2Q Axis REIT Managers Berhad Results Presentation 2016 5 August - - PowerPoint PPT Presentation

SLIDE 1

Axis REIT Managers Berhad Results Presentation

5 August 2016

2Q

2016

SLIDE 2

Our Milestones

2

 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 into an Islamic REIT  First REIT to introduce the Income Distribution Reinvestment Plan  First REIT to implement Unit Split

SLIDE 3

3

1H2016 HIGHLIGHTS

SLIDE 4

1H2016 Highlights

4

RM 2,133,481,000

Investment Properties

SLIDE 5

1H2016 Highlights

5

 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 consideration of RM33.0mil on 23 May 2016.  Successfully signed the Sale & Purchase Agreement for the acquisition of Scomi facility at Rawang, Selangor for a cash consideration of RM42.0 million

• n 1 August 2016.

 A total of RM16.277 million revaluation gain has been recorded for 1H2016.  Declared 4.10 sen DPU for 1H2016.  Successfully implemented the Income Distribution Reinvestment Plan (IDRP) in conjunction with the payment of the 1st Interim 2016 DPU with a success rate of 79%.  Currently trades at a premium of 36% to NAV.

SLIDE 6

6

* (Based on annualised DPU from operations + movement in market price)/opening market price as at 1 January 2016)

1H2016 Return Comparatives

0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% Axis-REIT Total Return * Axis-REIT Distribution Yield EPF Dividend Return 10-yr MGS 12 Months FD Rate OPR 8.66% 4.82% 6.40% 3.90% 3.63% 3.00%

(Avg.)

SLIDE 7

1H2016 FINANCE REPORT

SLIDE 8

8

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 Properties 38 Units in Circulation (Units) 1,105,173,591 Assets Under Management (RM'000) 2,183,609 Total Financing (RM'000) 744,739 Gearing Ratio 34.11% Total Unitholder's Fund (RM'000) 1,377,567 Market Capitalization (RM'000) 1,878,795 Net Asset Value per Unit (RM) 1.2465 IPO Retail Unit Price (RM) (restated from RM1.25) 0.625 Unit Price as at 30 June 2016 (RM) 1.70 Number of Unitholders 3,718

* Second interim income distribution to be paid on 9 September 2016

SLIDE 9

Income Statement 2Q2016 vs 2Q2015

9

2Q2016 (RM ‘000) 2Q2015 (RM’000) Changes / 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 (4,572) (4,342) + 5.30% Islamic Financing Cost (7,954) (7,532) + 5.60% Net Income 22,411 23,566

• 4.90%

DPU (sen) 2.05 2.15*

• 4.65%
• No. of units in issuance

1,105,173,591 547,758,040

Note: The above financials excludes unrealised earnings due to changes in fair value of investment properties/tenants’ deposits and derivative liability. * Restated from 4.30sen to reflect the 1 to 2 Unit Split

SLIDE 10

Income Statement 1H2016 vs 1H2015

10

1H2016 (RM ‘000) 1H2015 (RM’000) Changes / 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-Property Expenses - Note 3

(9,290) (9,219) + 0.77%

Islamic Financing Cost - Note 4

(15,745) (14,748) + 6.76%

Net Income

44,580 46,073

• 3.24%

DPU (sen) – Note 5

4.10 4.20 *

• No. of units in issuance – Note 5

1,105,173,591 547,758,040

Note: The above financials excludes unrealised earnings due to changes in fair value of investment properties/tenants’ deposits and derivative liability. * Restated from 8.40 sen to reflect the 1 to 2 Unit Split

SLIDE 11

11

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 of rental from Axis PDI Centre since 1 October 2015. Note 2 – Property Expenses Increase in property expenses is mainly due to the increase in building maintenance expenses and also the new properties added into the portfolio during the period. Note 3 – Non-Property Expenses The MER of the Fund has dropped to 1.27% of NAV, as compared to 1.31% for 1H2015 resulted from the increase in NAV. Note 4 – Islamic Financing Cost The increase in financing cost is due to the utilisation of financing facility to complete the Beyonics i-Park Block A, B, C and D acquisitions. 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.

