Axis Real Estate Investment Trust · MYX:AXREIT
Axis Real Estate Investment Trust — Q4 2016 Earnings Presentation
72 slides from Axis Real Estate Investment Trust's earnings presentation, Jan 19, 2017
Slide 1: 4Q 2016 Results Presentation
4Q Axis REIT Managers Berhad Results Presentation 2016 19 January 2017 1
Slide 2: Our Milestones
Our Milestones Assets Under Management RM296 million RM2.24 billion Space Under Management 978,000 sq ft 7,606,863 sq ft Properties 5 39 Fund Size RM206 million RM1.39 billion Valuation Gain since listing RM303,000,000 First REIT to be listed on Bursa Malaysia First REIT to convert int
Slide 3: 2016 Highlights
2016 HIGHLIGHTS 3
Slide 4: 2016 Highlights
2016 Highlights RM 2,198,149,000 Investment Properties 4
Slide 5: 2016 Highlights
2016 Highlights Completed the acquisition of 5 industrial properties: Beyonics i-Park Campus Block A, B, C & D for RM61.0 million on 28 January 2016 Scomi Facility @ Rawang for RM42.0 million on 15 November 2016 Signed the Sale & Purchase Agreement for the acquisition of Kerry Warehouse loca
Slide 6: 2016 Return Comparatives
2016 Return Comparatives 7.00% 6.40% 6.00% 5.12% 5.00% 4.20% 4.00% 3.20% 3.28% 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
Slide 7: Finance Report
2016 FINANCE REPORT 7
Slide 8: 4Q2016 Summary
4Q2016 Summary 4Q2016 Total Net Income (“Realised”)(RM' 000) 90,186 Income Available for Distribution ("Realised") (RM' 000) 91,122 Earnings per Unit ("EPU") ("Realised") (Sen) 8.19 Income Distribution Declared (RM'000) 91,067 Distribution per Unit ("DPU") (Sen) * 8.25 Number of Investment Propertie
Slide 9: Income Statement 4Q2016 vs 4Q2015
Income Statement 4Q2016 vs 4Q2015 4Q2016 4Q2015 Changes (RM ‘000) (RM’000) No. of Properties 39 34 +5 Property Income 42,230 39,832 +6.02% Property Expenses (6,625) (6,004) +10.34% Net Property Income 35,605 33,828 +5.25% Profit Income / other income 160 176 Non-Property Expenses (4,417) (4,668) -5.
Slide 10: Income Statement YTD 2016 vs 2015
Income IncomeStatement StatementYTD YTD3Q2016 2016 vsvs YTD 3Q2015 2015 2016 2015 Changes (RM‘000) (RM’000) No. of Properties 39 34 +5 Property Income - Note 1 166,685 163,077 +2.21% Property Expenses - Note 2 (27,048) (23,746) +13.91% Net Property Income 139,637 139,331 +0.22% Profit Income / other
Slide 11: Income Statement YTD 2016 vs 2015 Notes
Income Statement YTD 2016 vs 2015 Note 1 – Property Income The property income is RM3.6 million higher than 2015 notwithstanding that Axis PDI Centre is undergoing development. The increase is contributed by rental proceeds from the 5 newly acquired properties coupled with positive rental reversion
Slide 12: Gross Yield of Investment Properties
Gross Yield of Investment Properties Properties Gross yield (%) Average YTD gross yield = 9.50% 1 Wisma Kemajuan 18.56% 21 Infinite Centre 9.21% 2 FCI Senai 14.64% 22 Axis Business Park 9.16% 3 Crystal Plaza 14.48% 23 Axis Steel Centre 8.87% 4 Menara Axis 14.21% 24 Tesco Bukit Indah 8.76% 5 Delfi Wa
Slide 13: Net Yield of Investment Properties
Net Yield of Investment Properties Properties Net yield (%) Average YTD net yield = 8.17% 1 Wisma Kemajuan 14.48% 21 Scomi Facility @ Rawang 7.50% 2 FCI Senai 13.23% 22 Quattro West 7.28% 3 BMW Centre PTP 12.35% 23 Beyonics i-Park Campus Block D 7.26% 4 Crystal Plaza 12.05% 24 Wisma Academy Parcel 7
Slide 14: 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 23.23 22.67 22.58 22.69 22.62 21.87 10 5 0 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 14
