Axis Real Estate Investment Trust · MYX:AXREIT
Axis Real Estate Investment Trust — Q2 2016 Earnings Presentation
62 slides from Axis Real Estate Investment Trust's earnings presentation, Aug 5, 2016
Slide 1: 2Q 2016 Results Presentation
2Q Axis REIT Managers Berhad Results Presentation 2016 5 August 2016
Slide 2: Our Milestones
Our Milestones Assets Under Management RM296 million RM2.18 billion Space Under Management 978,000 sq ft 7,303,630 sq ft Properties 5 38 Fund Size RM206 million RM1.38 billion Valuation Gain since listing RM289,000,000 First REIT to be listed on Bursa Malaysia First REIT to convert int
Slide 3: 1H2016 Highlights
1H2016 HIGHLIGHTS 3
Slide 4: 1H2016 Highlights
1H2016 Highlights RM 2,133,481,000 Investment Properties 4
Slide 5: 1H2016 Highlights
1H2016 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 located at Pasir Gudang, Johor for a cash consideratio
Slide 6: 1H2016 Return Comparatives
1H2016 Return Comparatives 9.00% 8.66% 8.00% 7.00% 6.40% 6.00% 5.00% 4.82% 3.90% 4.00% 3.63% 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 (Avg.) * (Based on annualised DPU from operations + movement in market
Slide 7: 1H2016 Finance Report
1H2016 FINANCE REPORT
Slide 8: 1H2016 Summary
1H2016 Summary 1H2016 Total Net Income (“Realised”)(RM' 000) 44,580 Income Available for Distribution ("Realised") (RM' 000) 45,272 Earnings per Unit ("EPU") ("Realised") (Sen) 4.05 Income Distribution Declared (RM'000) 45,202 Distribution per Unit ("DPU") (Sen) * 4.10 Number of Investment Propertie
Slide 9: Income Statement 2Q2016 vs 2Q2015
Income Statement 2Q2016 vs 2Q2015 2Q2016 2Q2015 Changes / (RM ‘000) (RM’000) Movement No. of Properties 38 34 +4 Property Income 41,615 41,210 + 0.98% Property Expenses (6,839) (5,897) + 15.97% Net Property Income 34,776 35,313 - 1.52% Profit Income / other income 161 127 Non-Property Expenses (4,57
Slide 10: Income Statement 1H2016 vs 1H2015
Income Statement 1H2016 vs 1H2015 1H2016 1H2015 Changes / (RM ‘000) (RM’000) Movement No. of Properties 38 34 +4 Property Income - Note 1 82,690 81,614 + 1.32% Property Expenses - Note 2 (13,376) (11,916) + 12.25% Net Property Income 69,314 69,698 - 0.55% Profit Income / other income 301 342 Non-Pro
Slide 11: Income Statement 1H2016 vs 1H2015 Notes
Income Statement 1H2016 vs 1H2015 Note 1 – Property Income Increase in property income as compared to last preceding year corresponding period is due to contribution of rental proceeds from the newly acquired Beyonics i- Park Campus Block A,B,C and D since end January 2016. This has offset the loss
Slide 12: Gross Yield of Investment Properties
Gross Yield of Investment Properties Average YTD gross yield = 10.04% Properties Gross yield (%) 20 Giant Hypermarket, Sungai Petani 9.27% 1 Wisma Kemajuan 18.34% 21 Axis Vista 9.21% 2 FCI Senai 14.47% 22 Seberang Prai Logistic Warehouse 2 9.08% 3 Crystal Plaza 14.37% 23 Axis Steel Centre 8.91% 4 Me
Slide 13: Net Yield of Investment Properties
Net Yield of Investment Properties Properties Net yield (%) Average YTD net yield = 8.57% 1 Wisma Kemajuan 20 Axis Vista 8.01% 14.40% 2 FCI Senai 21 Tesco Bukit Indah 7.58% 13.04% 3 BMW Centre PTP 22 Beyonics i-Park Campus Block D 7.19% 12.42% 4 Menara Axis 23 Beyonics i-Park Campus Block A 7.17% 11
Slide 14: Income Statement: Income Available For Distribution
