Axis Real Estate Investment Trust · MYX:AXREIT
Axis Real Estate Investment Trust — Q4 2017 Earnings Presentation
62 slides from Axis Real Estate Investment Trust's earnings presentation, Jan 23, 2018
Slide 1: Axis Real Estate Investment Trust Results Presentation 4Q2017
Axis Real Estate Investment Trust Results Presentation 4Q2017 23 January 2018 1
Slide 2: Our Milestones
Our Milestones 1st REIT Listed on Bursa Malaysia Converted into an Islamic REIT Implemented Unit Split Implemented Income Distribution Reinvestment Plan Undertook first built-to-suit development in end 2016 2005 2017 Growth Assets Under Management RM296 million RM2.55 billion +761% Space U
Slide 3: 2017 Highlights
REAL ESTATE INVESTMENT TRUST 2017 HIGHLIGHTS
Slide 4: Investment Property Highlights
Investment Property Highlights RM 2,482,200,000 Investment Properties 4
Slide 5: Portfolio Highlights
Portfolio Highlights 1Q2017 Completed the disposal of Axis Eureka for RM56.1 million on 8 March 2017. 3Q2017 Completed the acquisition of Kerry Warehouse located at Pasir Gudang, Johor for RM33.0 million on 24 July 2017. 4Q2017 Acceptance of a Letter of Offer to acquire an industrial facility
Slide 6: Portfolio Highlights
Portfolio Highlights Completed the acquisition of Wasco Facility @ Kuantan, Pahang for RM155.0 million on 5 December 2017. Property Purchase Status Consideration Land 1 RM120.0 million Completed Land 2 RM35.0 million Pending payment of balance purchase price at a later stage in accordance with the
Slide 7: 2017 Return Comparatives
2017 Return Comparatives 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% Aw%als REAL ESTATE INVESTMENT TRUST 5.51% 5.70% 3.90% 3.33% 3.00% Axis-REIT EPF Dividend 10-yr MGS 12 Months FD Rate OPR Distribution Yield Retum www.axis-reit.com.my
Slide 8: 4Q2017 Finance Report
REAL ESTATE INVESTMENT TRUST 4Q2017 FINANCE REPORT
Slide 9: Financial Highlights
Financial Highlights Successfully concluded the sixth Placement with the listing of 125.0 million new units on 28 November 2017. Successfully implemented the Income Distribution Reinvestment Plan in conjunction with the payment of 3rd interim income distribution. A total of RM30.4 million reva
Slide 10: 2017 Summary
2017 Summary Insert Text/Table 2017 Total Net Income (“Realised”) (RM'000) 90,796 Income Available for Distribution ("Realised") (RM'000) 92,585 Earnings per Unit ("EPU") ("Realised") (Sen) 10.97 Income Distribution Declared (RM'000) 92,457 Distribution per Unit ("DPU") (Sen) 8.26 Number of Investme
Slide 11: Income Statement 4Q2017 vs 4Q2016
Income Statement 4Q2017 vs 4Q2016 4Q2017 4Q2016 Changes / (RM’000) (RM’000) Movement No. of Properties 40 39 +1 Property Income 41,913 42,230 -0.75% Property Expenses (6,607) (6,625) -0.27% Net Property Income 35,306 35,605 -0.84% Profit Income / Other Income 504 160 Non-Property Expenses (5,181) (4
Slide 12: Income Statement 2017 vs 2016
Income Statement 2017 vs 2016 2017 2016 Changes / (RM’000) (RM’000) Movement No. of Properties 40 39 +1 Property Income - Note 1 167,761 166,685 +0.65% Property Expenses - Note 2 (26,512) (27,048) -1.98% Net Property Income 141,249 139,637 +1.15% Profit Income / Other Income 984 678 Loss on disposal
Slide 13: Income Statement 2017 vs 2016
Income Statement 2017 vs 2016 Note 1 – Property Income Increase in property income as compared to preceding year is due to rental proceeds from newly acquired Kerry Warehouse and Wasco Facility @ Kuantan coupled with positive rental revision and rental of 17.6 acres land at Axis Mega Distribution Ce
Slide 14: Income Statement 2017 vs 2016