Slide 15: 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 8.19 8.25 8.01 8.00 8.65 8.70 7.89 7.90 8.50 8.00 7.73 7.64 7.00 6.80 6.82 6.41 6.48 6.00 5.00 4.00 3.00 2.00 1.00 - 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Gain on disposal DPU EPU (realised)
Slide 16: Statement of Financial Position
Statement of Financial Position 31/12/16 31/12/15 (RM’000) (RM’000) Changes Investment Properties – Note 1 2,198,149 2,048,626 +149,523 Fixed Assets 2,899 3,602 -703 Other Assets – Note 2 43,226 89,265 -46,039 TOTAL ASSETS 2,244,274 2,141,493 +102,781 Borrowings – Note 3 780,665 731,814 +48,851 Othe
Slide 17: 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 completed on 28 January 2016 at RM62.0 million and Scomi Facility @ Rawang completed on 15 November 2016 at RM42.0 million. During the year, a total of RM11.3 million was spen
Slide 18: 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) 209,816 230,456 308,932 416,609 311,338 548,920 528,004 683,769 731,814 780,665 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 19: Gearing Levels 4Q2016
Statement of Financial Position Gearing Levels Placements Undertaken 40.0% 37.5% 35.4% 38.2% 36.0% 36.0% 34.5% 34.2% 34.1% 34.78% 33.1% 33.9% 33.4% 32.8% 34.5% 35.0% 34.0% 34.5% 34.2% 32.7% 32.5% 32.5% 34.0% 33.0% 32.5% 32.5% 31.8% 31.7% 32.6% 32.7% 31.7% 31.3% 30.0% 30.0% 29.1% 27.3% 28.8% 26.8% 24
Slide 20: Unitholders' Capital – Note 4
Unitholders’ Capital – Note 4 2,500.0 2,244.0 2,141.5 2,085.7 2,000.0 1,589.4 1,616.5 1,500.0 1,298.4 1,208.9 RM mil 1,044.7 1,052.3 1,060.0 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 31/12/2016 Total Asse
Slide 21: Total returns on placements
Unitholders’ Capital – Note 4 … resulting in good total returns to unitholders. 320% 303% Total returns on placements 280% 240% 145% 200% 169% 162% 160% 75% 118% 120% 83% 55% 80% 158% 67% 94% 36% 40% 79% 63% 2% 31% 0% 9% -7% IPO @ RM1.25 Placement '08 @ Placement '09 @ Placement '10 @ Placement '11
Slide 22: Non-distributable Reserve – Note 5
Statement of Financial Position – Note 5 Non-distributable Reserve Non-distributable reserve mainly comprises the favorable gain in fair value of approximately RM303 million to date. Property Gain/(loss) RM’000 Property Gain/(loss) RM’000 Crystal Plaza 44,754 Seberang Prai Logistic Warehouse 3 3,183
Slide 23: Property Report
2016 PROPERTY REPORT 23
Slide 24: Overview
Overview As at 31 December 2016, the occupancy rate of Axis-REIT’s portfolio of properties stands at 92% with a stable weighted average lease expiry period of 4.45 years (based on rental). The Manager achieved 86% tenants’ retention rate with positive rental reversion of 3%. For 2017, 1,353,271 sq.
Slide 25: Key Metrics
Key Metrics As at 31 December 2016, the portfolio has 39 assets comprising 7,606,863 sq. ft. and 139 tenants. 2016 2015 Movement No of properties 39 34 5 Property Income (RM’000) 166,685 163,077 2.2% Property Expenses (RM’000) 27,048 23,746 13.9% Net Property Income (RM’000) 139,637 139,331 0.2% Occ
Slide 26: Key Metrics – Average Rental Rates
Key Metrics Average Rental Rates: Type of Properties 2016 2015 Movement Office (RM/sq. ft.) 4.80 4.64 0.16 Office Industrial (RM/sq. ft.) 2.73 2.72 0.01 Manufacturing Facilities (RM/sq. ft.) 1.29* 1.33 0.04 Warehouse Logistics (RM/sq. ft.) 1.53 1.52 0.01 Hypermarket (RM/sq. ft.) 2.36 2.24 0.12 Note:
Slide 27: Space Under Management (sq. ft.)