SLIDE 12

Gross Yield of Investment Properties

12

Average YTD gross yield = 10.04%

Properties Gross yield (%) 1 Wisma Kemajuan

18.34%

2 FCI Senai

14.47%

3 Crystal Plaza

14.37%

4 Menara Axis

14.31%

5 BMW Centre PTP

13.70%

6 Delfi Warehouse

13.48%

7 D8 Logistics Warehouse

12.04%

8 Strateq Data Centre

11.91%

9 Niro Warehouse

11.42%

10 Fonterra HQ

11.33%

11 Seberang Prai Logistic Warehouse 3

10.63%

12 Wisma Academy Parcel

10.21%

13 Emerson Industrial Facility Nilai

9.96%

14 Bayan Lepas Distribution Centre

9.83%

15 Axis Shah Alam DC 1

9.74%

16 Quattro West

9.69%

17 Seberang Prai Logistic Warehouse 1

9.53%

18 Bukit Raja Distribution Centre

9.52%

19 Infinite Centre

9.30%

20 Giant Hypermarket, Sungai Petani

9.27%

21 Axis Vista

9.21%

22 Seberang Prai Logistic Warehouse 2

9.08%

23 Axis Steel Centre

8.91%

24 Axis Business Park

8.85%

25 Tesco Bukit Indah

8.67%

26 Axis Shah Alam DC 3

8.19%

27 Beyonics i-Park Campus Block C

7.89%

28 Beyonics i-Park Campus Block B

7.87%

29 Beyonics i-Park Campus Block A

7.87%

30 Beyonics i-Park Campus Block D

7.86%

31 Axis MRO Hub

7.82%

32 Axis Shah Alam DC 2

7.73%

33 Axis Eureka

7.51%

34 Axis Technology Centre

7.46%

35 Axis Steel Centre@ SiLC

7.46%

36 The Annex

6.20%

37 Axis PDI Centre

• 38 Axis Business Campus

SLIDE 13

Net Yield of Investment Properties

13

Properties Net yield (%) 1 Wisma Kemajuan

14.40%

2 FCI Senai

13.04%

3 BMW Centre PTP

12.42%

4 Menara Axis

11.68%

5 Crystal Plaza

11.66%

6 Strateq Data Centre

11.18%

7 D8 Logistics Warehouse

11.11%

8 Niro Warehouse

10.41%

9 Fonterra HQ

9.75%

10 Delfi Warehouse

9.43%

11 Seberang Prai Logistic Warehouse 3

9.33%

12 Emerson Industrial Facility Nilai

9.05%

13 Seberang Prai Logistic Warehouse 1

9.01%

14 Bukit Raja Distribution Centre

8.96%

15 Axis Shah Alam DC 1

8.90%

16 Bayan Lepas Distribution Centre

8.82%

17 Giant Hypermarket, Sungai Petani

8.48%

18 Seberang Prai Logistic Warehouse 2

8.34%

19 Axis Steel Centre

8.08%

20 Axis Vista

8.01%

21 Tesco Bukit Indah

7.58%

22 Beyonics i-Park Campus Block D

7.19%

23 Beyonics i-Park Campus Block A

7.17%

24 Beyonics i-Park Campus Block B

7.17%

25 Beyonics i-Park Campus Block C

7.16%

26 Axis MRO Hub

7.14%

27 Axis Shah Alam DC 3

7.13%

28 Axis Steel Centre@ SiLC

7.09%

29 Wisma Academy Parcel

7.01%

30 Axis Shah Alam DC 2

6.95%

31 Quattro West

6.86%

32 Infinite Centre

6.79%

33 Axis Business Park

6.44%

34 Axis Technology Centre

5.61%

35 Axis Eureka

4.63%

36 The Annex

4.59%

37 Axis PDI Centre

• 38 Axis Business Campus
• Average YTD net yield = 8.57%

SLIDE 14

Income Statement

5 10 15 20 25 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 22.67 23.75 23.86 21.87 22.58 22.69 RM' million

Adjusted Income Before Taxation/ Income Available For Distribution

SLIDE 15

2Q2016 Income Distribution

15

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 September 2016

SLIDE 16

Implementation of Income Distribution Reinvestment Plan (IDRP)

16

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 Subscription rate : 79% Net amount converted into new units : RM 8.1 million

