Axis Real Estate Investment Trust · MYX:AXREIT
Axis Real Estate Investment Trust — Q1 2016 Earnings Presentation
70 slides from Axis Real Estate Investment Trust's earnings presentation, Apr 25, 2016
Slide 1: 1Q 2016 Results Presentation
1Q Axis REIT Managers Berhad Results Presentation 2016 25 April 2016
Slide 2: Our Milestones
Our Milestones Assets Under Management RM296 million RM2.16 billion Space Under Management 978,000 sq ft 7,304,854 sq ft Properties 5 38 Valuation Gain since listing RM275,000,000 First REIT to convert into an Islamic REIT First PLC to adopt Cloud Computing First REIT to introduce the
Slide 3: 1Q2016 Highlights
1Q2016 HIGHLIGHTS 3
Slide 4: 1Q2016 Highlights
1Q2016 Highlights RM 2,116,790,000 Investment Properties 4
Slide 5: 1Q2016 Highlights
1Q2016 Highlights Completed the acquisition of 4 industrial properties - Beyonics i-Park Campus Block A, B, C and D for RM61.0 million on 28 January 2016. Portfolio size increased by 4 to a total of 38. Acceptance of a Letter of Offer to acquire a logistics warehouse for RM33.0 million located
Slide 6: 1Q2016 Return Comparatives
1Q2016 Return Comparatives 7.00% 6.40% 6.00% 5.09% 5.00% 3.96% 4.00% 3.65% 3.17% 3.25% 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 mark
Slide 7: 1Q2016 Finance Report
1Q2016 FINANCE REPORT 7
Slide 8: 1Q2016 Summary
1Q2016 Summary 1Q2016 Total Net Income (“Realised”)(RM' 000) 22,169 Income Available for Distribution ("Realised") (RM' 000) 22,583 Earnings per Unit ("EPU") ("Realised") (Sen) 2.02 Income Distribution Declared (RM'000) 22,546 Distribution per Unit ("DPU") (Sen) * 2.05 Number of Investment Propertie
Slide 9: Income Statement 1Q2016 vs 1Q2015
Income Statement 1Q2016 vs 1Q2015 1Q2016 1Q2015 Changes / (RM ‘000) (RM’000) Movement No. of Properties 38 34 +4 Property Income - Note 1 41,075 40,404 + 1.66% Property Expenses - Note 2 (6,537) (6,019) + 8.61% Net Property Income 34,538 34,385 + 0.44% Profit Income / other income 140 215 Non-Proper
Slide 10: Income Statement 1Q2016 vs 1Q2015 Notes
Income Statement 1Q2016 vs 1Q2015 Note 1 – Property Income Increase in property income as compared to last preceding year corresponding quarter 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. Note 2 – Property Expens
Slide 11: Gross Yield of Investment Properties
Gross Yield of Investment Properties Average gross yield = 10.36% Properties Gross yield (%) 20 Bayan Lepas Distribution Centre 9.81% 1 Wisma Kemajuan 18.05% 21 Axis Vista 9.79% 2 FCI Senai 14.47% 22 Bukit Raja Distribution Centre 9.54% 3 Crystal Plaza 14.38% 23 Infinite Centre 9.37% 4 Menara Axis 1
Slide 12: Net Yield of Investment Properties
Net Yield of Investment Properties Average net yield = 8.82% Properties Net yield (%) 20 Axis Vista 8.36% 1 Wisma Kemajuan 14.25% 21 Giant Hypermarket, Sungai Petani 8.28% 2 FCI Senai 13.00% 22 Axis Steel Centre 8.06% 3 BMW Centre PTP 12.46% 23 Seberang Prai Logistic Warehouse 2 7.99% 4 Crystal Plaz
Slide 13: Income Statement
Income Statement Adjusted Income Before Taxation/ Income Available For Distribution: 25 20 15 RM' million 23.75 23.86 22.67 21.87 22.58 10 5 0 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 13
Slide 14: 1Q2016 Income Distribution
1Q2016 Income Distribution 1st Quarter 2016 Income Distribution: 2.05 sen The 2.05 sen DPU represents 99.83% income available for distribution for the period from 1 January 2016 to 31 March 2016. Important dates: Ex-date : 6 May 2016 Entitlement date :10 May 2016 Payment date :16 June 2016 14
Slide 15: 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 1Q 2016. Details are as follows: a) Electable Portion : 1.00 sen which is 48% of the 2.05 sen DPU to be allow for reinvestment
Slide 16: 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 8.01 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 2.02 2.05 2.00 1.00 - 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1 2016 16 Gain on disposal DPU EPU (rea
Slide 17: Statement of Financial Position
Statement of Financial Position 31/03/16 31/12/15 (RM’000) (RM’000) Changes Investment Properties – Note 1 2,116,790 2,048,626 + 68,164 Fixed Assets 3,497 3,602 - 105 Other Assets – Note 2 38,241 89,265 - 51,024 TOTAL ASSETS 2,158,528 2,141,493 + 17,035 Borrowings – Note 3 744,776 731,814 + 12,962 O
Slide 18: 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 RM61.0 million. During the quarter, a total of RM3.642 million was spent for enhancement of the properties on portfolio and RM2.5 million r
Slide 19: 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) 209,816 230,456 308,932 416,609 311,338 548,920 528,004 683,769 731,814 744,776 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 20: 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% 35.4% 34.5% 32.7% 33.4% 33.1% 34.5% 35.0% 34.0% 34.2% 33.9% 32.7% 32.5% 31.8% 33.0% 32.5% 32.8% 31.2% 31.3% 32.6% 31.7% 32.5% 32.5% 31.7% 30.0% 30.0% 29.1% 28.8% 26.8% 27.3% 25.0% 25.
