Axis Real Estate Investment Trust · MYX:AXREIT
Axis Real Estate Investment Trust — Q1 2015 Earnings Presentation
66 slides from Axis Real Estate Investment Trust's earnings presentation, Apr 20, 2015
Slide 1: Q1 2015 Results Presentation
Q1 2015 Axis REIT Managers Bhd Q1 2015 Results Presentation 20thApril 2015 1
Slide 2: Q1 2015 Highlights
Q1 2015 Highlights 2
Slide 3: Q1 2015 Highlights
Q1 2015 Highlights RM 2,034,183,000 Investment Properties 3
Slide 4: Q1 2015 Milestones
Q1 2015 Milestones Successfully completed the acquisition of the remaining 1 property with related party, Axis Shah Alam DC 2 on 31 March 2015. DPU at 4.10 sen DPU for Q1 2015. A total of RM0.51 million revaluation gain has been recorded for Q1 2015. Kick off the Proposed Unit Split of 2 for
Slide 5: Q1 2015 Finance Report
Q1 2015 Finance Report 5
Slide 6: Q1 2015 Summary
Q1 2015 Summary Q1 2015 Total Net Income (“Realised”)(RM' 000) 22,507 Income Available for Distribution ("Realised") (RM' 000) 22,672 Earnings per Unit ("EPU") ("Realised") (Sen) 4.11 Income Distribution Declared (RM'000) 22,458 Distribution per Unit ("DPU") (Sen) * 4.10 Number of Investment Propert
Slide 7: Income Statement Q1 2015 vs Q1 2014
Income Statement Q1 2015 vs Q1 2014 Q1 2015 Q1 2014 Changes / (RM ‘000) (RM’000) Movement No. of Properties 34 30 +4 Property Income - Note 1 40,404 35,412 + 14.1% Property Expenses - Note 2 (6,019) (5,840) + 3.1% Net Property Income 34,385 29,572 + 16.3% Profit Income 215 184 Net gain in disposal o
Slide 8: Income Statement Q1 2015 vs Q1 2014 Notes
Income Statement Q1 2015 vs Q1 2014 Note 1 – Property Income Property income is 14.1% higher as compared to Q1 2014. This is due to contribution from the newly completed acquisition in Q4 2014, ie. Axis MRO Hub, Axis Shah Alam DC 3 and Axis Steel Centre@SiLC . Note 2 – Property Expenses Property exp
Slide 9: Gross Yield of Investment Properties
Gross Yield of Investment Properties Properties Gross yield (%) Average gross yield = 9.84% 18 Bayan Lepas Distribution Centre 9.65% 1 Wisma Kemajuan 18.16% 19 Giant Hypermarket, Sungei Petani 9.03% 2 Crystal Plaza 14.23% 20 Seberang Prai Logistic Warehouse 1 9.01% 3 Delfi Warehouse 13.48% 21 Bukit
Slide 10: Net Yield of Investment Properties / Cost
Net Yield of Investment Properties / Cost Properties Net yield (%) Average net yield per property = 8.38% 18 Bukit Raja Distribution Centre 8.18% 1 Wisma Kemajuan 14.27% 2 Crystal Plaza 11.84% 19 Axis Steel Centre 7.97% 3 Delfi Warehouse 11.68% 20 Seberang Prai Logistic Warehouse 2 7.86% 4 FCI Senai
Slide 11: Income Statement
Income Statement 35.00 Adjusted Income Before Taxation/ Income Available For Distribution: 30.00 Gain on disposal RM10.952 mil 25.00 20.00 RM' million 15.00 22.67 10.00 20,82 20.83 20.26 19.85 5.00 0.00 1Q 2014 2Q 2014 3Q 2014 4Q 2014 1Q 2015 11
Slide 12: 1st Quarter Income Distribution Statement
1st Quarter Income Distribution Statement 1st Quarter 2015 Income Distribution a) 1st Interim 2015 DPU of 4.10 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 January 2015 to 31 March 2
Slide 13: Details of the 2015 IDRP
Details of the 2015 IDRP b) 1st Quarter 2015 IDRP The IDRP for 1st quarter 2015 will be postponed as the authority will be tabled for approval by the Unitholders at the forthcoming Unitholders’ meeting for the Proposed Unit Split, general mandate and IDRP. 13
Slide 14: 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 Increasing DPU y-o-y 17.41 17.28 17.20 since listing 15.80 15.77 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 8.00 6.00 4.87 4.70 4.11 4.10 4.00 2.00 - 2005 2006 2007 2008 2009 2010 20
