Axis Real Estate Investment Trust · MYX:AXREIT
Axis Real Estate Investment Trust — Q3 2015 Earnings Presentation
68 slides from Axis Real Estate Investment Trust's earnings presentation, Oct 19, 2015
Slide 1: Q3 2015 Results Presentation
Q3 2015 Axis REIT Managers Bhd Q3 2015 Results Presentation 19th October 2015
Slide 2: 3Q 2015 Highlights
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Slide 3: Axis-REIT turns 10!
Axis-REIT turns 10! Axis-REIT was listed on the 3rd August 2005 3
Slide 4: Our 10 year milestones - briefly
Our 10 year milestones - briefly Assets Under Management RM296 million RM2.09 billion Space Under Management 978,000 sq.ft 7,014,356 sq ft Properties 5 34 Valuation Gain since listing RM276,000,000 First REIT to convert into an Islamic REIT First PLC to adopt Cloud Computing First REIT
Slide 5: Dato' Stewart LaBrooy to retire as CEO
Dato’Stewart LaBrooy to retire as CEO Y Bhg Dato’ Stewart LaBrooy Ms. Leong Kit May CEO & Executive Director COO & Finance Director The Board of Directors of Axis REIT Managers Berhad, announced that the Manager had received approval from the Securities Commission Malaysia vide their letter dated 13
Slide 6: Q3 2015 Return Comparatives
Q3 2015 Return Comparatives 8.00% 7.00% 6.75% 6.00% 5.05% 5.00% 4.17% 4.00% 3.69% 3.25% 3.00% 2.00% 1.00% 0.00% Axis-REIT Total Axis-REIT EPF Dividend 10-yr MGS 12 Months FD OPR -1.00% Return * Distribution Yield Return Rate -2.00% -1.92% -3.00% * (Based on DPU from operations + gain on disposal + m
Slide 7: Highlights 3Q 2015
Highlights 3Q 2015 RM 2,046,976,000 Investment Properties 7
Slide 8: Highlights 3Q 2015
Highlights 3Q 2015 Completed the acquisition of Axis Shah Alam DC2 for RM45 million on 31 March , which was the remaining property with a related party initially transacted in 2014. Acceptance of a Letter of Offer to acquire a new industrial facility for RM61.0 million located in Indahpura, Joho
Slide 9: 3Q 2015 Finance Report
3Q 2015 Finance Report
Slide 10: 3Q 2015 Summary
3Q 2015 Summary 3Q 2015 Total Net Income (“Realised”)(RM' 000) 69,782 Income Available for Distribution ("Realised") (RM' 000) 70,280 Earnings per Unit ("EPU") ("Realised") (Sen) * 6.37 Income Distribution Declared (RM'000) 70,113 Distribution per Unit ("DPU") (Sen) ** 6.40 Number of Investment Prop
Slide 11: Income Statement 3Q 2015 vs 3Q 2014
Income Statement 3Q 2015 vs 3Q 2014 3Q 2015 3Q 2014 Changes / (RM ‘000) (RM’000) Movement No. of Properties 34 30 +4 Property Income 41,631 33,004 + 26.1% Property Expenses (5,826) (5,099) + 14.3% Net Property Income 35,805 27,905 + 28.3% Profit Income / other income 226 117 Non-Property Expenses (4
Slide 12: Income Statement YTD 3Q 2015 vs YTD 3Q 2014
Income Statement YTD 3Q 2015 vs YTD 3Q 2014 YTD 3Q 2015 YTD 3Q 2014 Changes / (RM ‘000) (RM’000) Movement No. of Properties 34 30 +4 Property Income - Note 1 123,245 103,255 + 19.4% Property Expenses - Note 2 (17,742) (16,318) + 8.7% Net Property Income 105,503 86,937 + 21.4% Profit Income / Other I
Slide 13: Income Statement YTD 3Q 2015 vs YTD 3Q 2014
Income Statement YTD 3Q 2015 vs YTD 3Q 2014 Note 1 – Property Income The higher property income is mainly due to contribution of rental proceeds from newly completed property acquisitions in 4Q 2014 and 1Q 2015, ie. Axis MRO Hub, Axis Shah Alam DC 3, Axis Steel Centre@SiLC and Axis Shah Alam DC2. No
Slide 14: Income Statement YTD 3Q 2015 vs YTD 3Q 2014
Income Statement YTD 3Q 2015 vs YTD 3Q 2014 Note 5 – No. of units in issuance and effect on DPU The Unit Split of 1 unit into 2 units has doubled the Fund's units in circulation and resulted in the DPU being halved. However the distribution yield remains. DPU declared for 2015 Prior to Unit Split Af