Income Statement 2017 vs 2016 Note 4 – Islamic Financing Cost Increase in financing cost due to additional financing facilities utilised to fund the new acquisitions. Note 5 – Loss on disposal of property Computation of distributable gain on disposal: RM'000 Disposal price 56,132 Less: Market value
Slide 15: Income Statement 2017 vs 2016
Income Statement 2017 vs 2016 Note 6 – Increase in Units in Issuance The Fund size has increased from 1,105,173,591 units to 1,232,326,803 through the Placement of new units and the implementation of the Income Distribution Reinvestment Plan (“IDRP”). i. The Placement of 125 million new units issued
Slide 16: Income Available For Distribution
Income Available For Distribution Adjusted Income Before Taxation/ Income Available For Distribution 25 Gain on disposal 1.35 million 20 15 RM' million 22.58 22.69 22.62 23.23 23.26 23.34 22.11 22.52 10 5 0 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 4Q 2017 16
Slide 17: 4Q2017 Income Distribution
4Q2017 Income Distribution a) 4th interim DPU of 1.02 sen On 10 November 2017, the Fund announced the DPU payment of 1.02 sen for the period of 1 October 2017 to 15 November 2017 due to the placement of 125 million new units. Payment has been made on 22 December 2017. b) Final 2017 DPU of 0.92 sen T
Slide 18: Details of the IDRP 2017
Details of the IDRP 2017 Details of the IDRP (in conjunction with payment of the 3rd interim income distribution): Income Distribution : 2.00 sen Electable Portion : 1.00 sen Issue Price : RM1.49 (5.09% discount to the 5-day VWAMP of RM1.57 per unit) Discount Rate : 5.09% No. of Units : 2,153,212 ne
Slide 19: Summary of Realised EPU and DPU
Summary of Realised EPU and DPU 10.00 9.30 9.23 9.25 1.18 9.00 8.64 0.10 0.65 8.71 8.65 8.35 8.40 8.70 8.25 7.90 8.01 8.00 8.50 8.19 8.13 0.12 8.00 7.89 7.73 7.64 8.14 7.00 6.80 6.82 6.00 5.00 4.00 3.00 2.00 1.00 - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Gain on disposal DPU EPU (real
Slide 20: Statement of Financial Position
Statement of Financial Position 31/12/17 31/12/16 (RM’000) (RM’000) Changes Investment Properties 2,482,200 2,198,149 +284,051 Fixed Assets 2,477 2,899 -422 Other Assets 64,932 43,226 +21,706 TOTAL ASSETS 2,549,609 2,244,274 305,335 Borrowings 842,594 780,665 +61,929 Other Payables 115,879 70,638 +4
Slide 21: Statement of Financial Position Borrowings
Statement of Financial Position Borrowings 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total Financing (RM’000) 230,456 308,932 416,609 311,338 548,920 528,004 683,769 731,814 780,665 842,594 Total Assets (RM’000) 726,371 907,745 1,208,897 1,298,431 1,589,408 1,616,523 2,085,883 2,141,493 2,24
Slide 22: Statement of Financial Position Gearing Levels
Statement of Financial Position Gearing Levels Placements Undertaken 40% 38%38% 36% 36% 35% 35% 36% 35% 35% 35% 34% 34%35%34% 34% 34%34% 34%34% 33% 33% 33% 33% 33% 33% 32% 32% 33% 33% 33%32%32%32% 31% 32% 30% 30% 29% 29% 27% 25% 24% 20% 15% 10% 5% 0% 2Q2008 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009
Slide 23: Unitholders' Capital
Unitholders’ Capital 3,000.0 2,549.6 2,500.0 2,244.0 2,141.5 2,085.7 2,000.0 1,589.4 1,616.5 RM million 1,500.0 1,298.4 1,208.9 1,240.3 1,044.7 1,052.3 1,060.0 1,000.0 907.7 726.4 728.2 735.4 751.0 581.8 540.3 500.0 406.9 323.3 234.9 - 31-Dec-07 31-Dec-08 31-Dec-09 31-Dec-10 31-Dec-11 31-Dec-12 31-D
Slide 24: Unitholders' Capital
Unitholders’ Capital 2%320% 302% Total returns on placements 280% 240% 162% 200% 168% 162% 160% 118% 120% 87% 95% 66% 80% 66% 140% 40% 81% 44% 67% 2% 52% 6% 22% 15% 1% 0% 5% -13% IPO @ RM0.625 Placement '08 @ Placement '09 @ Placement '10 @ Placement '11 @ Placement '14 @ Placement '17 @ RM0.90 RM0.
