Axis Real Estate Investment Trust · MYX:AXREIT
Axis Real Estate Investment Trust — Q3 2017 Earnings Presentation
64 slides from Axis Real Estate Investment Trust's earnings presentation, Oct 23, 2017
Slide 1: 3Q 2017 Results Presentation
3Q Axis REIT Managers Berhad Results Presentation 2017 23 October 2017 1
Slide 2: Our Milestones
Our Milestones Assets Under Management RM296 million RM2.35 billion Space Under Management 978,000 sq ft 7,595,482 sq ft Properties 5 39 Fund Size RM206 million RM1.40 billion Valuation Gain since listing RM311,000,000 First REIT to be listed on Bursa Malaysia First REIT to convert int
Slide 3: 3Q2017 Highlights
3Q2017 HIGHLIGHTS 3
Slide 4: 3Q2017 Highlights
3Q2017 Highlights RM 2,292,890,000 Investment Properties 4
Slide 5: 3Q2017 Highlights
3Q2017 Highlights Completed the acquisition of Kerry Warehouse located at Pasir Gudang, Johor for RM33.0 million on 24 July 2017. Successfully signed the Sales & Purchase Agreement for the acquisition of an industrial facility located at Kuantan, Pahang for a purchase consideration of RM155.0 mi
Slide 6: 3Q2017 Return Comparatives
3Q2017 Return Comparatives 6.00% 5.70% 5.24% 5.00% 4.59% 4.00% 3.90% 3.13% 3.00% 3.00% 2.00% 1.00% 0.00% Axis-REIT Total Axis-REIT EPF Dividend 10-yr MGS 12 Months FD OPR Return * Distribution Yield Return Rate * (Based on annualised DPU from operations + movement in market price)/opening market pri
Slide 7: 3Q2017 Finance Report
3Q2017 FINANCE REPORT
Slide 8: 3Q2017 Summary
3Q2017 Summary 3Q2017 Total Net Income (“Realised”)(RM' 000) 68,350 Income Available for Distribution ("Realised") (RM' 000) 70,062 Earnings per Unit ("EPU") ("Realised") (Sen) 6.18 Income Distribution Declared (RM'000) 69,846 Distribution per Unit ("DPU") (Sen) * 6.32 Number of Investment Propertie
Slide 9: Income Statement 3Q2017 vs 3Q2016
Income Statement 3Q2017 vs 3Q2016 3Q2017 3Q2016 Changes (RM ‘000) (RM’000) No. of Properties 39 38 +1 Property Income 41,865 41,765 +0.24% Property Expenses (7,143) (7,047) +1.36% Net Property Income 34,722 34,718 +0.01% Profit Income / other income 131 217 Loss on disposal of property (6) - Non-Pro
Slide 10: Income Statement YTD 3Q2017 vs YTD 3Q2016
Income Statement YTD 3Q2017 vs YTD 3Q2016 YTD 3Q2017 YTD 3Q2016 Changes (RM ‘000) (RM’000) No. of Properties 39 38 +1 Property Income - Note 1 125,848 124,455 +1.12% Property Expenses - Note 2 (19,905) (20,423) -2.54% Net Property Income 105,943 104,032 +1.84% Profit Income / other income 480 518 Lo
Slide 11: Income Statement YTD 3Q2017 vs YTD 3Q2016 Notes
Income Statement YTD 3Q2017 vs YTD 3Q2016 Note 1 – Property Income Increase in property income as compared to preceding year corresponding period are due to rental proceeds from newly acquired Scomi Facility @ Rawang and Kerry Warehouse coupled with positive rental revision and rental of 17.6 acres
Slide 12: Income Statement YTD: Loss on disposal of property
Income Statement YTD 3Q2017 vs YTD 3Q2016 Note 5 – Loss on disposal of property Computation of distributable gain on disposal : RM'000 Disposal price 56,132 Less: Market value (55,000) 1,132 Less : Incidential cost Legal fees - SPA (106) Valuation fee (28) Agency fee (1,059) Disposal fee, RPGT & oth
Slide 13: Gross Yield of Investment Properties
