Axis Real Estate Investment Trust · MYX:AXREIT
Axis Real Estate Investment Trust — Q3 2011 Earnings Presentation
61 slides from Axis Real Estate Investment Trust's earnings presentation, Oct 17, 2011
Slide 1: Presentation of 3Q Results
Presentation of 3Q Results October 17, 2011
Slide 2: Snapshot
Snapshot Approved Fund Size 375,901,000 units Manager Axis REIT Managers Bhd Investment Properties 27 Properties worth RM1. 28 billion (as at 30 September 2011 – Unaudited) Market Capitalisation RM883 million (as at 30 September 2011) Unit Price RM2.35 (as at 30 September 2011) Gearing R
Slide 3: Third Quarter 2011 Results
Axis REAL ESTATE INVESTMENT TRUST Third Quarter 2011 Results
Slide 4: Highlights 3Q 2011
Highlights 3Q 2011 Unitholders have approved to increase the Approved Fund Size from 375,901,000 units to 451,081,200 units SPA for RM 59 million logistics Building Enhancement Program warehouse signed 3Q 2011 continues with the extensive Total Acquisition to date RM makeover of Crystal Plaza set to
Slide 5: Highlights-Income Statement
Highlights-Income Statement Net Property Income exceeds 3Q2010 by 32.29% Changes / 3Q2011 3Q2010 Movement No. of Properties 27 23 +4 Property Income (RM’000) 29,175 22,003 + 32.60% Net Property Income (RM’000) 24,571 18,573 + 32.29% Profit before Taxation (RM’000) 16,241 12,589 + 29.01% Distribution
Slide 6: Highlights – Balance Sheet
Highlights – Balance Sheet Trading at premium to NAV of 17.59% YTD 3Q 2011 31 DEC 2010 (RM ‘000) (RM’000) Total Assets 1,280,567 1,208,897 Investment Properties 1,256,035 1,178,682 Borrowings 489,156 416,609 Net Asset Value 751,208 755,230 Unitholders’ Capital 540,281 540,281 Gearing 38.20% 34.46% N
Slide 7: Governance- Wins APREA Best Practices Award 2011
Governance- Wins APREA Best Practices Award 2011 Recently won the Asia Pacific Real Estate Association (APREA) Best Practices Award 2011 (Emerging Markets Category) and six sub categories. This is the second year Axis REIT Managers Bhd have won the award. 7
Slide 8: 30 September 2011 Financial Results
30 September 2011 Financial Results
Slide 9: Financial Results – Income Statement
Financial Results – Income Statement 3Q 2011 3Q 2010 Changes / (RM ‘000) (RM’000) Movement No. of Properties 27 23 +4 Property Income 29,175 22,003 + 32.60% Property Expenses (4,604) (3,430) + 34.23% Net Property Income 24,571 18,573 + 32.29% Interest Income 68 386 Non-Property Expenses (2,350) (1,8
Slide 10: Financial Results – Income Statement
Financial Results – Income Statement YTD 3Q 2011 YTD 3Q 2010 Changes / (RM ‘000) (RM’000) Movement No. of Properties 27 23 +4 Property Income – Note 1 84,785 62,778 +35.06% Property Expenses – Note 2 (12,762) (9,730) + 31.16% Net Property Income 72,023 53,048 + 35.77% Accounting loss on disposal – N
Slide 11: Notes to Financial Results – Income Statement
Notes to Financial Results – Income Statement Note 1 – Property Income Increase in property income as compared to last preceding year are due to:- a) Contribution of rental proceeds from the property acquisitions completed since the 2nd half of last year ie Tesco Bukit Indah, Axis PDI Centre, Axis T
Slide 12: Notes to Financial Results – Income Statement
Notes to Financial Results – Income Statement Note 3 – Accounting loss on disposal and Realisation of revaluation gain on disposal The disposal of Axis North Port LC 1 on 18 April 2011 (“the Disposal”), has resulted in a net gain of RM785,000 which can be calculated as follow: Simple mathematical co
Slide 13: Notes to Financial Results – Income Statement
