Axis Real Estate Investment Trust · MYX:AXREIT
Axis Real Estate Investment Trust — Q2 2015 Earnings Presentation
73 slides from Axis Real Estate Investment Trust's earnings presentation, Aug 4, 2015
Slide 1: Q2 2015 Results Presentation
Q2 2015 Axis REIT Managers Bhd Q2 2015 Results Presentation 4th August 2015 1
Slide 2: Q2 2015 Highlights
Q2 2015 Highlights 2
Slide 3: Axis-REIT turns 10!
Axis-REIT turns 10! Axis-REIT was listed on the 3rd August 2005 3
Slide 4: Our 10 year milestones - briefly
Our 10 year milestones - briefly Assets Under Management RM 296 Million RM2.04 Billion Space Under Management 978,000 sq. ft. 7,020,000 sq. ft. Properties 5 34 Valuation Gain since listing RM 276,000,000 First REIT to convert into an Islamic REIT First PLC to adopt Cloud Computing Firs
Slide 5: Q2 2015 Return Comparatives
Q2 2015 Return Comparatives 7.00% 6.75% 6.00% 5.00% 4.87% 3.96% 4.00% 3.40% 3.25% 3.00% 2.00% 1.00% -0.06% 0.00% Axis-REIT Total Axis-REIT EPF Dividend 10-yr MGS 12 Months FD OPR Return * Distribution Yield Return Rate -1.00% * (Based on DPU from operations + gain on disposal + movement in market pr
Slide 6: 1H 2015 Highlights
1H 2015 Highlights RM 2,044,682,000 Investment Properties 6
Slide 7: Highlights 1H 2015
Highlights 1H 2015 Completed the acquisition of Axis Shah Alam DC 2 for RM45 million on 31 March 2015, which was the remaining property with a related party initially transacted in 2014. Acceptance of a Letter of Offer to acquire and leaseback a leading cold chain logistics facility for RM46.0 m
Slide 8: 1H 2015 Finance Report
1H 2015 Finance Report 8
Slide 9: 1H 2015 Summary
1H 2015 Summary 1H 2015 Total Net Income (“Realised”)(RM' 000) 46,073 Income Available for Distribution ("Realised") (RM' 000) 46,423 Earnings per Unit ("EPU") ("Realised") (Sen) 8.41 Income Distribution Declared (RM'000) 46,012 Distribution per Unit ("DPU") (Sen) * 8.40 Number of Investment Propert
Slide 10: Income Statement Q2 2015 vs Q2 2014
Income Statement Q2 2015 vs Q2 2014 Q2 2015 Q2 2014 Changes / (RM ‘000) (RM’000) Movement No. of Properties 34 30 +4 Property Income 41,210 34,839 + 18.3% Property Expenses (5,897) (5,379) + 9.6% Net Property Income 35,313 29,460 + 19.9% Profit Income 127 246 Non-Property Expenses (4,342) (3,339) +
Slide 11: Income Statement 1H 2015 vs 1H 2014
Income Statement 1H 2015 vs 1H 2014 1H 2015 1H 2014 Changes / (RM ‘000) (RM’000) Movement No. of Properties 34 30 +4 Property Income - Note 1 81,614 70,251 + 16.2% Property Expenses - Note 2 (11,916) (11,219) + 6.2% Net Property Income 69,698 59,032 + 18.1% Profit Income 342 430 Net gain in disposal
Slide 12: Income Statement 1H 2015 vs 1H 2014 Notes
Income Statement 1H 2015 vs 1H 2014 Note 1 – Property Income The higher property income is mainly due to contribution of rental proceeds from newly completed property acquisitions in Q4 2014 and Q1 2015, ie. Axis MRO Hub, Axis Shah Alam DC 3, Axis Steel Centre@SiLC and Axis Shah Alam DC2. Note 2 – P
Slide 13: Gross Yield of Investment Properties
Gross Yield of Investment Properties Average gross yield 1H 2015 = 9.84% Properties Gross yield (%) 18 Bayan Lepas Distribution Centre 9.66% 1 Wisma Kemajuan 18.26% 19 Axis Shah Alam DC 1 9.32% 2 Crystal Plaza 14.29% 20 Giant Hypermarket, Sungei Petani 9.03% 3 Delfi Warehouse 13.48% 21 Seberang Prai
Slide 14: Net Yield of Investment Properties / Cost