Slide 21: Unitholders’ Capital – Note 4
Unitholders’ Capital – Note 4 2,500.0 2,141.5 2,158.5 2,085.7 2,000.0 1,589.4 1,616.5 1,500.0 1,298.4 RM mil 1,208.9 1,044.7 1,052.3 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 22: Unitholders’ Capital – Note 4
Unitholders’ Capital – Note 4 … resulting in good total returns to unitholders. 320% 297% Total returns on placements 280% 240% 139% 200% 164% 157% 160% 70% 114% 120% 78% 51% 80% 158% 63% 94% 32% 40% 79% 63% 31% 6% 0% -7% IPO @ RM1.25 Placement '08 @ Placement '09 @ Placement '10 @ Placement '11 @ P
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 RM275 million to date. Building Gain /(Loss) RM’000 Building Gain /(Loss) RM’000 Crystal Plaza 44,324 Delfi Warehouse 2,797 Menara Axis 37,5
Slide 24: 1Q2016 Property Report
1Q2016 PROPERTY REPORT 24
Slide 25: Overview
Overview In 1Q 2016, the occupancy rate has held 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. Out of the 26.5%, almost half has been committed for renewal to date. There have been some movements in the portfolio with so
Slide 26: 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 4Q 2015
Slide 27: Key Metrics
Key Metrics As at 31 March 2016, the portfolio has 38 assets comprising 7,304,854 sq. ft. and 139 tenants. 1Q2016 4Q2015 Movement No of properties 38 34 4 Property Income (RM’000) 41,075 39,832 3.12% Property Expenses (RM’000) 6,537 6,004 8.88% Net Property Income (RM’000) 34,538 33,828 2.10% Occupa
Slide 28: Key Metrics
Key Metrics Average Rental Rates: Type of Properties 1Q2016 4Q2015 Movement Office (RM/sq. ft.) 4.68 4.64 + 0.04 Office Industrial (RM/sq. ft.) 2.68 2.72 - 0.04 Manufacturing Facilities (RM/sq. ft.) 1.35 1.33 + 0.02 Warehouse Logistics (RM/sq. ft.) 1.53 1.52 + 0.01 Hypermarket (RM/sq. ft.) 2.36 2.24
Slide 29: Space Under Management (sq. ft.)
Space Under Management (sq. ft.) Space Under Management (sq ft) 8,000,000 7,304,854 7,015,242 7,000,000 6,859,474 6,000,000 5,463,5995,464,124 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 2
Slide 30: Portfolio Occupancy Rate
Portfolio Occupancy Rate As at 31 March 2016, Axis-REIT has only 13 out of 38 properties that carry vacancy. Occupancy Rate 25 properties enjoy 100% occupancy. Vacant Occupancy 8.04% As at 31 March 2016 91.96% Vacancy As at 31 March 2016 8.04% Space to be let out 587,130 sq. ft. Occupancy Multi-tena
Slide 31: Occupancy Rates by Property
Occupancy Rates by Property as at 31 March 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 62.90% 24 Seberang Prai Log
Slide 32: Properties Below 90% Occupancy
Properties Below 90% Occupancy Occupancy rates of properties below 90% as at 31 March 2016 Fonterra HQ 84.96 Quattro West 84.18 Crystal Plaza 81.33 Wisma Academy 81.03 Axis Tech Centre 81.01 Infinite Centre 68.08 Axis Business Park 62.90 Axis Eureka 59.08 Axis PDI - Axis Business Campus - Note: Vaca
Slide 33: Diversified Portfolio
Diversified Portfolio Portfolio Diversification by Type and NLA 8% 22% 21% 5% 44% Office Office/ Industrial Hypermarkets Warehouse Logistic Manufacturing Facilities 33
Slide 34: Diversified Portfolio
Diversified Portfolio Portfolio Diversification by Industry Sector and NLA Healthcare & Others 0.48% Lifestyle 3.66% Consumer Products 4.21% Vacant, Services 7.24% 5.27% Retail 5.86% Engineering/ IT/Electronics Building Materials 10.25% 21.95% Automotive 2.85% Financial Services 1.37% Logistics 36.8
Slide 35: Portfolio Location
