Axis Real Estate Investment Trust · MYX:AXREIT
Axis Real Estate Investment Trust — Q3 2016 Earnings Presentation
66 slides from Axis Real Estate Investment Trust's earnings presentation, Oct 24, 2016
Slide 1: 3Q 2016 Results Presentation
3Q Axis REIT Managers Berhad Results Presentation 2016 24 October 2016
Slide 2: Our Milestones
Our Milestones Assets Under Management RM296 million RM2.19 billion Space Under Management 978,000 sq ft 7,304,143 sq ft Properties 5 38 Valuation Gain since listing RM302,000,000 First REIT to be listed on Bursa Malaysia First REIT to convert into an Islamic REIT First REIT to introdu
Slide 3: 3Q2016 Highlights
3Q2016 HIGHLIGHTS 3
Slide 4: 3Q2016 Highlights
3Q2016 Highlights RM 2,149,810,000 Investment Properties 4
Slide 5: 3Q2016 Highlights
3Q2016 Highlights Completed the acquisition of 4 industrial properties - Beyonics i-Park Campus Block A, B, C & D for RM61.0 million on 28 January 2016. Successfully signed the Sale & Purchase Agreement for the acquisition of Kerry Warehouse at Pasir Gudang, Johor for a cash consideration of RM3
Slide 6: 3Q2016 Highlights – Contd.
3Q2016 Highlights – Contd. Total of RM29.664 million revaluation gain recorded for YTD 3Q2016. Declared 2.05 sen as 3rd Interim 2016 DPU. Successfully implemented the Income Distribution Reinvestment Plan (IDRP) in 1H2016 with a success rate of 79%. Traded at a premium of 39% to NAV. 6
Slide 7: 3Q2016 Return Comparatives
3Q2016 Return Comparatives 12.00% 11.71% 10.00% 8.00% 6.40% 6.00% 4.69% 3.90% 4.00% 3.28% 3.00% 2.00% 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 p
Slide 8: 3Q2016 Finance Report
3Q2016 FINANCE REPORT 8
Slide 9: 3Q2016 Summary
3Q2016 Summary 3Q2016 Total Net Income (“Realised”)(RM' 000) 67,066 Income Available for Distribution ("Realised") (RM' 000) 67,893 Earnings per Unit ("EPU") ("Realised") (Sen) 6.09 Income Distribution Declared (RM'000) 67,858 Distribution per Unit ("DPU") (Sen) * 6.15 Number of Investment Propertie
Slide 10: Income Statement 3Q2016 vs 3Q2015
Income Statement 3Q2016 vs 3Q2015 3Q2016 3Q2015 Changes / (RM ‘000) (RM’000) Movement No. of Properties 38 34 +4 Property Income 41,765 41,631 +0.32% Property Expenses (7,047) (5,826) +20.96% Net Property Income 34,718 35,805 -3.04% Profit Income / other income 217 226 Non-Property Expenses (4,418)
Slide 11: Income Statement YTD 3Q2016 vs YTD 3Q2015
Income Statement YTD 3Q2016 vs YTD 3Q2015 YTD 3Q2016 YTD 3Q2015 Changes / (RM ‘000) (RM’000) Movement No. of Properties 38 34 +4 Property Income - Note 1 124,455 123,245 +0.98% Property Expenses - Note 2 (20,423) (17,742) +15.11% Net Property Income 104,032 105,503 -1.39% Profit Income / other incom
Slide 12: Income Statement YTD 3Q2016 vs YTD 3Q2015 – Notes
Income Statement YTD 3Q2016 vs YTD 3Q2015 Note 1 – Property Income Increase in property income as compared to last preceding year corresponding period is due to contribution of rental proceeds from newly acquired properties coupled with the positive rental reversion on renewal of tenancies during th
Slide 13: Gross Yield of Investment Properties
Gross Yield of Investment Properties Properties Gross yield (%) Average YTD gross yield = 10.07% 1 Wisma Kemajuan 18.56% 20 Infinite Centre 9.23% 2 FCI Senai 14.56% 21 Seberang Prai Logistic Warehouse 2 9.18% 3 Crystal Plaza 14.47% 22 Axis Business Park 9.07% 4 Menara Axis 14.18% 23 Axis Steel Centr
Slide 14: Net Yield of Investment Properties
Net Yield of Investment Properties Properties Net yield (%) Average YTD net yield = 8.59% 1 Wisma Kemajuan 14.40% 20 Tesco Bukit Indah 7.88% 2 FCI Senai 13.15% 21 Quattro West 7.20% 3 BMW Centre PTP 12.37% 22 Beyonics i-Park Campus Block D 7.18% 4 Crystal Plaza 11.88% 23 Wisma Academy Parcel 7.17% 5