Gross Yield of Investment Properties Properties Gross yield (%) Average YTD gross yield = 9.6% 1 Wisma Kemajuan 17.65% 21 Axis Business Park 8.67% 2 FCI Senai 14.85% 22 Axis Vista 8.59% 3 Crystal Plaza 14.44% 23 Infinite Centre 8.49% 4 Menara Axis 13.53% 24 Axis Technology Centre 8.28% 5 Strateq Dat
Slide 14: Net Yield of Investment Properties
Net Yield of Investment Properties Properties Net yield (%) Average YTD net yield = 8.2% 1 FCI Senai 13.53% 21 Axis Vista 7.28% 2 Wisma Kemajuan 13.25% 22 Axis MRO Hub 7.20% 3 Crystal Plaza 12.15% 23 Axis Steel Centre@ SiLC 7.14% 4 Strateq Data Centre 11.53% 24 Axis Shah Alam DC 3 7.07% 5 Menara Axi
Slide 15: Income Available for Distribution
Income Available for Distribution Adjusted Income Before Taxation/ Income Available For Distribution: 25 Gain on disposal 1.35 20 15 RM' million 22.69 22.62 23.23 23.26 23.34 22.58 22.11 10 5 0 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 * Marginal decrease in 3Q2017 income compared to 2
Slide 16: 3Q 2017 Income Distribution
3Q 2017 Income Distribution 3rd Quarter 2017 Income Distribution: 2.00 sen The 2.00 sen DPU represents 99.69% income available for distribution from performance of properties for the period from 1 July 2017 to 30 September 2017. Important dates: Ex-date : 3 November 2017 Entitlement date : 7 Novembe
Slide 17: Implementation of Income Distribution Reinvestment Plan (IDRP)
Implementation of Income Distribution Reinvestment Plan (IDRP) The Manager wishes to announce that it will be implementing the Income Distribution Reinvestment Plan for the 3Q 2017. Details are as follows: a) Electable Portion : 1.00 sen which is 50% of the 2.00 sen DPU to be allowed for reinvestmen
Slide 18: Summary of Realised EPU and DPU
Summary of Realised EPU and DPU 10.00 1.18 9.30 0.65 9.23 9.25 9.00 8.64 0.10 8.71 8.35 8.40 8.25 8.19 8.01 8.00 8.65 8.00 7.73 7.89 7.90 8.50 8.70 7.64 7.00 6.80 6.82 0.12 6.18 6.00 6.2 5.00 4.00 3.00 2.00 1.00 - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 18 Gain on disposal DPU EPU (re
Slide 19: Statement of Financial Position
Statement of Financial Position 30/09/17 31/12/16 (RM’000) (RM’000) Changes Investment Properties – Note 1 2,292,890 2,198,149 +94,741 Fixed Assets 2,583 2,899 -316 Other Assets – Note 2 55,505 43,226 +12,279 TOTAL ASSETS 2,350,978 2,244,274 +106,704 Borrowings – Note 3 856,913 780,665 +76,248 Other
Slide 20: Statement of Financial Position – Investment Properties
Statement of Financial Position Note 1 – Investment Properties Disposal of Axis Eureka was completed on 8 March 2017 and Kerry Warehouse acquisition was completed on 24 July 2017. During the year, a total of RM8.7 million was spent on enhancement works of the properties in the portfolio and RM97.5 m
Slide 21: Statement of Financial Position – Financing
Statement of Financial Position – Note 3 Financing 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total Financing (RM’000) 230,456 308,932 416,609 311,338 548,920 528,004 683,769 731,814 780,665 856,913 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,
Slide 22: Gearing Levels
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 1Q2008 27% 2Q2008 29% 3Q2008 4Q2008 32% 32% 1Q2009 2Q2009 33% 33% 3Q2009 27% 4Q2009 34% 1Q2010 35% 2Q 2010 36% Gearing Levels 3Q 2010 31% 4Q 2010 35% 1Q 2011 36% 38% 2Q 2011 3Q 2011 38% 4Q 2011 24% 1Q2012 29% 2Q2012 30% 3Q2012 22 4Q2012 1Q2013 34%
Slide 23: Unitholders’ Capital
