Axis Real Estate Investment Trust · MYX:AXREIT
Axis Real Estate Investment Trust — Q2 2010 Earnings Presentation
59 slides from Axis Real Estate Investment Trust's earnings presentation, July 2010
Slide 1: Axis REIT 2Q 2010 Results Presentation
Axis REIT 2Q 2010 Results Presentation 1 July 2010
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: Snapshot
Snapshot Approved Fund Size 307,081,200 units Manager Axis REIT Managers Bhd Investment Properties 928.00 million (as at 30 June 2010 – Unaudited) Market Capitalisation RM620.30 million (as at 30 June 2010) Unit Price RM2.02 (as at 30 June 2010) Gearing RM343.26 million (36.03% of Total
Slide 4: Financial Results – Income Statement
Financial Results – Income Statement Net Property Income exceeds 2Q2009 by 21.31% Changes / 2Q2010 2Q2009 Movement No. of Properties 23 19 +4 Property Income (RM’000) 20,978 17,362 + 20.83% Net Property Income (RM’000) 17,753 14,634 + 21.31% Profit before Taxation (RM’000) 12,116 10,580 + 14.52% Ear
Slide 5: Financial Results – Balance Sheet
Financial Results – Balance Sheet Trading at premium to NAV of 9.76% 1H 2010 31 DEC 2009 (RM ‘000) (RM’000) Total Assets 952,578 907,745 Investment Properties 927,999 884,962 Borrowings 343,259 308,932 Net Asset Value 565,161 550,357 Unitholders’ Funds 565,161 550,357 Gearing 36.03% 34.03% NAV per u
Slide 6: 30 June 2010 Financial Results
30 June 2010 Financial Results
Slide 7: Financial Results – Income Statement
Financial Results – Income Statement 2Q 2010 2Q 2009 Changes / (RM ‘000) (RM’000) Movement No. of Properties 23 19 +4 Property Income 20,978 17,362 + 20.83% Property Expenses (3,225) (2,728) + 18.22% Net Property Income 17,753 14,634 + 21.31% Interest Income 43 ‐ Non‐Property Expenses (1,697) (1,825
Slide 8: Financial Results – Income Statement
Financial Results – Income Statement 2Q 2010 1Q 2010 Changes / (RM ‘000) (RM’000) Movement No. of Properties 23 23 ‐ Property Income 20,978 19,797 + 5.97% Property Expenses (3,225) (3,075) + 4.88% Net Property Income 17,753 16,722 + 6.17% Interest Income 43 51 Non‐Property Expenses (1,697) (1,580) +
Slide 9: Financial Results – Income Statement
Financial Results – Income Statement 1H2010 1H2009 Changes / (RM ‘000) (RM’000) Movement No. of Properties 23 19 Property Income – Note 1 40,775 34,691 + 17.54% Property Expenses – Note 2 (6,300) (5,433) + 15.96% Net Property Income 34,475 29,258 + 17.83% Interest Income 94 ‐ Non‐Property Expenses –
Slide 10: Notes to Financial Results – Income Statement
Notes to Financial Results – Income Statement Note 1 – Property Income Property Income has registered an 18% increase as compared to last preceding half year due to: Four additional properties that were completed since the 2nd half of last year ie Axis Steel Centre, Bukit Raja Distribution Centre an
Slide 11: Notes to Financial Results – Income Statement
Notes to Financial Results – Income Statement Note 2 – Property Expenses Increase in property expenses is due to the additional properties acquired. The ratio of property expenses over property income is maintaining at 15%. Note 3 – Non‐ Property Expenses Including in the non‐property expenses is th
