Axis Real Estate Investment Trust · MYX:AXREIT

Axis Real Estate Investment Trust — Q1 2013 Earnings Presentation

68 slides from Axis Real Estate Investment Trust's earnings presentation, Apr 22, 2013

  1. Slide 1: Axis-REIT Unaudited Results 1Q 2013

    Axis-REIT Unaudited Results 1Q 2013 22nd April 2013

  2. Slide 2: Highlights for 2012

    Highlights for 2012 AtalS REAL ESTATE INVESTMENT TRUST

  3. Slide 3: Highlights 1Q 2013

    Highlights 1Q 2013  Achieved a DPU of 4.5 sen 1Q 2013.  Provided our Unitholders with a total return of 20.3%*.  Preparing to launch our 2nd Sukuk for RM 190 million.  Completed our IT Transformation program for the company with the adoption of the YARDI platform.  Currently trades at a premium

  4. Slide 4: Our Strategy

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  5. Slide 5: Our Strategy

    Our Strategy  Targeting Growth in our asset class  Leading the Malaysian REIT Managers Association to drive Regulatory and Tax Reform  To build on our SUKUK presence in the market  Continue to enhance existing assets to drive value and income  Trading of assets to reward our Unitholders  Best

  6. Slide 6: Axis-REIT Financials for March 2013

    Axis- REIT Financials for 31 March 2013

  7. Slide 7: A Quick Snapshot 1Q 2013

    A Quick Snapshot 1Q 2013 Total Net Income (RM' 000) 20,875 Earnings per Unit ("EPU") ("Realised") (Sen) 4.50 Income Distribution Declared (RM'000) 20,543 Distribution per Unit* ("DPU") (Sen) 4.50 Number of Investment Properties 31 Units in Circulation (Units) 456,517,221 Assets Under Management (RM'

  8. Slide 8: Financial Results – Income Statement 1Q 2013

    Financial Results – Income Statement 1Q 2013 1Q 2012 Changes / (RM ‘000) (RM’000) Movement No. of Properties 31 29 +2 Property Income 34,893 32,236 + 8.24% Property Expenses (5,105) (4,792) + 6.53% Net Property Income 29,788 27,444 + 8.54% Interest Income 114 50 Non-Property Expenses (3,142) (2,937)

  9. Slide 9: Financial Results – Income Statement 1Q 2013 vs 4Q 2012

    Financial Results – Income Statement 1Q 2013 4Q 2012 Changes / (RM ‘000) (RM’000) Movement No. of Properties 31 31 - Property Income – Note 1 34,893 34,906 - 0.04% Property Expenses – Note 2 (5,105) (5,393) -5.34% Net Property Income 29,788 29,513 + 0.93% Interest Income 114 93 Non-Property Expenses

  10. Slide 10: Notes to Financial Results – Income Statement

    Notes to Financial Results – Income Statement Note 1 – Property Income Property income is in line with the last preceding quarter as the loss of income from Kayangan Depot which was disposed on 31 December 2012 has been offset against the positive rental revisions. Note 2 – Property Expenses Propert

  11. Slide 11: Note 4 – Islamic financing cost

    Notes to Financial Results – Income Statement Note 4 – Islamic financing cost The decrease in Islamic financing cost is due to the drop in gearing level of the Fund from the proceed of disposal of Kayangan Depot that was completed on 31 December 2012. The gearing level of the Fund dropped from 34.56

  12. Slide 12: Adjusted Income Before Taxation – Earnings by Quarter

    Notes to Financial Results – Income Statement Note 5 – Adjusted Income Before Taxation Earnings by Quarter (1Q 2013 vs Previous 4 Quarters in FY2012) 30.00 Gain on disposal of Kayangan Depot 25.00 5.93 20.00 RM (million) 15.00 10.00 19.86 19.81 19.21 19.76 20.54 5.00 - 1Q 2012 2Q 2012 3Q 2012 4Q 201

  13. Slide 13: Balance Sheet Highlights (RM’000)

    Balance Sheet Highlights (RM’000) 31/03/13 31/12/12 Changes Investment Properties 1,524,892 1,519,519 + 5,373 Fixed Assets 508 521 - 13 Other Assets 40,102 69,368 - 29,266 TOTAL ASSETS 1,565,502 1,589,408 - 23,906 Financing 531,391 549,285 - 17,894 Other Payables 48,948 50,418 - 1,470 TOTAL LIABILIT