Unitholders’ Capital – Note 4 2,500 2,351.0 2,244.0 2,141.5 2,085.7 2,000 1,589.4 1,616.5 1,500 1,298.4 RM mil 1,208.9 1,044.7 1,052.3 1,060.0 1,060.3 1,000 907.7 726.4 728.2 735.4 751.0 581.8 540.3 500 406.9 323.3 234.9 0 31-Dec-07 31-Dec-08 31-Dec-09 31-Dec-10 31-Dec-11 31-Dec-12 31-Dec-13 31-Dec-
Slide 24: Unitholders’ Capital – Total returns on placements
Unitholders’ Capital – Note 4 … resulting in good total returns to unitholders. 360% Total returns on placements 315% 320% 280% 240% 159% 200% 178% 170% 160% 126% 85% 120% 92% 64% 74% 80% 156% 43% 40% 93% 78% 62% 7% 31% 14% 0% -7% IPO @ RM1.25 Placement '08 @ Placement '09 @ Placement '10 @ Placemen
Slide 25: Non-distributable Reserve
Statement of Financial Position – Note 5 Non-distributable Reserve Non-distributable reserve mainly comprises the favorable gain in fair value of approximately RM311 million to date. Property Gain/(loss) RM’000 Property Gain/(loss) RM’000 Crystal Plaza 44,754 Axis Technology Centre 3,746 Menara Axis
Slide 26: 3Q2017 Property Report
BRD i = rai pent — ~ pysat SERVIS —— se oo AP ae a e oe BBRE RE SWS: 26
Slide 27: Overview
Overview As at 30 September 2017, the occupancy rate of Axis-REIT’s portfolio of properties stands at 90.1% with a stable weighted average lease expiry period of 4.51 years (based on rental). As at year to-date 30 September 2017, the Manager has achieved positive rental reversion of 5.9%. With the a
Slide 28: Overview
Overview The office market is expected to continue to remain challenging for the rest of 2017 with new supply continuing to outstrip demand. However, with the increasing demand from the logistics and manufacturing sectors, the industrial market is expected to remain positive. We are pleased to repor
Slide 29: Key Metrics
Key Metrics 3Q2017 2Q2017 Movement No. of properties 39 38 Weighted Average Lease Expiry 4.06 4.41 (WALE) by NLA Weighted Average Lease Expiry 4.17 4.51 (WALE) by Rental Occupancy 90.1% 89.1% The Fund has completed the Kerry Warehouse acquisition on 24 July 2017, taking the total number of propertie
Slide 30: Key Metrics: Average Rental Rates
Key Metrics Average Rental Rates Type of Properties 3Q2017 2Q2017 Movement Office (RM/sq. ft.) 4.80 4.74 0.06 Office Industrial (RM/sq. ft.) 2.74 2.71 0.03 Manufacturing Facilities (RM/sq. ft.) 1.29 1.29 - Warehouse Logistics (RM/sq. ft.) 1.54 1.57 0.03 Hypermarket (RM/sq. ft.) 2.36 2.36 - Note: The
Slide 31: Space Under Management
Space Under Management Space Under Management (sq ft) 8,000,000 7,606,863 7,595,482 6,859,474 7,015,242 7,000,000 6,000,000 5,463,5995,464,124 5,000,000 4,449,580 4,288,054 ( sq ft) 4,000,000 3,679,796 3,000,000 2,858,121 2,175,522 2,000,000 1,656,943 1,186,052 1,000,000 - 2005 2006 2007 2008 2009 2
Slide 32: Portfolio Occupancy Rate
Portfolio Occupancy Rate As at 30 September 2017, Axis-REIT has only 12 out of 39 properties that carry vacancy, while 1 is undergoing Occupancy Rate development. Vacant 26 properties enjoy 100% occupancy. 9.9% Occupancy As at 30 September 2017 90.1% Vacancy As at 30 September 2017 9.9 % Space to be
Slide 33: Occupancy Rates by Property
Occupancy Rates by Property as at 30 September 2017 1 Menara Axis 86% 21 Bukit Raja Distribution Centre 100% 2 Crystal Plaza 81% 22 Seberang Prai Logistic Warehouse 1 100% 3 Quattro West 50% 23 Seberang Prai Logistic Warehouse 2 100% 4 Axis Business Park 59% 24 D8 Logistics Warehouse 100% 5 Infinite
Slide 34: Properties Below 90% Occupancy