• No. of new units

: 5,380,523

SLIDE 17

Summary of Realised EPU and DPU

17

6.48 6.82 7.64 7.90 8.00 8.50 8.65 9.25 8.70 8.40 4.10 0.10 0.65 1.18 6.41 6.80 7.73 7.89 8.01 8.64 9.30 9.23 8.71 8.35 4.05

• 1.00

2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1H 2016 Gain on disposal DPU EPU (realised)

SLIDE 18

Statement of Financial Position

18

30/06/16 (RM’000) 31/12/15 (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 Other Payables 61,303 57,194 + 4,109 TOTAL LIABILITIES 806,042 789,008 + 17,034 NET ASSET VALUE (“NAV”) 1,377,567 1,352,485 + 25,082 Unitholders' Capital – Note 4 1,060,326 1,052,272 + 8,054 Undistributed Distributable Income 19,074 19,036 + 38 Non-Distributable Reserve – Note 5 298,167 281,177 + 16,990 TOTAL UNITHOLDERS' FUND 1,377,567 1,352,485 + 25,082 GEARING 34.11% 34.17% NAV/unit (RM) 1.2465 1.2298

• No. of units in issuance

1,105,173,591 1,099,793,068

SLIDE 19

Statement of Financial Position

19

Note 1 – Investment Properties The acquisition of Beyonics i-Park Campus Block A, B, C and D was completed

• n 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 revaluation gain has been recorded. Note 2 – Other assets The average collection of trade receivables is as shown below: For Period Ended

• Avg. Collection Period

(in days) 31-Dec-15 9 31-Mar-16 9 30-Jun-16 2

SLIDE 20

Statement of Financial Position – Note 3 Borrowings

20

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 2,085,883 2,141,493 2,183,609 Gearing 36.06% 31.73% 34.03% 34.46% 23.98% 34.54% 32.66% 32.78% 34.17% 34.11% Effective Profit Rate 4.39% 4.28% 4.11% 4.48% 4.66% 4.58% 4.38% 4.24% 4.28% 4.21% Percentage of short term borrowings- Maturity < 1 Year 100% 100% 47% 48% 52% 62% 50% 61% 55% 56% Percentage of medium/ long term borrowings (maturity more than 1 years and less than 7 years)

• 53%

52% 48% 38% 50% 39% 45% 44% Percentage of floating rate borrowings 100% 100% 47% 48% 52% 62% 40% 47% 50% 51% Percentage of fixed rate borrowings

• 53%

52% 48% 38% 60% 53% 50% 49% Total unencumbered assets 8 13 12 11 12 6 5 5 10 14 Percentage of unencumbered assets/total assets 34% 44% 52% 42% 44% 19% 16% 21% 26% 29% Financing cost cover 5.6 5.5 4.8 4.1 3.8 4.6 4.5 4.5 4.1 3.8

SLIDE 21

Statement of Financial Position Gearing Levels

21 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 14.0% 25.0% 23.7% 21.4% 23.5% 22.4% 31.2% 36.1% 26.8% 29.1% 31.8% 31.7% 33.0% 33.1% 27.3% 34.0% 35.4% 36.0% 31.3% 34.5% 36.0% 37.5% 38.2% 24.0% 28.8% 30.0% 34.2% 34.5% 33.9% 32.6% 32.7% 32.7% 32.5% 31.7% 33.4% 32.8% 32.5% 32.5% 32.5% 34.2% 34.5% 34.1%

Placements Undertaken

SLIDE 22

Unitholders’ Capital – Note 4

22

• 500.0

1,000.0 1,500.0 2,000.0 2,500.0

31-Dec-06 31-Dec-07 31-Dec-08 31-Dec-09 31-Dec-10 31-Dec-11 31-Dec-12 31-Dec-13 31-Dec-14 31-Dec-15 30-Jun-16

411.8 581.8 726.4 907.7 1,208.9 1,298.4 1,589.4 1,616.5 2,085.7 2,141.5 2,183.6 234.9 234.9 323.3 406.9 540.3 728.2 735.4 751.0 1,044.7 1,052.3 1,377.6

RM mil

Total Asset Unitholders' Capital

SLIDE 23

Statement of Financial Position – Note 5 Non-distributable Reserve

23

Non-distributable reserve mainly comprises the favorable gain in fair value of approximately RM289 million to date.