  14. Slide 14: Capital Return and Dividend Return

    Capital Return and Dividend Return 320% 280% 267% 240% 95% 200% 160% 142% 137% 120% 37% 48% 96% 80% 172% 23% 49% 89% 105% 10% 40% 73% 39% 0% IPO @ RM1.25 Placement '08 Placement '09 Placement '10 Placement '11 @ RM1.80 @ RM1.66 @ RM1.97 @ RM2.45 Capital Return Distribution Return 14

  15. Slide 15: Summary of EPU (Realized) and DPU

    Summary of EPU (Realized) and DPU Increasing DPU y-o-y 20.00 since listing 18.60 18.60 18.00 17.28 17.20 15.80 15.77 16.01 16.00 16.00 15.46 15.27 14.00 13.63 13.60 12.95 12.82 12.00 10.00 8.00 6.00 4.87 4.70 4.50 4.50 4.00 2.00 - 2005 2006 2007 2008 2009 2010 2011 2012 1Q 2013 EPU (realised) DPU 15

  16. Slide 16: Gross Yield Of Investment Properties

    Gross Yield Of Investment Properties 18.00% 16.00% 14.00% Average gross yield : 10.52% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 16

  17. Slide 17: Borrowings

    Borrowings 2006 2007 2008 2009 2010 2011 2012 1Q 2013 Total Financing 88,089 209,816 230,456 308,932 416,609 311,338 548,920 531,391 (RM’000) Total Assets 411,781 581,857 726,371 907,745 1,208,897 1,298,431 1,589,408 1,565,502 (RM’000) Gearings 21.39% 36.06% 31.73% 34.03% 34.46% 23.98% 34.54% 33.94%

  18. Slide 18: Gearing Levels

    Gearing Levels Placements Undertaken 45.0% 40.0% 38.2% 37.5% 36.1% 36.0% 36.0% 35.4% 34.5% 34.0% 34.5% 33.9% 35.0% 33.0% 33.1% 34.2% 31.2% 31.8% 31.7% 31.3% 30.0% 30.0% 29.1% 28.8% 26.8% 27.3% 25.0% 25.0% 23.7% 23.5% 24.0% 22.4% 21.4% 20.0% 15.0% 14.0% 11.8% 10.8% 10.0% 5.0% 0.0% 18

  19. Slide 19: Management Expense Ratio (MER)

    Management Expense Ratio (“MER”) MER= Total administrative expenses incl. Manager and Trustee’s fees 1,700 Average net asset value of the Fund. 10.00 1,589 1,600 1,566 1,537 1,500 1,400 Total Assets (RM'000) 1,298 1,300 1,267 1,209 % of NAV 1,200 1,100 1,000 953 908 900 800 726 733 700 658 582 600 5

  20. Slide 20: Total Assets and Unitholders’ Funds

    Total Assets and Unitholders’ Funds 1,800.0 Total Asset & Unitholders' Funds 1,589.4 1,565.5 1,600.0 1,411.1 1,434.8 1,400.0 1,281.6 1,208.9 1,200.0 989.7 985.1 1,000.0 952.6 959.3 959.0 907.7 RM mil 800.0 732.9 755.2 751.2 726.4 658.2 581.8 565.2 600.0 550.0 447.9 450.3 402.3 411.8 416.8 423.2 400.

  21. Slide 21: Asset Enhancement & Appreciation of Values

    Asset Enhancement & Appreciation of Values • As at 31 March 2013, only Axis Shah Alam DC1 have undergone a full revaluation, as it is mandatory for the management to have a full valuation done every 3 years for each investment property. • To-date, the Portfolio has recorded a favorable gain in fair

  22. Slide 22: Annual General Meeting

    Annual General Meeting AtalS REAL ESTATE INVESTMENT TRUST

  23. Slide 23: First AGM and Unitholders’ Meeting

    First AGM and Unitholders’ Meeting Date : 30th April 2013 Time : AGM at 10.00 a.m. followed by UM after adjournment of AGM Venue : Level 1, The Westin Agenda of AGM Ordinary Business – to receive Audited Financial Statements for FY2012 Special Business – Approval for renewal of IDRP Authority Agenda

  24. Slide 24: First AGM and Unitholders’ Meeting – Proposed Authority 1&2

    First AGM and Unitholders’ Meeting Details of the Proposed Authority 1&2 •Proposed placement of 90,762,819 new units; •Issuance of 2.0 mil units for payment of management fee in units •Approval for directors (including person relating to the director) of ARMB to subscribe for the units: Maximum subs