Slide 15: Gross Yield of Investment Properties
Gross Yield of Investment Properties Average gross yield 3Q 2015 = 9.86% Properties Gross yield (%) 18 Bayan Lepas Distribution Centre 9.66% 1 Wisma Kemajuan 18.15% 19 Axis Shah Alam DC 1 9.53% 2 Crystal Plaza 14.31% 20 Giant Hypermarket, Sungai Petani 9.02% 3 Delfi Warehouse 13.48% 21 Seberang Prai
Slide 16: Net Yield of Investment Properties / Cost
Net Yield of Investment Properties / Cost Average net yield 3Q 2015 = 8.47% Properties Net yield (%) 18 Giant Hypermarket, Sungai Petani 8.26% 1 Wisma Kemajuan 14.09% 2 Crystal Plaza 12.05% 19 Bukit Raja Distribution Centre 8.20% 3 FCI Senai 11.86% 20 Axis Steel Centre 8.02% 4 Delfi Warehouse 11.74%
Slide 17: Income Statement RM' million
Income Statement 35.00 Adjusted Income Before Taxation/ Income Available For Distribution: Gain on 30.00 disposal Gain on RM10.952 disposal mil Gain on disposal RM10.952 RM7.2 25.00 mil Gain on mil disposal RM5.9 mil 20.00 RM' million 15.00 23.75 23.86 22.67 10.00 20.83 20.83 20.26 19.85 5.00 0.00 1
Slide 18: 3rd Quarter 2015 Income Distribution
3rd Quarter 2015 Income Distribution 3rd Interim 2015 Income Distribution: 2.20 sen The 2.20 sen DPU represents 99.76% income available for distribution from performance of properties for the period from 1 July 2015 to 30 September 2015 Important dates: Ex-date: 29 October 2015 Entitlement date: 2 N
Slide 19: Implementation of Income Distribution Reinvestment Plan (IDRP)
Implementation of Income Distribution Reinvestment Plan (IDRP) The Manager wishes to announce that it will be implementing the Income Distribution Reinvestment Plant for the 3Q 2015. Details are as follows: a) Electable Portion : 1.00 sen which is 45% of the 2.20 sen DPU to be allow for reinvestment
Slide 20: Summary of Realised EPU and DPU (Restated After Unit Split)
Summary of Realised EPU and DPU (Restated After Unit Split) 10.00 9.88 9.30 9.30 9.23 9.25 9.00 8.71 8.64 8.60 7.89 7.90 8.01 8.00 8.00 7.73 7.64 7.00 6.80 6.82 6.41 6.48 6.37 6.40 6.00 sen per unit 5.00 4.00 3.00 2.44 2.35 2.00 1.00 - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD 3Q 2015 EP
Slide 21: Statement of Financial Positions
Statement of Financial Positions 30/09/15 31/12/14 (RM’000) (RM’000) Changes Investment Properties – Note 1 2,046,976 1,982,587 + 64,389 Fixed Assets 3,712 2,821 + 891 Other Assets – Note 2 36,925 100,475 - 63,550 TOTAL ASSETS 2,087,613 2,085,883 + 1,730 Borrowings – Note 3 681,640 683,769 - 2,129 O
Slide 22: Statement of Financial Positions
Statement of Financial Positions Note 1 – Investment properties The acquisition of Axis Shah Alam DC2 was completed on 31 March 2015 at RM45 million. A total of RM9.905 million has been incurred for enhancement of the properties in the nine months period of 2015. Five properties have been revalued i
Slide 23: Statement of Financial Positions - Note 3 Borrowings
Statement of Financial Positions - Note 3 Borrowings YTD 2006 2007 2008 2009 2010 2011 2012 2013 2014 3Q 2015 Total Borrowings (RM’000) 88,089 209,816 230,456 308,932 416,609 311,338 548,920 528,004 683,769 681,640 Total Assets (RM’000) 411,781 581,857 726,371 907,745 1,208,897 1,298,431 1,589,408 1
Slide 24: Statement of Financial Positions
Statement of Financial Positions Gearing Levels Placements Undertaken 40.0% 38.2% 37.5% 36.1% 35.4% 36.0% 36.0% 34.5% 33.1% 34.0% 34.5% 32.5% 35.0% 34.2% 33.9% 32.7% 32.5% 32.8% 31.7% 33.0% 33.4% 32.5% 32.6% 32.7% 32.5% 31.2% 31.8% 31.3% 31.7% 30.0% 30.0% 29.1% 28.8% 26.8% 27.3% 25.0% 25.0% 24.0% 23
