Axis Real Estate Investment Trust · MYX:AXREIT
Axis Real Estate Investment Trust — Q2 2012 Earnings Presentation
77 slides from Axis Real Estate Investment Trust's earnings presentation, July 2012
Slide 1: Presentation of 2Q 2012 Results
Axis Real Estate Investment Trust Presentation of 2Q 2012 Results
Slide 2: Highlights 2Q 2012
Axis REAL ESTATE INVESTMENT TRUST Highlights 2Q 2012
Slide 3: A Quick Snapshot
A Quick Snapshot IH 2012 Total Net Income (RM' 000) 40,416 Income Available for Distribution ("Realised") (RM' 000) 39,667 Earnings per Unit ("EPU") ("Realised") (Sen) 8.75 Income Distribution Declared (RM'000) 39,482 Distribution per Unit* ("DPU") (Sen) 8.70 Number of Investment Properties 29 Units
Slide 4: Highlights
Highlights Net Property Income up by 16.48% when compared to 2Q 2011 DPU declared of 4.40 sen for 2Q 2012. Disposal of Kayangan Depot at a premium of 35%. Tax Free Capital Gain to be distributed in 4Q 2012 at approximately 1.30 sen per Unit Launch of the 2nd Income Distribution Reinvestment
Slide 5: Our Program Today
Our Program Today 1. Axis REIT Financials for 2Q 2012 & 1H 2012 2. Revaluation of properties 3. Proposed distribution & IDRP program 4. Capital Management Report 5. Sale of Kayangan Depot 6. Property Report 7. Reports 8. Investor Relations 9. Acquisitions 5
Slide 6: Axis-REIT Financials for 2Q2012
Axis-REIT Financials for 2Q2012
Slide 7: Financial Results – Income Statement Summary
Financial Results – Income Statement Summary Net Property Income exceeds 2Q2011 by 16.48% Changes / 2Q2012 2Q2011 Movement No. of Properties 29 27 +2 Property Income (RM’000) 32,836 28,362 + 15.77% Net Property Income (RM’000) 27,884 23,938 + 16.48% Income Before Taxation (RM’000) 19,812 15,584 + 27
Slide 8: Financial Results – Income Statement
Financial Results – Income Statement 1H 2012 1H 2011 Changes / (RM ‘000) (RM’000) Movement No. of Properties 29 27 +2 Property Income – Note 1 65,072 55,610 +17.01% Property Expenses – Note 2 (9,744) (8,158) + 19.44% Net Property Income 55,328 47,452 + 16.60% Accounting loss on disposal - (258) Inte
Slide 9: Notes to Financial Results – Income Statement
Notes to Financial Results – Income Statement Note 1 – Property Income Increase in property income as compared to last half year is due to:- a) Income from 2 new acquisitions completed in the current financial year; Seberang Perai Warehouse 3 and Bayan Lepas Distribution Centre. b) Quattro West achi
Slide 10: Notes to Financial Results – Income Statement
Notes to Financial Results – Income Statement Note 3 – Non-Property Expenses The increase in non-property expenses is due to the increase in the Net Asset Value (“NAV”) of the Fund. The Management Expenses Ratio (‘MER”) for the first half of the financial year is at 1.22% of NAV. Note 4 – Islamic fi
