Axis Real Estate Investment Trust · MYX:AXREIT
Axis Real Estate Investment Trust — Q2 2009 Earnings Presentation
52 slides from Axis Real Estate Investment Trust's earnings presentation, July 2009
Slide 1: Axis REIT Second Quarter 2009 Financial Performance
Axis REIT Second Quarter 2009 Financial Performance Corporate Presentation
Slide 2: Disclaimer
Disclaimer This the information contained in this document is provided for information purposes only and in no way constitutes an offer of services or solicitation. Past performance is not indicative of future performance We decline any responsibility with respect to direct or indirect damages or co
Slide 3: Contents
Contents 1. Snapshot of Axis REIT 2. Financial Highlights 3. Proposed Acquisition 4. Proposed Placement 5. Investor Relation Activity 6. Portfolio Performance Update 7. Refinancing of Short Term Debt 8. Detailed Financials 3
Slide 4: A Quick Snapshot
A Quick Snapshot Approved Fund Size 255,901,000 units Manager Axis REIT Managers Bhd Assets Under Management 728.11 million Market Capitalisation RM383.9 million (as at 30 June 2009) Unit Price RM1.50 (as at 30 June 2009) Gearing RM242.54 million (33.09% of Total Asset Value as at 30 Jun
Slide 5: Financial Highlights
AS41S Financial Highlights REAL \ INVESTMENT TRUST
Slide 6: Highlights 1H 2009
Highlights 1H 2009 ¾ Highest quarterly earnings per unit since listing pushing the 1H09 DPU to over 8 sen per unit for the first time since listing. ¾ Successfully refinanced RM 170.4 million of short term debt into 3‐5 year term loans substantially reducing refinancing risk of the Trust ¾ First REI
Slide 7: Financial Highlights – Income Statement (Unaudited)
Financial Highlights – Income Statement (Unaudited) EPU of 4.14sen exceeds 2Q2008 by 10.4% 2Q2009 2Q2008 Changes / (RM ‘000) (RM’000) Movement No. of Properties 19 17 +2 Property Income 17,362 15,673 + 10.78% Net Property Income 14,634 13,229 + 10.62% Income before Taxation 10,580 9,587 + 10.36% Ear
Slide 8: Financial Highlights – Income Statement (Unaudited)
Financial Highlights – Income Statement (Unaudited) Net Property Income exceeds 2H2008 by 15.08% YTD 2H2009 YTD 2H2008 Changes / (RM ‘000) (RM’000) Movement No. of Properties 19 17 +2 Property Income 34,691 30,102 + 15.24% Net Property Income 29,258 25,423 + 15.08% Income before Taxation 21,004 18,6
Slide 9: Financial Highlights – Balance Sheet (Unaudited)
Financial Highlights – Balance Sheet (Unaudited) Discount to NAV narrows to 14.77 % in 2Q from 25.23% in 1Q 2Q2009 1Q2009 (RM ‘000) (RM’000) Total Assets 732,912 728,829 Investment Properties 728,109 724,641 Borrowings 242,544 240,327 Net Asset Value 450,335 448,290 Unitholders’ Funds 450,335 448,29
Slide 10: Growth in Property Portfolio Since Listing
Growth in Property Portfolio Since Listing 10
Slide 11: Property Portfolio in 2005
Property Portfolio in 2005 Axis Plaza, Shah Alam Infinite Centre, Petaling Jaya high yielding property 15.0%* Axis Business Park, Petaling Jaya Wisma Kemajuan, Petaling Jaya (Purchase Price : RM 29,192,000) Crystal Plaza , Petaling Jaya * Gross Yield Menara Axis, Petaling Jaya 11
Slide 12: Property Portfolio in 2006
Property Portfolio in 2006 8.0%* high yielding properties Cycle & Carriage Bintang Bhd HQ, Petaling Jaya (Purchase price: RM 32.68mil) 12.9%* 9.4%* Kayangan Depot, Shah Alam (Purchase Price : RM 16.24mil) North Port Logistics Centre 1, Klang * Gross Yield 12 (Purchase Price: RM 10.37mil)
Slide 13: Property Portfolio in 2007
Property Portfolio in 2007 10.5%* 8.4%* 7.5%* FCI Connectors, Senai, Johor Nestle Office & Warehouse, Shah Alam Giant Hypermarket, Sg Petani, Kedah (Purchase Price : RM12.30mil) (Purchase Price :RM7.20mil) (Purchase Price : RM38.00mil) 9.5%* 7.7%* Nestle House, Petaling Jaya (Purchase Price : RM39.8