Portfolio Location Portfolio Diversification by Geographical Location Petaling Jaya 27.29% Johor 27.06% Shah Alam 22.09% Penang 10.24% Klang 5.82% Nilai 3.99% Kedah 1.89% Cyberjaya 1.61% 35
Slide 36: Tenancy Mix
Tenancy Mix Single Tenant vs Multi-Tenants 3% 39% 58% Single Tenant Multi Tenants Vacant 36
Slide 37: Lease Expiry Profile – Looking Forward
Lease Expiry Profile – Looking Forward Year Area up % of % of for renewal Total NLA Rental Income 2016 1,938,654 sq. ft. 26.54% 28.85% 2017 1,179.585 sq. ft. 16.15% 18.76% 2018 703,941 sq. ft. 9.64% 9.73% 37
Slide 38: Lease Expiry Profile – Looking Forward
Lease Expiry Profile – Looking Forward Year % of % of Rental Year % of % of Rental Year % of % of Rental Total Income/ Income/ Income/ Property 2016 NLA month 2017 Total NLA month 2018 Total NLA month Menara Axis 103,019 1.41 3.24 22,073 0.30 1.09 - - - Crystal Plaza 120,122 1.64 3.76 11,153 0.15 0.
Slide 39: Positive Rent Reversions
Positive Rent Reversions Space Renegotiated % Rent Properties (sq. ft.) Movement Menara Axis 60,987 +4.50% Crystal Plaza -* +8.45% Axis Business Park -* +33.33% Infinite Centre -* +7.14% Wisma Kemajuan 31,005 +0.44% Quattro West 9,349 +0.33% Axis Technology Centre 41,182 +0.00% Wisma Academy Parcel
Slide 40: Weighted Average Lease Expiry (WALE)
Weighted Average Lease Expiry (WALE) The WALE for the portfolio is: By Year 1Q 2016 4Q 2015 By NLA 4.32 3.89 By Rental 4.41 3.99 40
Slide 41: Portfolio Efficiency (PE)
Portfolio Efficiency (PE) The Portfolio Efficiency Ratio = Operating Cost for the Portfolio / Gross Property Income The Efficiency Ratio in 1Q 2016 has increased by 1.36% compared to 4Q 2015 due to increase in maintenance cost. 1Q 2016 4Q 2015 15.92% 14.56% 41
Slide 42: Top 10 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 Schenker Logistics (Malaysia) Sdn. Bhd. 6 Tesco Stores (Malaysia) Sdn. Bhd. 7 Strateq Data Centre Sdn. Bhd. 8 DHL Proper
Slide 43: 1Q2016 Asset Enhancements
1Q2016 ASSET ENHANCEMENTS 43
Slide 44: Menara Axis – Enhancement
Menara Axis – Enhancement Handicap-friendly & Loading Ramp Drop-Off Area Columns COMPLETED 44 COMPLETED
Slide 45: Menara Axis – Enhancement
Menara Axis – Enhancement Ground Floor Lobby Columns COMPLETED 45
Slide 46: Menara Axis – Enhancement
Menara Axis – Enhancement Penthouse Lobby With Additional Lift Access 46 COMPLETED
Slide 47: Menara Axis – Enhancement
Menara Axis – Enhancement Typical Toilets On All Floors 47 COMPLETED
Slide 48: Menara Axis – Enhancement
Menara Axis – Enhancement Male & Female Surau 48 COMPLETED
Slide 49: Menara Axis – Enhancement
Menara Axis – Enhancement Dome Painting COMPLETED 49
Slide 50: Menara Axis – Enhancement
Menara Axis – Enhancement Lifts Upgrading 50 ONGOING
Slide 51: Wisma Academy – Enhancement
Wisma Academy – Enhancement Lifts Upgrading ONGOING 51
Slide 52: Wisma Academy – Enhancement
Wisma Academy – Enhancement Carpark Lighting Upgrade ONGOING 52
Slide 53: Axis PDI Centre – Proposed Enhancement (Before)
Axis PDI Centre – Proposed Enhancement (Before) 50 acre site 53
Slide 54: Axis PDI Centre – Proposed Enhancement (After)
Axis PDI Centre – Proposed Enhancement (After) A collaboration project with the Axis Group on the enhancement. 54
Slide 55: Axis PDI Centre – Proposed Enhancement
Axis PDI Centre – Proposed Enhancement Lebuhraya Shah Alam Proposed Johan Setia LRT Station GPS Coordinates : 2.949773, 101.472042 Subject Property Caltex Sijangkang Lebuhraya Lembah Klang Selatan The existing site is centrally located in the heart of the Klang Valley, enjoying a wide frontage onto
Slide 56: Sustainability Initiatives – Up To 1Q2016