Slide 12: Summary of EPU (Realised) and DPU
Summary of EPU (Realised) and DPU 18.00 15.46 15.27 15.77 15.80 16.00 14.00 13.60 13.63 12.82 12.95 12.00 10.00 Sen/ unit 7.76 7.40 8.00 6.00 4.87 4.70 4.00 2.00 ‐ 2005 2006 2007 2008 2009 1H2010 EPU (realised) DPU 12
Slide 13: Detailed Property Performance Analysis (RM'000)
Detailed Property Performance Analysis (RM’000) Book Value Fair Value Acq Cost + Annualised Gross Yield 30 June 2010 (a) Adjust (b) Enhancement (c) Revenue (d) (d) / (c) 1 ABP 105,924 20,855 85,069 11,421 13.43% 2 Axis Plaza 29,500 6,998 22,502 2,725 12.11% 3 Crystal Plaza 89,800 33,263 56,537 9,430
Slide 14: Management Expense Ratio and Total Assets
Management Expense Ratio (“MER”) MER: Total administrative expenses incl. Manager and Trustee’s fees Average net asset value of the Fund. 1,000 953 4.00 908 900 3.50 800 726 733 3.00 700 658 Total Assets (RM'000) 582 2.50 % of NAV 600 500 2.00 417 400 1.47 1.38 1.50 1.37 1.35 300 1.29 1.22 1.21 1.00
Slide 15: Balance Sheet Highlights (RM'000)
Balance Sheet Highlights (RM’000) 30/6/10 31/12/09 Changes Investment Properties 927,999 884,962 + 43,037 Other Assets 24,579 22,783 + 1,796 TOTAL ASSETS 952,578 907,745 + 44,833 Borrowings 343,259 308,932 + 34,327 Other Payables 44,158 48,456 ‐ 4,298 TOTAL LIABILITIES 387,417 357,388 + 30,029 NET A
Slide 16: Total Assets & Unitholders' Funds
Total Assets & Unitholders’ Funds 1,200.0 1,000.0 952.6 907.7 800.0 726.4 732.9 658.2 581.8 565.2 600.0 550.0 423.2 447.9 450.3 402.3 411.8 416.8 400.0 339.6 334.7 277.9 286.5 294.1 294.2 200.0 ‐ 31‐Dec‐05 30‐Jun‐06 31‐Dec‐06 30‐Jun‐07 31‐Dec‐07 30‐Jun‐08 31‐Dec‐08 30‐Jun‐09 31‐Dec‐09 30‐Jun‐10 Tota
Slide 17: Borrowings
Borrowings 2006 2007 2008 2009 1H 2010 Total Borrowings (RM’000) 88,089 209,816 230,456 308,932 343,259 Total Assets (RM’000) 411,781 581,857 726,371 907,745 952,578 Gearings 21.39% 36.06% 31.73% 34.03% 36.03% Effective Interest Rate 4.38% 4.39% 4.28% 4.11% 4.35% Percentage of short term 100% 100% 1
Slide 18: Gearing Levels
Gearing Levels Placements undertaken 40.0% 36.1% 35.4% 36.0% 35.0% 34.0% 33.0% 33.1% 31.2% 31.8% 31.7% 30.0% 29.1% 26.8% 27.3% 25.0% 25.0% 23.7% 23.5% 22.4% 21.4% 20.0% 15.0% 14.0% 11.8% 10.8% 10.0% 5.0% 0.0% 18
Slide 19: Summary of FV movement in 1H2010 (RM'000)
Summary of FV movement in 1H2010 (RM’000) Book Value as at Revaluation Surplus to be Name of Properties 30 June 2010 Amount incorporated 1 Seberang Prai Logistic Warehouse 1 17,695 18,990 1,295 2 Seberang Prai Logistic Warehouse 2 6,980 7,490 510 3 Axis Shah Alam DC 1 18,936 19,000 64 4 BMW Centre P
Slide 20: Fair Valuation Gain on Investment Properties
Fair Valuation Gain on Investment Properties 120,000 100,000 80,000 60,000 RM'000 40,000 20,000 ‐ Fair Value Adjustment Acquisition Cost + Enhancement 20
Slide 21: 2010 Acquisitions
A8%41S 2010 Acquisitions
Slide 22: 2010 Acquisition – PTP D8, Johor
2010 Acquisition – PTP D8, Johor • Sale & Purchase Agreement signed on 20 April 2010 • Estimated Completion Date : October 2010 • The purchase price of RM30 million is at 3.23% discount to the market value providing Unitholders with a capital gain of approximately RM0.5 million • Tenant – Nippon Exp