Income Statement 25 Adjusted Income Before Taxation/ Income Available For Distribution 20 15 RM' million 23.75 23.86 22.67 22.58 22.69 21.87 10 5 0 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016
Slide 15: 2Q2016 Income Distribution
2Q2016 Income Distribution Income Distribution: 2.05 sen The 2.05 sen DPU represents 99.84% income available for distribution from performance of properties for the period from 1 April 2016 to 30 June 2016. Important dates: Ex-date : 16 August 2016 Entitlement date : 18 August 2016 Payment date : 9
Slide 16: Implementation of Income Distribution Reinvestment Plan (IDRP)
Implementation of Income Distribution Reinvestment Plan (IDRP) Details of the 2016 IDRP (in conjunction with the payment of the 1st Interim 2016 Income Distribution): Electable portion : 1.00 sen out of 2.05 sen Exercise price : RM1.50; representing 8.35% discount to 5-days VWAMP RM1.6366 Subscripti
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 8.65 8.70 7.89 7.90 8.01 8.00 8.50 8.00 7.73 7.64 7.00 6.80 6.82 6.41 6.48 6.00 5.00 4.05 4.10 4.00 3.00 2.00 1.00 - 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1H 2016 17 Gain on disposal DPU EPU (rea
Slide 18: Statement of Financial Position
Statement of Financial Position 30/06/16 31/12/15 (RM’000) (RM’000) Changes Investment Properties – Note 1 2,133,481 2,048,626 + 84,855 Fixed Assets 3,658 3,602 + 56 Other Assets – Note 2 46,470 89,265 - 42,795 TOTAL ASSETS 2,183,609 2,141,493 + 42,116 Borrowings – Note 3 744,739 731,814 + 12,925 Ot
Slide 19: Statement of Financial Position
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 RM6.606 million was spent for enhancement of the properties on portfolio and RM16.227 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) 209,816 230,456 308,932 416,609 311,338 548,920 528,004 683,769 731,814 744,739 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% 38.2% 37.5% 36.1% 36.0% 36.0% 34.5% 34.2% 34.5% 35.4% 34.5% 32.7% 33.4% 33.1% 35.0% 34.0% 34.2% 33.9%32.7% 32.5% 34.1% 31.8% 33.0% 32.5% 32.8% 31.3% 32.6% 32.5% 32.5% 31.2% 31.7% 31.7% 30.0% 30.0% 29.1% 28.8% 26.8% 27.3% 25.0
Slide 22: Unitholders' Capital – Note 4
Unitholders’ Capital – Note 4 2,500.0 2,141.5 2,183.6 2,085.7 2,000.0 1,589.4 1,616.5 1,500.0 1,377.6 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-07 31-Dec-08 31-Dec-09 31-Dec-10 31-Dec-11 31-Dec-12 3
Slide 23: 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 RM289 million to date. Building Gain /(Loss) RM’000 Building Gain /(Loss) RM’000 Crystal Plaza 44,324 Axis Steel Centre 3,727 Menara Axis 37
Slide 24: Unitholders' Capital – Note 4
Unitholders’ Capital – Note 4 … resulting in good total returns to unitholders. 360% Total returns on placements 314% 320% 280% 240% 142% 200% 177% 170% 160% 72% 126% 81% 120% 53% 73% 80% 172% 105% 34% 40% 89% 73% 39% 8% 0% -1% IPO @ RM1.25 Placement '08 @ Placement '09 @ Placement '10 @ Placement '
Slide 25: 2Q2016 Property Report
2Q2016 PROPERTY REPORT
Slide 26: Overview
Overview Axis-REIT portfolio occupancy rate maintained steady at 92%. In 2016, a total of 1,938,654 sq. ft. of space will be coming for renewal representing 26.5% of the portfolio. 48% of this amount has been renewed while 23% has expressed commitment to renew. The Manager is actively working on the
Slide 27: Overview