Slide 15: Income Available for Distribution
Income Available for Distribution 25 Adjusted Income Before Taxation/Income Available For Distribution 20 15 RM' million 23.75 23.86 22.67 21.87 22.58 22.69 22.62 10 5 0 15 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016
Slide 16: 3Q2016 Income Distribution
3Q2016 Income Distribution Proposed : 2.05 sen DPU The 2.05 sen DPU represents 99.95% income available for distribution from performance of properties for the period from 1 July 2016 to 30 September 2016. Important dates: Ex-date : 3 November 2016 Entitlement date : 7 November 2016 Payment date : 30
Slide 17: Summary of Realised EPU and DPU
Summary of Realised EPU and DPU 10.00 9.30 0.65 9.23 9.25 1.18 9.00 8.64 0.10 8.71 8.35 8.40 8.01 8.65 8.70 7.89 7.90 8.00 8.50 8.00 7.73 7.64 7.00 6.80 6.82 6.41 6.48 6.09 6.15 6.00 5.00 4.00 3.00 2.00 1.00 - 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD 3Q 2016 Gain on disposal 17 DPU EPU
Slide 18: Statement of Financial Position
Statement of Financial Position 30/09/16 31/12/15 (RM’000) (RM’000) Changes Investment Properties – Note 1 2,149,810 2,048,626 +101,184 Fixed Assets 3,802 3,602 +200 Other Assets – Note 2 39,015 89,265 -50,250 TOTAL ASSETS 2,192,627 2,141,493 +51,134 Borrowings – Note 3 744,701 731,814 +12,887 Other
Slide 19: Statement of Financial Position – Notes
Statement of Financial Position Note 1 – Investment Properties The acquisition of Beyonics i-Park Campus Block A, B, C and D was completed on 28 January 2016 at RM62.0 million. During the period, a total of RM9.498 million was spent for enhancement of the properties on portfolio and RM29.664 million
Slide 20: Statement of Financial Position – Note 3 Borrowings
Statement of Financial Position – Note 3 Borrowings 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total Borrowings (RM’000) 209,816 230,456 308,932 416,609 311,338 548,920 528,004 683,769 731,814 744,701 Total Assets (RM’000) 581,857 726,371 907,745 1,208,897 1,298,431 1,589,408 1,616,523 2,085,
Slide 21: Statement of Financial Position Gearing Levels
Statement of Financial Position Gearing Levels Placements Undertaken 40.0% 37.5% 38.2% 35.4% 36.0% 36.0% 34.5% 34.2% 34.1% 35.0% 33.0% 34.0% 34.5% 33.9% 32.8% 34.2% 32.7% 32.5% 34.5% 34.0% 33.1% 33.4% 32.5% 32.5% 31.8% 31.7% 31.3% 32.6% 32.7% 32.5% 31.7% 30.0% 30.0% 29.1% 28.8% 26.8% 27.3% 25.0% 24.
Slide 22: Unitholders' Capital – Note 4
Unitholders’ Capital – Note 4 2,500.0 2,183.6 2,192.6 2,141.5 2,085.7 2,000.0 1,589.4 1,616.5 1,500.0 1,377.6 1,391.4 1,298.4 1,208.9 RM mil 1,044.7 1,052.3 1,000.0 907.7 726.4 728.2 735.4 751.0 581.8 540.3 500.0 411.8 406.9 323.3 234.9 234.9 - 31-Dec-06 31-Dec-08 31-Dec-10 31-Dec-12 31-Dec-14 30-Ju
Slide 23: Unitholders' Capital – Note 4
Unitholders’ Capital – Note 4 … resulting in good total returns to unitholders. 360% 325% Total Return on Placements 320% 280% 145% 240% 200% 186% 177% 160% 75% 133% 83% 120% 55% 180% 79% 80% 111% 36% 94% 40% 78% 43% 10% 0% IPO @ RM1.25 Placement '08 @ Placement '09 @ Placement '10 @ Placement '11 @
Slide 24: Statement of Financial Position – Note 5 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 RM302 million to date. Property Gain/(loss) RM’000 Property Gain/(loss) RM’000 Crystal Plaza 44,754 Niro Warehouse 3,766 Menara Axis 37,616
Slide 25: Revaluation of Properties
Revaluation of Properties Surplus/ Carrying Value as Open Market (deficit) to be Property at 30 Sept 2016 Value incorporated (RM'000) (RM'000) (RM'000) 1 Menara Axis 123,575 123,600 25 2 Crystal Plaza 109,570 110,000 430 3 Axis Business Park 120,112 120,000 (112) 4 Infinite Centre 42,206 43,000 794