Slide 25: Statement of Financial Position Non-distributable Reserve
Statement of Financial Position Non-distributable Reserve Non-distributable reserve mainly comprises the gain in fair value of approximately RM331 million to date. Property Gain/(loss) RM’000 Property Gain/(loss) RM’000 Axis Steel Centre 3,813 Crystal Plaza 45,565 Menara Axis 36,733 Niro Warehouse 3
Slide 26: 4Q2017 Property Report
REAL ESTATE INVESTMENT TRUST 4Q2017 PROPERTY REPORT
Slide 27: Overview
Overview As at 31 December 2017, the occupancy rate of Axis REIT’s portfolio stands at 91.12% with stable weighted average lease expiry period of 5.87 years (based on rental). The Manager achieved positive rental reversion of 6.25% for the year. With the acquisition of Wasco Facility @ Kuantan in 4Q
Slide 28: Overview
Overview In 2018, the office space market will continue to remain challenging with the current economic condition and the amount of new supply coming into the market. With the recent curb on development of new commercial space expected to be enforced, this situation may correct itself in the medium
Slide 29: Key Portfolio Metrics
Key Portfolio Metrics As at 31 December 2017, the portfolio has 40 assets comprising 8,087,781 sq. ft. and 140 tenants. 2017 2016 Movement No of properties 40 39 +1 Property Income (RM’000) 167,761 166,685 +0.6% Property Expenses (RM’000) 26,512 27,048 -2.0% Net Property Income (RM’000) 141,249 139,
Slide 30: Key Portfolio Metrics
Key Portfolio Metrics Average Rental Rates Type of Properties 2017 2016 Movement Office (RM/sq. ft.) 4.80 4.80 - Office Industrial (RM/sq. ft.) 2.74 2.73 + 0.01 Manufacturing Facilities (RM/sq. ft.) 1.47 1.29 + 0.18 Warehouse Logistics (RM/sq. ft.) 1.53 1.53 - Hypermarket (RM/sq. ft.) 2.36 2.36 - 6.
Slide 31: Space Under Management
Space Under Management 9,000,000 8,087,781 8,000,000 7,606,863 6,859,474 7,015,242 7,000,000 6,000,000 5,463,599 5,464,124 5,000,000 ( sq ft) 4,288,054 4,449,580 4,000,000 3,679,796 2,858,121 3,000,000 2,175,522 2,000,000 1,656,943 1,186,052 1,000,000 - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2
Slide 32: Portfolio Occupancy Rate
Portfolio Occupancy Rate As at 31 December 2017, only 11 out of 40 properties carry vacancy, while one is undergoing development. Single Tenant vs Multi Tenants 28 properties enjoy 100% occupancy. Occupancy 2% As at 31 December 2017 91.12 % Vacancy 35% As at 31 December 2017 8.88 % Space available 7
Slide 33: Properties Below 90% Occupancy
Properties Below 90% Occupancy Occupancy rates of properties below 90% as at 31 December 2017 Menara Axis 86% Fonterra HQ 85% Wisma Kemajuan 84% Crystal Plaza 81% Wisma Academy Parcel 81% Axis Technology Centre 74% Infinite Centre 63% Axis Business Park 59% Quattro West 47% Axis Business Campus 26%
Slide 34: Occupancy Rates By Property
Occupancy Rates By Property as at 31 December 2017 Notes: • D21 Logistics Warehouse (formerly known as BMW Centre PTP) will be 100% occupied on 1 February 2018. • Vacant space in Fonterra HQ is built for their future expansion. • Development of 515,000 sq. ft. warehouse for the Nestle Distribution C
Slide 35: Diversified Portfolio