Building Gain /(Loss) RM’000 Crystal Plaza 44,324 Menara Axis 37,591 Bukit Raja Distribution Centre 26,073 Wisma Kemajuan 25,101 Axis Vista 22,251 Axis Business Park 20,344 Tesco Bukit Indah 15,076 Axis Business Campus 14,807 Strateq Data Centre 10,471 Axis Shah Alam DC 1 9,853 Giant Hypermarket, Sungei Petani 7,027 Infinite Centre 6,763 Quattro West 5,924 The Annex 5,630 Fonterra HQ 5,572 Wisma Academy Parcel 5,041 FCI Senai 4,307 Axis Technology Centre 3,745 Building Gain /(Loss) RM’000 Axis Steel Centre 3,727 Delfi Warehouse 2,797 Emerson Industrial Facility Nilai 2,693 Seberang Prai Logistic Warehouse 1 2,678 Niro Warehouse 2,466 D8 Logistics Warehouse 2,252 BMW Centre PTP 2,217 Seberang Prai Logistic Warehouse 3 1,728 Bayan Lepas Distribution Centre 1,432 Seberang Prai Logistic Warehouse 2 815 Axis Eureka 764 Axis Shah Alam DC 2 219 Axis MRO Hub (375) Axis Steel Centre@ SiLC (449) Axis PDI Centre (1,687) Axis Shah Alam DC 3 (2,287)

SLIDE 24

Unitholders’ Capital – Note 4

24

… resulting in good total returns to unitholders.

172% 89% 105% 73% 39%

• 1%

142% 81% 72% 53% 34% 8% 314% 170% 177% 126% 73%

• 40%

0% 40% 80% 120% 160% 200% 240% 280% 320% 360% IPO @ RM1.25 Placement '08 @ RM1.80 Placement '09 @ RM1.66 Placement '10 @ RM1.97 Placement '11 @ RM2.45 Placement '14 @ RM3.45

Total returns on placements

Capital return Distribution return

SLIDE 25

2Q2016 PROPERTY REPORT

SLIDE 26

26

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 balance 29%. For the 1st half of 2016, we have accepted new tenancies from Alcon Laboratories, Jeunesse, 7-Eleven and existing tenants such as Fuji Xerox and Montreal Trading Sdn. Bhd. have expanded and increased their space with us. Our existing tenants continue to be supportive with expanding their space within our buildings. The office properties within the portfolio are well located, supported by amenities and public transportation, will continue to attract both new and existing tenants, maintaining their high occupancy rates and competitive rentals. Our office buildings in Petaling Jaya and Cyberjaya which are in the affordable rental category continues to appeal to companies that are expanding or relocating from high rental rates. Second half of 2016 remains challenging for the office leasing market with new supply continuing to outstrip demand as well as impact from the soft economic condition. Our exposure to pure office properties is limited to 8% of our entire portfolio. As such, this

• versupply factor has minimal impact on the Fund and we continue to enjoy an average

81% occupancy for our office properties.

SLIDE 27

27

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, the redevelopment of Axis PDI Centre into a mega distribution centre is in progress now to provide space to capture the future demand of industrial space. The vacant spaces in the portfolio currently stands at 604,017 sq. ft. as at 30 June 2016. Our leasing team continues to work hard to secure new tenants to fill up the voids in our properties within the portfolio. By filling the current voids, we expect to add as much as 1.65 sen to the annual DPU.

SLIDE 28

28

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 Property Income (RM’000) 38 41,615 38 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% Occupancy 92% 92%

SLIDE 29

29

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

• Key Metrics

Average Rental Rates:

SLIDE 30

30

Space Under Management (sq. ft.)