Slide 23: 2010 Acquisition – Axis Technology Center
2010 Acquisition – Axis Technology Center • 3rd related party acquisition since IPO • Sale & Purchase Agreement signed on 3 June 2010 • Estimated Completion Date : October 2010 • The purchase price of RM49 million is at 5.77% discount to the market value providing Unitholders with a capital gain of
Slide 24: 2010 Acquisition – Axis PDI Center
2010 Acquisition – Axis PDI Center • 4TH related party acquisition since IPO • Sale & Purchase Agreement signed on 3 June 2010 • Estimated Completion Date : October 2010 • The purchase price of RM85 million is at 7.61% discount to the market value providing Unitholders with a capital gain of approxi
Slide 25: 2010 Acquisition – Axis PDI Center
2010 Acquisition – Axis PDI Center 25
Slide 26: 2010 Acquisition – Tesco, Johor
2010 Acquisition – Tesco, Johor Land Area : 9.69 acres (422,370 sq ft) • Letter of Offer accepted on 7 July 2010 Gross Built Up : 233,579 sq ft • Estimated Completion Date : October 2010 Land Tenure : Freehold • Tenant – Tesco Stores (Malaysia) Sdn Bhd Occupancy : 100% • Strengths – Brand new facili
Slide 27: Impact on Asset Under Management
Impact on Asset Under Management 1,200.00 1,119.38 1,000.00 952.58 926.78 907.74 800.00 726.37 732.91 658.22 RM mil 600.00 518.86 402.27 411.78 416.75 400.00 339.63 200.00 - Dec'05 Jun'06 Dec'06 Jun'07 Dec'07 Jun'08 Dec'08 Jun'09 Dec'09 Mar'10 Jun'10 Jun'10* Note * : assumes inclusion of PTP D8, Axi
Slide 28: Impact on Space Under Management
Impact on Space Under Management 4,292,475 28 4,000,000 3,839,103 26 26 3,679,797 24 3,600,000 23 22 3,200,000 21 2,858,121 2,858,121 2,858,121 20 Net Lettable Area (sq ft) 2,800,000 19 19 19 18 No. of Properties 2,400,000 16 2,175,522 14 14 2,000,000 1,656,943 12 1,600,000 10 9 1,186,052 1,200,000
Slide 29: Potential Property Pipelines
Potential Property Pipelines
Slide 30: Pipeline of Properties from Private Equity
Pipeline of Properties from Private Equity Special Purpose Vehicles 121,800 sq ft Office / 1 Axis Techpoint 1 2.84 acres Petaling Jaya Warehouse Axis Technology 170,700 sq ft Office / 2 4.13 acres Petaling Jaya Center Warehouse SPA executed Klang, off 3 Axis PDI Center 48.29 acres Automotive PDI Cen
Slide 31: Private Equity Pipeline – Axis Techpoint 1
Private Equity Pipeline – Axis Techpoint 1 Lot 11, Jalan 225, Petaling Jaya Office Warehouse Site Area = 2.84 acres (123,710 sq ft) Built Up Area = 121,800 sq ft Land Tenure = 99 yrs expiring May 2067 6‐storey office block = 66,000 sqft Single storey warehouse = 55,800 sqft Car Parks = 149 lots Ware
Slide 32: Potential 3rd Party Acquisitions
Potential 3rd Party Acquisitions The Manager is currently assessing for the following assets as potential acquisition targets : 1. Two units of brand new Logistics Warehouses in Johor . Each with a long lease arrangement and step ups. SPA signed for one of the warehouses. 2. Retail warehousing in Jo
Slide 33: Capital Raising
AXelS Capital Raising
Slide 34: Proposed Placement – Trading @ Premium to NAV