Notes to Financial Results – Income Statement Note 3 – Accounting loss on disposal and Realisation of revaluation gain on disposal (cont’d) Due to the compliance requirement with the FRS 140 accounting standard, the Accounting loss on disposal of (RM258,000) needs to be offset against the Realisatio
Slide 14: Notes to Financial Results – Income Statement
Notes to Financial Results – Income Statement Note 4 – Non-Property Expenses The increase in non-property expenses is due to the increase in the Net Asset Value (“NAV”) of the Fund. The Management Expenses Ratio (‘MER”) for the first nine- month is at 1.22% of NAV. Note 5 – Islamic financing cost Th
Slide 15: Balance Sheet Highlights (RM’000)
Balance Sheet Highlights (RM’000) 30/9/11 31/12/10 Changes Investment Properties 1,256,035 1,178,682 + 77,353 Other Assets 24,532 30,215 - 5,683 TOTAL ASSETS 1,280,567 1,208,897 + 71,670 Borrowings 489,156 416,609 + 72,547 Other Payables 40,203 37,058 + 3,145 TOTAL LIABILITIES 529,359 453,667 + 75,6
Slide 16: Summary of EPU (Realised) and DPU
Summary of EPU (Realised) and DPU 18.00 15.77 15.80 16.01 16.00 16.00 15.46 15.27 EPU (realised) DPU 14.00 13.60 13.63 12.82 12.95 13.05 13.00 12.00 10.00 8.00 6.00 4.87 4.70 4.00 2.00 - 2005 2006 2007 2008 2009 2010 3Q2011 16
Slide 17: Gearing Levels
Gearing Levels Placements Undertaken 45.0% 40.0% 38.2% 37.5% 36.1% 35.4% 36.0% 36.0% 34.0% 34.5% 35.0% 33.0% 33.1% 31.2% 31.8% 31.7% 31.3% 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% 10.0% 5.0% 0.0% 17
Slide 18: Management Expense Ratio (“MER”)
Management Expense Ratio (“MER”) MER= Total administrative expenses incl. Manager and Trustee’s fees Average net asset value of the Fund. MER 1.6 1.47 1.38 1.37 1.35 1.4 1.29 1.22 1.21 1.22 1.2 1.14 1 0.8 0.6 0.4 0.2 0 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Sept 11 MER 18
Slide 19: Total Assets and Unitholders’ Funds
Total Assets and Unitholders’ Funds Rapid increase in both Total Assets and Unitholders’ Funds 1,400.0 Total Asset & Unitholders' Funds 1,280.6 1,208.9 1,200.0 1,000.0 952.6 907.7 800.0 732.9 755.2 751.2 726.4 RM mil 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
Slide 20: Detailed Property Performance Analysis (RM’000)
Detailed Property Performance Analysis (RM’000) Book Value Fair Value Acq Cost + Annualised Gross Yield (a) Adjust (b) Enhancement (c) Revenue (d) (d) / (c) 1 ABP 107,546 21,883 85,663 11,179 13.05% 2 Axis Plaza 31,095 8,498 22,597 2,854 12.63% 3 Crystal Plaza 99,645 39,458 60,187 10,260 17.05% 4 In
Slide 21: Investor Relations
Investor Relations
Slide 22: Unit Price Performance
Unit Price Performance Month End Closing Prices RM Sept 2010 – Sept 2011 2.7 2.6 2.61 2.5 2.45 2.45 2.44 2.4 2.4 2.37 2.37 2.36 2.35 2.33 2.32 2.33 2.3 2.22 2.2 2.16 2.1 2 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 11-Oct 2010 2011 22
Slide 23: Highlights - YTD Unit Price Performance
Highlights - YTD Unit Price Performance AXIS vs KLCI (12 month) Price & Volume Statistic 1.30 1.25 Current Price : RM2.42 1.20 1.15 52 Week Hi : RM2.63 1.10 52 Week Lo : RM2.16 1.05 Axis REIT KLCI Index 1.00 1-Mth Daily : 134,485 0.95 Avg Volume 0.90 0.85 3-Mth Daily : 210,122 Avg Volume 6-Mth Daily
Slide 24: > 1 Million Unitholders – Key Points
> 1 Million Unitholders – Key Points Top 10 unitholders 1 EMPLOYEES PROVIDENT FUND BOARD 2 TEW PENG HWEE @ TEOH PENG HWEE 3 ALEX LEE LAO 4 AMANAH RAYA TRUSTEES BERHAD SKIM AMANAH SAHAM BUMIPUTERA 5 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 6 CITIGROUP NOMINEES (TEMPATAN) SDN BHD EXEMPT AN FOR AMERICAN
Slide 25: > 1 Million Unitholders – Key Points
> 1 Million Unitholders – Key Points Notable mentions of changes in shareholdings 1. EPF Board has added 1.852 million units retaining its top spot. 2. Uni.Asia General Insurance Berhad has added 2.83 million units to move up from 14th to 12th place 3. ING Insurance Berhad has added 540,000 million