Diversified Portfolio NLA by Industry Sector Services 5% Healthcare & Others Lifestyle Aerospace 1% 3% 3% Vacant 9% Consumer Products 4% Engineering/Building Materials 22% Retail 5% IT/Electronics 9% Financial Services 1% Automotive 4% Logistics 34% 35
Slide 36: Diversified Portfolio
Diversified Portfolio Portfolio Diversification by Type and NLA 6% 29% 19% 5% 41% Office Office/ Industrial Hypermarkets Warehouse Logistic Manufacturing Facilities - Light Industrial 36
Slide 37: Portfolio Location
Portfolio Location Portfolio Diversification by Geographical Location Johor 26.63% Petaling Jaya 24.65% Shah Alam 19.95% Penang 9.25% Kuantan 6.27% Klang 4.19% Rawang 3.74% Nilai 3.61% Kedah 1.71% 37
Slide 38: Lease Expiry Profile
Lease Expiry Profile % of To re-check data % of % of Year % of Rental Year % of Rental Year % of Rental Property Income/ Income/ Income/ 2017 Total NLA month 2018 Total NLA month 2019 Total NLA month Petaling Jaya 565,548 6.99 12.59 379,888 4.70 6.99 513,972 6.35 13.49 Klang 366,839 4.54 3.63 - - -
Slide 39: Top Tenants
Top 10 Tenants 1. LF Logistics Services (M) Sdn Bhd 2. Yongnam Engineering Sdn Bhd 3. POS Logistic Berhad (formerly known as Konsortium Logistik Berhad) 4. Tenaga Nasional Berhad 5. Tesco Stores (Malaysia) Sdn. Bhd. 6. Schenker Logistics (Malaysia) Sdn. Bhd. 7. DHL Properties (M) Sdn Bhd 8. Strateq
Slide 40: 4Q2017 Asset Enhancements
4Q2017 ASSET ENHANCEMENTS 40
Slide 41: Completed Enhancement Works
Completed Enhancement Works Seberang Prai Logistics Warehouse 3 Upgrading of warehouse lighting to LED lighting Wisma Academy Parcel Upgrading of building façade, RC slab water proofing, road resurfacing and internal and façade painting 41
Slide 42: Completed Enhancement Works
Completed Enhancement Works Crystal Plaza Upgrading of metal deck roof and water proofing on RC roof slab Pasir Gudang Logistics Warehouse 1 Upgrading of metal deck roof 42
Slide 43: Property Development
2017 PROPERTY DEVELOPMENT 43
Slide 44: Nestle DC @ Axis Mega Distribution Centre
Nestle DC @ Axis Mega Distribution Centre (After) 50 acre site 44
Slide 45: Nestle DC @ Axis Mega Distribution Centre
Nestle DC @ Axis Mega Distribution Centre NLA : 515,000 sf Rental Rate : Starting rental of RM19.2 million per annum Tenure : 10 years with option of 2 terms of 3 years each Handover date : 31 January 2018 Lease Commencement : 1 June 2018 Cost incurred up to 31 December 2017 Market Value Valuation g
Slide 46: Upeca Facility @ Malaysia International Aerospace Centre Technology Park, Subang
Upeca Facility @ Malaysia International Aerospace Centre Technology Park, Subang 50 acre site 46
Slide 47: Location of 7.02 acres site in Subang
Location of 7.02 acres site in Subang Sultan Abdul Aziz Shah Airport Upeca Facility site Spirit Aerosystems Mosque 47
Slide 48: Salient Terms of Development
Salient Terms of Development a) Details of purchase of the sub-lease of land from MAHB Size : 7.02 acres Purchase price : RM19,876,428 (based on RM65 psf) Tenure : 49 years, expiring 31 December 2066 48
Slide 49: Salient Terms of Development