Slide 25: Unitholders' Capital – Note 4
Unitholders’Capital – Note 4 2,500.0 The funds raised from equity placements are being injected into acquiring good 2,085.7 2,086.7 2,000.0 quality properties….. 1,589.4 1,616.5 1,500.0 1,298.4 RM mil 1,208.9 1,044.7 1,045.5 1,000.0 907.7 726.4 728.2 735.4 751.0 581.8 540.3 500.0 411.8 406.9 339.6 3
Slide 26: Unitholders' Capital – Note 4
Unitholders’Capital – Note 4 … resulting in good total returns to unitholders. 320% 302% Total returns on placements 280% 240% 132% 200% 169% 162% 160% 65% 119% 120% 74% 47% 80% 170% 67% 104% 29% 40% 88% 72% 38% 4% 0% -2% IPO @ RM1.25 Placement '08 @ RM1.80 Placement '09 @ RM1.66 Placement '10 @ RM1
Slide 27: Statement of Financial Positions
Statement of Financial Positions Note 5 – Non-distributable reserve Non-distributable reserve mainly comprises the favorable gain in fair value of approx. RM276 million to date. Building Gain /(Loss) RM’000 Building Gain /(Loss) RM’000 Crystal Plaza 44,329 Axis Technology Centre 2,891 Menara Axis 38
Slide 28: Q3 2015 Property Report
Q3 2015 Property Report 28
Slide 29: 2015 Overview
2015 Overview Q3 2015 occupancy rate has held steady registering a slight adjustment down to 92.64% from 92.67% in Q2 2015. There have been some movements in the portfolio with some tenants moving out, however the leasing team has succeeded to secure replacements tenants for these spaces at higher r
Slide 30: 2015 Overview
2015 Overview The industrial portfolio continues to perform very well and has excellent growth prospects in the coming years. Demand for e-commerce platforms are rising and we are working with our current tenants to upgrade their current facilities to meet this new demand. The current weakness in th
Slide 31: Key Metrics
Key Metrics As at 30 September 2015 the Portfolio has 34 assets comprising 7,014,356 sq. ft. and 138 tenants. Type Q3 2015 Q2 2015 Movement Property Income 41,631 41,210 1.02% (RM’000) Property Expenses 5,825 5,897 1.22% (RM’000) Net Property Income 35,805 35,313 1.40% (RM’000) Occupancy 92.64% 92.6
Slide 32: Key Metrics
Key Metrics Average Rental Rates: Type of Properties Q3 2015 Q2 2015 Movement Office (RM/sq. ft.) 4.64 4.63 + 0.01 Office Industrial (RM/sq. ft.) 2.62 2.62 No change Manufacturing Facilities (RM/sq. ft.) 1.33 1.29 + 0.04 Warehouse Logistics (RM/sq. ft.) 1.70 1.69 + 0.01 Hypermarket (RM/sq. ft.) 2.24
Slide 33: Space Under Management (Sq. Ft.)
Space Under Management (Sq. Ft.) 33
Slide 34: Portfolio Occupancy Rate
Portfolio Occupancy Rate Occupancy Rate As at 30 September 2015 Axis REIT has only 11 out of 34 properties that carry vacancy. 23 properties enjoy 100% occupancy. Vacant 7.36% Occupancy As at 30 June 2015 92.67% As at 30 Sept 2015 92.64% Vacancy As at 30 September 2015 7.36% Occupied Space to be let
Slide 35: Occupancy Rates by Property As At 30 Sep 2015
Occupancy Rates by Property As At 30 Sep 2015 1 Menara Axis 78.77% 19 Niro Warehouse 100.00% 2 Crystal Plaza 81.33% 20 Delfi Warehouse 100.00% 3 Quattro West 84.18% 21 Axis Steel Centre 100.00% 4 Axis Eureka 59.08% 22 Bukit Raja Distribution Centre 100.00% 5 Axis Business Park 63.99% 23 Seberang Pra
Slide 36: Properties Below 90% Occupancy
Properties Below 90% Occupancy Occupancy rates of properties below 90% as at 30 September 2015 Note: Vacant space in Fonterra HQ is built for their future expansion 36
Slide 37: Diversified Portfolio
Diversified Portfolio Portfolio Diversification by Type and NLA 9% 18% 22% 5% 46% Office Office/ Industrial Hypermarkets Warehouse Logistic Manufacturing Facilities - Light Industrial 37