1,186,052 1,656,943 2,175,522 2,858,121 3,679,796 4,288,054 4,449,580 5,463,599 5,464,124 6,859,474 7,015,242 7,303,630

• 1,000,000

2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q2 2016 ( sq ft)

SLIDE 31

31

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 As at 30 June 2016 91.73% Vacancy As at 30 June 2016 8.27% Space to be let out 604,017 sq. ft. Occupancy Multi-tenants properties 84.06% Single tenant properties 98.38% Unbilled space income RM18.2 million per year Potential annual DPU upside 1.65 sen per unit/year

Occupied 91.73% Vacant 8.27%

Occupancy Rate

SLIDE 32

32

Occupancy Rates by Property as at 30 June 2016

1 Menara Axis 93.74% 2 Crystal Plaza 81.33% 3 Quattro West 84.18% 4 Axis Eureka 59.08% 5 Axis Business Park 65.93% 6 Infinite Centre 68.08% 7 Wisma Kemajuan 100.00% 8 Axis Business Campus

• 9

Strateq Data Centre 100.00% 10 Fonterra HQ 84.96% 11 Axis Vista 65.31% 12 Axis Tech Centre 81.01% 13 Wisma Academy Parcel 81.87% 14 The Annex 100.00% 15 Giant Hypermarket Sg. Petani 100.00% 16 Tesco Bukit Indah 100.00% 17 Axis Shah Alam DC 1 100.00% 18 BMW Centre PTP 100.00% 19 Niro Warehouse 100.00% 20 Delfi Warehouse 100.00% 21 Axis Steel Centre 100.00% 22 Bukit Raja Distribution Centre 100.00% 23 Seberang Prai Logistic Warehouse 1 100.00% 24 Seberang Prai Logistic Warehouse 2 100.00% 25 Axis PDI Centre

• 26

D8 Logistics Warehouse 100.00% 27 FCI Senai 100.00% 28 Bayan Lepas Distribution Centre 100.00% 29 Seberang Prai Logistic Warehouse 3 100.00% 30 Emerson Industrial Facility Nilai 100.00% 31 Axis Shah Alam DC 3 100.00% 32 Axis MRO Hub 100.00% 33 Axis Steel Centre @ SiLC 100.00% 34 Axis Shah Alam DC 2 100.00% 35 Beyonics I-Park Campus Block A 100.00% 36 Beyonics i-Park Campus Block B 100.00% 37 Beyonics i-Park Campus Block C 100.00% 38 Beyonics i-Park Campus Block D 100.00%

SLIDE 33

33

Properties Below 90% Occupancy

Occupancy rates of properties below 90% as at 30 June 2016 Note: Vacant space in Fonterra HQ is built for their future expansion, Axis PDI is vacant for re-development initiatives.

59.08% 65.31% 65.93% 68.08% 81.01% 81.33% 81.87% 84.18% 84.96% Axis Business Campus Axis PDI Axis Eureka Axis Vista Axis Business Park Infinite Centre Axis Tech Centre Crystal Plaza Wisma Academy Quattro West Fonterra HQ

SLIDE 34

34

Diversified Portfolio

8% 21% 5% 44% 22% Portfolio Diversification by Type and NLA Office Office/ Industrial Hypermarkets Warehouse Logistic Manufacturing Facilities

SLIDE 35

35

Diversified Portfolio

Portfolio Diversification by Industry Sector and NLA

Services 6% Healthcare & Lifestyle 4% Engineering/Buildi ng Materials 22% Financial Services 1% Logistics 36% Automotive 2% IT/Electronics 10% Retail 6% Consumer Products 4% Others 1% Vacant 8%

SLIDE 36

36

Portfolio Location

1.61% 1.89% 3.99% 5.82% 10.25% 22.10% 27.07% 27.28% Cyberjaya Kedah Nilai Klang Penang Shah Alam Johor Petaling Jaya

Portfolio Diversification by Geographical Location

SLIDE 37

37

Tenancy Mix

58% 39% 3% Single Tenant vs Multi-Tenants

Single Tenant Multi Tenants Vacant

SLIDE 38

38

Lease Expiry Profile – Looking Forward

Year Area up for renewal % of Total NLA % of 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%