Slide 11: Notes to Financial Results – Earnings by Quarter
Notes to Financial Results – Income Statement Note 5 – Adjusted Income Before Taxation/ Income Available For Distribution: Earnings by Quarter (2Q12, 1Q12 vs Previous 4 Quarters in FY2011) 25.00 Increase by an average of 20.6% 19.86 19.81 20.00 16.80 16.60 16.20 16.20 RM(million) 15.00 1Q11 2Q11 3Q1
Slide 12: Balance Sheet Highlights (RM'000)
Balance Sheet Highlights (RM’000) 30/06/12 31/12/11 Changes Investment Properties 1,396,400 1,276,180 + 120,220 Fixed Assets 603 102 + 501 Other Assets 37,821 22,149 +15,672 TOTAL ASSETS 1,434,824 1,298,431 + 136,393 Borrowings 430,072 311,338 + 118,734 Other Payables 45,796 42,996 + 2,800 TOTAL LIA
Slide 13: Capital Return and Dividend Return
Capital Return and Dividend Return 240% 207% 200% 83% 160% 120% 96% 97% 80% 28% 40% 58% 124% 16% 40% 69% 17% 56% 42% 4% 13% 0% IPO @ RM1.25 Placement '08 @ RM1.80 Placement '09 @ RM1.66 Placement '10 @ RM1.97 Placement '11 @ RM2.45 Capital Return Distribution Return 13
Slide 14: Summary of EPU (Realised) and DPU
Summary of EPU (Realised) and DPU Increasing DPU y-o-y 20.00 since listing 18.00 17.28 17.20 16.01 16.00 15.77 15.80 16.00 15.46 15.27 14.00 13.60 13.63 12.82 12.95 12.00 10.00 8.75 8.70 8.00 6.00 4.87 4.70 4.00 2.00 - 2005 2006 2007 2008 2009 2010 2011 2Q 2012 1H 2012 EPU (realised) DPU 14
Slide 15: Gross Yield Of Investment Properties
Gross Yield Of Investment Properties Gross Yield On Properties/ Investment Cost 18.00% 16.00% 14.00% 12.00% Average gross yield : 10.66% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 15
Slide 16: Borrowings
Borrowings 2006 2007 2008 2009 2010 2011 2012(2Q) Total Borrowings 88,089 209,816 230,456 308,932 416,609 311,338 430,072 (RM’000) Total Assets 411,781 581,857 726,371 907,745 1,208,897 1,298,431 1,434,824 (RM’000) Gearings 21.39% 36.06% 31.73% 34.03% 34.46% 23.98% 29.97% Effective Interest 4.38% 4.
Slide 17: Gearing Levels
Gearing Levels Placements Undertaken 45.0% 40.0% 37.5% 38.2% 36.1% 36.0% 36.0% 35.4% 34.0% 34.5% 35.0% 33.0% 33.1% 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% 10.0% 5.0% 0.0% 17
Slide 18: Management Expense Ratio and Total Assets
Management Expense Ratio (“MER”) MER= Total administrative expenses incl. Manager and Trustee’s fees 1,500 Average net asset value of the Fund. 1,435 10.00 1,400 1,298 1,300 1,267 1,209 1,200 1,100 1,000 953 908 Total Assets (RM'000) 900 % of NAV 800 726 733 700 658 582 600 500 417 400 300 1.47 1.38
Slide 19: Total Assets and Unitholders' Funds
Total Assets and Unitholders’ Funds 1,600.0 Total Asset & Unitholders' Funds 1,411.1 1,434.8 1,400.0 1,281.6 1,208.9 1,200.0 1,000.0 952.6 959.3 959.0 907.7 RM mil 800.0 726.4 732.9 755.2 751.2 658.2 581.8 565.2 600.0 550.0 447.9 450.3 402.3 411.8 416.8 423.2 400.0 339.6 334.7 277.9 286.5 294.1 294.