Slide 38: Portfolio Location
Portfolio Location Portfolio Diversification by Geographical Location Petaling Jaya 28.39% Johor 24.07% Shah Alam 23.01% Penang 10.67% Klang 6.06% Nilai 4.16% Kedah 1.97% Cyberjaya 1.68% 38
Slide 39: Tenancy Mix
Tenancy Mix Single Tenant vs. Multi Tenant 43% 57% Single Tenant Multi Tenant 39
Slide 40: Lease Expiry Profile – Looking Forward
Lease Expiry Profile – Looking Forward Year Area up for % of Total % of Rental renewal NLA Income 2015 903,977 sq. ft. 12.89% 15.24% 2016 1,765,120 sq. ft. 25.16% 26.46% 2017 1,140,198 sq. ft. 16.26% 17.84% 40
Slide 41: Lease Expiry Profile – Looking Forward
Lease Expiry Profile – Looking Forward Year % of % of Rental Year % of % of Rental Year % of % of Rental Property 2015 Total NLA Income/month 2016 Total NLA Income/month 2017 Total NLA Income/month Menara Axis - - 0.02 91,514 1.30 2.84 22,073 0.31 1.08 Crystal Plaza 3,407 0.05 0.06 120,122 1.71 3.72
Slide 42: Positive Rent Reversions
Positive Rent Reversions Space Renegotiated Space Properties Renegotiated % Rent Movement (sq. ft.) Crystal Plaza 3,407 0.00% Axis Business Park 14,163 12.96% Axis Shah Alam DC 1 110,406 15.38% Wisma Kemjuan 54,737 10.63% Axis Eureka 160 0.22% Axis Technology Centre 91,837 8.78% Seberang Prai Logist
Slide 43: Income Growth – Leasing Profile
Income Growth – Leasing Profile Successfully renegotiated 562,480 sq. ft. space out of 903,977 sq. ft. space due for renewal in 2015, representing 62.2% tenant retention. Rental growth of 549,156 sq. ft. space achieved from pre- negotiated rent step up in the leases. The leases in the portfoli
Slide 44: Weighted Average Lease Expiry (WALE)
Weighted Average Lease Expiry (“WALE”) The “WALE” for the portfolio is: By Year Q3 2015 Q2 2015 By NLA 4.07 4.27 By Rental 4.05 4.25 44
Slide 45: Portfolio Efficiency (PE)
Portfolio Efficiency (“PE”) The Efficiency Ratio = Operating Cost for the Portfolio / Gross Property Income As part of the Fund’s continuous effort to manage operational cost, the Efficiency Ratio has improved . YTD 3Q 2015 YTD 2Q 2015 14.40% 14.60% 45
Slide 46: Top 10 Tenants – Strong Rental Covenants
Top 10 Tenants – Strong Rental Covenants 1. Konsortium Logistik Berhad 2. LF Logistics Services (M) Sdn Bhd 3. Yongnam Engineering Sdn Bhd 4. Schenker Logistics (M) Sdn Bhd 5. Tenaga Nasional Berhad 6. Tesco Stores (M) Sdn Bhd 7. Strateq Data Center Sdn Bhd 8. DHL Properties (M) Sdn Bhd 9. SR Techni
Slide 47: Q3 2015 Asset Enhancement Initiatives
Q3 2015 Asset Enhancement Initiatives 47
Slide 48: The Annex Enhancement - Existing
The Annex Enhancement - Existing
Slide 49: The Annex Enhancement - Proposed
The Annex Enhancement - Proposed
Slide 50: Axis Business Campus Block C Enhancement
Axis Business Campus Block C Enhancement
Slide 51: Axis Business Campus Block C – Concept Design
Axis Business Campus Block C – Concept Design Block C – New Block B – Existing Block A – Existing
Slide 52: Axis Business Campus Block C – Concept Design
Axis Business Campus Block C – Concept Design New Block adds an additional 60,000 sq. ft. to the property
Slide 53: Axis Business Campus Block C – Concept Design
Axis Business Campus Block C – Concept Design
Slide 54: Sustainability Initiatives
Sustainability Initiatives 54
Slide 55: Initiatives Carried Out Up To 3Q 2015
Initiatives Carried Out Up To 3Q 2015 Sustainability policy drafted and implemented Attended various trainings and conferences Energy audit completed for Crystal Plaza With the acquisition of Axis Shah Alam DC2, Axis REIT portfolio has more roof space rented out for solar energy harvesting.