Sustainability Initiatives – Up To 1Q2016 In the process of drafting a holistic sustainability plan encompassing energy efficient, water conservation and solid waste management – dubbed “GREEN WITH ENVY”. Secured lease of 30,720 sq. ft. of roof space for installing solar panels at Axis Business
Slide 57: 1Q2016 Investments Report
1Q2016 INVESTMENTS REPORT 57
Slide 58: 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
Slide 59: Ongoing Acquisitions
Ongoing Acquisitions Logistics Warehouse – Pasir Gudang, Johor Land Area : Approx. 6 acres Land Tenure : Leasehold Occupancy : 100% Purchase Price : RM33 million WALE : 5 years
Slide 60: Ongoing Acquisitions
Ongoing Acquisitions Manufacturing Facility – Rawang, Selangor Land Area : Approx. 15.25 acres Land Tenure : Freehold Occupancy : 100% Purchase Price : RM42 million WALE : 15 years
Slide 61: Prospective Acquisition Targets
Prospective Acquisition Targets The Manager is currently undergoing assessments for the following assets as future acquisition targets: 1. Industrial facility in Seberang Prai, Penang for RM23million 2. Two Industrial facilities in Meru and one industrial facility in Balakong, Selangor for a total o
Slide 62: 1Q2016 Investor Relations Report
1Q2016 INVESTOR RELATIONS REPORT 62
Slide 63: Unit Price Performance YTD 2016
Unit Price Performance YTD 2016 AXREIT: 1 Jan 2014 – 31 Mar 2016 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 3.45 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 1.61 1.64 1.61 1.55 1.55 1.50 1.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr M
Slide 64: Unit Price Movement YTD 2016
Unit Price Movement YTD 2016 140% AXREIT vs KLCI: 1 Jan 2013 – 31 Mar 2016 130% 120% 110% 100% 90% KLCI AXREIT 80% Price Statistics 1Q 2016: Unit Price @ 31 Mar 2016 RM1.61 Highest Price YTD: January 2016 RM1.63 4Q 2015: Unit Price @ 31 Dec 2015 RM1.64 Lowest Price YTD: March 2016 RM1.50 64
Slide 65: Volume Movement YTD 2016
Volume Movement YTD 2016 AXREIT: 1 Jan 2014 – 31 Mar 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 12,995,800 11,271,000 11,143,400
Slide 66: Top 10 Unitholders YTD 2016
Top 10 Unitholders YTD 2016 1 AMANAH SAHAM BUMIPUTERA 11.68% 2 EMPLOYEES PROVIDENT FUND 10.27% 3 TEW PENG HWEE @ TEOH PENG HWEE 5.04% 4 LEMBAGA TABUNG HAJI 5.00% 5 ALEX LEE LAO 4.52% 6 PERMODALAN NASIONAL BERHAD 3.72% 7 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 3.09% 8 AMANAH SAHAM MALAYSIA 2.48% 9 EX
Slide 67: Analysis of >2 million Unitholders
Analysis of >2 million Unitholders Top 5 increases in unitholdings: Last Quarter Increase Employees Provident Fund 0.7% Lembaga Tabung Haji 0.5% Etiqa Takaful Berhad 0.3% CIMB Islamic Trustee Berhad – Kenanga Syariah Growth Fund 0.2% Abas Carl Gunnar bin Abdullah 0.1% Top 5 decreases in unitholdings
Slide 68: Investor Visibility and Liquidity YTD 2016
Investor Visibility and Liquidity YTD 2016 No. of CDS Accounts 4,000 3,790 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 Quarter-on-quarter, total number of CDS accou
Slide 69: Analyst Coverage 1Q 2016
Analyst Coverage 1Q 2016 Coverage Rating Target Price (RM) Published Date AffinHwang Hold 1.65 19 Jan 2016 Hong Leong IB Hold 1.60 4 Mar 2016 KAF Hold 1.70 17 Feb 2016 Maybank Hold 1.55 19 Jan 2016 MIDF Hold 1.68 19 Jan 2016 S&P Capital IQ 1.66 29 Mar 2016 Consensus Recommendation Movement 1Q 2016 4
Slide 70: Thank You
THANK YOU A |S REAL ESTATE INVESTMENT TRUST
Axis Real Estate Investment Trust — Q1 2016 Earnings Presentation on 6ix