders’ returns? The Manager will closely monitor the timing on the rolling out of the Proposed Placement and the completion of the acquisitions; to minimise negative carry on the new units. It is crucial in ensuring that
Slide 32: 2. Proposed Income Distribution Reinvestment Plan (“IDRP”)
2. Proposed Income Distribution Reinvestment Plan (“IDRP”)
Slide 33: Proposed Income Distribution Reinvestment Plan (“IDRP”)
Proposed Income Distribution Reinvestment Plan (“IDRP) What is a Income Distribution Reinvestment Plan (“IDRP”)? Unitholders are given an option to reinvest income distribution in new Units instead of receiving cash. How does it work? Whenever a cash income distribution is announced, the Board d
Slide 34: Proposed Income Distribution Reinvestment Plan (cont’d)
Proposed Income Distribution Reinvestment Plan (cont’d) Will withholding tax still be applicable? Yes. Withholding tax Applies to both the Electable Portion and remaining Portion. What benefits are there for Unitholders? Opportunity to invest in new Units at a discount and to provide Unitholders
Slide 35: Proposed Income Distribution Reinvestment Plan (cont’d)
Proposed Income Distribution Reinvestment Plan (cont’d) How much discount will I receive and how are the units priced? Issue price will be at a discount of not more than 10% to the 5‐day volume weighted average market price (“VWAMP”) of the Units immediately before the Price‐Fixing Date. What ha
Slide 36: Illustration on the IDRP
Illustration on the IDRP Income distribution of 4.50 sen per Unit. Individual A holds 12,000 Units . Option for Unitholders to reinvest 50% of the income distribution under IDRP. VWAMP for new Unit is assumed to be RM2.55 and the Exercise price for IDRP is RM2.43(net of 5% discount) Scenario
Slide 37: Illustration on the IDRP (cont’d)
Illustration on the IDRP (cont’d) Scenario 2 – Individual A elects to receive the entire electable portion in new units Individual A’s pay out in terms of new Units and cash is tabulated below:‐ New Units Cash Income distribution (net of withholding tax) 243.00 243.00 Units alloted at Exercise Pri
Slide 38: Indicative Timeline of the Income Dividend Reinvestment Plan
Indicative Timeline of the Income Dividend Reinvestment Plan Event Indicative Timeline Announcement of the Price‐Fixing Date and Book T Closure Date Book Closure Date T + 10 market days Despatch of information memorandum and Notice of T + 18 Market Days Election Expiry Date T + 30 Market Days Issuan
Slide 39: 3. Proposed Amendments to the Trust Deed
3. Proposed Amendments to the Trust Deed
Slide 40: Proposed Amendments to the Trust Deed
Proposed Amendments to the Trust Deed What is the rationale to implement the proposed amendments? Rationale for Proposed Amendments to Management Fee Clause Strengthening the alignment of the Manager’s interest in the fund Rationale for Proposed Amendments to Other Clauses Amendments are administr
Slide 41: Proposed Amendments to the Trust Deed
Proposed Amendments to the Trust Deed Will this affect the Unitholders’ capital, earnings, NAV per Unit and gearing? No. The proposed amendments will not affect any of the above.