Slide 26: > 1 Million Unitholders – Key Points
> 1 Million Unitholders – Key Points 26
Slide 27: Investor Visibility and Liquidity
Investor Visibility and Liquidity No. of Unitholders 3000 2597 2589 2420 2500 2230 2109 1959 2000 1652 1500 1370 1166 941 1000 500 0 Dec '06 Dec '07 Jun '08 Dec '08 Jun '09 Dec '09 Jun '10 Dec ' 10 Jun '11 Sep '11 Liquidity of the stock remains at June 2011 levels 3Q2011 – 10.1 mln units transac
Slide 28: Volume Performance
Volume Performance Mln Monthly Volume Traded 7.00 6.63 6.46 6.42 5.90 6.00 5.16 5.27 5.00 4.00 3.00 2.47 2.51 2.34 2.11 2.00 1.63 1.20 1.03 1.00 0.52 - Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 11-Oct 28
Slide 29: Malaysian REIT Managers Association (“MRMA”)
Malaysian REIT Managers Association (“MRMA”) REIT Roadshows- Held on the 29th July 2011 at the Hyatt Regency Kota Kinabalu Approximately 150 attendees were present The MRMA now has 12 members out of 13 listed REITs The two working committees at the MRMA are the: Finance Committee – currently engagin
Slide 30: Malaysian REIT Managers Association (“MRMA”)
Malaysian REIT Managers Association (“MRMA”) The Finance Committee of the MRMA had appealed during 2011 to the Ministry Of Finance to extend the existing regime on income tax distribution Malaysian Real Estate Trusts (M-REIT’s) to Unit holders. This is covered under Section 6(b) (i) Income Tax Act 1
Slide 31: Bursa Malaysia Investor Education Program
Bursa Malaysia Investor Education Program Bursa Malaysia and together with several brokerage houses held a series of talks targeted to retail investors who wish to know more about investing in ETFs, Derivatives and REITs. CEO of Axis REIT Managers Bhd Stewart LaBrooy presented during the following d
Slide 32: Business Development
Business Development
Slide 33: Logistics Warehouse Bukit Tengah, Seberang Prai
Logistics Warehouse Bukit Tengah, Seberang Prai Land Area : 13.7 acres (596,800 sq ft) Gross Built Up : 380,000 sq ft Land Tenure : Leasehold Occupancy : 100% Tenancy/lease period : 3+2 years Tenants : DB Schenker Purchase Price : RM59.0 million Valuation : RM 62 million Projected Net Yield : 10.2%
Slide 34: Potential 3rd Party Acquisitions
Potential 3rd Party Acquisitions The Manager is currently assessing the following assets as potential acquisition targets : A Logistics Warehouse at Bayan Lepas Penang (Value RM 48,500,000) 2 Retail hypermarkets in the Klang Valley Value ( Value RM 120,000,000 ) An Industrial Facility in Nilai
Slide 35: Property Report
Property Report
Slide 36: Asset Performance – 2011
Asset Performance – 2011 TENANT CARE GROWING INCOME MANAGING RISK WORLD CLASS FACILITIES MANAGEMENT & ENHANCEMENTS
Slide 37: Income Growth – Rental Reversions in Q3 2011
Income Growth – Rental Reversions in Q3 2011 Space Renegotiated Properties (sq. ft.) % Movement Menara Axis 28,152 +1.35% Crystal Plaza 7,746 +10.0% Axis Business Park 234,254 -3.52% Infinite Centre 38,933 +4.83% Wisma Kemajuan 40,632 +4.48% Kayangan Depot 2,609 No Change Axis Plaza 57,439 No Change
Slide 38: Income Growth- Increasing Occupancy Rates for Q3 2011
Income Growth- Increasing Occupancy Rates for Q3 2011 As at 31st Dec, 2010 95.73% As at 30th Sept 2011 96.83% A Comparison to the Market Selangor Office Occupancy Rates Q2. 2011 76.00% Axis Multi-tenanted Buildings Q2. 2011 95.98%
Slide 39: Occupancy Rates – Q3 2011
Occupancy Rates – Q3 2011 Vacant 3.17% As at 30th Sept 2011 we have only 4 of our 27 buildings that carry vacancy below 90%. This is only 3.17% of NLA Occupancy is at Occupied 97.09% with tenancies commencing Oct & 96.83% Nov 2011.