Net Yield of Investment Properties / Cost Average net yield 1H 2015 = 8.66% Properties Net yield (%) 18 Giant Hypermarket, Sungei Petani 8.26% 1 Wisma Kemajuan 14.17% 2 Crystal Plaza 11.96% 19 Bukit Raja Distribution Centre 8.24% 3 Delfi Warehouse 11.72% 20 Axis Steel Centre 7.97% 4 FCI Senai 11.43%
Slide 15: Income Statement RM' million
Income Statement 35.00 Adjusted Income Before Taxation/ Income Available For Distribution: Gain on 30.00 disposal RM10.952 mil 25.00 20.00 RM' million 15.00 23.75 22.67 10.00 31.78 20.83 20.26 19.85 5.00 0.00 1Q 2014 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 15
Slide 16: 2nd Quarter Income Distribution Statement
2nd Quarter Income Distribution Statement 2nd Quarter 2015 Income Distribution a) 2nd Interim DPU of 4.30 sen This is based on a 99.1% payout ratio on Income Available for Distribution (after adding back non-cash items as allowed under the Trust Deed) for the period 1 April 2015 to 30 June 2015. Imp
Slide 17: Summary of EPU (Realized) and DPU
Summary of EPU (Realized) and DPU 19.75 20.00 18.60 18.60 18.46 18.50 18.00 17.28 17.20 17.41 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 sen per unit 10.00 8.40 8.41 8.00 6.00 4.87 4.70 4.00 2.00 - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1H 2015 EPU (real
Slide 18: Statement of Financial Positions
Statement of Financial Positions 30/06/15 31/12/14 (RM’000) (RM’000) Changes Investment Properties – Note 1 2,044,682 1,982,587 + 62,095 Fixed Assets 3,445 2,821 + 624 Other Assets – Note 2 38,548 100,475 - 61,927 TOTAL ASSETS 2,086,675 2,085,883 + 792 Borrowings – Note 3 677,792 683,769 - 5,977 Oth
Slide 19: Statement of Financial Positions
Statement of Financial Positions Note 1 – Investment properties The acquisition of Axis Shah Alam DC2 was completed on 31 March 2015 at RM45 million. A total of RM7.611 million has been incurred for enhancement of the properties in the first half of 2015. Five properties have been revalued in 1H 201
Slide 20: Statement of Financial Positions - Note 3 Borrowings
Statement of Financial Positions - Note 3 Borrowings 1H 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total Borrowings (RM’000) 88,089 209,816 230,456 308,932 416,609 311,338 548,920 528,004 683,769 677,792 Total Assets (RM’000) 411,781 581,857 726,371 907,745 1,208,897 1,298,431 1,589,408 1,616
Slide 21: Statement of Financial Positions
Statement of Financial Positions Gearing Levels Placements Undertaken 40.0% 38.2% 37.5% 36.1% 36.0% 36.0% 35.4% 34.5% 33.1% 34.0% 34.5% 34.2% 33.9% 32.7% 32.5% 33.4% 35.0% 33.0% 32.8% 32.5% 32.6% 32.7% 31.2% 31.8%31.7% 31.3% 31.7% 32.5% 30.0% 30.0% 29.1% 28.8% 26.8% 27.3% 25.0% 25.0% 23.7% 23.5% 24.
Slide 22: Unitholders' Capital – Note 4
UNITHOLDERS’ CAPITAL – Note 4 2,500.0 The funds raised from equity placements are being injected into acquiring good 2,085.7 2,086.7 2,000.0 quality properties….. 1,589.4 1,616.5 1,500.0 1,298.4 RM mil 1,208.9 1,044.7 1,045.5 1,000.0 907.7 726.4 728.2 735.4 751.0 581.8 540.3 500.0 411.8 406.9 339.6
Slide 23: Unitholders' Capital – Note 4
UNITHOLDERS’ CAPITAL – Note 4 … resulting in good total returns to unitholders. 360% 320% 305% 280% 240% 129% 200% 164% 170% 160% 62% 120% 120% 72% 45% 80% 176% 68% 108% 27% 40% 92% 3% 75% 41% 0%+3% 0% IPO @ RM1.25 Placement '08 Placement '09 Placement '10 Placement '11 Placement '14 @ RM1.80 @ RM1.