Slide 26: 3Q2016 Property Report
3Q2016 PROPERTY REPORT
Slide 27: Overview
Overview Axis-REIT’s portfolio occupancy rate maintained steady at 91.44%. In 2016, a total of 1,938,654 sq. ft. of space will be coming for renewal representing 26.5% of the portfolio. 60% of this amount has been renewed while 24% has expressed commitment to renew. The Manager is actively working o
Slide 28: Key Metrics
Key Metrics As at 30 September 2016, the portfolio has 38 assets comprising 7,304,143 sq. ft. and 139 tenants. 3Q2016 2Q2016 Movement No of properties 38 38 - Property Income (RM’000) 41,764 41,615 0.36% Property Expenses (RM’000) 7,047 6,839 3.04% Net Property Income (RM’000) 34,717 34,776 0.17% Oc
Slide 29: Key Metrics
Key Metrics Average Rental Rates: Type of Properties 3Q2016 2Q2016 Movement Office (RM/sq. ft.) 4.79 4.70 + 0.09 Office Industrial (RM/sq. ft.) 2.71 2.71 - Manufacturing Facilities (RM/sq. ft.) 1.36 1.36 - Warehouse Logistics (RM/sq. ft.) 1.53 1.53 - Hypermarket (RM/sq. ft.) 2.36 2.36 - 29
Slide 30: Space Under Management (sq. ft.)
Space Under Management (sq. ft.) 8,000,000 7,304,143 7,015,242 7,000,000 6,859,474 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 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 2010 2011 2012 2013 2014 2015 Q
Slide 31: Portfolio Occupancy Rate
Portfolio Occupancy Rate As at 30 September 2016, Axis-REIT has only 13 out of 38 properties that carry vacancy. 25 properties enjoy 100% occupancy. Occupancy Rate Vacant Occupancy 8.56% As at 30 September 2016 91.44% Vacancy As at 30 September 2016 8.27% Space to be let out 625,186 sq. ft. Occupanc
Slide 32: Occupancy Rates by Property
Occupancy Rates by Property as at 30 September 2016 1 Menara Axis 93.75% 21 Axis Steel Centre 100.00% 2 Crystal Plaza 81.35% 22 Bukit Raja Distribution Centre 100.00% 3 Quattro West 65.90% 23 Seberang Prai Logistic Warehouse 1 100.00% 4 Axis Eureka 59.08% 24 Seberang Prai Logistic Warehouse 2 100.00
Slide 33: Properties Below 90% Occupancy
Properties Below 90% Occupancy Occupancy rates of properties below 90% as at 30 September 2016 Fonterra HQ 84.96% Crystal Plaza 81.35% Axis Tech Centre 81.01% Wisma Academy… 78.88% Axis Business Park 69.80% Infinite Centre 68.08% Quattro West 65.90% Axis Vista 65.31% Axis Eureka 59.08% Axis PDI Cent
Slide 34: Diversified Portfolio
Diversified Portfolio Portfolio Diversification by Type and NLA 8% 22% 21% 5% 44% Office Office/ Industrial Hypermarkets Warehouse Logistic Manufacturing Facilities 34
Slide 35: Diversified Portfolio
Diversified Portfolio Portfolio Diversification by Industry Sector and NLA Healthcare & Others Lifestyle 1% 4% Consumer Vacant Services Products 8% 6% 4% Retail 6% Engineering/Buildi IT/Electronics ng Materials 10% 22% Automotive 2% Financial Services 1% Logistics 36% 35
Slide 36: Portfolio Location
Portfolio Location Portfolio Diversification by Geographical Location Petaling Jaya 27.28% Johor 27.07% Shah Alam 22.10% Penang 10.25% Klang 5.82% Nilai 3.99% Kedah 1.89% Cyberjaya 1.61% 36
Slide 37: Tenancy Mix
Tenancy Mix Single Tenant vs Multi-Tenants 3% 39% 58% Single Tenant Multi Tenants Vacant 37
Slide 38: Lease Expiry Profile – Looking Forward
Lease Expiry Profile – Looking Forward Year Area up % of % of for renewal Total NLA Rental Income 2016 1,948,792 sq. ft. 26.68% 28.53% 2017 1,207,273 sq. ft. 16.53% 19.25% 2018 723,719 sq. ft. 9.91% 9.86% 38
Slide 39: Lease Expiry Profile – Looking Forward
Lease Expiry Profile – Looking Forward Year % of % of Rental Year % of % of Rental Year % of % of Rental Income/ Income/ Income/ Property 2Q 2016 Total NLA month 2017 Total NLA month 2018 Total NLA month Menara Axis 103,019 1.41 3.18 33,578 0.46 1.44 - - - Crystal Plaza 120,358 1.65 3.70 11,153 0.15