Properties Below 90% Occupancy Occupancy rates of properties below 90% as at 30 September 2017 Menara Axis 86% Axis Tech Centre 86% Fonterra HQ 85% Wisma Academy 83% Crystal Plaza 81% Axis Business Park 59% Infinite Centre 52% Quattro West 50% Delfi Warehouse 47% Axis Business 26% Campus D21 Logisti
Slide 35: Diversified Portfolio
Diversified Portfolio Portfolio Diversification by Type and NLA 6% 25% 20% 5% 44% Office Office/ Industrial Hypermarkets Warehouse Logistic Manufacturing Facilities - Light Industrial 35
Slide 36: Diversified Portfolio: NLA by Industry Sector
Diversified Portfolio NLA by Industry Sector Services Healthcare & Others 5% Lifestyle 1% 3% Consumer Products Vacant 3% 10% Retail 6% Engineering/Building Materials IT/Electronics 20% 10% Financial Services 1% Automotive 4% Logistics 37% 36
Slide 37: Portfolio Location
Portfolio Location Portfolio Diversification by Geographical Location Johor 28.17% Petaling Jaya 26.25% Shah Alam 21.25% Penang 9.85% Klang 4.83% Rawang 3.98% Nilai 3.84% Kedah 1.83% 37
Slide 38: Tenancy Mix
Tenancy Mix Single Tenant vs Multi-Tenants 2% 38% 60% Single Tenant Multi Tenants Vacant 38
Slide 39: Lease Expiry Profile
Lease Expiry Profile % of Rental Year Area Up for Renewal % of Total NLA Income 2017 1,299,012 sq. ft. 17.10% 22.96% 2018 1,126,685 sq. ft. 14.83% 16.09% 2019 1,263,784 sq. ft. 16.64% 23.35% 39
Slide 40: Lease Expiry Profile
Lease Expiry Profile 5.9% positive rental reversion year to-date By Location Year % of % of Rental Year % of % of Rental Year % of % of Rental Location Income/ Income/ Income/ 2017 Total NLA month 2018 Total NLA month 2019 Total NLA month Petaling Jaya 565,548 7.45 13.32 291,899 3.84 5.90 576,917 7.
Slide 41: Portfolio Efficiency (PE)
Portfolio Efficiency (PE) The Portfolio Efficiency Ratio = Operating Cost for the Portfolio / Gross Property Income 3Q 2017 2Q 2017 15.82% 15.20% 41
Slide 42: Top Tenants – Strong Rental Covenants
Top 10 Tenants – Strong Rental Covenants 1. LF Logistics Services (M) Sdn Bhd 2. POS Logistics Berhad (formerly known as Konsortium Logistik Berhad) 3. Yongnam Engineering Sdn Bhd 4. Tenaga Nasional Berhad 5. Tesco Stores (M) Sdn Bhd 6. Schenker Logistics (M) Sdn Bhd 7. DHL Properties (M) Sdn Bhd 8.
Slide 43: 3Q2017 Asset Enhancements
3Q2017 ASSET ENHANCEMENTS 43
Slide 44: Completed Enhancement Works
Completed Enhancement Works Crystal Plaza New metal deck roofing, waterproofing and new water tank for cooling towers Wisma Academy Building painting and waterproofing works 44
Slide 45: Property Development
2017 PROPERTY DEVELOPMENT 45
Slide 46: Nestle Centre – Proposed Development at Axis PDI Centre
Axis PDIDC Nestle Centre – Proposed at Axis PDI Centre Development The Manager is pleased to announced that on 19 August 2016, RHB Trustees Berhad signed an Agreement to Build and Lease with Nestle Products Sdn Bhd to develop a 515,000 sq. ft. distribution warehouse facility for Nestle as their nati
Slide 47: Nestle DC at Axis PDI Centre (Before)
Nestle Axis PDIDC at Axis Centre PDI Centre (Before) – Proposed Development (Before) 50 acre site 47
Slide 48: Nestle DC at Axis PDI Centre (After)
Nestle DC at Axis PDI Centre (After) Artists’ Impression 48
Slide 49: Nestle DC at Axis PDI Centre
Nestle DC at Axis PDI Centre Artists’ Impression 49
Slide 50: Nestle DC at Axis PDI Centre (Current)