Slide 24: Statement of Financial Positions
Statement of Financial Positions Note 5 – Non-distributable reserve Non-distributable reserve mainly comprises the favorable gain in fair value of approx. RM276 million to date. Building Gain /(Loss) RM’000 Building Gain /(Loss) RM’000 Crystal Plaza 44,329 Axis Technology Centre 2,891 Menara Axis 38
Slide 25: Q2 2015 Revaluation of Properties
Q2 2015 Revaluation of Properties 25
Slide 26: Revaluation of Properties
Revaluation of Properties Name of Properties Net Book Value Open Surplus to be as at 30 June Market incorporated 2015 Value into the (RM'000) (RM'000) accounts (RM'000) 1 Axis Business Campus 68,480 73,200 4,720 2 Wisma Academy Parcel 77,016 79,500 2,484 3 The Annex 17,012 18,000 988 Total 162,508 1
Slide 27: Q2 2015 Property Report
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Slide 28: 1H 2015 Overview
1H 2015 Overview Q2 2015 occupancy rates have increased to 92.67% from 92.58% in Q1 2015. There have been some movements in the portfolio with a major tenant moving out from Axis Technology Centre due to their corporate consolidation exercise but this has been mitigated by the new leases secured dur
Slide 29: 1H 2015 Overview
1H 2015 Overview The vacant spaces in the portfolio currently stands at 514,313 sq. ft. It is fortunate that these vacancies are occurring in our newly refurbished buildings which have recently come back on the market. Being new and contemporary, they have generated much interest with prospective te
Slide 30: Key Metrics
Key Metrics As at 30 June 2015 the Portfolio has 34 assets comprising 7,014,356 sq. ft. and 138 tenants. Type Q2 2015 Q1 2015 Movement Property Income (RM’000) 41,210 40,404 1.99% Property Expenses (RM’000) 5,897 6,019 2.03% Net Property Income (RM’000) 35,313 34,385 2.70% Occupancy 92.67% 92.58% 0.
Slide 31: Key Metrics
Key Metrics Average Rental Rates: Type of Properties Q2 2015 Q1 2015 Movement Office (RM/sq. ft.) 4.63 4.63 No change Office Industrial (RM/sq. ft.) 2.62 2.60 + 0.02 Manufacturing Facilities (RM/sq. ft.) 1.29 1.29 No change Warehouse Logistics (RM/sq. ft.) 1.69 1.68 + 0.01 Hypermarket (RM/sq. ft.) 2
Slide 32: Space Under Management (Sq. Ft.)
Space Under Management (Sq. Ft.) Space Under Management (sq ft) 8,000,000 7,014,356 6,859,474 7,000,000 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 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
Slide 33: Portfolio Occupancy Rate
Portfolio Occupancy Rate Occupancy Rate As at 30 June 2015 Axis REIT has only 11 out of 34 properties that carry vacancy. 23 properties enjoy 100% occupancy. Vacant 7.33% Occupancy As at 31 March 2015 92.58% As at 30 June 2015 92.67% Vacancy As at 30 June 2015 7.33% Occupied Space to be let out 514,
Slide 34: Occupancy Rates by Property As At 30 June 2015
Occupancy Rates by Property As At 30 June 2015 1 Menara Axis 78.77% 19 Niro Warehouse 100.00% 2 Crystal Plaza 81.33% 20 Delfi Warehouse 100.00% 3 Quattro West 84.18% 21 Axis Steel Centre 100.00% 4 Axis Eureka 59.08% 22 Bukit Raja Distribution Centre 100.00% 5 Axis Business Park 59.34% 23 Seberang Pr
Slide 35: Properties Below 90% Occupancy
Properties Below 90% Occupancy Occupancy rates of properties below 90% as at 30 June 2015 Fonterra HQ 84.96% Infinite Centre 84.90% Quattro West 84.18% Crystal Plaza 81.33% Menara Axis 78.77% Axis Tech Centre 78.12% Axis Business Park 59.34% Axis Eureka 59.08% Axis Business - Campus Note: Vacant spa
Slide 36: Diversified Portfolio
Diversified Portfolio Portfolio Diversification by Type and NLA = Office = Office/ Industrial m Hypermarkets = Warehouse Logistic = Manufacturing Facilities - Light Industrial 36
Slide 37: Portfolio Location
Portfolio Location Portfolio Diversification by Geographical Location Petaling Jaya 28.39% Johor 24.07% Shah Alam 23.01% Penang 10.67% Klang 6.06% Nilai 4.16% Kedah 1.97% Cyberjaya 1.68% 37
