Corporate Presentation 2 nd Quarter 2016 Financial Results 2 August 2016
Important Notice This presentation is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for units in MRCB-Quill REIT (formerly know as Quill Capita Trust) (“ MQReit ”) . The past performance of MQReit is not necessarily indicative of the future performance of MQReit. This presentation may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitations) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments, shifts in expected levels of property rental income and occupancy, changes in operating expenses including employee wages, benefits and training, property expenses and governmental and public policy changes. You are cautioned not to place undue reliance on these forward-looking statements which are based on the manager’s current view of future events. The value of units in MQReit (Units”) and the income derived from them may fall as well as rise. Units are not obligations of, deposits in, or guaranteed by, the manager or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Investors have no right to request the manager to redeem their Units while the Units are listed. It is intended that unitholders may only deal in their Units through trading on the Main Board of Bursa Malaysia Securities Berhad. Listing of the Units on the Bursa Securities does not guarantee a liquid market for the Units. The information in this Announcement must not be published outside Malaysia. 2 MRCB-Quill REIT Presentation *August 2016*
Contents Slide No. 4 • Financial Results 10 • Portfolio Update 16 • Conclusion 3 MRCB-Quill REIT Presentation *August 2016*
Financial Results Quill Building 5 - IBM MRCB-Quill REIT Presentation *August 2016*
Delivers DPU of 4.23 sen for 1H 2016 (Unaudited) (Unaudited) Variance (RM’000) 2Q 2015 2Q 2016 Gross Revenue 32,175 32,565 +1.2% Net Property Income 24,314 25,700 +5.7% Net Income 1 13,632 15,387 +12.9% EPU 2 2.20 sen 2.33 sen +5.9% 1H 2015 1H 2016 4 +3.2% 4.10 sen 4.23 sen DPU 3 1 Net Income refers to realised income after taxation (exclude gain from re-measurement of derivatives and revaluation surplus) 2 EPU refers to Realised Earnings Per Unit 3 DPU refers to Distribution Per Unit 5 MRCB-Quill REIT Presentation *August 2016*
Total Assets – RM1.63 billion NAV per unit – RM1.3621 (Unaudited) (Audited) (Unaudited) (Unaudited) as at as at as at as at 30 Sept 15 31 Dec 2015 31 Mar 2016 30 Jun 2016 (RM’000) (RM’000) (RM’000) (RM’000) Non Current Assets 1,569,724 1,573,632 1,571,915 1,571,797 Current Assets 37,956 51,608 33,238 54,407 Total Assets 1,607,680 1,625,240 1,605,153 1,626,204 Current Liabilities 20,133 205,001 199,420 205,424 Non Current Liabilities 703,150 516,384 519,506 519,893 Net Assets 884,397 903,855 886,227 900,887 No of Units 661,381 661,381 661,381 661,381 NAV per Unit (RM) 1.3372 1.3666 1.3400 1.3621 6 MRCB-Quill REIT Presentation *August 2016*
Stable Financial Indicators Unaudited Audited Unaudited Unaudited as at as at as at as at 30 Sept 15 31 Dec 15 31 Mar 16 31 Jun 16 Total Debts (RM’000) 688,170 689,722 688,607 690,180 Gearing Ratio ¹ 0.43x 0.42x 0.43x 0.42x Interest Coverage 2 2.96x 3.02x 3.05x 3.05x Average Term to Maturity (year) 3 3.35 3.09 2.84 2.60 Average Cost of Debt (p.a.) 4 4.4% 4.4% 4.4% 4.4% Notes: 1.Gearing ratio refers to Gross Debt over Total Assets. 2.Interest coverage refers to year to date (YTD) EBITDA / YTD Interest Expense 3.Average Term to Maturity means weighted average time lapse to maturity 4.Average Cost of Debt is calculated based on YTD Interest Expense / Average Weighted Borrowing 7 MRCB-Quill REIT Presentation *August 2016*
Capital Management Prudent Capital Management 100%* of borrowings on Average cost of debt Gearing Ratio fixed rate 60% SC Limit 4.4% 50% Fixed 40% 42% rate Gearing level CPs 100% MTN 30% RM118m RM118m RM117m 42% CPs 20% 10% Below SC limit of 50% Total average borrowings : 0% RM696 mil 30-Jun 8 MRCB-Quill REIT Presentation *August 2016*
Debt Maturity Profile Next Refinancing Due in September 2016 Average debt to maturity : 2.60 years RM(mil) 450 56% 400 CP RM279mil 350 TL RM110mil 300 CPs 250 RM118m RM118m 27% CPs 200 CP RM130mil 150 17% MTN MTN RM60 mil TL RM60m TL 100 RM72.2m RM117m 50 0 2015 2016 2017 2018 2019 2020 The Manager has commenced the refinancing exercise for the borrowings due in September 2016. Note; 1. MTN - Medium Term Notes 2. CP – Commercial Papers 9 MRCB-Quill REIT Presentation *August 2016* 3. TL – Term Loan