Nestle DC at Axis PDI Centre (Current) Phase 2 land – Rented as vehicle storage yard Phase 2 land – Rented as vehicle storage yard 50
Slide 51: 3Q2017 Investments Report
3Q2017 INVESTMENTS REPORT 51
Slide 52: Completed Acquisition
Completed Acquisition Kerry Warehouse – Pasir Gudang, Johor Completion Date : 24 July 2017 Land Area : Approx. 6 acres Land Tenure : Leasehold Occupancy : 100% Purchase Price : RM33 million Projected Net Property Yield : 7.5% WALE : 3.5 years 52
Slide 53: Ongoing Acquisitions
Ongoing Acquisitions Wasco Facility – Gebeng, Pahang Target Completion Date : 4Q2017 (SPA signed on 24 July 2017) Land Area : Approx. 120 acres Land Tenure : Leasehold Occupancy : 100% Purchase Price : RM155 million WALE : 15 years 53
Slide 54: Ongoing Acquisitions
Ongoing Acquisitions Manufacturing Facility – Iskandar Puteri, Johor Target Completion Date : 4Q2017 Land Area : Approx. 9.0 acres Land Tenure : Freehold Occupancy : 100% Purchase Price : RM50 million WALE : 21 years 54
Slide 55: Ongoing Acquisitions
Ongoing Acquisitions Manufacturing Facility – Senawang, Negeri Sembilan Target Completion Date : 1H2018 Land Area : Approx. 4.21 acres Land Tenure : Freehold Occupancy : 100% Purchase Price : RM18.5 million WALE : 10 years 55
Slide 56: 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 57: 3Q2017 Investor Relations Report
3Q2017 INVESTOR RELATIONS REPORT 57
Slide 58: Unit Price Performance 3Q2017
Unit Price Performance 3Q2017 4.00 AXREIT: 1 Jan 2014 – 30 Sep 2017 3.69 3.69 3.62 3.62 3.62 3.553.54 3.55 3.58 3.50 3.53 3.53 3.45 3.50 3.38 3.37 3.31 3.34 3.27 3.09 3.00 2.85 2.50 2.00 1.771.801.75 1.69 1.701.70 1.72 1.72 1.65 1.66 1.68 1.68 1.611.64 1.61 1.61 1.631.651.64 1.641.64 1.60 1.60 1.551
Slide 59: Unit Price Movement 3Q2017
80% 85% 90% 95% 100% 105% 110% 115% 120% 125% 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 2Q2017: Unit Price @ 30 Jun 2016 3Q2017: Unit Price @ 30 Jun 2016 1/1/2015 1/2/2015 1/3/2015 1/4/2015 1/5/2015 RM1.64 RM1.60 1/6/2015 1/7/2015
Slide 60: Volume Movement 3Q2017
Volume Movement 3Q2017 45,000,000 AXREIT: 1 Jan 2014 – 30 Sep 2017 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 21,092,600 21,028,800 20,000,000 18,616,000 15,849,600 16,046,400 13,159,100 15,009,300 14,
Slide 61: Top 10 Unitholders 3Q2017
Top 10 Unitholders 3Q2017 1 EMPLOYEES PROVIDENT FUND 9.29% 2 AMANAH SAHAM BUMIPUTERA 9.05% 3 LEMBAGA TABUNG HAJI 5.43% 4 TEW PENG HWEE @ TEOH PENG HWEE 5.04% 5 ALEX LEE LAO 4.63% 6 PERMODALAN NASIONAL BERHAD 3.85% 7 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 3.79% 8 AMANAH SAHAM BUMIPUTERA 2 2.26% 9 AM
Slide 62: Analysis of >2 million Unitholders
Analysis of >2 million Unitholders Top 5 increases in unitholdings: Last Quarter Increase EMPLOYEES PROVIDENT FUND 0.6% KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 0.4% RHB TRUSTEES BERHAD FOR MANULIFE INVESTMENT SHARIAH 0.1% PROGRESSFUND ALEX LEE LAO 0.1% ABERDEEN ASSET MANAGEMENT SDN BHD FOR TENAGA NA
Slide 63: Investor Visibility and Liquidity 3Q2017
Investor Visibility and Liquidity 3Q2017 No. of CDS Accounts 4,500 4,011 4,098 3,891 3,934 4,000 3,790 3,718 3,776 3,611 3,500 3,200 3,219 3,309 3,176 3,009 3,000 2,850 2,702 2,420 2,500 2,080 2,000 1,652 1,500 1,000 500 - 2008 2009 2010 2011 2012 2013 2014 1Q20152Q20153Q20154Q20151Q20162Q20163Q2016
Slide 64: Thank You
THANK YOU 64
Axis Real Estate Investment Trust — Q3 2017 Earnings Presentation on 6ix