Slide 38: Tenancy Mix
Tenancy Mix Single Tenant vs. Multi Tenant 43% 57% Single Tenant Multi Tenant Note: No change from 1Q 2015 38
Slide 39: Lease Expiry Profile – Looking Forward
Lease Expiry Profile – Looking Forward Year Area up for % of Total % of Rental renewal NLA Income 2015 903,977 sq. ft. 12.89% 15.27% 2016 1,769,935 sq. ft. 25.23% 26.92% 2017 1,134,364 sq. ft. 16.17% 17.89% 39
Slide 40: Lease Expiry Profile – Looking Forward
Lease Expiry Profile – Looking Forward Year % of % of Rental Year % of % of Rental Year % of % of Rental Property 2015 Total NLA Income/month 2016 Total NLA Income/month 2017 Total NLA Income/month Menara Axis - - 0.02 91,514 1.30 2.86 22,073 0.31 1.09 Crystal Plaza 3,407 0.05 0.07 120,122 1.71 3.76
Slide 41: Positive Rent Reversions
Positive Rent Reversions Space Renegotiated Space Properties Renegotiated % Rent Movement (sq. ft.) Crystal Plaza 3,407 0.00% Axis Business Park 14,163 12.96% Axis Shah Alam DC 1 110,406 15.38% Wisma Kemajuan 38,246 10.30% Axis Eureka 160 0.22% Axis Technology Centre 57,817 8.05% Seberang Prai Logis
Slide 42: Income Growth – Leasing Profile
Income Growth – Leasing Profile Successfully renegotiated 495,089 sq. ft. space out of 903,977 sq. ft. space due for renewal in 2015, representing 54.77% tenant retention. Rental growth of 549,156 sq. ft. space achieved from pre- negotiated rent step up in the leases. The leases in the portfol
Slide 43: Weighted Average Lease Expiry (WALE)
Weighted Average Lease Expiry (“WALE”) The “WALE” for the portfolio is: By Year Q2 2015 Q1 2015 By NLA 4.27 4.33 By Rental 4.25 4.28 43
Slide 44: Portfolio Efficiency (PE)
Portfolio Efficiency (“PE”) The Efficiency Ratio = Operating Cost for the Portfolio / Gross Property Income Q2 2015 Q1 2015 14.60% 14.90% 44
Slide 45: Top 10 Tenants – Strong Rental Covenants
Top 10 Tenants – Strong Rental Covenants 1. Konsortium Logistik Berhad 2. LF Logistics Services (M) Sdn Bhd 3. Yongnam Engineering Sdn Bhd 4. Schenker Logistics (M) Sdn Bhd 5. Tenaga Nasional Berhad 6. Tesco Stores (M) Sdn Bhd 7. Strateq Data Center Sdn Bhd 8. DHL Properties (M) Sdn Bhd 9. Nippon Ex
Slide 46: Q2 2015 Asset Enhancement Initiatives
Q2 2015 Asset Enhancement Initiatives
Slide 47: Axis Business Park Block C Enhancement - Before
Axis Business Park Block C Enhancement - Before
Slide 48: Axis Business Park Block C Enhancement - After
Axis Business Park Block C Enhancement - After
Slide 49: Axis Business Park Block C Enhancement
Axis Business Park Block C Enhancement New ground floor lift lobby New entrance to lift lobby
Slide 50: Axis Business Park Block C Enhancement
Axis Business Park Block C Enhancement Drop-off lobby with disabled ramp New café area on ground floor
Slide 51: The Annex Enhancement - Existing
The Annex Enhancement - Existing
Slide 52: The Annex Enhancement - Proposed
The Annex Enhancement - Proposed
Slide 53: Axis Business Campus Block C – Concept Design
Axis Business Campus Block C – Concept Design Block C – New Block B – Existing Block A – Existing
Slide 54: Axis Business Campus Block C – Concept Design
Axis Business Campus Block C – Concept Design New Block adds an additional 60,000 sq. ft. to the property
Slide 55: Axis Business Campus Block C – Concept Design
Axis Business Campus Block C – Concept Design
Slide 56: Sustainability Initiatives
Sustainability Initiatives
Slide 57: Initiatives Carried Out Up To Q2 2015
Initiatives Carried Out Up To Q2 2015 In the process of implementing a holistic sustainability plan encompassing energy efficiency, water conservation and solid waste management. Secured lease of 16,145 sq. ft. of roof space for installing solar panels at Wisma Kemajuan. This initiative not only
Slide 58: 2Q 2015 Business Development Report
2Q 2015 Business Development Report
Slide 59: Ongoing Acquisitions