Slide 15: Statement of Financial Positions
Statement of Financial Positions 31/03/15 31/12/14 (RM’000) (RM’000) Changes Investment Properties – Note 1 2,034,183 1,982,587 + 51,596 Fixed Assets 2,884 2,821 + 63 Other Assets – Note 2 31,596 100,475 - 68,879 TOTAL ASSETS 2,068,663 2,085,883 - 17,220 Borrowings – Note 3 673,089 683,769 - 10,680
Slide 16: 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 RM5.279 million has been incurred for enhancement of the other properties in the portfolio. Note 2 – Other assets Trade receivables increas
Slide 17: Statement of Financial Positions - Note 3 Borrowings
Statement of Financial Positions - Note 3 Borrowings Q1 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total Borrowings (RM’000) 88,089 209,816 230,456 308,932 416,609 311,338 548,920 528,004 683,769 673,089 Total Assets (RM’000) 411,781 581,857 726,371 907,745 1,208,897 1,298,431 1,589,408 1,616
Slide 18: Statement of Financial Positions: Gearing Levels
Statement of Financial Positions Gearing Levels Placements Undertaken 40.0% 38.2% 36.0% 37.5% 36.1% 36.0% 34.5% 35.4% 34.5% 32.6% 33.4% 35.0% 33.0% 34.0% 34.2% 32.7% 32.5% 33.1% 33.9% 32.7% 32.5% 32.8% 31.8% 31.7% 31.2% 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
Slide 19: Unitholders' Capital – Note 4
UNITHOLDERS’ CAPITAL – Note 4 2,500.0 The funds raised from equity placements are being 2,085.7 2,068.7 2,000.0 injected into acquiring good quality properties….. 1,589.4 1,616.5 1,500.0 1,298.4 RM mil 1,208.9 1044.7 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 3
Slide 20: Unitholders' Capital – Total Returns
UNITHOLDERS’ CAPITAL – Note 4 … resulting in good total returns to unitholders. 360% 320% 307% 280% 240% 125% 200% 165% 173% 160% 60% 121% 69% 120% 42% 80% 182% 69% 113% 25% 96% 40% 79% 4% 44% 2% + 2% 0% IPO @ RM1.25 Placement '08 @ Placement '09 @ Placement '10 @ Placement '11 @ Placement RM1.80 RM
Slide 21: Statement of Financial Positions – Non-distributable reserve
Statement of Financial Positions Note 5 – Non-distributable reserve Non-distributable reserve mainly comprises the favorable gain in fair value of approx. RM267 million to date. Building Gain /(Loss) RM’000 Building Gain /(Loss) RM’000 Crystal Plaza 44,329 Bukit Raja Distribution Centre 20,584 Infin
Slide 22: Q1 2015 Revaluation of Properties
Q12015 Revaluation of Properties 22
Slide 23: Revaluation of Properties
Revaluation of Properties Name of Properties Net Book Value Open Surplus to be as at 31 March Market incorporated 2015 Value into Axis-REIT (RM'000) (RM'000) (RM'000) 1 Axis Steel Centre 70,000 70,000 - 2 Emerson Industrial Facility Nilai 29,490 30,000 510 Total 99,490 100,000 510 23
Slide 24: Q1 2015 Property Report
Q1 2015 Property Report 24
Slide 25: 2015 Overview
2015 Overview Q1 2015 there was a slight rise in portfolio vacancy by 0.4% as two tenants ended their leases with us. The largest was a non-Shariah compliant tenant whose leaving allowed us to further reduce our non Shariah compliant tenants to just above 1% and seek new Shariah compliant tenants to
Slide 26: Key Metrics
Key Metrics As at 31 March 2015 the Portfolio has 34 assets comprising 7,014,356 sq. ft. and 137 tenants. Type Q1 2015 Q4 2014 Movement Property Income (RM’000) 40,404 34,370 17.56% **Property Expenses (RM’000) 6,019 5,235 14.98% Net Property Income (RM’000) 34,385 29,135 18.02% Occupancy 92.58% 92.
Slide 27: Space Under Management (Sq. Ft.)