Overview The industrial portfolio continues to perform very well and has excellent growth prospects in the coming years. Demand for industrial and warehousing space are rising and we are working with our new and current tenants on their space expansion to meet this new demand. As reported in 1Q 2016
Slide 28: Key Metrics
Key Metrics As at 30 June 2016, the portfolio has 38 assets comprising 7,303,630 sq. ft. and 140 tenants. 2Q2016 1Q2016 Movement No of properties 38 38 - Property Income (RM’000) 41,615 41,075 1.31% Property Expenses (RM’000) 6,839 6,537 4.61% Net Property Income (RM’000) 34,776 34,538 0.69% Occupan
Slide 29: Key Metrics
Key Metrics Average Rental Rates: Type of Properties 2Q2016 1Q2016 Movement Office (RM/sq. ft.) 4.70 4.68 + 0.02 Office Industrial (RM/sq. ft.) 2.71 2.68 + 0.03 Manufacturing Facilities (RM/sq. ft.) 1.36 1.35 + 0.01 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 7,303,630 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 June 2016, Axis-REIT has only 12 out of 38 properties that carry vacancy. 26 properties enjoy 100% occupancy. Occupancy Rate Occupancy Vacant As at 30 June 2016 91.73% 8.27% Vacancy As at 30 June 2016 8.27% Space to be let out 604,017 sq. ft. Occupancy Multi-tenants
Slide 32: Occupancy Rates by Property
Occupancy Rates by Property as at 30 June 2016 1 Menara Axis 93.74% 21 Axis Steel Centre 100.00% 2 Crystal Plaza 81.33% 22 Bukit Raja Distribution Centre 100.00% 3 Quattro West 84.18% 23 Seberang Prai Logistic Warehouse 1 100.00% 4 Axis Eureka 59.08% 5 Axis Business Park 65.93% 24 Seberang Prai Logi
Slide 33: Properties Below 90% Occupancy
Properties Below 90% Occupancy Occupancy rates of properties below 90% as at 30 June 2016 Fonterra HQ 84.96% Quattro West 84.18% Wisma Academy 81.87% Crystal Plaza 81.33% Axis Tech Centre 81.01% Infinite Centre 68.08% Axis Business Park 65.93% Axis Vista 65.31% Axis Eureka 59.08% Axis PDI Axis Busin
Slide 34: Diversified Portfolio by Type and NLA
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 by Industry Sector
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% 28.73% 2017 1,195,768 sq. ft. 16.37% 19.01% 2018 723,719 sq. ft. 9.91% 9.93% 38
Slide 39: Lease Expiry Profile by Property
Lease Expiry Profile – Looking Forward Year % of % of Rental Year % of % of Rental Year % of % of Rental Income/ Income/ Income/ Property 2Q2016 Total NLA month 2017 Total NLA month 2018 Total NLA month Menara Axis 103,019 1.41 3.20 22,073 0.30 1.08 - - - Crystal Plaza 120,358 1.65 3.73 11,153 0.15
Slide 40: Positive Rent Reversions
Positive Rent Reversions Space Renegotiated % Rent Properties (sq. ft.) Movement Menara Axis 60,987 +4.50% Crystal Plaza -* +8.91% Axis Business Park 23,507 +2.64% Infinite Centre -* +7.14% Wisma Kemajuan 52,220 +1.75% Quattro West 19,004 +5.29% Axis Technology Centre 41,182 No change Axis Eureka 15
Slide 41: Weighted Average Lease Expiry (WALE)
Weighted Average Lease Expiry (WALE) The WALE for the portfolio is: By Year 2Q2016 1Q2016 By NLA 4.28 4.32 By Rental 4.41 4.41 41
Slide 42: Portfolio Efficiency (PE)
Portfolio Efficiency (PE) The Portfolio Efficiency Ratio = Operating Cost for the Portfolio / Gross Property Income The Efficiency Ratio in 2Q2016 has increased by 0.51% compared to 2Q2016 due to increase in maintenance cost. 2Q2016 1Q2016 16.43% 15.92% 42
Slide 43: Top 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: 2Q2016 Asset Enhancements