Slide 20: Asset Enhancement & Appreciation of Values
Asset Enhancement & Appreciation of Values • As at 30 June 2012, only Axis Steel Centre and Wisma Bintang has undergone a full revaluation, as it is mandatory for the management to have a full valuation done every 3 years for each investment property. • The Portfolio has recorded a favorable gain in
Slide 21: Revaluation of properties
A%|S k__» VESTMEN Revaluation of properties
Slide 22: Revaluation
Revaluation Name of Property Valuation Net Book Open Surplus/(deficit) date Value as at Market to be 30 June Value incorporated into 2012 Axis-REIT (RM’000) (RM’000) (RM’000) Wisma Bintang 4 May 2012 47,514 47,000 (514)* * The valuation of the property had dropped by RM100,000 due to the fact that i
Slide 23: Proposed 2nd interim distribution and implementation of IDRP
Proposed 2nd interim distribution and implementation of IDRP
Slide 24: 2nd interim 2012 income distribution 4.40 sen DPU
2nd interim 2012 income distribution 4.40 sen DPU - based on 98.3% payout ratio 24
Slide 25: IDRP
IDRP Further to the success of the 2011 IDRP; which registered a subscription rate of 86%, Axis-REIT be rolling out its 2nd round of IDRP in conjunction of the payment of the 2nd interim income distribution. Electable Portion: 50% of the 2nd interim 2012 distribution of 4.40 sen per unit will be ent
Slide 26: IDRP
IDRP How much can the Fund retain and impact to DPU: Estimated to be aroud RM4.5 to RM7.8 million based on the following subscrition rate : Subscription rate 50% 86% Amount to be retained (based on 10% RM4,492,760 RM7,727,546 withholding tax) New units raised (assuming at RM2.68) 1,676,403 2,883,413
Slide 27: IDRP
IDRP Timeline: Event Timeline Announcement of the price-fixing date and books closing - 23 July 2012 date Books closing date - 6 August 2012 Confirmation from the nominees - 10 August 2012 Despatch of information memorandum and notice of - 15 August 2012 election Last date for Unitholders to make an
Slide 28: Capital Management
Axis REAL ESTATE INVESTMENT TRUST Capital Management
Slide 29: Capital Management
11. Capital Management a) Corporate Exercise Two Unitholders’ Meeting:- To expedite the completion of Wisma Academy and the Annex as the proposed placement submission require a minimum 1 month approval from SC before lodgement of circular to Bursa.
Slide 30: Capital Management
11. Capital Management a) Corporate Exercise (cont’d) Agenda for the 1st Unitholder’s Meeting To approve the following proposals: Proposed acquisitions of Wisma Academy and the Annex Renewal of IDRP Target date: End August 2012 Agenda for the 2st Unitholder’s Meeting To approve the following p
Slide 31: SUKUK
SUKUK “Axis-REIT has successfully issued RM110.0 million in nominal value Sukuk via its wholly-owned subsidiary Axis REIT Sukuk Berhad; a company incorporated by Axis-REIT to facilitate the establishment of a RM300.0 million in nominal value Sukuk programme.” -- announcement dated 16 July 2012
Slide 32: SUKUK
SUKUK Why a SUKUK? Matches cash-flow profile of the secured properties Provides a standby funding facility during the term of the programme period There is no stamp duty and commitment fee cost penalty Provides debt funding flexibility as REIT can tap the debt capital market according to its
Slide 33: SUKUK