Space Under Management (Sq. Ft.) 27
Slide 28: Portfolio Occupancy Rate
Portfolio Occupancy Rate Occupancy Rate As at 31 March 2015 Axis REIT has only 11 out of 34 properties that carry vacancy. 23 properties enjoy 100% occupancy. Vacant 7.42% Occupancy As at 31 Dec 2014 92.98% As at 31 Mac 2015 92.58% Vacancy As at 31 Mac 2015 7.42% Occupied Space to be let out 520,291
Slide 29: Occupancy Rates by Property As At 31 Mac 2015
Occupancy Rates by Property As At 31 Mac 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 58.99% 23 Seberang Pra
Slide 30: Properties Below 90% Occupancy
Properties Below 90% Occupancy Occupancy rates of properties below 90% as at 31 Mac 2015 Note: Vacant space in Fonterra HQ is built for their future expansion 30
Slide 31: Diversified Portfolio
Diversified Portfolio Portfolio Diversification by Type and NLA = Office = Office/ Industrial = Hypermarkets = Warehouse Logistic ®& Manufacturing Facilities - Light Industrial 31
Slide 32: 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% 32
Slide 33: Tenancy Mix
Tenancy Mix Single Tenant vs. Multi Tenant 43% 57% Single Tenant Multi Tenant 33
Slide 34: Lease Expiry Profile – Looking Forward
Lease Expiry Profile – Looking Forward Year Area up for % of Total % of Rental renewal NLA Income 2015 902,252 sq. ft. 12.86% 15.21% 2016 1,769,935 sq. ft. 25.23% 27.00% 2017 1,101,407 sq. ft. 15.70% 17.50% 34
Slide 35: Positive Rent Reversions
Positive Rent Reversions Space Renegotiated Space Properties Renegotiated % Rent Movement (sq. ft.) Axis Business Park 14,163 12.96% Axis Shah Alam DC 1 110,406 15.38% Wisma Kemajuan 16,689 12.32% Axis Eureka 160 0.22% Axis Technology Centre 57,817 8.05% Seberang Prai Logistic Warehouse 3 64,500 0.0
Slide 36: Income Growth – Leasing Profile
Income Growth – Leasing Profile Successfully renegotiated 280,284 sq. ft. space out of 902,251 sq. ft. space due for renewal in 2015, representing 31% tenant retention. Rental growth of 355,662 sq. ft. space achieved from pre- negotiated rent step up in the leases. The leases in the portfolio
Slide 37: Weighted Average Lease Expiry (WALE)
Weighted Average Lease Expiry (“WALE”) The “WALE” for the portfolio is: By Year Q1 2015 Q4 2014 By NLA 4.33 4.22 By Rental 4.28 4.33 Note: Improvement in WALE is contributed by new leases from asset acquisition and renewals of expiring leases. 37
Slide 38: Portfolio Efficiency (PE)
Portfolio Efficiency (“PE”) The Efficiency Ratio = Operating Cost for the Portfolio / Gross Property Income Q1 2015 Q4 2014 14.90% 15.66% 38
Slide 39: 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 40: Q1 2015 Asset Enhancement Initiatives
Q1 2015 Asset Enhancement Initiatives 40
Slide 41: Crystal Plaza Lobby Refurbishment
Crystal Plaza Lobby 2 Refurbishment New lift lobby New lift lobby 41
Slide 42: Axis Business Campus Enhancement
Axis Business Campus Enhancement 42
Slide 43: Axis Business Park Block C Enhancement - Before
Axis Business Park Block C Enhancement - Before 43
Slide 44: Axis Business Park Block C Enhancement - After
Axis Business Park Block C Enhancement - After 44
Slide 45: Axis Business Park Block C Enhancement
Axis Business Park Block C Enhancement New ground floor lift lobby New entrance to lift lobby 45
Slide 46: Axis Business Park Block C Enhancement
Axis Business Park Block C Enhancement Drop-off lobby with disabled ramp New café area on ground floor 46
Slide 47: Enhancement Projects Planned
Enhancement Projects Planned Project Remarks Status Axis Business Construction of new 6 storey office- In the process of finalizing Campus warehouse building with 1-level basement design for DO re-submission (Block C) carpark at the existing open carpark area. and building plan submission concurrent
Slide 48: Axis Business Campus Block C – Concept Design
Axis Business Campus Block C – Concept Design Block C – New Block B – Existing Block A – Existing 48
Slide 49: Axis Business Campus Block C – Concept Design
Axis Business Campus Block C – Concept Design 49
Slide 50: Axis Business Campus Block C – Concept Design
Axis Business Campus Block C – Concept Design 50
Slide 51: The Annex Redevelopment - Current
The Annex Redevelopment - Current 51
Slide 52: The Annex Enhancement – Proposed
The Annex Enhancement – Proposed 52
Slide 53: Sustainability Initiatives
Sustainability Initiatives 53
Slide 54: Initiatives Carried Out Up To Q1 2015
Initiatives Carried Out Up To Q1 2015 Sustainability policy drafted and implemented Attended various trainings and conferences Energy audit completed for Crystal Plaza With the acquisition of Axis Shah Alam DC2, Axis REIT portfolio has more roof space rented out for solar energy harvesting.