Space Under Management (sq. ft.) 8,000,000 7,606,863 7,015,242 6,859,474 7,000,000 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 2,858,121 3,000,000 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 2
Slide 28: Portfolio Occupancy Rate
Portfolio Occupancy Rate As at 31 December 2016, Axis-REIT has only 12 out of 39 properties that carry vacancy, while 1 is undergoing development. 26 properties enjoy 100% occupancy. Occupancy Rate Occupancy Vacant As at 31 December 2016 92.03 % 7.97% Vacancy As at 31 December 2016 7.97 % Space to b
Slide 29: Occupancy Rates by Property as at 31 December 2016
Occupancy Rates by Property as at 31 December 2016 1 Menara Axis 93.75% 21 Axis Steel Centre 100.00% 2 Crystal Plaza 81.19% 22 Bukit Raja Distribution Centre 100.00% 3 Quattro West 65.90% 23 Seberang Prai Logistic Warehouse 1 100.00% 4 Axis Eureka 59.64% 24 Seberang Prai Logistic Warehouse 2 100.00%
Slide 30: Occupancy Rates by Property (Under Development)
Occupancy Rates by Property as at 31 December 2016 100.00 92.03% 90.00 80.00 70.00 60.00 50.00 Under development 40.00 30.00 20.00 10.00 - 30
Slide 31: Occupancy Rates – 5 Year Analysis
Occupancy Rates – 5 Year Analysis 96.25% 94.87% 92.98% 92.03% 91.97% 7.02% 8.03% 7.97% 3.75% 5.13% 2012 2013 2014 2015 2016 Occupied Vacant 31
Slide 32: Diversified Portfolio
Diversified Portfolio NLA by Industry Sector Services Others 5% Healthcare & Consumer Products 1% Lifestyle 4% Vacant 3% 8% Retail 6% Engineering/Building Materials IT/Electronics 21% 10% Automotive 6% Financial Services 1% Logistics 35% 32
Slide 33: Diversified Portfolio
Diversified Portfolio Portfolio Diversification by Type and NLA 8% 25% 20% 5% 42% Office Office/ Industrial Hypermarkets Warehouse Logistic Manufacturing Facilities - Light Industrial 33
Slide 34: Diversified Portfolio – 5 Year Analysis
Diversified Portfolio – 5 Year Analysis Portfolio Diversification by Type and NLA 50% 46% 45% 45% 43% 43% 42% 40% 35% 31% 31% 30% 25% 25% 23% 22% 20% 20% 19% 18% 15% 11% 11% 10% 9% 9% 8% 8% 8% 7% 7% 5% 5% 5% 5% 0% 2012 2013 2014 2015 2016 Office Office/Industrial Hypermarket Warehouse Logistic Manuf
Slide 35: Portfolio Location
Portfolio Location Portfolio Diversification by Geographical Location Petaling Jaya 26.20% Johor 25.99% Shah Alam 21.22% Penang 9.84% Klang 5.59% Rawang 3.98% Nilai 3.83% Kedah 1.80% Cyberjaya 1.55% 35
Slide 36: Tenancy Mix
Tenancy Mix Single Tenant vs Multi-Tenants 1% 40% 59% Single Tenant Multi Tenants Vacant 36
Slide 37: Tenancy Mix – 4 Years Analysis
Tenancy Mix – 4 Years Analysis 70% 61% 58% 59% 60% 56% 50% 40% 41% 40% 40% 36% 30% 20% 10% 3% 2% 3% 1% 0% 2013 2014 2015 2016 Multi-tenants Single tenant Vacant 37
Slide 38: Properties Below 90% Occupancy
Properties Below 90% Occupancy Occupancy rates of properties below 90% as at 31 December 2016 Fonterra HQ 84.96% Axis Tech Centre 82.88% Crystal Plaza 81.19% Wisma Academy 81.00% Axis Business Park 69.80% Infinite Centre 68.08% Quattro West 65.90% Axis Vista 65.31% Axis Eureka 59.64% Axis Business C
Slide 39: Lease Expiry Profile – Looking Forward
Lease Expiry Profile – Looking Forward Year % of % of Rental Year % of % of Rental Year % of % of Rental Property 2017 Total NLA Income/month 2018 Total NLA Income/month 2019 Total NLA Income/month Menara Axis 33,578 0.44 1.49 - - 0.03 122,177 1.61 4.73 Crystal Plaza 47,313 0.62 1.45 - - - 118,981 1