SLIDE 39

39

Lease Expiry Profile – Looking Forward

Year % of % of Rental Year % of % of Rental Year % of % of Rental Property 2Q2016 Total NLA Income/ month 2017 Total NLA Income/ month 2018 Total NLA Income/ 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 0.32 - - - Axis Business Park 70,721 0.97 1.50 153,236 2.10 3.39 17,395 0.24 0.34 Infinite Centre 51,145 0.70 0.99 30,383 0.42 0.45 21,096 0.29 0.37 Wisma Kemajuan 129,279 1.77 2.28 9,583 0.13 0.25 51,604 0.71 0.95 Axis Vista 40,937 0.56 0.70 77,080 1.06 1.22 - - - Quattro West 61,474 0.84 2.03 17,422 0.24 0.56 18,160 0.25 0.52 Axis Technology Centre 61,234 0.84 0.92 34,020 0.47 0.38 61,817 0.85 1.05 Axis Eureka 15,235 0.21 0.50 54,259 0.74 1.55 - - - Wisma Academy Parcel 69,613 0.95 1.33 50,741 0.69 1.04 81,628 1.12 1.47 The Annex 45,400 0.62 0.50 2,354 0.03 0.01 - - - Emerson Industrial Facility Nilai 291,642 3.99 1.61 - - - - - - Axis Steel Centre

• - - 366,839 5.02 3.49 - - -

Bayan Lepas Dist Centre

• - - 205,151 2.81 2.95 - - -

Seberang Prai Logistic Waehouse 3 395,225 5.41 3.99 - - - - - - Fontera HQ 600 0.01 0.01 - - - - - - BMW

• - - 161,474 2.21 2.31 - - -

Axis PDI Centre

• - - - - - - - -

Axis Shah Alam DC 1

• - - - - - - - -

Axis Shah Alam DC 2

• -
• 164,400 2.25 1.89

D8, PTP

• -
• 171,000 2.34 2.21

FCI Senai

• - - - - - 136,619 1.87 1.13

Delfi Warehouse 130,743 1.79 1.03 - - - - - - Axis Shah Alam DC 3 362,167 4.96 4.38

• - - - -

1,948,792 26.68 28.73 1,195,768 16.37 19.01 723,719 9.91 9.93

SLIDE 40

40

Positive Rent Reversions

* Telco antenna on building roof

Properties Space Renegotiated (sq. ft.) % Rent 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 15,235 +6.52% Wisma Academy Parcel 28,622 +1.07% Emerson 291,642 +8.03% SPLW 3 395,225 No change Fonterra HQ 600 +5.42% Total Pre-negotiated Rent Step Up 1,674,098 +4.62% 3.82% positive rental reversion in 2Q2016

SLIDE 41

41

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

SLIDE 42

42

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%

SLIDE 43

43

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 Properties (Malaysia) Sdn. Bhd. 9 GCH Retail (Malaysia) Sdn. Bhd. 10 SR Technics Malaysia Sdn Bhd The top ten tenants account for 53% of the total revenue of the Trust.

SLIDE 44

2Q2016 ASSET ENHANCEMENTS

SLIDE 45

Enhancements To Date

45

Menara Axis: Handicap-friendly Loading Ramp, Drop-Off Area Columns, Ground Floor Lobby Columns, Typical Toilets on All Floors Wisma Academy: Lifts Upgrading, Carpark Lighting Upgrading

SLIDE 46

Axis PDI Centre – Proposed Development (Before)

50 acre site

46

SLIDE 47

Axis PDI Centre – Proposed Development (After)

47

SLIDE 48

Axis PDI Centre – Proposed Development

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 LRT3 Johan Setia LRT Station.

Lebuhraya Shah Alam Lebuhraya Lembah Klang Selatan Subject Property

Proposed Johan Setia LRT Station 48

SLIDE 49

2Q2016 INVESTMENTS REPORT

SLIDE 50

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

Completed Acquisitions

50

SLIDE 51

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

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

Ongoing Acquisitions

52

SLIDE 53

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 Seberang Prai, Penang RM34 million
• 4. Industrial facility in Kulim, Kedah for RM20 million
• 5. Industrial facility in Seberang Prai, Penang for RM55 million

Total Estimated Value of RM188 million

53

SLIDE 54

2Q2016 INVESTOR RELATIONS REPORT

SLIDE 55

Unit Price Performance YTD 2016

55

AXREIT: 1 Jan 2014 – 30 Jun 2016

2.85 3.09 3.38 3.50 3.37 3.31 3.55 3.54 3.62 3.69 3.55 3.62 3.58 3.69 3.53 3.62 3.53 3.45 3.34 3.27 1.69 1.65 1.61 1.64 1.55 1.55 1.61 1.66 1.70 1.70 1.00 1.50 2.00 2.50 3.00 3.50 4.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Pre-Unit Split Price Post-Unit Split Price