SUKUK Issue Details: First Sukuk Rating Issue Amount Periodic Expected Issue (RM’ mil) Distribution Maturity Rate Class A AAA 95 4.50% 13 July 2022 Class B AA1 5 4.95% 13 July 2022 Class C AA2 5 5.30% 13 July 2022 Class D AA3 5 5.60% 13 July 2022 Total =110 Blended all–in 4.61% p.a fixed for 10 year
Slide 34: Report on IT transformation
Report on IT transformation Microsoft 365 Done YARDI Voyager Agreement Signed. On Line 1 January 2013 Yardi Systems is one of the leading global developers of real estate software for investment, asset and property management. In selecting Yardi Voyager Axis Real Estate Investment Trust will dri
Slide 35: Disposal of Kayangan Depot
A%|S k__» VESTMEN Disposal of Kayangan Depot
Slide 36: Kayangan Depot, Shah Alam
Kayangan Depot, Shah Alam Land Area : 3 acres (132,697 sq ft), Leasehold 99 yrs expiring on Jan 2086 Gross Built Up : 173,582 sq ft Occupancy : 60% (Up to 31st Mar 2012). By end of year, occupancy will reduce to 25% with the departure of tenants including DHL, 1901 and Courts Sale Process : By way o
Slide 37: Property Report
Axis REAL ESTATE INVESTMENT TRUST Property Report
Slide 38: Key Metrics
Key Metrics Portfolio Size: As at 31st July 2012 we have 29 assets comprising 5,036,076 sq.ft and 112 Tenants Occupancy: The Portfolio has an occupancy of 97.67% as at 30th June 2012. This is up from 97.22% as at 1 January 2012 Gross Income Our Gross Income was RM65,017,533 for the period 1H 2012 Pr
Slide 39: Income Growth – Rental Reversions in Q2 2012
Income Growth – Rental Reversions in Q2 2012 Space Renegotiated Properties (Sq. Ft.) % Movement Crystal Plaza 12,433 +10.53% Axis Business Park 28,996 +3.99% Infinite Centre 9,250 +4.55% Wisma Kemajuan 5,252 +3.24% Kayangan Depot 2,609 No Change FCI 136,619 +25.00% Axis Technology Centre 75,165 +8.5
Slide 40: Occupancy Rates – 30th June 2012
Occupancy Rates – 30th June 2012 As at 30th June 2012 Axis REIT has only 6 out of 29 properties that carry vacancy. 23 properties enjoy 100% occupancy Occupancy As at 31st Dec, 2011 97.22% As at 30th June 2012 97.67% This is only 2.33% of NLA For Axis Multi-tenanted Buildings Q2. 2012 occupancy is 9
Slide 41: Occupancy Rates – 30th June 2012
Occupancy Rates- 30th June 2012 Occupancy rates of properties below 90% as of 30th June 2012 Note: Vacant space in Fonterra HQ is built for their future expansion. Occupancy %
Slide 42: Risk Management- Keeping a Diverse Portfolio
Risk Management- Keeping a Diverse Portfolio Portfolio Diversification by Type and NLA Portfolio Diversification by Geographical and NLA Single Tenant Vs Multi-Tenants
Slide 43: 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/ Income/ Income/ Property 2012 Total NLA month 2013 Total NLA month 2014 Total NLA month Menara Axis - - 0.04 74,636 1.48 2.72 46,548 0.92 1.82 Crystal Plaza 12,433 0.25 0.46 193,
Slide 44: Weighted Average Lease Expiry (WALE)
Weighted Average Lease Expiry (“WALE”) The Weighted Average Lease Expiry For the Portfolio is: By Net lettable Area = 5.75 years By Rental = 5.37 years
Slide 45: Risk management - Top Ten Tenants
Risk management -Top Ten Tenants -Strong Rental Covenants 1. Konsortium Logistik Bhd 2. LF Logistics Services (M) Sdn Bhd (Formerly known as IDS Logistics Services (M) Sdn Bhd) 3. Schenker Logistics (M) Sdn Bhd 4. Tesco Stores (M) Sdn Bhd 5. Tenaga Nasional Bhd 6. Fuji Xerox Asia Pacific Pte Ltd 7.
