Axis Real Estate Investment Trust · MYX:AXREIT
Axis Real Estate Investment Trust — Q1 2011 Earnings Presentation
50 slides from Axis Real Estate Investment Trust's earnings presentation, April 2011
Slide 1: Presentation on First Quarter 2011 Results
Presentation on First Quarter 2011 Results
Slide 2: Disclaimer
Disclaimer This the information contained in this document is provided for information purposes only and in no way constitutes an offer of services or solicitation. Past performance is not indicative of future performance We decline any responsibility with respect to direct or indirect damages or co
Slide 3: Snapshot
Snapshot Approved Fund Size q 375,901,000 units Manager q Axis REIT Managers Bhd Investment Properties q 1,210.00 million (as at 31 March 2011 – Unaudited) Market Capitalisation q RM875.85 million (as at 31 March 2011) Unit Price q RM2.33 (as at 31 March 2011) Gearing q RM443.79 million (35.99% of T
Slide 4: Financial Results – Income Statement
Financial Results – Income Statement Net Property Income exceeds 1Q2010 by 40.62% Changes / 1Q2011 1Q2010 Movement No. of Properties 27 23 +4 Property Income (RM’000) 27,248 19,797 + 37.64% Net Property Income (RM’000) 23,514 16,722 + 40.62% Profit before Taxation (RM’000) 16,205 11,713 + 38.35% Ear
Slide 5: Financial Results – Balance Sheet
Financial Results – Balance Sheet Trading at premium to NAV of 17.00% 1Q 2011 31 DEC 2010 (RM ‘000) (RM’000) Total Assets 1,233,182 1,208,897 Investment Properties 1,210,443 1,178,682 Borrowings 443,791 416,609 Net Asset Value 752,552 755,230 Unitholders’ Capital 540,281 540,281 Gearing 35.99% 34.46
Slide 6: 31 March 2011 Financial Results
31 March 2011 Financial Results
Slide 7: Financial Results – Income Statement
Financial Results – Income Statement 1Q 2011 1Q 2010 Changes / (RM ‘000) (RM’000) Movement No. of Properties 27 23 +4 Property Income 27,248 19,797 + 37.64% Property Expenses (3,734) (3,075) + 21.43% Net Property Income 23,514 16,722 + 40.62% Interest Income - 51 Non-Property Expenses (2,192) (1,580
Slide 8: Financial Results – Income Statement
Financial Results – Income Statement 1Q 2011 4Q 2010 Changes / (RM ‘000) (RM’000) Movement No. of Properties 27 26 +1 Property Income – Note 1 27,248 26,435 + 3.08% Property Expenses – Note 2 (3,734) (3,231) + 15.57% Net Property Income 23,514 23,204 + 1.34% Interest Income - 158 Non-Property Expens
Slide 9: Notes to Financial Results – Income Statement
Notes to Financial Results – Income Statement Note 1 – Property Income Property Income in the current quarter increased by 3% as compared to immediate preceeding quarter due to : a) Rental income from the newly completed D8 Logistics Warehouse on 1 March 2011; and b) Positive rental reversion record
Slide 10: Notes to Financial Results – Income Statement
Notes to Financial Results – Income Statement Note 3 – Non-Property Expenses Non-Property expenses has dropped for the current quarter as a result of reversal on provision of doubtful debt of RM107,000. Note 4 – Islamic financing cost The increase in islamic financing cost is due to the utilisation
Slide 11: Summary of EPU (Realised) and DPU
Summary of EPU (Realised) and DPU 18.00 15.7715.80 16.0116.00 16.00 15.4615.27 14.00 13.6013.63 12.8212.95 12.00 10.00 8.00 6.00 4.87 4.70 4.31 4.20 4.00 2.00 - 2005 2006 2007 2008 2009 2010 1Q 2011 EPU (realised) DPU 11
Slide 12: 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 107,235 21,883 85,352 11,132 13.04% 2 Axis Plaza 31,000 8,498 22,502 2,794 12.42% 3 Crystal Plaza 96,170 39,458 56,712 10,348 18.25% 4 In
Slide 13: Balance Sheet Highlights (RM’000)
Balance Sheet Highlights (RM’000) 31/3/11 31/12/10 Changes Investment Properties 1,210,443 1,178,682 + 31,761 Other Assets 22,739 30,215 - 7,476 TOTAL ASSETS 1,233,182 1,208,897 + 24,285 Borrowings 443,791 416,609 + 27,182 Other Payables 36,839 37,058 - 219 TOTAL LIABILITIES 480,630 453,667 + 26,963