Proposed Placement – Trading @ Premium to NAV 2.20 Initial Second Placement Placement 2.00 @ RM1.80 2.02 @ RM1.66 2.00 1.93 1.80 1.85 1.84 1.78 1.79 1.79 1.70 1.68 1.75 1.75 1.76 1.74 1.60 1.63 1.65 1.65 1.65 Potential window 1.62 1.50 for capital raising 1.40 1.31 1.20 1.12 1.00 Dec'07 Mar'08 June'
Slide 35: Proposed Placement
Proposed Placement From the positive response on the second placement (2.03x over subscription) in September 2009, the Managers have taken proactive steps to sustain the continued growth of the Trust by seeking SC’s approval for the next capital raising. In March 2010, SC granted a specific appr
Slide 36: Investor Relations
AS%4|S Investor Relations
Slide 37: Malaysian REIT Managers Association
Malaysian REIT Managers Association 37
Slide 38: Malaysian REIT Managers Association
Malaysian REIT Managers Association To date we have a total of 10 REIT managers are members. They are: Atrium REIT Managers Sdn Bhd Chan Kum Chong AmARA REIT Managers Sdn Bhd YP Lim Axis REIT Managers Berhad Stewart Labrooy AmanahRaya REIT Managers Bhd Adenan Md Yusof Boustead REIT Managers Sdn Bhd
Slide 39: Malaysian REIT Managers Association
Malaysian REIT Managers Association Axis REIT Managers recognised the need to form an association in order to collectively lobby the regulators and tax authorities for changes necessary to have a vibrant M‐REIT market. We spearheaded the formation of the Malaysia REIT Managers Association (“MRMA”)
Slide 40: Malaysian REIT Managers Association
Malaysian REIT Managers Association The Objects of the Association clearly spells out how it will assist its members in moving forward: To act as a collective representation of the Malaysian real estate investment sector. To establish an environment for more investments into high quality real esta
Slide 41: Investors Outreach Program
Investors Outreach Program 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 . The first roadshow was held in Penang on 4 July 2009, with over 200 members of th
Slide 42: Bursa Malaysia – Investors Expo 2010
Bursa Malaysia – Investors Expo 2010 Participated in Bursa’s Investor Expo 2010 which was held on 17 to 18 July 2010. 5 REITs were showcased – Axis REIT, AmFirst REIT, AmanahRaya REIT, Sunway REIT and Quill Capita Trust. Expo targeted the Retail Investors. 42
Slide 43: Annual Report in Mandarin
Annual Report in Mandarin Continue to provide mandarin version of the 2009 annual report online at : www.axis‐reit.com.my. 43
Slide 44: Improving Investor Visibility and Liquidity
Improving Investor Visibility and Liquidity 2,500 2,300 2,230 2,109 2,100 1,959 1,900 1,700 1,652 No. of Unitholders 1,500 1,370 1,300 1,216 1,166 1,100 1,034 941 900 700 500 300 100 (100) Dec'05 Dec'06 Jun'07 Dec'07 Jun'08 Dec'08 Jun'09 Dec'09 Jun'10 44
Slide 45: Improving Investor Visibility and Liquidity
Improving Investor Visibility and Liquidity 2,230 unitholders represents an increase of 35% from end 2008. The single largest unitholder (non‐related party) is EPF with 33.6 million units or 10.9%. EPF has been actively buying units from the open market post private placement in September 2009.