Slide 56: 3Q 2015 Business Development Report
3Q 2015 Business Development Report
Slide 57: Ongoing Acquisitions
Ongoing Acquisitions Manufacturing Facility - Kulaijaya, Johor Land Area : Approx. 10 acres Land Tenure : Freehold Occupancy : 100% Purchase Price : RM61 million WALE : 10 years 57
Slide 58: Ongoing Acquisitions
Ongoing Acquisitions Logistics Warehouse – SiLC, Nusajaya, Johor Land Area : Approx. 7 acres Land Tenure : Freehold Occupancy : 100% Purchase Price : RM41 million WALE : 7 years 58
Slide 59: Prospective Acquisition Targets
Prospective Acquisition Targets The Manager is currently undergoing assessments for the following assets as future acquisition targets: 1. A warehouse in Pasir Gudang, Johor 2. An industrial facility at Bayan Lepas, Penang Total Estimated Value of RM140 million 59
Slide 60: 3Q 2015 Investor Relations Report
3Q 2015 Investor Relations Report
Slide 61: Unit Price Performance YTD 2015
Unit Price Performance YTD 2015 AXREIT: 1 Jan 2014 – 30 Sep 2015 4.00 3.69 3.69 3.62 3.62 3.58 3.62 3.55 3.54 3.55 3.53 3.53 3.50 3.50 3.45 3.38 3.37 3.34 3.31 3.27 3.22 3.09 3.00 2.85 2.50 2.00 1.69 1.61 1.50 Note: 2-for-1 Unit Split on 4 Sep 2015 from RM3.22 to RM1.61 1.00 Jan Feb Mar Apr May Jun
Slide 62: Unit Price Movement YTD 2015
Unit Price Movement YTD 2015 AXREIT vs KLCI: 1 Jan 2013 – 30 Sep 2015 Price & Volume Statistics 140% 3Q2015: Unit Price @ 30 Sep 2015 RM1.69 2Q2015: Unit Price @ 30 Jun 2015 RM3.45 130% Highest Price: 2015 YTD (February) RM3.69 Lowest Price: 2015 YTD (August) RM3.20 120% Note: 2-for-1 Unit Split on
Slide 63: Share Volume YTD 2015
Share Volume YTD 2015 25,000,000 AXREIT: 1 Jan 2014 – 30 Sep 2015 20,104,000 19,891,600 20,000,000 16,913,000 15,000,000 13,903,000 13,673,900 11,725,700 11,245,800 10,546,300 10,514,400 10,000,000 9,308,000 7,924,800 6,497,900 5,635,500 5,571,700 5,664,300 5,173,600 4,869,550 4,744,600 4,554,600 5,
Slide 64: Top 10 Unitholders YTD 2015
Top 10 Unitholders YTD 2015 1 SKIM AMANAH SAHAM BUMIPUTERA 2 EMPLOYEES PROVIDENT FUND 3 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 4 TEW PENG HWEE @ TEOH PENG HWEE 5 LEMBAGA TABUNG HAJI 6 ALEX LEE LAO 7 PERMODALAN NASIONAL BERHAD 8 ABAS CARL GUNNAR BIN ABDULLAH 9 EXEMPT AN FOR EASTSPRING INVESTMENTS BE
Slide 65: Analysis of >2 million Unitholders
Analysis of >2 million Unitholders Top 5 increases in unitholdings: Last Quarter Increase Exempt An for The Bank of New York Mellon (Mellon Acct) 382.8% Amanah Saham Gemilang for Amanah Saham Pendidikan 179.7% Public Ittikal Sequel Fund 36.9% BNP Paribas Secs SVS Paris for Arqaam Capital Limited 29.
Slide 66: Investor Visibility and Liquidity YTD 2015
Investor Visibility and Liquidity YTD 2015 No. of CDS Accounts 3,500 3,309 3,176 3,200 3,219 3,009 3,000 2,850 2,702 2,500 2,420 2,080 2,000 1,652 1,500 1,000 500 - 2008 2009 2010 2011 2012 2013 2014 1Q2015 2Q2015 3Q2015 Quarter-on-quarter, total number of CDS accounts increased by 90 to 3,309. Un
Slide 67: Analyst Coverage 3Q2015
Analyst Coverage 3Q2015 Coverage Rating Target Price (RM) Published Date Affin Hwang Buy 3.90 4 Aug 2015 KAF Buy 4.00 4 Aug 2015 MIDF Hold 3.50 4 Aug 2015 Hong Leong IB Hold 3.44 4 Aug 2015 Maybank Hold 3.35 4 Aug 2015 Alliance DBS Hold 3.50 5 Aug 2015 Consensus Hold 1.81 30 Sep 2015 (S&P Capital IQ
Slide 68: THANK YOU
THANK YOU 68
Axis Real Estate Investment Trust — Q3 2015 Earnings Presentation on 6ix