Slide 14: Total Assets and Unitholders’ Funds
Total Assets and Unitholders’ Funds 1,400.0 1,233.2 Rapid increase in both Total Assets & Unitholders’ Funds 1,208.9 1,200.0 1,000.0 952.6 907.7 800.0 732.9 755.2 752.6 726.4 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 15: Gearing Levels
40.0% Gearing Levels Placements Undertaken 36.1% 36.0% 36.0% 35.4% 34.0% 34.5% 35.0% 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% 15
Slide 16: 2011 Acquisitions
WE 2011 Acquisitions a
Slide 17: 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 18: 2011 Acquisition – Axis Eureka (Cyberjaya)
2011 Acquisition – Axis Eureka (Cyberjaya) • SPA signed on 30 December 2010 • Completion Date: 18 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 19: 2011 Disposal
2011 Disposal
Slide 20: 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 20
Slide 21: 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 22: Impact on Asset Under Management
Impact on Asset Under Management 1,400.00 1,277.32 1,239.42 1,208.90 1,200.00 1,000.00 952.58 907.74 800.00 726.37 732.91 658.22 RM mil 600.00 518.86 402.27 411.78 416.75 400.00 339.63 200.00 - Dec'05 Jun'06 Dec'06 Jun'07 Dec'07 Jun'08 Dec'08 Jun'09 Dec'09 Jun'10 Dec'10 Mar'10 Mar'10* * Note * : Inc
Slide 23: Potential Pipelines
W& Potential Pipelines ve
Slide 24: 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 25: Potential 3rd Party Acquisitions
Potential 3rd Party Acquisitions The Manager is currently assessing for the following assets as potential acquisition targets : 1 logistics warehouses in Johor with a long lease arrangement and step ups. 1 warehouse in Pasir Gudang Johor 1 brand new logistics warehouse in the Klang Valley for a mult
Slide 26: Investor Information
Investor Information e / oS
Slide 27: Unit Price Performance
Unit Price Performance 2.45 2.40 2.40 2.37 2.35 2.32 2.33 2.33 2.30 2.25 2.20 2.22 2.15 2.16 2.10 2.12 2.09 2.05 2.03 2.00 2.01 2.02 1.95 1.90 1.85 1.80 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 27
Slide 28: Improving Investor Visibility and Liquidity
Improving Investor Visibility and Liquidity Number of Unitholders 3,000 2,517 2,420 2,500 2,230 2,109 1,959 2,000 1,652 1,500 1,370 1,166 941 1,000 500 - Dec '06 Dec '07 Jun '08 Dec '08 Jun'09 Dec'09 Jun'10 Dec'10 Mar'11 v Have seen significant improvement in the liquidity of the stock 4Q2010 – 6.22
Slide 29: Property Portfolio Performance
Property Portfolio Performance
Slide 30: Asset Performance - 2011: Income Growth, Risk Management, Asset Enhancement
Asset Performance - 2011 It is all about ….. INCOME GROWTH RISK MANAGEMENT ASSET ENHANCEMENT
Slide 31: Income Growth – The Four Paths to Success
Income Growth – The Four Paths to Success 1. Acquisitions 2. Organic Growth - rental reversions 3. Increase Occupancy 4. Improve Efficiency
Slide 32: Organic Growth – Rental Reversions in Q1 2011
Organic Growth – Rental Reversions in Q1 2011 Properties Space Negotiated Sq Ft % Movement Menara Axis 17,976 + 7.64% Crystal Plaza 7,746 + 10.0% Axis Business Park 189,923 -4.75% Infinite Centre 21,068 + 3.07% Wisma Kemajuan 28,283 + 5.42% Kayangan Depot 2,609 No Change North Port Logistic Center 1
Slide 33: Increasing Occupancy Rates for Q1 2011
Increasing Occupancy Rates for Q1 2011 As at 31st Dec, 2010 95.73% As at 31st Mar 2011 95.83% A Comparison to the Market Selangor Office Occupancy Rates Q4. 2010 78.20% Axis Multi-tenanted Buildings * Q4. 2010 90.09%
Slide 34: Occupancy Rates – Q1 2011
Occupancy Rates – Q1 2011 4.17% As at 31st Mar 2011 we have only 6 of our 27 buildings that carry any vacancy. This is only 4.17% of NLA 95.83%
Slide 35: Occupancy Rates – Q1 2011