Slide 46: The Real Estate Team
The Real Estate Team David Aboud Head of Development and Real Estate A team of 32 Real Estate Professionals takes excellent care of the Axis Portfolio
Slide 47: Summary of Projects
Summary of Projects Fonterra Brands (M) Sdn Bhd Project completed -Tenant moved in March 6 , 2012 Infinite Centre Budget approved – RM RM6, 726,275.39 approved by Board on 16th January 2012. Tender awarded, Building plans approved & work commenced July 2012 Wisma Bintang Budget of RM 20,940,740 appr
Slide 48: Fonterra HQ
Fonterra HQ Project Aims: We had an asset that was facing 100% vacancy in 18 months time– tenant leaving We secured a new tenant Fonterra Brands Malaysia Sdn Bhd and completed a Build to Suit (BTS) for them Executed a long term lease and achieved higher yields
Slide 49: Fonterra HQ
Fonterra HQ Project Completed Main Frontage Main Frontage
Slide 50: Fonterra HQ
Fonterra HQ Project Completed Main Lobby Bistro Office Area Breakout Area
Slide 51: Infinite Centre Enhancement
Infinite Centre Enhancement Perspective View – Main Frontage:
Slide 52: Infinite Centre Enhancement
Infinite Centre Enhancement Perspective View – New Lift Lobby:
Slide 53: Infinite Centre Enhancement
Infinite Centre Enhancement Project aim: Facelift for an older asset. A “Defensive Play” To make the asset more competitive in a tightening PJ office / Industrial market Section has transformed – Jaya One, New development at the Star Newspaper site, Jaya 33 new extension, land prices have skyr
Slide 54: Wisma Bintang Proposed Enhancement
Wisma Bintang Proposed Enhancement Perspective View – Main Frontage:
Slide 55: Wisma Bintang Proposed Enhancement
Wisma Bintang Proposed Enhancement Project aim: Aggressive Aim – The is a “Product Re-positioning” play Rebranding the building as “Axis Business Campus” We are enhancing to unlock the potential value from 5 acre development of prime PJ land. We anticipate a significant increase in rentals P
Slide 56: MSC Status
MSC Status Project Aims: To position our buildings to attract Multinationals with a MSC requirement. This will drive rents in the future. Buildings are excellently located nest to LRT stations or have access. Target Properties: Menara Axis, Crystal Plaza, Axis Business Campus (ABC) and Strateq Statu
Slide 57: Reports
Reports 1. Malaysian REIT Managers Association (MRMA) 2. Corporate Social Responsibility
Slide 58: MRMA Report
MRMA Report Membership I am pleased to report that we have added one member to the membership roll – Pintar Projek Sdn Bhd (Starhill REIT) represented by their Company Secretary Ho Say Keng To date we have a total of 15 REIT managers and 1 Bank as members. Committees The Association has three workin
Slide 59: MRMA Report
MRMA Report Website. This is now live and the URL is www.mrma.my Members Meeting 2Q 2012 The members met for their 2nd Quarterly meeting at the KL Hilton on the 3rd of July 2012. It was a breakfast meeting of members and there was a big turnout of 60 members. The meeting featured two presentations.
Slide 60: CSR Report
CSR Report Refurbishment of the HQ for the Malaysian Association of the Blind
Slide 61: CSR Report
CSR Report Project Description The project is a proposal to carry out internal and external re-painting works of Malaysian Association for the Blind (MAB) main activity block and other related areas such as fencing and staircases. Tender Briefing Tender briefing held at site on 10 April 2012 and ten
Slide 62: Investor Relations
Axis REAL ESTATE INVESTMENT TRUST Investor Relations
Slide 63: Unit Price Performance - Continues to trend upwards
Unit Price Performance - Continues to trend upwards 63
Slide 64: Outperformed the KLSE in 2Q 2012
Outperformed the KLSE in 2Q 2012 AXIS REIT vs KLCI (Jul 2011- Jun 2012) Price & Volume Statistics Current Price : RM2.83 Average Monthly Volume in the last 12 : 3,933,500 months Highest Monthly Volume in the last 12 : 7,386,300 months @May 2012 Lowest Monthly Volume in the last 12 : 2,282,800 months
Slide 65: Top 10 Unitholders
Top 10 Unitholders 1 EMPLOYEES PROVIDENT FUND BOARD 2 TEW PENG HWEE @ TEOH PENG HWEE AMANAH RAYA TRUSTEES BERHAD 3 SKIM AMANAH SAHAM BUMIPUTERA 4 ALEX LEE LAO 5 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 6 ABAS CARL GUNNAR BIN ABDULLAH CITIGROUP NOMINEES (TEMPATAN) SDN BHD 7 EXEMPT AN FOR AMERICAN INTE
Slide 66: % of Holdings by Main Unitholders
% of Holdings by Main Unitholders Top unitholders’percentage holdings Top 5 CDS accounts hold 34% of total units Top 10 unitholders hold 54% of total units 1 million unitholders’total shareholding = 85% Number of unit holders Total number of unit holders increased by 34 to 2,745 66
Slide 67: Key Institutional Unitholders with >1 Million Units
Key Institutional Unitholders with >1 Million Units 60 Millions EPF* 50 SKIM AMANAH SAHAM BUMIPUTERA 40 KUMPULAN WANG PERSARAAN 30 (DIPERBADANKAN) 20 CITIGROUP NOMINEES (TEMPATAN) SDN BHD EXEMPT AN FOR AMERICAN INTERNATIONAL ASSURANCE BERHAD 10 GREAT EASTERN* - * Denotes consolidated number of CDS a
Slide 68: Improving Investor Visibility and Liquidity
Improving Investor Visibility and Liquidity No. of Unitholders 3000 2745 2702 2711 2597 2420 2500 2230 2109 1959 2000 1652 1500 1370 1000 500 0 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Mar-12 Jun-12 Total foreign holdings is recorded at 13.52%, of which 8.85% is related party and 4.
