Axis Real Estate Investment Trust · MYX:AXREIT
Axis Real Estate Investment Trust — Q4 2008 Earnings Presentation
37 slides from Axis Real Estate Investment Trust's earnings presentation, January 2009
Slide 1: Axis REIT Managers Bhd Presentation of 4Q results 2008
Axis REIT Managers Bhd Presentation of 4Q results 2008 1
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. Overview of Axis REIT 2. Acquisition Pipeline 3. Financials for 2008 3
Slide 4: A Quick Snapshot
A Quick Snapshot Approved Fund Size 255,901,000 units Manager Axis REIT Managers Bhd Listing Date 3 August 2005 Market Capitalisation RM286.61 million (as at 31 December 2008) Gearing RM230.46million (31.73% of Total Asset Value as at 31 December 2008 – Unaudited) Unit Price RM1.12 (as a
Slide 5: Highlights YTD December 2008
Highlights YTD December 2008 Successful Equity Raising of RM 90,000,000 from the placement of 50,000,000 new Axis‐REIT Units Completion of 5 new properties to the portfolio raising the number up to 19 Successful conversion into the world first Islamic Office / Industrial REIT Successful refinanc
Slide 6: Highlights YTD Dec'08 vs YTD Dec'07
Highlights YTD Dec’08 vs YTD Dec’07 Excluding unrealised earnings due to changes YTD 2008 YTD 2007 Changes / in fair value of investment properties. (RM ‘000) (RM‘000) Movement (Unaudited) (Unaudited) No. of Properties 19 14 +5 Property Income 63,331 46,819 + 35.3 % Property Expenses (9,876) (8,639)
Slide 7: Financial Ratios
Financial Ratios Item 31/12/07 30/6/08 31/12/08 No. of Properties 14 17 19 Total Assets – (RM’000) 581,857 658,221 726,371 Total Borrowings – (RM ‘000) 209,816 191,403 230,456 Units in Issue – ‘000 205,901 255,901 255,901 Unit Price ‐ RM 1.85 1.68 1.12 Realized Earnings Per Unit (sen) 13.59 15.02 15
Slide 8: Financial Highlights
Financial Highlights Total Asset & Unitholders' Funds 800 726.37 658.22 700 600 518.86 500 447.85 402.27 411.78 416.75 423.16 RM mil 400 339.63 334.65 277.85 286.53 294.11 294.19 300 200 100 0 31-Dec-05 30-Jun-06 31-Dec-06 30-Jun-07 31-Dec-07 30-Jun-08 31-Dec-08 Total Asset Unitholders' Funds Total
Slide 9: Consistent AUM Growth
Consistent AUM Growth Yield Enhancement Growth=118% CAGR=30% 800 723.1 700 570.4 Book Value (RM mil) 600 500 408.3 400 332.2 300 200 100 0 2005 2006 2007 2008 • Book value of AUM has increased by over 118% since the IPO in August 2005. • Maintained an AUM CAGR of 30% per annum since IPO. 9
Slide 10: Consistent AUM Growth: Yield Enhancement
Consistent AUM Growth Yield Enhancement DPU (sen) Distribution Yield (%) CAGR=10.6% 15.27 13.63 16 14 13.63 12.95 12 12 11.28 10 7.71 7.37 8 6.65 8 6 4 4 2 - - 2005 2006 2007 2008 2005 2006 2007 2008 1. DPU and distribution yield of 2005 have been annualised. 2. 2008 distribution yield is based on a
Slide 11: No. of Properties
Consistent AUM Growth Growth of Space Growth =190% 2,857,840 20 CAGR = 42.6% 2,739,823 19 2,800,000 2,609,092 18 18 17 16 2,175,522 Net Lettable Area (sq ft) 2,100,000 14 14 No. of Properties 1,656,943 1,656,943 1,656,943 12 10 1,400,000 9 9 9 1,186,052 8 985,122 6 6 5 700,000 4 2 0 - Aug'05 Dec'05
Slide 12: Yield Accretive Acquisitions in 2008
Consistent AUM Growth Yield Accretive Acquisitions in 2008 Focus on high‐quality yield accretive properties • Over 1st Half of 2008, Axis REIT acquired • On 4th August 2008, completed the the following properties – BMW/PTP, acquisition of the Delphi Cocoa Warehouse Kompakar, Niro Granite Warehouse J
Slide 13: Portfolio Diversification by Type
Portfolio Diversification Type of Properties Portfolio Diversification by Type and NLA Portfolio Diversification by Geographical and NLA 4.83% Office 14.71% 20.86% 16.92% Light Industrial Johor 24.63% 4.78% 4.83% Office/Industrial Kedah 4.69% Klang Warehousing/Logistics 54.91% Petaling Jaya 48.83% W