SLIDE 56

Unit Price Movement YTD 2016

56

Price Statistics AXREIT vs KLCI: 1 Jan 2013 – 30 Jun 2016

2Q2016: Unit Price @ 30 Jun 2016 RM1.70 1Q2016: Unit Price @ 31 Mar 2015 RM1.61 Highest Price YTD: June 2016 RM1.73 Lowest Price YTD: March 2016 RM1.50

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… 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 1/10/2… 1/11/2… 1/12/2… 1/1/2015 1/2/2015 1/3/2015 1/4/2015 1/5/2015 1/6/2015 1/7/2015 1/8/2015 1/9/2015 1/10/2… 1/11/2… 1/12/2… 1/1/2016 1/2/2016 1/3/2016 1/4/2016 1/5/2016 1/6/2016 KLCI AXREIT

SLIDE 57

Volume Movement YTD 2016

57

Volume Statistics AXREIT: 1 Jan 2014 – 30 Jun 2016

Average Monthly Volume 2016 11,158,717 Highest Monthly Volume: March 2016 32,708,200 Lowest Monthly Volume: February 2016 3,032,900

33,826,000 27,806,000 18,616,000 9,489,200 11,271,000 8,030,800 8,638,200 11,143,400 9,109,200 15,849,600 9,349,000 21,092,600 40,208,000 12,995,800 27,347,800 21,028,800 11,328,600 23,451,400 39,783,200 22,491,600 9,712,000 8,930,700 4,370,900 8,875,800 6,433,500 3,032,900 32,708,200 7,690,600 3,928,000 13,159,100

• 5,000,000

10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

SLIDE 58

Top 10 Unitholders YTD 2016

58

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 INVESTMENTS BERHAD 2.47% 9 AMANAH SAHAM MALAYSIA 2.39% 10 AMANAH SAHAM WAWASAN 2020 2.18% Holdings Breakdown Units Held 2Q2016 Units Held 1Q2016 Q-on-Q Change Top 5 Unitholders 37.23% 36.51% 0.72% Top 10 Unitholders 50.48% 50.31% 0.17% Unitholders with > 2 million unitholdings 87.37% 87.01% 0.36%

SLIDE 59

Analysis of >2 million Unitholders

59

Top 5 increases in unitholdings: Top 5 decreases 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% Last Quarter Decrease ETIQA TAKAFUL BERHAD

• 0.6%

KUMPULAN WANG PERSARAAN (DIPERBADANKAN)

• 0.4%

EXEMPT AN FOR BNP PARIBAS SECURITIES SERVICES (CLT ASSET-AIFM)

• 0.3%

SIX SIS FOR B&I PACIFIC REAL ESTATE SECURITIES FUND

• 0.2%

PERMODALAN NASIONAL BERHAD

• 0.1%

SLIDE 60

Investor Visibility and Liquidity YTD 2016

60

 Quarter-on-quarter, total number of CDS accounts decreased by 72 to 3,719.

• No. of CDS Accounts

Units Held 2Q2016 Units Held 1Q2016 Q-on-Q Change Total foreign holdings 12.37% 12.69%

• 0.29%

Foreign holdings – related-party 7.65% 7.64% 0.17% Foreign holdings – non-related-party 4.72% 5.05%

• 0.46%

Promoters 13.98% 13.96% 0.19%

1,652 2,080 2,420 2,702 2,850 3,009 3,176 3,200 3,219 3,309 3,611 3,790 3,718

• 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 2008 2009 2010 2011 2012 2013 2014 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016

SLIDE 61

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 UOBKayHian

Hold

1.68 26-Apr-16 Nomura

Buy

1.81 6-May-16 S&P Capital IQ Consensus 1.71 14-Jul-2016

Recommendation Movement 2Q2016 1Q2016 Buy

↑

2 Hold

↑

8 5 Sell

↔

61

SLIDE 62

THANK YOU