Portfolio Update Quill Building 3 - BMW MRCB-Quill REIT Presentation *August 2016*
Portfolio of Quality Assets Quill Building 1 Quill Building 4 Quill Building 2 Platinum Sentral - DHL 1 (a) - DHL 2 (a) - HSBC (a) - KL Sentral (b) 10 Properties valued at RM1.57 bil Quill Building 3 Quill Building 5 Quill Building 8 Total NLA of - BMW (a) - IBM (a) - DHL (XPJ) (a) 1.70 mil sq ft *Excluding car park area Portfolio Occupancy Rate Part of Plaza Wisma Technip (b) TESCO Building 97.2% Mon’t Kiara (b) Penang (a) a) The Properties were valued by DTZ Nawawi Tie Leung Property Consultants Sdn Bhd, an independent firm of professional valuer registered with the Board of Valuers, Appraisers & Estate Agents Malaysia. b) The Properties were valued by CH Williams Talhar & Wong Sdn Bhd, an independent firm of professional valuer, registered with the Board of Valuers, Appraisers & Estate Agents Malaysia. 11 MRCB-Quill REIT Presentation *August 2016*
Geographical Diversification Other Klang Valley Area Mont' Kiara 2% By Valuation 7% Cyberjaya Penang 23% 9% ¹ Kuala Lumpur City Centre 11% Klang 68% Valley Cyberjaya 23% Penang 9% KL Sentral 48% Notes: (1) Other Klang Valley Area refers to Klang Valley generally excluding KL city centre and Mont’ Kiara. Klang Valley refers to Kuala Lumpur and Selangor State excluding Kuala Selangor, Sepang and Sabak Bernam (2) The Properties were valued by DTZ Nawawi Tie Leung Property Consultants Sdn Bhd, an independent firm of professional valuer registered with the Board of Valuers, Appraisers & Estate Agents Malaysia. (3) The Properties were valued by CH Williams Talhar & Wong Sdn Bhd, an independent firm of professional valuer, registered with the Board of Valuers, Appraisers & Estate Agents Malaysia. 12 MRCB-Quill REIT Presentation *August 2016*
Diversified Segmental Contributions Car Park Retail Assets 3% By Valuation 13% Other Commercial Building 2% Office 82% Notes: (1) Office comprises Quill Buildings (excluding Quill Building 8-DHL (XPJ) at Glenmarie, Shah Alam), Platinum Sentral and Wisma Technip (2) Retail refers to retail portion of Plaza Mont’ Kiara & TESCO Building Penang (3) Car Park refers to car parking bays in Plaza Mont’ Kiara (4) Other commercial building refers to Quill- Building 8- DHL (XPJ) at Glenmarie, Shah Alam (5) The Properties were valued by DTZ Nawawi Tie Leung Property Consultants Sdn Bhd and CH Williams Talhar & Wong Sdn Bhd, independent firm of professional valuers registered with the Board of Valuers, Appraisers & Estate Agents Malaysia. 13 MRCB-Quill REIT Presentation *August 2016*
Tenant Mix Well Balanced Tenancy Mix By Net Lettable Area IT/ Electronics 7% Government Linked Office 18% Oil & Gas 21% Retail 24% Logistics 15% Education Automotive 1% Banking 2% 11% 14 MRCB-Quill REIT Presentation *April 2016*
Lease Expiry Profile Lease Up for Renewal by NLA - 30 June 2016 sq ft 800,000 Lease Expiring 700,000 Renewed Not Renewed 600,000 500,000 400,000 43% 300,000 26% 200,000 13% 100,000 11% 4% 2.7% 0.6% - 2016 2017 2018 2019 2020 - 2032 % of net lettable area that are due for renewal 15 MRCB-Quill REIT Presentation *April 2016*
Conclusion Quill Building 1 – DHL 1 MRCB-Quill REIT Presentation *August 2016*
In Summary 2Q 2016 : Deliver DPU of 4.23 sen for 1H 2016 Achieved Realised EPU of 2.33 sen in 2Q 2016, 5.9% higher than 2.20 sen achieved on 2Q 2015 Delivers DPU of 4.23 sen in 1H 2016, which is 3.2% higher than 4.10 sen distributed in 1H 2015 Successfully renewed 87% of the leases due in 1H 2016 On 30 June 2016 MQREIT entered into a conditional sale and purchase agreement with 348 Sentral Sdn Bhd, a wholly-owned subsidiary of MRCB, for the proposed acquisition of Menara Shell together with a five (5)-storey podium and a four (4)-storey basement car park for a purchase consideration of RM640,000,000 which shall be satisfied entirely in cash (“Proposed Acquisition ”) Year 2016 Prospects – Ongoing Strategies Proactive asset management strategies to focus on tenant relations and continuous building improvements Prudent capital management strategies Continue to explore yield accretive acquisition opportunities 17 MRCB-Quill REIT Presentation *August 2016*
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