Slide 14: Property Portfolio in 2008
Property Portfolio in 2008 8.6%* 10.2%* 11.2%* BMW Asia Technology Centre Kompakar, Petaling Jaya Delfi Warehouse Tanjung Pelepas, Johor (Purchase Price : RM 37.00mil) Pasir Gudang, Johor (Purchase Price : RM27.00mil) (Purchase Price RM12.5mil) 9.8%* 10.2%* Niro Granite Warehouse, Axis Vista, Petali
Slide 15: Acquisitions for 2009 – Axis Steel Centre
Acquisitions for 2009 Axis Steel Centre North Port Port Klang Total - 20 15
Slide 16: Acquisitions for 2009‐Axis Steel Centre
Acquisitions for 2009‐Axis Steel Centre Location Strengths: 9Facing the Customs Office 9Next to the Container Port and the Custom Bonded Area 9Is a natural expansion of the limited Customs Bonded area of North Port Container Port Cranes Customs Bonded Area Customs Main Office 16
Slide 17: Acquisitions for 2009‐Axis Steel Centre
Acquisitions for 2009‐Axis Steel Centre Enhancement Possibilities: 9The acquisition uses only 50% of the land area 9Possible to add further warehouse space in the areas marked 9May add an additional 60,000 sq ft of warehouse in future 17
Slide 18: Acquisitions for 2009‐Axis Steel Centre
Acquisitions for 2009‐Axis Steel Centre Unique product positioning: 9High floor loading capabilities up to 1000 lb/sq ft is unique in Port Klang 9Heavy Load storage has problems in finding a home in the port bonded space. 9No likely competition as areas surrounding have all been developed. 18
Slide 19: Acquisitions for 2009‐Axis Steel Centre
Acquisitions for 2009‐Axis Steel Centre Smaller warehouse allows flexibility for storage of lighter loads: 9New office warehouse development compliments existing development 19
Slide 20: Axis Steel Centre – Data Sheet
Axis Steel Centre – Data Sheet Address Lot 19, Lebuh Sultan Hishamuddin 1, North Port, Port Klang. Land Area 16.42 Acres (715,262 sq ft) Built Up 366,839 sq ft Land tenure 99 year leasehold with 93 years remaining Tenant Konsortium Logistik Berhad Occupancy 100% Tenure 5 year lease with a 3 year opt
Slide 21: Axis Steel Centre – Information
Axis Steel Centre – Information ¾ The Proposed Acquisition is a Related Party Transaction (RPT). Since listing, this will be only the second related party acquisition out of the past 15 acquisitions. ¾ The Proposed Acquisition will require Unitholders’ approval as the size of the acquisition is > 5%
Slide 22: Axis Steel Centre – Financials
Axis Steel Centre – Financials ¾ The Acquisition will be by means of bank Borrowings. ¾ Funds for the Proposed Acquisition has been secured via a revolving credit with an indicative interest of 3.5% ¾ The acquisition is yield accretive ¾ The Proposed Acquisition will have the following financial imp
Slide 23: Impact on Assets Under Management (AUM)
Impact on Assets Under Management (AUM ) 900.0 803.11 800.0 723.1 724.6 728.1 Book Value (RM mil) 700.0 600.0 570.4 500.0 408.3 400.0 332.2 300.0 200.0 100.0 - 2005 2006 2007 2008 1Q2009 2Q2009 2009* * Upon Completion of Axis Steel Centre 23
Slide 24: Impact on Space Under Management
Impact on Space Under Management 3,500,000 3,224,960 24 22 3,000,000 2,858,121 2,858,121 2,858,121 20 20 Net Lettable Area (sq ft) 19 19 19 2,500,000 18 No. of Properties 2,175,522 16 2,000,000 14 14 1,656,943 12 1,500,000 10 1,186,052 9 8 1,000,000 6 6 500,000 4 2 0 - Dec'05 Dec'06 Dec'07 Dec'08 Ma
Slide 25: Raising Capital via Private Placement
Raising Capital via Private Placement 25
Slide 26: Proposed Placement – Narrowing of Discount to NAV
Proposed Placement – Narrowing of Discount to NAV 2.00 Initial Placement @ RM1.80 1.85 1.80 1.75 1.75 1.76 1.76 1.70 1.68 1.65 1.66 1.60 1.65 1.65 1.63 1.62 1.50 1.40 1.31 1.20 1.12 1.00 Dec'07 Mar'08 June'08 Sept'08 Dec'08 Mar'09 June'09 Jul'09 NAV Market price 26