2Q2016 ASSET ENHANCEMENTS
Slide 45: Enhancements To Date
Enhancements To Date Menara Axis: Handicap-friendly Loading Ramp, Drop-Off Area Columns, Ground Floor Lobby Columns, Typical Toilets on All Floors Wisma Academy: Lifts Upgrading, Carpark 45 Lighting Upgrading
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 (After)
Axis PDI Centre – Proposed Development (After) 47
Slide 48: Axis PDI Centre – Proposed Development
Axis PDI Centre – Proposed Development 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
Slide 49: 2Q2016 Investments Report
2Q2016 INVESTMENTS REPORT
Slide 50: 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 50
Slide 51: 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 51
Slide 52: 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 52
Slide 53: Prospective Acquisition Targets
Prospective Acquisition Targets The Manager is currently undergoing assessments for the following assets as future acquisition targets: 1. Industrial facility in SiLC, Iskandar Puteri, Johor for RM55 million 2. Industrial facility in Seberang Prai, Penang for RM24 million 3. Industrial facility in S
Slide 54: 2Q2016 Investor Relations Report
2Q2016 INVESTOR RELATIONS REPORT
Slide 55: Unit Price Performance YTD 2016
Unit Price Performance YTD 2016 4.00 AXREIT: 1 Jan 2014 – 30 Jun 2016 3.69 3.69 3.62 3.62 3.58 3.62 3.55 3.54 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 1.69 1.65 1.66 1.70 1.70 1.61 1.64 1.61 1.55 1.55 1.50 1.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ja
Slide 56: Unit Price Movement YTD 2016
80% 90% 100% 110% 120% 130% 140% 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 1/10/2… 1/11/2… 1/12/2… 2Q2016: Unit Price @ 30 Jun 2016 1Q2016: Unit Price @ 31 Mar 2015 1/1/2014 1/2/2014 1/3/2014 1/4/2014 RM1.61 RM1.70 1/5/2014 1/6/2014 1/7/2014 1/8/2014 1/9/2014 K
Slide 57: Volume Movement YTD 2016
Volume Movement YTD 2016 AXREIT: 1 Jan 2014 – 30 Jun 2016 45,000,000 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 15,000,000 13,159,100 12,995,800 11,271,000
Slide 58: Top 10 Unitholders YTD 2016
Top 10 Unitholders YTD 2016 1 AMANAH SAHAM BUMIPUTERA 11.93% 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 3.60% 7 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 2.61% 8 EXEMPT AN FOR EASTSPRING INVESTM
Slide 59: Analysis of >2 million Unitholders
Analysis of >2 million Unitholders Top 5 increases in unitholdings: Last Quarter Increase AMANAH SAHAM DIDIK 0.4% LEMBAGA TABUNG HAJI 0.4% AMANAH SAHAM WAWASAN 2020 0.3% SKIM AMANAH SAHAM BUMIPUTERA 0.3% BNP PARIBAS SECS SVS PARIS FOR REIT ASIEN 1 0.3% Top 5 decreases in unitholdings: Last Quarter D
Slide 60: Investor Visibility and Liquidity YTD 2016
Investor Visibility and Liquidity YTD 2016 No. of CDS Accounts 4,000 3,790 3,718 3,611 3,500 3,219 3,309 3,176 3,200 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 Quarter-on-quarter, total number
Slide 61: Analyst Coverage 2Q2016
Analyst Coverage 2Q2016 Coverage Rating Target Price (RM) Published Date AffinHwang Hold 1.65 26-Apr-16 Alliance DBS Hold 1.60 26-Apr-16 CIMB Buy 1.80 26-Apr-16 Hong Leong IB Hold 1.60 26-Apr-16 KAF Hold 1.70 26-Apr-16 Kenanga Hold 1.60 26-Apr-16 Maybank Hold 1.55 26-Apr-16 MIDF Hold 1.71 26-Apr-16
Slide 62: Thank You
THANK YOU A |S REAL ESTATE INVESTMENT TRUST
Axis Real Estate Investment Trust — Q2 2016 Earnings Presentation on 6ix