Slide 40: Positive Rent Reversions
Positive Rent Reversions Space Renegotiated % Rent Properties (sq. ft.) Movement Menara Axis 79,848 +3.57% Crystal Plaza 107,363 +0.20% Axis Business Park 25,057 +2.45% Infinite Centre 46,195 +5.98% Wisma Kemajuan 64,797 +2.82% Quattro West 19,004 +5.29% Axis Technology Centre 41,182 No change Axis
Slide 41: Weighted Average Lease Expiry (WALE)
Weighted Average Lease Expiry (WALE) The WALE for the portfolio is: By Year 3Q2016 2Q2016 By NLA 4.16 4.28 By Rental 4.36 4.41 41
Slide 42: Portfolio Efficiency (PE)
Portfolio Efficiency (PE) The Portfolio Efficiency Ratio = Operating Cost for the Portfolio / Gross Property Income YTD 30 Sept 2016 YTD 30 Jun 2016 16.41% 16.43% 42
Slide 43: Top 10 Tenants – Strong Rental Covenants
Top 10 Tenants – Strong Rental Covenants Ranking Tenant 1 LF Logistics Services (M) Sdn. Bhd. 2 Konsortium Logistik Berhad 3 Yongnam Engineering Sdn Bhd 4 Tenaga Nasional Berhad 5 Tesco Stores (Malaysia) Sdn. Bhd. 6 Schenker Logistics (Malaysia) Sdn. Bhd. 7 Strateq Data Centre Sdn. Bhd. 8 DHL Proper
Slide 44: Property Development
PROPERTY DEVELOPMENT
Slide 45: Axis PDI Centre – Proposed Development
Axis PDI Centre – Proposed 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 National Distribution Centre. Th
Slide 46: Axis PDI Centre – Proposed Development (Before)
Axis PDI Centre – Proposed Development (Before) 50 acre site 46
Slide 47: Axis PDI Centre – Proposed Development
Axis PDI Centre – Proposed Development Phase 1 – Phase 2 – Future Nestle National Distribution Development Centre 47
Slide 48: Axis PDI Centre – Phase 1 Nestle National Distribution Centre
Axis PDI Centre – Phase 1 Nestle National Distribution Centre 48
Slide 49: Axis PDI Centre – Location
Axis PDI Centre – Location Lebuhraya Shah Alam Proposed Johan Setia LRT Station Subject Property Lebuhraya Lembah Klang Selatan The existing site is centrally located in the heart of the Klang Valley, enjoying a wide frontage onto the Klang / Banting Highway (E5), 3.8km from the proposed LRT3 Johan
Slide 50: 3Q2016 Investments Report
3Q2016 INVESTMENTS REPORT
Slide 51: Completed Acquisitions
Completed Acquisitions Beyonics iPark Campus, Kulaijaya, Johor Completion Date : 28 January 2016 Land Area : Approx. 10 acres Land Tenure : Freehold Occupancy : 100% Purchase Price : RM61 million Projected Net Property Yield : 7.12% WALE : 10 years 51
Slide 52: Ongoing Acquisitions
Ongoing Acquisitions Kerry Warehouse – Pasir Gudang, Johor Land Area : Approx. 6 acres Land Tenure : Leasehold Occupancy : 100% Purchase Price : RM33 million Projected Net Property Yield : 7.5% WALE : 5 years 52
Slide 53: Ongoing Acquisitions
Ongoing Acquisitions Scomi Facility – Rawang, Selangor Land Area : Approx. 15.25 acres Land Tenure : Freehold Occupancy : 100% Purchase Price : RM42 million Projected Net Property Yield : 7.3% WALE : 15 years 53
Slide 54: Prospective Acquisition Targets
Prospective Acquisition Targets The Manager is currently undergoing assessments for the following assets as future acquisition targets: 1. Industrial facility in Negeri Sembilan for RM19.5 million 2. Industrial facilities in Selangor for RM80 million 3. Industrial property in Kedah for RM130 million
Slide 55: Property Disposal
PROPERTY DISPOSAL
Slide 56: Property Disposal
Property Disposal Axis Eureka – Cyberjaya, Selangor SPA Signing Date: 24 October 2016 Price: RM56,132,075.00 Buyer: Malaysia Qualifications Agency (Agensi Kelayakan Malaysia) Current Occupancy Rate: 59.5% as at 17 October 2016 Expected Completion Date: December 2016 / Early 2017 Gain on Disposal: RM
Slide 57: Property Disposal (Cont.)