Slide 40: Positive Rent Reversions
Positive Rent Reversions Space Renegotiated Rent Movement Properties (sq. ft.) (%) Menara Axis 103,019 4.44% Crystal Plaza 119,796 0.90% Axis Business Park 43,893 1.37% Infinite Centre 46,195 5.98% Wisma Kemajuan 121,251 1.81% Quattro West 19,004 5.29% Axis Technology Centre 61,234 0% Axis Eureka 15
Slide 41: Lease Expiry – Leasing Profile 2012 to 2016
Lease Expiry – Leasing Profile 2012 to 2016 2012 2013 2014 2015 2016 Space expiring (sq. ft.) 757,195 938,917 1,825,949 902,252 1,938,654 % over total NLA 13.86% 17.18% 26.62% 12.86% 25.49% Space renewed (sq. ft.) 507,841 789,795 1,445,092 736,554 1,675,609 % over total NLA 9.29% 14.45% 21.06% 10.50
Slide 42: Weighted Average Lease Expiry (WALE)
Weighted Average Lease Expiry (WALE) The WALE for the portfolio is: By Year 2016 2015 2014 2013 2012 By NLA 4.33 3.89 4.22 3.89 4.43 By Rental 4.45 3.99 4.33 3.99 4.17 42
Slide 43: Portfolio Efficiency (PE)
Portfolio Efficiency (PE) The Portfolio Efficiency Ratio = Operating Cost for the Portfolio / Gross Property Income 2016 2015 2014 2013 2012 16.23% 14.56% 15.66% 14.73% 15.17% 43
Slide 44: Top 10 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. Strateq Data Center Sdn Bhd 8
Slide 45: Asset Enhancements
2016 ASSET ENHANCEMENTS 45
Slide 46: Enhancement Works
Enhancement Works Menara Axis Lifts upgrading Status : In progress Axis Shah Alam DC 1 Upgrading fire fighting system in the property to comply with Authority Code of Compliance. Status: Completed Axis Shah Alam DC 3 Upgrading fire fighting system in the property to comply with Authority Code of Com
Slide 47: Enhancements To Date
Enhancements To Date Enhancement Works Axis Shah Alam DC 1 Upgrading fire fighting system in the property to comply with Authority Code of Compliance. Status - completed Axis Shah Alam DC 3 Upgrading fire fighting system in the property to comply with Authority Code of Compliance. Status – in progre
Slide 48: Property Development
2016 PROPERTY DEVELOPMENT 48
Slide 49: Axis PDI Centre – Proposed Development
Axis Axis PDI PDI Centre Centre – Proposed Development 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 50: Axis PDI Centre – Proposed Development (Before)
Axis PDI Axis PDI Centre Centre –– Proposed Proposed Development Development (Before) (Before) 50 acre site 50
Slide 51: Axis PDI Centre – Proposed Development (After)
Axis PDI Centre – Proposed Development (After) 51
Slide 52: Nestle National Distribution Centre
Nestle National Distribution Centre 52
Slide 53: Axis PDI Centre – Proposed Development (Current Condition)
Axis PDI Centre – Proposed Development (Current Condition) Phase 2 land – Rented as vehicle storage yard 53
Slide 54: Sustainability Initiatives
2016 SUSTAINABILITY INITIATIVES54
Slide 55: Sustainability Initiatives
Sustainability Initiatives Axis-REIT’s inaugural sustainability report 2016 will be published in February 2017 and has been prepared in accordance with the Global Reporting Initiative (“GRI”) G4 guidelines – core, and the GRI Construction and Real Estate Sector Supplement (“CRESS”). Going forward,
Slide 56: Investments Report
2016 INVESTMENTS REPORT 56
Slide 57: Completed Acquisitions
Completed Acquisitions Beyonics iPark Campus Block A, B, C, D, 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 57
Slide 58: Completed Acquisitions