Occupancy Rates – Q1 2011 Occupancy rates of the 6 buildings as of 31 March 2011 are: Kayangan Depot 56.87 Wisma Kemajuan 73.95 Infinite Centre 93.42 Axis Plaza 80.26 Axis Business Park 99.57 Quattro West 72.59 - 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 100.00 Occupancy %
Slide 36: Increasing Efficiency of Building Operations - Q1 2011
Increasing Efficiency of Building Operations - Q1 2011 Income less operational building costs produce our Net Operating Income [NOI] for the assets. Measures to improve operational efficiency include: v Life cycle Management of Asserts v Vendor / contractor management and benchmarking v Improved bui
Slide 37: Top Ten Tenants - Strong Rental Covenants
Top Ten Tenants -Strong Rental Covenants 1. Konsortium Logistik Bhd 2. IDS Logistics Services (M) Sdn Bhd 3. Fuji Xerox Asia Pacific 4. Tenaga Nasional Bhd 5. Strateq Data Center Sdn Bhd (formerly Kompakar CRC Sdn Bhd) 6. BMW Asia Technology Centre Sdn Bhd 7. Scope International (M) Sdn Bhd 8. GCH R
Slide 38: Portfolio Diversifications
Portfolio Diversifications Portfolio Diversification by Type and NLA Portfolio Diversification by Geographical and NLA 3% 3% 11% 3% 22% 39% 43% 35% 13% 8% 20% Ofiice Office/Industrial Warehouse Retail Warehouse Logistic Light Industrial Petaling Jaya Shah Alam Klang Johor Kedah Prai Single Tenant Vs
Slide 39: Lease Expiry Profile
Lease Expiry Profile Year % of % of Rental Year % of % of Rental Year % of % of Rental Income/ Income/ Income/ Property 2011 Total NLA month 2012 Total NLA month 2013 Total NLA month Menara Axis 29,313 0.66 1.49 555 0.01 0.06 65,204 1.46 2.79 Crystal Plaza 9,262 0.21 0.40 12,433 0.28 0.53 181,517 4.
Slide 40: Asset Enhancement
We Asset Enhancement Va
Slide 41: Asset Enhancement
Asset Enhancement The aim of asset enhancement is to assess the REIT assets from a “property player’s” perspective. We employ our experience as a group to enhance and reposition these assets to increase their performance.
Slide 42: Asset Enhancement Quattro West: The Results
Asset Enhancement Quattro West : The Results vOccupancy 72.6% (will be 80.3% from 2Q) v vRental increases up by 25% vValuation of the property 2009 RM38 mil 2010 RM52 mil Up by 37%
Slide 43: Enhancements Underway - 2011
Asset Enhancement Enhancement s Underway - 2011 vMenara Axis New penthouse Level 8,039 sf. Completed on 16th April 2011. vCrystal Plaza Upgrading façade & common areas. Strategy is the retention of tenants. vFuji Xerox New lifts, facelift for common areas. New lease signed. vInfinite Centre Refurbis
Slide 44: Menara Axis – A New Penthouse Level Completed
Menara Axis – A New Penthouse Level Completed Previously unused area comprising 8,039 sf, will be converted to grade A office space with high grade toilets and fittings completed on 16th April 2011
Slide 45: Crystal Plaza – Refurbishment
Crystal Plaza – Refurbishment v New drop off area v New toilets and lobbies v Improvements to M&E systems v New restaurants at ground floor
Slide 46: Crystal Plaza Refurbishment
Crystal Plaza Refurbishment Major upgrading of Lobbies and Toilets
Slide 47: Other Major Asset Enhancements Planned for 2011
Asset Enhancement Other Major Asset Enhancements Planned for 2011 vInfinite Centre Refurbishment to improve the façade, upgrade lifts and common areas. vAxis Business Park – Fuji Xerox Toilets and Lift Lobbies Refurbishment Part of Axis commitment for tenant Fuji Xerox vNiro Ceramic upgrading Part o
Slide 48: Infinite Centre – existing site
Infinite Centre – existing site
Slide 49: Infinite Centre – Refurbishment Project
Infinite Centre – Refurbishment Project New entrance with internal staircase exposed using reflective glass paneling and façade cladding. Louvers to hide split A/C, with repositioning of driveway
Slide 50: Thank You
Thank You
Axis Real Estate Investment Trust — Q1 2011 Earnings Presentation on 6ix