Slide 27: Proposed Placement
Proposed Placement ¾ The Manager will be seeking Unitholders’ approval to renew the general mandate for 2009. ¾ With KLCI closing at an 11‐month high of 1110.0 pts and the narrowing of the discount between market price and NAV of Axis‐REIT units, there is a potential window for a placement in third
Slide 28: Investor Relation Activity
Investor Relation Activity 28
Slide 29: Investors Outreach Program
Investors Outreach Program ¾ In collaboration with AmFirst REIT, AmanahRaya REIT, Regroup Associates and OSK Investment Bank Bhd , Axis REIT Managers Bhd initiated the first of a series of Retail Investor Roadshows . ¾ The first was held in Penang on 4 July 2009, with over 200 members of the investi
Slide 30: Annual Report in Mandarin
Annual Report in Mandarin ¾ First REIT to have a Mandarin version of the annual report available online at www.axis‐reit.com.my. ¾ Manager felt that it was important to have the widest possible reach to the general investing community both in and outside the country. 30
Slide 31: Improving Investor Visibility and Liquidity
Improving Investor Visibility and Liquidity 2,000 1,800 1,959 1,600 1,778 No. of Unitholders 1,400 1,652 1,200 1,437 1,370 1,000 1,216 1,166 800 941 1,034 600 400 200 - Dec'05 Dec'06 Jun'07 Dec'07 Jun'08 Sept'08 Dec'08 Mar'09 Jun'09 Since the reclassification to Shariah compliant, there is an increa
Slide 32: Portfolio Performance 1H 2009
Portfolio Performance 1H 2009 32
Slide 33: Occupancy Levels
Occupancy Levels 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 98% 93% 95.4% 90% 85% 85% 82% 80% 75% % Area Occupied 70% 60% 50% 40% 30% 20% 10% 0% Occupancy maintained since last quarter 33
Slide 34: Portfolio Diversification
Portfolio Diversification Portfolio Diversification by Type and NLA Portfolio Diversification by Geographical and Book Value 4.83% Office 9.5% 10.8% 5.2% 16.92% Johor Light Industrial 2.1% 24.63% 4.78% Kedah Office/Industrial Klang Warehousing/Logistics Petaling Jaya 48.83% Warehouse Retail 72.4% Fa
Slide 35: Portfolio Diversification
Portfolio Diversification Portfolio Diversification by Sector and Revenue Services 2% Healthcare & Lifestyle 12% 24% 4% Engineering / Building 9% Materials 10% Financial Services 12% Logistics 9% 6% Automotive 12% IT/Electronics Retail Consumer Products Others Note: The above chart excludes manual c
Slide 36: Lease Expiry Profile
Lease Expiry Profile Year % of % of Rental Year % of % of Rental Year % of % of Rental Property 2009 Total NLA Income /mth 2010 Total NLA Income /mth 2011 Total NLA Income /mth Menara Axis 51,510 1.80% 3.11% 58,002 2.03% 4.92% 14,034 0.49% 1.48% Crystal Plaza 24,856 0.87% 1.63% 169,002 5.91% 9.68% 9
Slide 37: Maintaining Positive Rental Reversions
Maintaining Positive Rental Reversions Overall : Positive Rent Reversion by 3.35% Multi Tenanted Properties Space Negotiated % Movement Menara Axis 1,181 No change Crystal Plaza 12,433 ‐ 2.56% Axis Business Park 19,262 +11.71% Infinite Center 6,712 No change Axis Plaza 5,939 No change Wisma Kemajuan
Slide 38: Refinancing of Short Term Debt
Refinancing of Short Term Debt 38
Slide 39: List of Bank Facilities
List of Bank Facilities Previously: Maybank Murabahah Overdraft Limit RM60,000,000 Maybank Revolving Credit Limit RM85,000,000 CIMB Revolving Credit Limit RM40,000,000 HSBC Revolving Credit Limit RM95,000,000 RM280,000,000 Notes: ¾ 100% short term borrowings ¾ Range of historical interest rate paid:
Slide 40: List of Bank Facilities
List of Bank Facilities Previously: Currently Maybank Murabahah Overdraft Limit RM60,000,000 Refinanced with RM170.4 mil. Maybank Revolving Credit Limit RM85,000,000 Term Loan CIMB Revolving Credit Limit RM40,000,000 HSBC Revolving Credit Limit RM95,000,000 RM280,000,000 Notes: ¾ 100% short term bor