Salient Terms of Development b) Details of lease agreement with Upeca Net Lettable Area : 178,978.60 sq. ft. on 7.02 acres land Estimated Construction Cost: RM46,800,000 (capped) Net Yield : Starting at 7% net yield Tenure : 20 years with options of 2 terms of 6 years Rent Step-up : Approximately 10
Slide 50: 4Q2017 Investments Report
4Q2017 INVESTMENTS REPORT 50
Slide 51: Completed Acquisitions
Completed Acquisitions Wasco Facility – Gebeng, Pahang Completion Date : 5 December 2017 Land Area : Approx. 120 acres Land Tenure : Leasehold Occupancy : 100% Purchase Price : RM155 million WALE : 15 years 51
Slide 52: Ongoing Acquisitions
Ongoing Acquisitions Manufacturing Facility – Senawang, Negeri Sembilan Target Completion Date : 2H2018 Land Area : Approx. 4.21 acres Land Tenure : Freehold Occupancy : 100% Purchase Price : RM18.5 million WALE : 10 years 52
Slide 53: Ongoing Acquisitions
Ongoing Acquisitions Warehouse Facility – Shah Alam, Selangor Target Completion Date : 2H2018 Land Area : Approx. 10.11 acres Land Tenure : Freehold Occupancy : 100% Purchase Price : RM87 million WALE : 6 years 53
Slide 54: Ongoing Acquisitions
Ongoing Acquisitions Manufacturing Facility – Indahpura, Johor Target Completion Date : 1H2018 Land Area : Approx. 6.7 acres Land Tenure : Freehold Occupancy : 100% Purchase Price : RM45.15 million WALE (Average) : 7 years 54
Slide 55: 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 56: 4Q2017 Investor Relations Report
4Q2017 INVESTOR RELATIONS REPORT 56
Slide 57: Unit Price Performance
80% 85% 90% 100% 105% 110% 115% 120% 125% 95% 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 1/12/2014 1/1/2015 1/2/2015 1/3/2015 1/4/2015 1/5/2015 1/6/2015 1/7/2015 1/8/2015 1/9/2015 KLCI Unit Price Performance 1/10/2015 1/11/2015 1/12/2015 57 1
Slide 58: Volume Movement
Volume Movement AXREIT: 1 Jan 2014 – 31 Dec 2017 45,000,000 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 21,028,800 20,000,000 18,616,000 16,046,400 13,159,100 15,009,300 14,402,100 15,000,000 12,995,800
Slide 59: Top Unitholders
Top 10 Unitholders Name of Unitholder % CITIGROUP NOMINEES (TEMPATAN) SDN BHD 1 10.23% EMPLOYEES PROVIDENT FUND AMANAHRAYA TRUSTEES BERHAD 2 8.11% AMANAH SAHAM BUMIPUTERA 3 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 8.01% 4 LEMBAGA TABUNG HAJI 4.87% 5 TEW PENG HWEE @ TEOH PENG HWEE 4.53% 6 ALEX LEE LAO
Slide 60: Analysis of Unitholders with >2million Units
Analysis of Unitholders with >2million Units Top 5 Increases in Unitholdings Changes vs Last Quarter KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 1.6% EMPLOYEES PROVIDENT FUND 1.4% GREAT EASTERN LIFE ASSURANCE (MALAYSIA) BERHAD (PAR 3) 0.3% AMANAH SAHAM WAWASAN 2020 0.1% RHB TRUSTEES BERHAD FOR MANULIFE
Slide 61: Investor Visibility & Liquidity
Investor Visibility & Liquidity 4,500 No. of CDS Accounts 4,098 4,184 3,891 3,934 4,011 4,000 3,790 3,718 3,776 3,611 3,500 3,176 3,200 3,219 3,309 3,009 3,000 2,850 2,702 2,420 2,500 2,080 2,000 1,652 1,500 1,000 500 - Units Held 4Q2017 Units Held 3Q2017 Movement Total no. of unitholders 4,184 4,09
Slide 62: Thank You
REAL ESTATE INVESTMENT TRUST THANK YOU Win www.axis-reit.com.my
Axis Real Estate Investment Trust — Q4 2017 Earnings Presentation on 6ix