Completed Acquisitions Scomi Facility @ Rawang, Selangor Completion Date : 15 November 2016 Land Area : Approx. 15.25 acres Land Tenure : Freehold Occupancy : 100% Purchase Price : RM42 million Projected Net Property Yield : 7.3% WALE : 15 years 58
Slide 59: Ongoing Acquisitions
Ongoing Acquisitions Kerry Warehouse – Pasir Gudang, Johor Target Completion Date : 1Q 2017 Land Area : Approx. 6 acres Land Tenure : Leasehold Occupancy : 100% Purchase Price : RM33 million Projected Net Property Yield : 7.5% WALE : 5 years 59
Slide 60: Prospective Acquisition Targets
Prospective Acquisition Targets The Manager is currently undergoing assessments for the following assets as future acquisition targets: 1. Industrial facility in Section 51, Petaling Jaya, Selangor 2. Logistic facility in Sepang, Selangor 3. Industrial facility in Kuantan, Pahang 4. Industrial facil
Slide 61: Property Disposal
PROPERTY DISPOSAL 61
Slide 62: 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) Occupancy Rate: 59.6% as at 31 December 2016 Net Yield: 4.8% for 2016 Expected Completion Date: 1st Quarter 2017 Gain on Disp
Slide 63: Property Disposal – Rationale
Property Disposal 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. Given the favourable market price for t
Slide 64: Investor Relations Report
2016 INVESTOR RELATIONS REPORT 64
Slide 65: Unit Price Performance 2016
Unit Price Performance 2016 AXREIT: 1 Jan 2014 – 31 Dec 2016 4.00 3.69 3.69 3.62 3.623.58 3.62 3.553.54 3.55 3.53 3.53 3.50 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 1.691.65 1.701.70 1.721.68 1.66 1.611.64 1.61 1.61 1.551.55 1.50 1.00 Pre-Unit Split Price Post-Unit Sp
Slide 66: Unit Price Movement 2016
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 3Q2016: Unit Price @ 31 Sep 2016 4Q2016: Unit Price @ 30 Dec 2016 1/11/2014 1/12/2014 1/1/2015 1/2/2015 RM1.75 RM1.61 1/3/2015 1/4/2015 1/5/2015 1/6/2015 66 Unit P
Slide 67: Volume Movement 2016
Volume Movement 2016 45,000,000 AXREIT: 1 Jan 2014 – 30 Dec 2016 40,208,000 39,783,200 40,000,000 35,000,000 33,826,000 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 16,046,400 15,000,000 12,995,800 13,159,100 12,8
Slide 68: Top 10 Unitholders 2016
Top 10 Unitholders 2016 1 EMPLOYEES PROVIDENT FUND 10.27% 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 4.53% 6 PERMODALAN NASIONAL BERHAD 3.95% 7 AMANAH SAHAM MALAYSIA 2.84% 8 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 2.78% 9 AMANAH
Slide 69: Analysis of >2 million Unitholders
Analysis of >2 million Unitholders Top 5 increases in unitholdings: Last Quarter Increase PAMB FOR PRULINK EQUITY FUND 1.6% AMANAH SAHAM MALAYSIA 0.5% AMANAH SAHAM WAWASAN 2020 0.5% AMANAH SAHAM BUMIPUTERA 2 0.4% PUBLIC ITTIKAL SEQUEL FUND 0.4% Top 5 decreases in unitholdings: Last Quarter Decrease
Slide 70: Investor Visibility and Liquidity 2016
Investor Visibility and Liquidity 2016 4,500 No. of CDS Accounts 3,891 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 4Q2016 Quar
Slide 71: Analyst Coverage 4Q2016
Analyst Coverage 4Q2016 Coverage Rating Target Price (RM) Published Date Alliance DBS Hold 1.75 25-Oct-16 Hong Leong IB Hold 1.73 25-Oct-16 KAF Hold 1.70 25-Oct-16 Kenanga Hold 1.71 25-Oct-16 Maybank Hold 1.70 25-Oct-16 MIDF Hold 1.72 25-Oct-16 UOBKayHian Hold 1.80 25-Oct-16 RHB Hold 1.75 25-Oct-16
Slide 72: Thank You
THANK YOU 72
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