Slide 69: Volume Performance
Volume Performance Significant improvement in the liquidity of the stock - Volume traded in 2Q2012 increased by 37% compared to volume traded in 1Q2012 2Q2012 – 16.75 million units transacted; compared to 14.08 million units transacted in 2Q2011 69
Slide 70: Events and Happenings
Events and Happenings 1) Invest Malaysia 2012 The Manager had one on one sessions of presentation briefing, followed by Q&A with three different fund managers. 2) Visit by Investment/Fund Managers • Representatives from both local and international investment fund management companies were briefed w
Slide 71: Awards and Nominations
Awards and Nominations 1) Malaysia Investor Relations Association (MIRA) Awards, 6th June 2012 Axis REIT was nominated under 5 categories under: Under Small Cap Category • Best Company for Investor Relations (IR) • Best CEO for IR • Best IR Website Under New Categories • Business Knowledge & Insight
Slide 72: Awards and Nominations
Awards and Nominations 3) The Edge Billion Ringgit Club (BRC) 2012 Axis REIT qualified for the Edge-BRC 2012. The BRC List of Members will be published in the special pullout of ‘The Edge-BRC 2012’ in the July 23 issue of The Edge. Note: To be a member of this elite group, a company must be listed o
Slide 73: Acquisitions
Axis REAL ESTATE INVESTMENT TRUST
Slide 74: Emerson Facility at Nilai, Seremban
Emerson Facility at Nilai, Seremban Land Area : 7.27 acres (316,863 sq ft) Gross Built Up : 192,677 sq ft Land Tenure : Leasehold (84 years unexpired) Occupancy : 100% Tenancy/lease period : 3+3+3 years Tenants : Emerson Process Management Manufacturing & K Plastics Industries Purchase Price : RM 26
Slide 75: Wisma Academy & The Annex, Petaling Jaya
Wisma Academy & The Annex, Petaling Jaya Land Area : 3.5 acres (152,269 sq ft) Gross Built Up : 411,256 sq ft Land Tenure : Leasehold Occupancy : 100% Tenancy/Term : Multiple tenancies with various tenancy terms Major Tenants : Dataprep Holdings, Ban Leong Technologies, TNB Purchase Price : RM85.0 m
Slide 76: Total Size of Pipeline for 2012 / 2013
Total Size of Pipeline for 2012 / 2013 1 Logistics DC in Bayan Lepas (Value RM48,500,000) *Completed 1 Logistics DC in Prai (Value, RM59,000,000) *Completed Emerson Facility in Nilai (Value RM 27,000,000) *SPA Signed Wisma Academy and Annex in Petaling Jaya (Value RM 85,000,000) *SPA Signed Comp
Slide 77: Thank You
AXelS Thank You
Axis Real Estate Investment Trust — Q2 2012 Earnings Presentation on 6ix