Slide 42: Investor Relations
Investor Relations
Slide 43: Volume Performance
Volume Performance Volume Traded Jun 2010 ‐ Jun 2011 7,000,000 6,629,000 6,455,7006,422,800 5,902,000 6,000,000 5,156,000 5,000,000 4,000,000 3,000,000 2,472,700 2,152,300 2,114,400 2,000,000 1,634,700 1,538,100 1,197,600 1,014,5001,026,700 1,000,000 ‐ Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
Slide 44: Improving Investor Visibility and Liquidity
Improving Investor Visibility and Liquidity No. of Unitholders 3000 2597 2500 2420 2230 2109 1959 2000 1652 1500 1370 1166 941 1000 500 0 Dec '06 Dec '07 Jun '08 Dec '08 Jun '09 Dec '09 Jun '10 Dec ' 10 Jun '11 Liquidity of the stock remains new Q1 2011 levels 2Q2011 – 14.01 mln units transacted
Slide 45: Malaysian REIT Managers Association (“MRMA”)
Malaysian REIT Managers Association (“MRMA”) REIT Roadshows‐ The next event will be held on the 29th July 2011 at the Hyatt Regency Kota Kinabalu The MRMA now has 12 members out of 13 listed REITs The two working committees at the MRMA are the: Finance Committee – currently engaging with the MOF to
Slide 46: Business Development
Business Development
Slide 47: Acquisitions Completed
We Acquisitions Completed > q p
Slide 48: 2011 Acquisition – D8, PTP (Johor)
2011 Acquisition – D8, PTP (Johor) • SPA signed on 20 April 2010 • Completion Date: 1 March 2011 • Tenant: Nippon Express (M) Sdn Bhd Land Area : 6.12 acres (622,587 sq ft) Gross Built Up : 187,000 sq ft Land Tenure : Leasehold land with 47 yrs ‐ sublease expired Mar 2055 Occupancy : 100% Tenure : 1
Slide 49: 2011 Acquisition – Axis Eureka (Cyberjaya)
2011 Acquisition – Axis Eureka (Cyberjaya) • SPA signed on 30 December 2010 • Completion Date: 19 April 2011 • Tenant: • Scicom (MSC) Berhad • Multimedia Development Corporation Sdn Bhd (MDEC) • Wolters Kluwer Enterprise Services Land Area : 2.06 acres (89,760 sq ft) • Partners Sdn Bhd Gross Built U
Slide 50: 2011 Disposal
—/ 2011 Disposal / ~
Slide 51: 2011 Disposal – Axis North Port Logistics Centre
2011 Disposal – Axis North Port Logistics Centre Completion Date : 18 April 2011 Disposal Price : RM 14.5 million Net Gain on Disposal : RM 791,951 RPGT : RM0 Net Gain available for Distribution : RM 791,951 51
Slide 52: Axis North Port Logistic Center
Axis North Port Logistic Center Rationale In less than 5 years of ownership of the property by Axis‐REIT; the Manager believes it has optimized the potential of Axis North Port LC 1. The Manager also feels that there is a limited upside to future rental growth and therefore this is an opportune time
Slide 53: Acquisitions for 2011
we Acquisitions for 2011 /> 4
Slide 54: Private Equity Pipeline – Axis Techpoint
Private Equity Pipeline – Axis Techpoint 1 Lot 11, Jalan 225, Petaling Jaya Office Warehouse Site Area = 2.84 acres (123,710 sq ft) Built Up Area = 121,800 sq ft Land Tenure = 99 yrs expiring May 2067 6‐storey office block = 66,000 sqft Single storey warehouse = 55,800 sqft Car Parks = 149 lots Ware
Slide 55: Potential 3rd Party Acquisitions
Potential 3rd Party Acquisitions The Manager is currently assessing for the following assets as potential acquisition targets : ¾ 1 logistics warehouse on a sale and leaseback arrangement in Bayan Lepas with a Multinational Company – Value 48,500,000 (Indicative Yield 8.3%) ¾ 1 logistics warehouse i
Slide 56: Property Report
Property Report
Slide 57: Asset Performance – 2010/2011
Asset Performance – 2010/ 2011 It is all about ….. INCOME GROWTH RISK MANAGEMENT ASSET ENHANCEMENT
Slide 58: Income Growth – Rental Reversions in Q2 2011
Income Growth – Rental Reversions in Q2 2011 Properties Space Renegotiated (sq. ft.) % Movement Menara Axis 26,255 +1.39% Crystal Plaza 7,746 +10.0% Axis Business Park 225,817 ‐3.80% Infinite Centre 38,933 +4.83% Wisma Kemajuan 40,632 +4.48% Kayangan Depot 2,609 No Change Axis Plaza 57,439 No Change
Slide 59: Income Growth – Increasing Occupancy Rates for Q2 2011