  25. Slide 25: Updates on the REIT Guidelines

    Updates on the REIT Guidelines

  26. Slide 26: Updates to Guidelines on REITs

    Updates to Guidelines on REITs The highlights of the latest updates to the Guidelines on Real Estate Investment Trusts issued by the Securities Commission effective on 28 December 2012 •Insertion of definitions on ‘accounts’, ‘consolidated accounts and financial statements’. •Requirement to call an

  27. Slide 27: Licensing of REIT Managers and Tax Incentive Certification

    Updates to Guidelines on REITs Licensing of REIT Managers and The Application for Certification for Tax Incentive The Capital Markets and Services Act 2007 was amended and came into effect on 28 December 2012. Amendments include expanding the definition of fund management to include the management o

  28. Slide 28: Real Estate Report

    Real Estate Report AtalS REAL ESTATE INVESTMENT TRUST

  29. Slide 29: Portfolio Key Metrics

    Key Metrics Portfolio Size: As at 31st March 2013 the Portfolio have 31 assets comprising 5,463,599 sq. ft. and 130 tenants Occupancy: The Portfolio has an occupancy of 95.64% as at 31st March 2013. There is a slight decrease from 96.21% as at 31st December 2012 Gross Income Our Gross Income was RM

  30. Slide 30: Space Under Management (Sq Ft)

    Space Under Management (Sq Ft)

  31. Slide 31: Income Growth – Rental Reversions in Q1 2013

    Income Growth – Rental Reversions in Q1 2013 Space Renegotiated Properties (Sq. Ft.) % Rent Movement MENARA AXIS 25,443 +9.01% CRYSTAL PLAZA - * +7.69% AXIS BUSINESS PARK 7,000 No Change INFINITE CENTRE - * 7.69% AXIS PLAZA - * 7.69% WISMA KEMAJUAN 19,560 +6.67% QUATTRO WEST 52,342 13.51% ANNEX 25,0

  32. Slide 32: Occupancy Rates – 31st March 2013

    Occupancy Rates – 31st March 2013 As at 31st March 2013 Axis-REIT has 9 out of 31 properties that carry any vacancy. The balance 22 properties enjoy 100% full occupancy Occupancy As at 31st Dec, 2012 96.21% As at 31st Mar, 2013 95.64% This is only 4.36% vacant of total NLA For our Multi-tenanted Bui

  33. Slide 33: Occupancy Rates – 31st March 2013

    Occupancy Rates – 31st March 2013 120.00 100.00 95.64% 80.00 60.00 40.00 20.00 -

  34. Slide 34: Risk Management – Keeping a Diverse Portfolio

    Risk Management- Keeping a Diverse Portfolio Portfolio Diversification by Type and NLA Portfolio Diversification by Geographical and NLA Cyberjaya Nilai 8% 11% 2% 5% Penang Kedah 14% Petaling Jaya 31% 3% 37% 43% Johor 18% Klang Shah Alam 7% 8% 13% Office Office/Industrial Warehouse Retail Warehouse

  35. Slide 35: Occupancy rates of properties below 90%

    Occupancy Rates Occupancy rates of properties below 90% as of 31st March 2013 Occupancy % Fonterra HQ 84.96 Axis Business Campus 15.74 Under Refurbishment Wisma Kemajuan 87.15 Axis Plaza 89.27 Note: * Vacant space Fonterra HQ is built for their future expansion *Axis Business Campus (formerly Wisma

  36. Slide 36: Risk Profile – Manageable Lease Expiry Profiles

    Risk Profile – Manageable Lease Expiry Profiles Year % of % of Rental Year % of % of Rental Year % of % of Rental Property 1Q 2013 Total NLA Income/mth 2014 Total NLA Income/mth 2015 Total NLA Income/mth Menara Axis 74,636 1.37 2.59 54,587 1.00 2.23 - - 0.03 Crystal Plaza 120,358 2.20 4.05 7,746 0.1

  37. Slide 37: Weighted Average Lease Expiry (WALE)

    Weighted Average Lease Expiry (“WALE”) The Weighted Average Lease Expiry For the Portfolio is: Q1 2013 Q4 2012 By NLA 4.66 4.43 By Rental 4.52 4.17

  38. Slide 38: Portfolio Efficiency (PE)

    Portfolio Efficiency (“PE”) The Efficiency Ratio of the Operating Cost for the Portfolio is: 1Q 2013 4Q 2012 By % 14.50 15.17

  39. Slide 39: Risk Management – Top Ten Tenants

    Risk Management -Top Ten Tenants -Strong Rental Covenants 1. Konsortium Logistik Bhd 2. LF Logistics Services (M) Sdn Bhd 3. Tenaga Nasional Berhad 4. Schenker Logistics (M) Sdn Bhd 5. Tesco Stores (M) Sdn Bhd 6. Fuji Xerox Asia Pacific Pte Ltd 7. DHL Properties (M) Sdn Bhd 8. Strateq Data Center Sd

  40. Slide 40: Property Report on Enhancements: The Value Add Strategy

    Property Report on Enhancements: The Value Add Strategy

  41. Slide 41: Asset Enhancement

    Asset Enhancement The aim of asset enhancement is to assess the REIT’s portfolio from a “property player’s” perspective. We employ our experience as a group to enhance and reposition these assets to increase their Revenue and Value - the key performance drivers of a REIT.