Slide 41: List of Bank Facilities – RM170.4 mil Term Loan
List of Bank Facilities – RM170.4 mil Term Loan Details of the RM170.4 million Club Deal Term Loan (“Term Loan”) ¾ Offer accepted on 5 June 2009 ¾ Jointly offered by CIMB Islamic Bank and Public Islamic Bank ¾ Tenures: • Tranche 1 : RM70.4 million for 3 years; and • Tranche 2 : RM100.0 million for 5
Slide 42: List of Bank Facilities–RM170.4mil Term Loan (cont’d)
List of Bank Facilities–RM170.4mil Term Loan (cont’d) Details of the RM170.4 million Club Deal Term Loan (“Term Loan”) ¾ Based on 50% fixed rate and 50% floating rate ¾ Islamic Profit Rate Swap (“IPRS”) • Equivalent to interest rate swap but IPRS is Shariah compliant; • To hedge against fluctuation
Slide 43: List of Bank Facilities with the Restructuring
List of Bank Facilities‐ with the Restructuring Effective 15 July 2009 onwards: RM’000 Ratios of medium/long term vs short term ratios Public & CIMB Term Loan Limit 170,400 HSBC Revolving Credit Limit 95,000 265,400 64: 36 Add: New borrowings secured: Maybank Revolving Credit Limit 50,000 CIMB Revol
Slide 44: 30 June 2009 Financial Results
30 June 2009 Financial Results 44
Slide 45: Financial Results - Income Statement (Unaudited)
Financial Results ‐ Income Statement (Unaudited) Excluding unrealised earnings 2Q2009 2Q2008 Changes / due to changes in fair value of (RM ‘000) (RM’000) Movement investment properties No. of Properties 19 17 +2 Property Income – Note 1 17,362 15,673 + 10.78% Property Expenses (2,728) (2,444) Net Pr
Slide 46: Financial Results - Income Statement (Unaudited)
Financial Results ‐ Income Statement (Unaudited) Excluding unrealised earnings 1H 2009 1H 2008 Changes / due to changes in fair value of (RM ‘000) (RM’000) Movement investment properties No. of Properties 19 17 +2 Property Income – Note 1 34,691 30,102 + 15.24% Property Expenses (5,433) (4,679) Net
Slide 47: Notes to Financial Results – Income Statement
Notes to Financial Results – Income Statement Note 1 – Property Income Increase in property income is due to contribution of rental proceeds from property acquisitions completed since the 2nd half of 2008. Note 2 – Non‐Property Expenses Reduction in non‐property expenses in the current quarter is du
Slide 48: Notes to Financial Results – Income Statement (Cont’d)
Notes to Financial Results – Income Statement (Cont’d) Note 3 – Borrowing Cost Included in the borrowing cost are the followings: ¾ Amortisation of term loan expenses: RM 55,000 ¾ Provision for stamp duty and legal fee on new borrowings of RM75 mil. =RM250,000 Note 4 – Interest/ Islamic Financing Co
Slide 49: Summary of EPU (Realised) and DPU
Summary of EPU (Realised) and DPU Sen/ unit EPU(realised) = Income available for distribution 49
Slide 50: Detailed Property Performance Analysis – 30.6.2009
Detailed Property Performance Analysis – 30.6.2009 (RM’000) Book Fair Value Acq Cost + 12 Months Gross Value Adjustment Enhancement Annualised Yield (a) (b) (c) Revenue (d) (d) / (c) 1 ABP 102,515 17,536 84,979 11,110 13.06% 2 Axis Plaza 30,700 8,198 22,502 2,796 12.43% 3 Crystal Plaza 89,800 33,304
Slide 51: Balance Sheet Highlights (Unaudited)
Balance Sheet Highlights (Unaudited) 30/06/09 31/12/08 Changes RM '000 RM '000 Investment Properties 728,109 723,100 + 5,009 Other Assets 4,803 3,271 + 1,532 TOTAL ASSETS 732,912 726,371 + 6,541 Borrowings 242,544 230,456 + 12,088 Other Payables 40,033 48,069 ‐ 8,036 TOTAL LIABILITIES 282,577 278,52
Slide 52: Thank You
REAL ESTATE INVESTMENT TRUST Thank You
Axis Real Estate Investment Trust — Q2 2009 Earnings Presentation on 6ix