Income Growth‐ Increasing Occupancy Rates for Q2 2011 As at 31st Dec, 2010 95.73% As at 30th June 2011 95.98% A Comparison to the Market Selangor Office Occupancy Rates Q4. 2010 78.20% Axis Multi‐tenanted Buildings Q4. 2010 90.09%
Slide 60: Occupancy Rates – Q2 2011
Occupancy Rates – Q2 2011 4.02% As at 30th June 2011 we have only 7 of our 27 buildings that carry any vacancy. This is only 4.02% of NLA 95.98%
Slide 61: Occupancy Rates – Q2 2011
Occupancy Rates – Q2 2011 Occupancy rates of the 7 buildings as of 30th June 2011 are: Kayangan Depot 56.87 Wisma Kemajuan 73.95 Infinite Centre 93.42 Axis Plaza 80.26 Axis Business 99.57 Park Quattro West 80.33 Menara Axis 99.62 Occupancy %
Slide 62: Occupancy Rates – Q2 2011
Occupancy Rates – Q2 2011 Occupancy rates (Improvement by 30th September 2011) 65.45 Kayangan Depot 56.87 77.20 Wisma Kemajuan 73.95 93.42 Infinite Centre 93.42 89.25 Axis Plaza 80.26 100.00 Axis Business Park 99.57 89.45 Quattro West 80.33 100.00 Menara Axis 99.62 Current Occupancy % By 30th Septem
Slide 63: Risk management - Top Ten Tenants - Strong Rental Covenants
Risk management ‐Top Ten Tenants ‐Strong Rental Covenants 1. Konsortium Logistik Bhd 2. IDS Logistics Services (M) Sdn Bhd 3. Tesco Stores (M) Sdn Bhd 4. Fuji Xerox Asia Pacific Pte Ltd 5. Tenaga Nasional Bhd 6. Strateq Data Center Sdn Bhd (formerly Kompakar CRC Sdn Bhd) 7. BMW Asia Technology Centr
Slide 64: Risk Management – Keeping a Diverse Portfolio
Risk Management‐ Keeping a Diverse Portfolio Portfolio Diversification by Type and NLA Portfolio Diversification by Geographical and NLA Kedah Prai Cyberjaya 3% 3% 3% 3% 14% Johor Petaling Jaya 40% 22% 39% 35% Klang 10% Shah Alam 8% 20% Ofiice Office/Industrial Warehouse Retail Warehouse Logistic Li
Slide 65: Risk Profile – Manageable Lease Expiry Profiles
Risk Profile – Manageable Lease Expiry Profiles Year % of % of Rental Year % of % of Rental Year % of % of Rental Income/m Income/m Income/m Property 2011 Total NLA onth 2012 Total NLA onth 2013 Total NLA onth Menara Axis 29,313 0.66 1.44 ‐ ‐ 0.03 72,739 1.64 3.03 Crystal Plaza 9,262 0.21 0.39 12,43
Slide 66: Asset Enhancements - Project Update
Asset Enhancements ‐ Project Update
Slide 67: Asset Enhancements - Project Update
Asset Enhancements ‐ Project Update
Slide 68: Asset Enhancements – Menara Axis Penthouse
Asset Enhancements‐ Menara Axis Penthouse Previously unused area comprising 6,700sf, has been converted to grade A office space with high grade toilets and fittings.
Slide 69: Menara Axis – Penthouse
Menara Axis – Penthouse Board Room Breakout Area Main Workstations CEO’s Office
Slide 70: Asset Enhancements – Crystal Plaza
Asset Enhancements‐ Crystal Plaza
Slide 71: Crystal Plaza Enhancement
Crystal Plaza Enhancement 6 new Cooling Towers Installed 6 new pumps installed New waterproofing installed All Toilets Upgraded New male toilet fittings New Lobby Designs
Slide 72: Infinite Centre – existing site
Infinite Centre – existing site
Slide 73: Infinite Centre Enhancement
Infinite Centre Enhancement Perspective View:
Slide 74: Infinite Centre Enhancement
Infinite Centre Enhancement Perspective View:
Slide 75: Wisma Bintang Proposed Enhancement
Wisma Bintang Proposed Enhancement Current Building Complex
Slide 76: Wisma Bintang Proposed Enhancement
Wisma Bintang Proposed Enhancement Perspective View:
Slide 77: Wisma Bintang Proposed Enhancement
Wisma Bintang Proposed Enhancement Perspective View:
Slide 78: Wisma Bintang Proposed Enhancement
Wisma Bintang Proposed Enhancement Perspective View:
Slide 79: Wisma Bintang Proposed Enhancement
Wisma Bintang Proposed Enhancement Layout View – Overall site plan:
Slide 80: Kayangan Depot Project
Kayangan Depot Project Current View
Slide 81: Kayangan Depot Project
Kayangan Depot Project Perspective View: Front View – Main Lobby
Slide 82: Thank You
Thank You
Axis Real Estate Investment Trust — Q2 2011 Earnings Presentation on 6ix