  42. Slide 42: Summary of Projects In Progress in 2013 – Infinite Centre

    Summary of Projects In Progress in 2013 Infinite Centre Total budget approved RM7,376,275.39. Works awarded: 16th July 2012 Status: Main building works completed 14th February 2013

  43. Slide 43: Projects In Progress – Axis Business Campus

    Summary of Projects In Progress in 2013 Axis Business Campus (formerly Wisma Bintang) Phase 1 – TNB Sub-station Contract awarded 28th Sept 2012 Status: Completed 14th February 2013 Phase 2 – West Block & South Block Contract awarded 7th January 2013 Revised completion date: 31 July 2013 Phase 3 - Ea

  44. Slide 44: Projects In Progress – MSC, Titles, Crystal Plaza Lifts

    Summary of Projects In Progress in 2013 MSC Application for Menara Axis MDEC approved application Status: Works in progress, scheduled completion June 2014 Amalgamation of Titles Property: Shah Alam DC 1 Bukit Raja Distribution Centre Seberang Prai Logistic Centre 3 Emerson, Nilai Status: In progres

  45. Slide 45: Proposed Enhancement Projects – Wisma Academy Parcel

    Proposed Enhancement Projects in 2013/ 2014 WISMA ACADEMY PARCEL Project Aims: Asset repositioning to achieve higher yields Tenants retention Asset valuation enhancement

  46. Slide 46: Wisma Academy Parcel & The Annex – Current Condition

    Proposed Enhancement Projects in 2013/ 2014 Wisma Academy Parcel & The Annex – Current Condition

  47. Slide 47: Wisma Academy Refurbishment Concepts

    Proposed Enhancement Projects in 2013/ 2014 Wisma Academy Refurbishment Concepts Wisma Academy

  48. Slide 48: Wisma Academy Refurbishment Concepts

    Proposed Enhancement Projects in 2013/ 2014 Wisma Academy Refurbishment Concepts

  49. Slide 49: Proposed Enhancement Projects – The Annex

    Proposed Enhancement Projects in 2013/ 2014 THE ANNEX Project Aims: Aggressive Aim – This is a “product Re-positioning” Asset valuation enhancement – we are enhancing to unlock the potential value of prime PJ land. We anticipate a significant increase in rentals Creating more car parks to complim

  50. Slide 50: The Annex Redevelopment Concept

    Proposed Enhancement Projects in 2013/ 2014 The Annex Redevelopment Concept The Annex

  51. Slide 51: Proposed Enhancement Projects – Menara Axis

    Proposed Enhancement Projects in 2013/ 2014 MENARA AXIS Project Deliverables: Enhancement of toilets and lift lobbies Project Aims: Asset repositioning to achieve tenants’ retention Sustainability features, translating to lower operating costs To keep asset competitiveness

  52. Slide 52: Proposed Enhancement Projects – Axis Technology Centre

    Proposed Enhancement Projects in 2013/ 2014 AXIS TECHNOLOGY CENTRE Project Deliverables: Passenger lift to roof car park Project Aims: Improve accessibility to roof top car park Enhance marketability

  53. Slide 53: Report on IT Transformation

    Report on IT Transformation MICROSOFT 365 platform – completed and running YARDI- New software platform for Axis REIT Managers Bhd accounts and property management All Departments have gone live on 1 April 2013 Data migration completed Data verification completed. Some customization in still und

  54. Slide 54: MRMA Report

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  55. Slide 55: MRMA Report – Membership

    3.4 MRMA Report Membership To date we have a total of 15 REIT managers and 1 Bank as members. Committees The Association voted the following heads of our working committees •The Regulatory Committee headed by Stewart LaBrooy •The Finance Committee headed by YP Lim •The Islamic REITs Committee headed

  56. Slide 56: MRMA Report – Members Meeting 1Q 2013

    3.4 MRMA Report Members Meeting 1Q 2013 The members met for their 1st Quarterly meeting at the PJ Hilton on the 4th April 2013. It was a breakfast meeting of members and a joint meeting with the APREA Malaysia Chapter. The meeting had 48 attendees. The meeting featured two presentations. •“Claim of