Slide 40: Occupancy Rates – Q3 2011
Occupancy Rates – Q3 2011 Occupancy rates ( as of 30th September 2011) 65.51 Kayangan Depot 62.20 77.20 Wisma Kemajuan 77.20 89.25 Axis Plaza 89.25 89.45 Quattro West 89.45 3Q 2011 (with tenancies commencing Oct & Nov 2011) Occupancy % 3Q 2011
Slide 41: Risk management -Top Ten Tenants -Strong Rental Covenants
Risk management -Top Ten Tenants -Strong Rental Covenants 1. Konsortium Logistik Bhd 2. IDS Logistics Services (M) Sdn Bhd 3. Tesco Stores (M) Sdn Bhd 4. Fuji Xerox Asia Pacific Pte Ltd 5. Tenaga Nasional Bhd 6. Strateq Data Center Sdn Bhd (formerly Kompakar CRC Sdn Bhd) 7. BMW Asia Technology Centr
Slide 42: Risk Management- Keeping Occupancy Levels High in Q3
Risk Management- Keeping Occupancy Levels High in Q3
Slide 43: Risk Management- Keeping a Diverse Portfolio
Risk Management- Keeping a Diverse Portfolio Portfolio Diversification by Type and NLA Portfolio Diversification by Geographical and NLA Kedah Prai Cyberjaya 3% 3% 3% 3% 14% Johor Petaling Jaya 40% 22% 39% 35% Klang 10% Shah Alam 8% 20% Ofiice Office/Industrial Warehouse Retail Warehouse Logistic Li
Slide 44: Risk Profile – Manageable Lease Expiry Profiles
Risk Profile – Manageable Lease Expiry Profiles Year % of % of Rental Year % of % of Rental Year % of % of Rental Income/ Income/ Income/ Property 2011 Total NLA month 2012 Total NLA month 2013 Total NLA month Menara Axis 29,313 0.66 1.43 - - 0.03 74,636 1.68 3.04 Crystal Plaza 9,262 0.21 0.38 12,43
Slide 45: Asset Enhancements Creating Value
Asset Enhancements Creating Value
Slide 46: Crystal Plaza Refurbishment
Crystal Plaza Refurbishment
Slide 47: Crystal Plaza Refurbishment
Crystal Plaza Refurbishment Project Status: Board presentation : 17th January 2011 √ Letter of Intent (waterproofing) : 22nd December 2011 √ Letter of award : 28th February 2011 √ Site Possession by ISG : 21st March 2011 √ Current status as of 14th Oct 2011 : New façade front (facing LRT) and rear (
Slide 48: Axis Business Park – Block B Toilets and Lift Lobbies Refurbishment
Axis Business Park – Block B Toilets and Lift Lobbies Refurbishment Basement 1 – New lift Lobby Basement 2 – New Lift Lobby Basement 1 – New Male Toilet Basement 1 – Male New Urinal, WC and Shower Basement 1 – Male New Cubicle
Slide 49: Axis Business Park – Block B Toilets and Lift Lobbies Refurbishment
Axis Business Park – Block B Toilets and Lift Lobbies Refurbishment Board presentation : 25th July 2011 √ Tendering exercise : 1st August 2011 √ Letter of award : 19th September 2011 √ Site Possession by Main Contractor : 19th September 2011 √ Current status as of 14th Oct 2011 : Basement 1 Lift Lob
Slide 50: NIRO Warehouse Upgrading
NIRO Warehouse Upgrading Before Repainting in progress Front View
Slide 51: Subang Hi-Tech – Existing Site
Subang Hi-Tech – Existing Site
Slide 52: Subang Hi-Tech – Built to Suit for Fonterra
Subang Hi-Tech – Built to Suit for Fonterra The concept follows Fonterra requirement to have a new headquarters built to suit their expansion. The additional investment of RM 2.6 million will enhance yields to 11% p.a. Fonterra will be signed 10 year lease with 3 year step ups in rent
Slide 53: Subang Hi-Tech – Built to Suit for Fonterra
Subang Hi-Tech – Built to Suit for Fonterra Project Status: Board presentation : 25th July 2011 √ Tendering exercise : 3rd Oct 2011 (completed and interview in progress) √ MBSJ submission : 25th August 2011 √ MBSJ approval : 21st October 2011 √ Letter of award : 26th October 2011 Site Possession by
Slide 54: Infinite Centre – existing site
Infinite Centre – existing site
Slide 55: Infinite Centre – New Enhancement
Infinite Centre – New Enhancement Perspective View
Slide 56: Infinite Centre – New Enhancement
Infinite Centre – New Enhancement Project Status: Board presentation : 25th July 2011 √ Architectural drawing preparation : 31st October 2011 (80% drawing completed) MBPJ submission : 1st November 2011 Start tendering : 5th December 2011 Contractors Award : 3rd January 2012 Site Possession : 9th Jan
Slide 57: Wisma Bintang Refurbishment
Wisma Bintang Refurbishment Current Building Complex
Slide 58: Wisma Bintang Refurbishment
Wisma Bintang Refurbishment Perspective View
Slide 59: Wisma Bintang Refurbishment
Wisma Bintang Refurbishment Perspective View
Slide 60: Wisma Bintang Refurbishment
Wisma Bintang Refurbishment Layout View – Overall Site Plan
Slide 61: Thank You
we Thank You
Axis Real Estate Investment Trust — Q3 2011 Earnings Presentation on 6ix