Slide 14: Portfolio Diversification by Sector
Portfolio Diversification Type of Properties Portfolio Diversification by Sector and NLA 10% 2% Services 5% 24% Healthcare & Lifestyle 10% Engineering / Building Materials 8% Financial Services 9% Logistics Automotive 9% IT/Electronics 10% 8% Retail Consumer Products Others • Portfolio of properties
Slide 15: Portfolio Diversification: Tenancy
Portfolio Diversification Tenancy 7,000,000.00 6,000,000.00 5,000,000.00 4,000,000.00 RM 3,000,000.00 2,000,000.00 1,000,000.00 - • The top ten tenants accounted for 51.8% or RM32.85 million of the year‐to ‐date gross rental income. 15
Slide 16: Occupancy Rate
Portfolio Diversification Occupancy Rate 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 96.4% 100 93 89 90 82 80 75 % Area Occupied 70 60 50 40 30 20 10 - • Reduced the overall vacancy of the portfolio from 7.3% on 31 Dec 2007 to 3.6% on 31 Dec 2008. • Average occupancy currently stands
Slide 17: Maintaining Positive Rental Reversions
Maintaining Positive Rental Reversions Multi Tenanted Properties Space Negotiated % Movement Crystal Plaza 33,830 + 13.29% Menara Axis 16,440 + 2.04% Infinite Centre 60,712 + 6.38% Axis Business Park 282,758 + 4.76% Axis Plaza 64,398 + 6.39% Wisma Kemajuan 90,430* ‐ 8.46% Kayangan Depot 25,448 + 13.
Slide 18: Asset Enhancements on Current Portfolio
Asset Enhancements on Current Portfolio Upgrading of Axis Plaza • Repainting and cleaning of the building • Injected new lease of life to it Up to 31 Dec 2008, approximately RM7,233,000 has been invested in the enhancements Completed on the the properties external works in the Portfolio. for Kompaka
Slide 19: Planned Asset Enhancements for 2008/2009
Planned Asset Enhancements for 2008/2009 Menara Axis • Refurbishment of exterior planned with the addition of two extra lifts • Application to convert the 13th Floor for office use which will add additional 6,000 sq ft to the portfolio [in progress] • Completion 1st Quarter 2009 • Capital commitment
Slide 20: Planned Asset Enhancements for 2008/2009
Planned Asset Enhancements for 2008/2009 Crystal Plaza • Refurbishment of exterior planned • Upgrade of toilets and lift lobbies • New covered drop off zone and F&B facilities • Completion 2010 20
Slide 21: Asset Enhancements & Impact on Valuation
Asset Enhancements & Impact on Valuation Properties Appreciation Value as at 31 December 2008 Asset Enhancement 120,000 Completed 20.6% 100,000 25.3% 59.0% 80,000 RM'000 60,000 58.3% 6.5% 16.3% 17.0% 40,000 37.4% 36.4% 33.0% 20,000 8.9% 11.5% 5.9% 2.0% - Fair Value Adjustment Acquisition Cost + Enha
Slide 22: Gearing Levels
Gearing Levels 50mil units Placement 40.00% 36.06% 35.00% 31.78% 31.73% 31.23% 29.08% 30.00% 26.78% 24.96% 23.72% Gearing Level % 25.00% 23.53% 22.39% 21.39% 20.00% 13.95% 15.00% 11.78% 10.84% 10.00% 5.00% 0.00% Axis REIT operates at conservative gearing levels. 22
Slide 23: Capital Raising
Capital Raising Axis REIT successfully placed out all 50million units @ RM1.80 per unit back in January 2008. The placement proceeds of RM90million provided a war chest for the 5 property acquisitions in 2008. These acquisitions proved to be yield accretive to the Fund with average gross yields of
Slide 24: Axis REIT completes its Conversion into Islamic
Axis REIT completes its Conversion into Islamic The reclassification was completed on 11 December 2008 Why? To widen Axis REIT’s investor base to include locally based Shariah Funds as well develop investors interest from Foreign Shariah Funds. Allow Axis REIT to tap the growing Islamic funds in