  57. Slide 57: Investor Relations

    Investor Relations AtalS REAL ESTATE INVESTMENT TRUST

  58. Slide 58: Unit Price Performance

    Unit Price Performance - Continues to trend upwards 3.9 Month-end Closing Price 3.72 3.7 3.5 3.4 3.3 3.27 3.12 3.13 3.1 3.06 3.11 3.1 2.9 3 2.75 2.73 2.74 2.85 2.8 2.7 2.71 2.68 2.5 Dec-12 May-12 Apr-12 Jun-12 Aug-12 Jan-12 Mar-12 Nov-12 Mar-13 Feb-12 Jul-12 Sep-12 Oct-12 Jan-13 Feb-13 19th Apr 2013

  59. Slide 59: Outperformed the KLSE in FY 2012

    Outperformed the KLSE in FY 2012 AXIS REIT vs KLCI ( Apr 2012 to Mar 2013 ) 140% Price & Volume Statistics 135% 130% Current Price (19thApr) : RM3.72 125% Average Monthly 120% Volume in the last 12 : 5,413,275 115% months KLCI 110% Axis REIT Highest Monthly 105% Volume in the last 12 : 11,051,000 mo

  60. Slide 60: Top 10 Unitholders

    Top 10 Unitholders 1 EMPLOYEES PROVIDENT FUND BOARD 2 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 3 TEW PENG HWEE @ TEOH PENG HWEE 4 SKIM AMANAH SAHAM BUMIPUTERA 5 ALEX LEE LAO 6 AMERICAN INTERNATIONAL ASSURANCE BERHAD 7 AMANAHRAYA TRUSTEES BERHAD AS 1MALAYSIA 8 AMANAH SAHAM DIDIK 9 AMANAH SAHAM MALAYSI

  61. Slide 61: ROD analysis

    ROD analysis Top unitholders’percentage holdings 1.Top 5 CDS accounts hold 34% of total units 2.Top 10 unitholders hold 49% of total units 3.> 1 million unitholders’total shareholding = 85% Number of unitholders 1.Total number of unit holders increased by 4 to 2,854 Most Notable Increase in Unithold

  62. Slide 62: Improving Investor Visibility and Liquidity

    Improving Investor Visibility and Liquidity Number of Unitholders 3,000 2,850 2,854 2,702 2,745 2,597 2,500 2,420 2,230 2,080 1,959 2,000 1,652 1,500 1,000 500 - @ 31 Dec'08 @30 Jun '09 @ 31 Dec'09 @30 Jun'10 @31 Dec'10 @30 Jun'11 @ 31 Dec '11 @29 Jun '12 @31 Dec '12 @ Mar '12  Total foreign holdin

  63. Slide 63: Volume Performance

    Volume Performance Month End Volume Traded 12 11.02 9.84 10 8.25 8.23 8 7.39 7.59 Million Units 6 5.31 5.14 4.5 4.13 4.05 4 2.96 3.08 3.19 2.77 2 0.86 0 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 12th Apr 2013  27.5 million units were tr

  64. Slide 64: Investor Relations Events and Conferences

    Investor Relations Events and Conferences Q1 2013 Calendar Date Conference / Events Description Stephanie Ping (SP) attended: Screens and Tools used by Socially 13/03/2013 Malaysian Investor Relations Seminar. Responsible Fund Managers. Truventus Industrial Estates and 13/03/2013 Dato’ Stewart LaBro

  65. Slide 65: Analyst Coverage – 2 New Research Reports

    Analyst Coverage – 2 New Research Reports • 2 Research Reports were initiated in 2013 by Alliance Research and CIMB • Both reports gave positive outlooks to Axis REIT • Both reports gave “BUY” and “OUTPERFORM” calls at RM3.34 • Initiation coverage meetings have been held with other banks. We anticip

  66. Slide 66: Acquisitions

    Acquisitions AtalS REAL ESTATE INVESTMENT TRUST

  67. Slide 67: Summary of Target Acquisitions

    Summary of Target Acquisitions  A Business Park Building in Petaling Jaya  An Office Building in Petaling Jaya  A newly built warehouse in North Port, Port Klang.  Great Avenue Warehouses in Shah Alam  Logistics Warehouse in Shah Alam  A Hypermarket in Prai  A Logistics warehouse in PTP Total

  68. Slide 68: Thank You

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Axis Real Estate Investment Trust — Q1 2013 Earnings Presentation on 6ix