Slide 46: Property Portfolio Performance
Property Portfolio Performance
Slide 47: Occupancy Levels
Occupancy Levels 100% 98% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 95.5 % 93% 92% 88% 90% Refurbishment completed – 100% leased 83% 80% 77% 70% 61% % Area Occupied 60% 50% 40% 30% 20% 10% 0% 0% Quattro West – 100% space signed up with 4 tenants. Rental income to commence
Slide 48: Occupancy Levels
Occupancy Levels The Manager has worked hard to maintain occupancy levels across the portfolio. Recent track record of Occupancy Rates. As at : Dec.31. 2009 92.27% Apr.30. 2010 90.23% Jun.30. 2010 92.86% Projected Aug.1.2010 95.5% Comparison to the Market Selangor. Office Occupancy Rates Q1. 2010 78
Slide 49: Top 10 Tenants
Top 10 Tenants 4,000,000.00 3,500,000.00 3,000,000.00 2,500,000.00 2,000,000.00 1,500,000.00 1,000,000.00 500,000.00 ‐ IDS Logistics Konsortium Fuji Xerox Tenaga BMW Asia Kompakar Scope GCH Retail Cycle & Fujifilm (M) Services (M) Logistik Asia Pacific Nasional Technology CRC Sdn Bhd International (
Slide 50: Lease Expiry Profile 2010 - 2012
Lease Expiry Profile 2010 ‐ 2012 Property % of % of Rental Year % of % of Rental Year % of % of Rental Year 2010 Total NLA per month 2011 Total NLA per month 2012 Total NLA per month Menara Axis 58,002 1.52 3.06 14,034 0.37 1.16 ‐ ‐ ‐ Crystal Plaza 169,146 4.42 8.08 9,118 0.24 0.50 12,433 0.32 0.65
Slide 51: Maintaining Positive Rental Reversions
Maintaining Positive Rental Reversions Multi Tenanted Properties Space Negotiated % Movement Menara Axis 36,769 + 5.84% Crystal Plaza 169,146 + 8.41% Axis Business Park 21,353 + 3.16% Infinite Centre 44,235 + 5.17% Axis Plaza 32,873 + 0.13% Wisma Kemajuan 33,037 + 5.77% Kayangan Depot 76,278 ‐ 6.50%
Slide 52: Portfolio Diversification by Type and Geography
Maintaining Positive Rental Reversions Portfolio Diversification by Type and NLA Portfolio Diversification by Geographical and NLA Kedah Prai 4% 13% 4% 4% 41% Johor 15% Petaling Jaya 38% 41% Klang 13% 4% Shah Alam 23% Ofiice Office/Industrial Warehouse Retail Warehouse Logistic Light Industrial Sing
Slide 53: Portfolio Diversifications
Portfolio Diversifications Portfolio Diversification by Sector and Revenue Services Healthcare & Lifestyle Engineering/Building Materials Financial Services Logistics Automotive IT/Electronics Retail Consumer Products Others 4% 6% 1% 8% 23% 8% 8% 8% 24% 10% 53
Slide 54: Asset Enhancements
AS%41S Asset Enhancements
Slide 55: The Aim
THE AIM As a manager we understand that acquisition alone is not sufficient and that we need to devote management time and effort to the performance of the existing assets. Asset enhancement occurs for two main reasons: One: To reposition the asset achieve better yields, Two: As a defensive strategy
Slide 56: Quattro West
Quattro West A complete refurbishment to reposition asset and increase revenue . . . . .. 56
Slide 57: Quattro West Best Redevelopment in Malaysia 100% Leased
Quattro West And some further Good News on Quattro West On Friday, 17th April, 2010 in an awards ceremony in Hong Kong, we were awarded a 5 star award for the; Best Redevelopment in Malaysia by the International Property Awards in Association with Bloomberg Television 100% Leased 57
Slide 58: Crystal Plaza - A major upgrade is being undertaken
Crystal Plaza ‐A major upgrade is being undertaken to improve retention The Scope To give a completely new look to the front and back. New entrance, lobbies and some M&E upgrades Aim To ensure retention on key tenants Status Plans submitted for MBPJ approval Timing : Start work Q3/10 58
Slide 59: Thank You
Thank You Avgels »
Axis Real Estate Investment Trust — Q2 2010 Earnings Presentation on 6ix