Slide 55: Q1 2015 Business Development Report
Q1 2015 Business Development Report 55
Slide 56: Current Acquisitions
Current Acquisitions Axis Shah Alam DC 2 - Section 16 Shah Alam Completion Date : 31 March 2015 Land Area : Approx. 6 acres Net Lettable Area : 164,400 sq ft Land Tenure : Leasehold expiring 8 August 2066 Occupancy : 100% Solar Panel Leases : Approx. 145,000sf of roof space Purchase Price : RM45 mil
Slide 57: Axis Shah Alam DC 2 - Section 16 Shah Alam
Axis Shah Alam DC 2 - Section 16 Shah Alam 57
Slide 58: 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 in Seberang Prai, Penang 3. A warehouse in Seberang Prai, Penang 4. An industrial facilit
Slide 59: Q1 2015 Investor Relations Report
Q1 2015 Investor Relations Report 59
Slide 60: Unit Price Performance YTD 2015
Unit Price Performance YTD 2015 AXREIT: 1 Jan 2014 – 31 March 2015 3.80 3.69 3.69 3.62 3.62 3.55 3.55 3.58 3.54 3.53 3.50 3.38 3.37 3.31 3.30 3.09 2.85 2.80 2.30 1.80 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 60
Slide 61: Unit Price Movement YTD 2015
Unit Price Movement YTD 2015 AXREIT vs KLCI: 1 Jan 2013 – 31 March 2015 Price & Volume Statistics 140% Q1 2015: Unit Price @ 31 Mar 2015 RM 3.53 Q4 2014: Unit Price @ 31 Dec 2014 RM 3.62 130% Highest Price: YTD 2015 RM 3.69 (February) 120% Lowest Price: YTD 2015 RM 3.48 (March) 110% Average Monthly
Slide 62: Share Volume YTD 2015
Share Volume YTD 2015 AXREIT: 1 Jan 2014 – 31 March 2015 25,000,000 20,104,000 20,000,000 16,913,000 15,000,000 13,903,000 13,673,900 10,546,300 10,000,000 9,308,000 7,924,800 5,635,500 5,571,700 6,497,900 4,319,100 5,173,600 4,744,600 4,554,600 5,000,000 4,015,400 - Jan Feb Mar Apr May Jun Jul Aug
Slide 63: 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 ALEX LEE LAO 6 EXEMPT AN FOR AIA BHD. 7 ABAS CARL GUNNAR BIN ABDULLAH 8 LEMBAGA TABUNG HAJI 9 PERMODALAN NASIONAL BERHAD 10 AMANAH SAHAM
Slide 64: Investor Visibility and Liquidity YTD 2015
Investor Visibility and Liquidity YTD 2015 3,500 No. of CDS Accounts 3,176 3,200 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 Quarter-on-quarter, total number of CDS accounts increased by 24 to 3,200. Units Held Total foreign hol
Slide 65: Analyst Coverage Q1 2015
Analyst Coverage Q1 2015 Coverage Rating Target Price (RM) Published Date Affin Hwang Buy 3.90 21 Jan 2015 Alliance DBS Hold 3.60 22 Jan 2015 CIMB Bank Buy 3.85 21 Jan 2015 Hong Leong IB Hold 3.57 4 Mar 2015 Kenanga Sell 3.27 4 Mar 2015 Maybank Hold 3.37 21 Jan 2015 MIDF Hold 3.50 4 Mar 2015 RHB Hol
Slide 66: Thank You
THANK YOU 66
Axis Real Estate Investment Trust — Q1 2015 Earnings Presentation on 6ix