Slide 25: No. of Unitholders
Improving Investor Visibility and increasing liquidity 1,652 1,800 1,600 1,437 1,370 No. of Unitholders 1,400 1,216 1,166 1,200 1,034 941 1,000 800 600 400 200 - 31-Dec-05 31-Dec-06 30-Jun-07 31-Dec-07 30-Jun-08 30-Sep-08 31-Dec-08 Budget 2009. Cut foreign withholding tax from 20% to 10% and indiv
Slide 26: Acquisition Pipeline for 2009-10
Acquisition Pipeline for 2009‐10 26
Slide 27: Acquisition Strategy
Acquisition Strategy ¾ Axis REIT has an existing pipeline of properties from the sponsors. ¾ The manager will also use 2009 to start lining up properties from 3rd party vendors in preparation for when the markets recover. ¾ Acquisition may take the form of a cash and units deal that will have to be
Slide 28: Financial Results for 2008
Financial Results for 2008 28
Slide 29: Financial Results – Income Statement
Financial Results – Income Statement Excluding unrealised earnings due to changes 4Q2008 3Q2008 in fair value of investment properties. (RM ‘000) (RM ‘000) Changes / (Unaudited) (Unaudited) Movement No. of Properties 19 18 +1 Property Income – Note 1 16,862 16,367 + 3.0 % Property Expenses (2,638) (
Slide 30: Financial Results – Income Statement
Financial Results – Income Statement Excluding unrealised earnings due to changes YE 2008 YE 2007 Changes / in fair value of investment properties. (RM ‘000) (RM ‘000) Movement (Unaudited) (Unaudited) No. of Properties 19 14 +5 Property Income 63,331 46,819 + 35.3 % Property Expenses (9,876) (8,639)
Slide 31: Notes to Financial Results – Income Statement
Notes to Financial Results – Income Statement (Unaudited) Note 1 – Property Income Property income increased by 3% compared to 3rd quarter due to the acquisition of Axis Vista which was completed on 9 Dec 2008. Note 2 – Interest Income Interest income is mainly derived from the refundable earnest de
Slide 32: Summary of EPU (realised) and DPU
Summary of EPU (realised) and DPU 15.46 15.27 16 13.6 13.63 14 12.95 12.82 12 sen/unit 10 8 6 4.87 EPU (realised) 4.7 DPU 4 2 0 2005 2006 2007 2008 EPU (realised) = Income available for distribution 32
Slide 33: Summary of EPU
Summary of EPU 25 21.18 19.72 20 15.46 15 13.6 12.82 Realised income/ Income available sen/unit for distribution 9.57 10 8.03 Fair value adjustment 4.87 5 0 2005 2006 2007 2008 The total fair value adjustment of investment properties over the years amounted to RM124.226 million 33
Slide 34: Detailed Property Performance Analysis – 31/12/08
Detailed Property Performance Analysis – 31/12/08 (RM’000) Book Fair Value Acq Cost + 12 Months Gross Value Adjustment Enhancement Gross Yield (a) (b) (c) Revenue (d) (d) / (c) 1 ABP 102,500 17,536 84,964 10,645 12.53% 2 Axis Plaza 30,700 8,198 22,502 2,764 12.28% 3 Crystal Plaza 89,800 33,304 56,49
Slide 35: Balance Sheet Highlights (Unaudited)
Balance Sheet Highlights (Unaudited) 31/12/08 30/09/08 Changes / RM '000 RM '000 Movement Investment Properties 723,100 665,765 + 57,335 Other Assets 3,271 10,733 ‐ 7,462 TOTAL ASSETS 726,371 676,498 + 49,873 Borrowings 230,456 214,992 + 15,464 Other Payables 48,069 38,251 + 9,818 TOTAL LIABILITIES
Slide 36: Balance Sheet Highlights (Unaudited)
Balance Sheet Highlights (Unaudited) 31/12/08 31/12/07 Changes / RM '000 RM '000 Movement Investment Properties 723,100 570,400 + 152,700 Other Assets 3,271 11,457 ‐ 8,186 TOTAL ASSETS 726,371 581,857 + 144,514 Borrowings 230,456 209,816 + 20,640 Other Payables 48,069 37,389 + 10,680 TOTAL LIABILITI
Slide 37: Thank You
REAL ESTATE INVESTMENT TRUST Thank You
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