Property Disposal (Cont.) Axis Eureka – Cyberjaya, Selangor Rationale for Disposal The Manager believes that in the 5 years of owning Axis Eureka, it has maximised the income-generating potential of this asset and that there is limited upside for future rental growth. Net Yield Occupancy Rate Axis E
Slide 58: 3Q2016 Investor Relations Report
3Q2016 INVESTOR RELATIONS REPORT
Slide 59: Unit Price Performance YTD 2016
Unit Price Performance YTD 2016 AXREIT: 1 Jan 2014 – 30 Sept 2016 4.00 3.69 3.69 3.62 3.62 3.62 3.55 3.54 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 1.77 1.80 1.75 1.69 1.70 1.70 1.65 1.66 1.61 1.64 1.61 1.55 1.55 1.50 1.00 Jan Feb Mar Apr May Jun Jul Aug Se
Slide 60: Unit Price Movement YTD 2016
80% 90% 110% 120% 130% 140% 100% 1/1/2013 1/2/2013 1/3/2013 1/4/2013 1/5/2013 1/6/2013 1/7/2013 1/8/2013 1/9/2013 1/10/2013 1/11/2013 1/12/2013 1/1/2014 2Q2016: Unit Price @ 31 Jun 2016 3Q2016: Unit Price @ 30 Sept 2016 1/2/2014 1/3/2014 1/4/2014 1/5/2014 RM1.70 RM1.75 1/6/2014 1/7/2014 1/8/2014 KLC
Slide 61: Volume Movement YTD 2016
Volume Movement YTD 2016 45,000,000 AXREIT: 1 Jan 2014 – 30 Sept 2016 40,208,000 39,783,200 40,000,000 33,826,000 35,000,000 32,708,200 30,000,000 27,806,000 27,347,800 25,000,000 23,451,400 22,491,600 21,092,600 21,028,800 20,000,000 18,616,000 15,849,600 13,159,100 15,000,000 12,995,800 12,854,800
Slide 62: Top 10 Unitholders YTD 2016
Top 10 Unitholders YTD 2016 1 AMANAH SAHAM BUMIPUTERA 11.00% 2 EMPLOYEES PROVIDENT FUND 10.30% 3 LEMBAGA TABUNG HAJI 5.43% 4 TEW PENG HWEE @ TEOH PENG HWEE 5.04% 5 ALEX LEE LAO 4.53% 6 PERMODALAN NASIONAL BERHAD 3.79% 7 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 2.59% 8 EXEMPT AN FOR EASTSPRING INVESTM
Slide 63: Analysis of >2 million Unitholders
Analysis of >2 million Unitholders Top 5 increases in unitholdings: Last Quarter Increase AMANAH SAHAM BUMIPUTERA 2 0.8% EXEMPT AN CLR (A) FOR 0.7% AMANAHRAYA TRUSTEES BERHAD AMANAH SAHAM DIDK 0.4% ALEX LEE LAO 0.2% GREAT EASTERN LIFE ASSURANCE 0.2% (MALAYSIA) BERHAD DR Top 5 decreases in unitholdin
Slide 64: Investor Visibility and Liquidity YTD 2016
Investor Visibility and Liquidity YTD 2016 No. of CDS Accounts 4,000 3,790 3,776 3,718 3,611 3,500 3,309 3,176 3,200 3,219 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 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 Quarter-on-quarter,
Slide 65: Analyst Coverage 3Q2016
Analyst Coverage 3Q2016 Coverage Rating Target Price (RM) Published Date AffinHwang Hold 1.67 5-Aug-16 Alliance DBS Hold 1.75 5-Aug-16 CIMB Hold 1.86 7-Aug-16 Hong Leong IB Hold 1.68 22-Aug-16 KAF Hold 1.70 22-Aug-16 Kenanga Hold 1.76 8-Aug-16 Maybank Hold 1.72 22-Aug-16 MIDF Hold 1.72 5-Aug-16 UOBK
Slide 66: Thank You
THANK YOU A |S REAL ESTATE INVESTMENT TRUST
Axis Real Estate Investment Trust — Q3 2016 Earnings Presentation on 6ix