Corporate Presentation 3 rd Quarter 2017 Financial Results 17 November 2017
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 ( 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 The information in this Announcement must not be published outside Malaysia. 2
Contents Financial Results Portfolio Update Conclusion Slide No. 4 11 17 3
Financial Results Quill Building 5 - IBM
MQREIT records 3Q 2017 Realised Net Income of RM21.38 million (RM 000) Gross Revenue (Unaudited) 3Q 2016 32,498 (Unaudited) 3Q 2017 44,875 Variance +36.7% Net Property Income 25,528 34,340 +32.8% Net Income 1 15,227 21,381 +40.4% EPU 2 2.30 sen 2.00 sen -13.0% Distributable Income 4 2.30 sen 2.17 sen -5.8% Per Unit 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 3Q 2017 distributable income of RM23.16 million or 2.17 sen distributable income per unit was achieved after non-cash adjustment for manager s fee payable in units of RM1.84 million 5
MQREIT records YTD 3Q 2017 Realised Net Income of RM66.59 million (RM 000) Gross Revenue (Unaudited) YTD 3Q 2016 97,774 (Unaudited) YTD 3Q 2017 135,055 Variance +38.1% Net Property Income 76,731 104,919 +36.7% Net Income 1 45,852 66,588 +45.2% EPU 2, 6.93 sen 6.23 sen -10.1% Distributable 4Income 6.93 sen 6.56 sen -5.4% Per Unit 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 Distributable income for YTD 3Q 2017 was RM70.05 million or 6.56 sen distributable income per unit, consisting of income before taxation of RM66.59 million and non-cash adjustments for manager s fees payable in units amounting to RM3.98 million 6
Total Assets RM2.3 billion NAV per unit RM1.2927 (Audited) (Unaudited) (Unaudited) (Unaudited) as at as at as at as at 31 Dec 2016 (RM 000) 31 Mar 2017 (RM 000) 31 Jun 2017 (RM 000) 30 Sept 2017 (RM 000) Non Current Assets 2,224,971 2,224,782 2,224,597 2,224,395 Current Assets 72,370 55,827 79,963 56,715 Total Assets 2,297,341 2,280,609 2,304,560 2,281,110 Current Liabilities 252,238 19,042 21,182 136,935 Non Current Liabilities 685,405 878,422 878,952 763,605 Net Assets 1,359,699 1,383,145 1,404,426 1,380,570 No of Units 1,068,000 1,068,000 1,068,000 1,068,000 NAV per Unit (RM) 1.2988 1.2951 1.3150 1.2927 7
Stable Financial Indicators Audited Unaudited Unaudited Unaudited as at as at as at as at 31 Dec 16 31 Mar 17 31 Jun 17 30 Sept 17 Total Debts (RM 000) 851,567 853,789 853,101 854,150 Gearing Ratio ¹ 0.37x 0.37x 0.37x 0.37x Interest Coverage 2 3.20x 3.52x 3.44x 3.38x Average Term to Maturity (year) 3 2.69 2.91 3.30 3.05 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 8
Capital Management Prudent Capital Management 76% of borrowings on fixed rate Average cost of debt 60% Gearing Ratio Floating rate, 24% 4.4% 50% 40% SC Limit RM118m CPs CPs Fixed rate, 76% RM118m Gearing level MTN RM117m 37% 30% 20% 37% 10% Total average borrowings : RM861 mil Below SC limit of 50% 0% 30-Sep 9
Debt Maturity Profile Next Refinancing Due in September 2018 RM(mil) 450 400 350 300 250 200 150 100 50 RM118m CPs CPs RM118m MTN RM60mil CP RM130 mil 14% TL RM117m Average debt to maturity : 3.05 years CP RM130mil MTN RM60 mil TL RM117m 45% CP RM279mil TL RM110mil CP RM279mil TL RM110mil 19% CP RM144mil MTN RM20mil 22% MTN RM130mil CP RM61 mil 10 0 2017 2018 2019 2020 2021 2022 Note; 1. MTN - Medium Term Notes 2. CP Commercial Papers 3. TL Term Loan
Portfolio Update Quill Building 3 - BMW
Portfolio of Quality Assets Quill Building 1 - DHL 1 (a) Quill Building 4 Quill Building 2 - DHL 2 (a) - HSBC (a) Platinum Sentral - KL Sentral (b) Market Value of 11 Properties: RM2.22 bil (c) Total NLA: 2.25 mil sq ft *Excluding car park area Quill Building 3 Quill Building 5 - BMW (a) - IBM (a) Quill Building 8 - DHL (XPJ) (a) Portfolio Occupancy Rate: 96.6% Part of Plaza Mon t Kiara (b) Wisma Technip (b) TESCO Building Penang (a) Menara Shell (b) Weighted Average Term to Expiry: 5.5 years 12 a) The Properties were valued by 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. c) Based on valuation as at 31 December 2016.
Geographical Diversification Penang 6% Mont' Kiara 5% Other Klang Valley Area 1% Cyberjaya 17% By Valuation ¹ Kuala Lumpur City Centre 8% Klang Valley 77% Cyberjaya 17% Penang 6% KL Sentral 63% Notes: (1) Other Klang Valley Area refers to Klang Valley generally excluding KL city centre, KL Sentral 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 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. (3) Based on valuation as at 31 December 2016. 13
Diversified Segmental Contributions Retail Assets 9% Other Commercial Building 1% Car Park 2% By Valuation 14 Office 88% Notes: (1) Office comprises Quill Buildings (excluding Quill Building 8-DHL (XPJ) at Glenmarie, Shah Alam), Platinum Sentral, Wisma Technip and Menara Shell (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. (6) Based on valuation as at 31 December 2016.
Tenant Mix Well Balanced Tenancy Mix Insurance 7.2% FMCG, 0.2% Manufacturing, 0.2% By Net Lettable Area Services 0.7% IT/ Electronics 4.7% Government Linked Office 14.4% Retail 18.6% Oil & Gas, 30.8% Education 0.8% Logistics 11.5% Automotive 2.4% Banking 8.5% 15
Lease Expiry Profile - 14% of Total NLA due in 2017 sq ft 900,000 Lease Up for Renewal by NLA - 30 Sept 2017 800,000 700,000 600,000 Lease Expiring Renewed Not Renewed 500,000 400,000 38% 300,000 26% 200,000 8% 100,000 4% 13% 9% - 2% 2017 2018 2019 2020 2021-2032 % of net lettable area that are due for renewal 16
Conclusion Quill Building 1 DHL 1
In Summary 3Q 2017 : Records Realised Net Income of RM21.28 million Achieved Realised EPU of 2.00 sen in 3Q 2017. After non-cash adjustment for manager s fee payable in units of RM1.84 million, distributable income of RM23.16 million or 2.17 sen distributable income per unit was achieved in 3Q 2017 Distributable income for YTD 3Q 2017 is RM70.05 million or 6.56 sen per unit, consisting of income before taxation of RM66.59 million and non-cash adjustments for manager s fees payable in units amounting to RM3.98 million Successfully renewed 90% of the leases due up in 3Q 2017. In addition 45% of leases due in 4Q 2017 have been renewed ahead of its expiry Year 2017 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 18
Thank you For enquires, please contact: Ms Joyce Loh (General Line: 603-2786 8080) (Fax : 603-2780 0098)