Ongoing Acquisitions Haisan cold chain logistics facility @ Port Klang Announcement Date : 22 June 2015 Land Area : Approx. 15 acres Land Tenure : Leasehold Occupancy : 100% Purchase Price : RM46 million WALE : 15 years 60
Slide 60: Ongoing Acquisitions
Ongoing Acquisitions Electronics manufacturing facility @ Indahpura, Johor Land Area : Approx. 10 acres Land Tenure : Freehold Occupancy : 100% Purchase Price : RM61 million WALE : 10 years 61
Slide 61: Prospective Acquisition Targets
Prospective Acquisition Targets The Manager is currently undergoing assessments for the following assets as future acquisition targets: 1. An industrial facility at Bayan Lepas, Penang 2. An industrial facility at Seberang Prai, Penang 3. An industrial facility in Nilai, Negri Sembilan 4. A warehous
Slide 62: 2Q 2015 Investor Relations Report
2Q 2015 Investor Relations Report
Slide 63: Unit Price Performance YTD 2015
Unit Price Performance YTD 2015 AXREIT: 1 Jan 2014 – 30 June 2015 3.80 3.69 3.69 3.62 3.62 3.62 3.58 3.55 3.54 3.55 3.53 3.53 3.50 3.45 3.38 3.37 3.31 3.30 3.09 2.85 2.80 2.30 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 64
Slide 64: Unit Price Movement YTD 2015
Unit Price Movement YTD 2015 AXREIT vs KLCI: 1 Jan 2013 – 30 June 2015 Price & Volume Statistics 140% 2Q2015: Unit Price @ 30 Jun 2015 RM3.45 1Q2015: Unit Price @ 31 Mar 2015 RM3.53 130% Highest Price: 2015 YTD (February) RM3.69 120% Lowest Price: 2015 YTD (June) RM3.44 110% 100% 90% KLCI AXREIT 80%
Slide 65: Share Volume YTD 2015
Share Volume YTD 2015 AXREIT: 1 Jan 2014 – 30 June 2015 25,000,000 20,104,000 20,000,000 16,913,000 15,000,000 13,903,000 13,673,900 11,725,700 10,546,300 10,514,400 10,000,000 9,308,000 7,924,800 6,497,900 5,635,500 5,571,700 5,664,300 4,744,600 5,173,600 4,319,100 4,554,600 5,000,000 4,015,400 - J
Slide 66: Top 10 Unitholders YTD 2015
Top 10 Unitholders YTD 2015 1 EMPLOYEES PROVIDENT FUND 2 SKIM AMANAH SAHAM BUMIPUTERA 3 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 4 TEW PENG HWEE @ TEOH PENG HWEE 5 LEMBAGA TABUNG HAJI 6 ALEX LEE LAO 7 ABAS CARL GUNNAR BIN ABDULLAH 8 PERMODALAN NASIONAL BERHAD 9 EXEMPT AN FOR EASTSPRING INVESTMENTS BE
Slide 67: Analysis of >1 million Unitholders
Analysis of >1 million Unitholders Top 5 increases in unitholdings: Last Quarter Increase Public Ittikal Sequel Fund 60.4% Etiqa Takaful Berhad 53.3% Amanah Saham Gemilang for Amanah Saham Persaraan 48.2% Lembaga Tabung Haji 35.0% BBH & Co Boston for Vanguard Global Ex-US Real Estate Index 21.7% Fun
Slide 68: Investor Visibility and Liquidity YTD 2015
Investor Visibility and Liquidity YTD 2015 No. of CDS Accounts 3,500 3,176 3,200 3,219 3,009 3,000 2,850 2,702 2,500 2,420 2,080 2,000 1,652 1,500 1,000 500 - 2008 2009 2010 2011 2012 2013 2014 1Q2015 2Q2015 Quarter-on-quarter, total number of CDS accounts increased by 19 to 3,219. Units Held 2Q20
Slide 69: Analyst Coverage 2Q2015
Analyst Coverage 2Q2015 Coverage Rating Target Price (RM) Published Date Affin Hwang Buy 3.90 21 Apr 2015 RHB Hold 3.75 21 Apr 2015 MIDF Hold 3.50 17 Jun 2015 Hong Leong IB Hold 3.53 23 Jun 2015 Kenanga Hold 3.41 23 Jun 2015 Maybank Hold 3.40 23 Jun 2015 Consensus Hold 3.62 30 July 2015 (S&P Capital
Slide 70: 2015 Calendar: Unitholders, Analyst & Media
2015 Calendar: Unitholders, Analyst & Media Category Description Date Release of Annual Report 2014 29-Feb Unitholders Annual General Meeting 30-April Extraordinary General Meeting 21-Aug Announcement of 1Q2015 results 20-Apr Analysts & Announcement of 2Q2015 results 3-Aug Press Announcement of 3Q20
Slide 71: Investor Relations Update: Website www.axis-reit.com.my
Investor Relations Update: Website www.axis-reit.com.my Landing Page 72
Slide 72: Investor Relations Update: Website
Investor Relations Update: Website Property Portfolio 73
Slide 73: Thank You
THANK YOU 74
Axis Real Estate Investment Trust — Q2 2015 Earnings Presentation on 6ix