Axis Real Estate Investment Trust – Integrated Annual Report 2023

Value Creation & Sustainable Development Goals

OUR BUSINESS CAPITALS

INPUTS & BUSINESS ACTIVITIES

CAPEX: RM176.8 million
Operational cash flows: RM198.7 million
Undertaking capital raising to pare down financing and provide financial headroom for property acquisitions and developments
Managing financial resources through the implementation of a disciplined investment strategy
Maintaining a proactive portfolio management strategy to preserve and enhance the value of properties
Adopting cost discipline and optimisation of the Fund’s capital structure
Maintaining an optional balance of short- and long-term financing through a prudent capital management strategy
Increasing the proportion of single-tenanted buildings with triple-net leases in the portfolio
Obtaining sustainability-linked financing facilities

Total no. of properties: 62
Investments in strategic AEIs and development projects in 2023: RM172.7 million
Strengthening the property portfolio with yield-accretive acquisitions and quality new builds
Preserving the value of the property portfolio through strategic AEIs
Securing credible and reliable tenants
Incorporating green building designs and features in major AEIs and development projects, in line with our Environmental Policy, and aligning these efforts with green building standards
Leveraging on existing initial due diligence assessments to evaluate annual flood risks in the mid- to long-term horizons of new acquisitions and proposed developments
Focusing on development projects with long lease tenures

Total community investments in 2023: RM181,000
Total procurement (excluding government-related expenses) from local suppliers in 2023: RM205.6 million
Building strong public awareness and brand association of Axis-REIT’s commitments towards sustainability
Actively providing training sessions for our suppliers
Upholding strong ethical practices among our value chains by conducting periodic assessments and audits on key suppliers and contractors
Forging strong relationships with existing tenants
Continual engagements with tenants to understand their business strategies and needs

Total workforce: 80 employees
Employee training expenses: RM39,000
Providing employee engagement programmes such as ongoing learning opportunities, year-end performance appraisals, annual dinners and company trip
Providing equal employment benefits to both permanent and contract employees
Upholding strong HSE practices by on-site managers in accordance with our HSE Policy
Conducting periodic HSE audits

Strengthening cybersecurity defences by engaging with our outsourced IT service provider to explore the implementation of an IT disaster recovery plan
Undertaking an internal audit on IT processes
Implementing end-to-end encryption and threat detection
Installing endpoint detection and response software on Facilities Management computers
Subscribing to an online interactive cybersecurity awareness programme for employees
Maintaining seamless communication with tenants via our Hello Axis online portal to address their service requests, feedback and complaints

Implementing measures to increase energy and water use efficiency
Upgrading air conditioning systems to environmentally-friendly systems at selected multi-tenanted properties
Installing new energy efficient transformers at Crystal Plaza in 2023
Establishing a baseline and targets for waste management initiatives
Actively promoting waste reduction efforts through the 5R concept
Prioritising the inclusion of additional green building features in major AEIs and new developments

Improvement in revenue and net property income: RM288.4 million and RM245.4 million respectively
Economic value distributed: RM193.9 million
DPU: 8.65 sen
Liquidity: RM592.7 million
Value of committed sustainability-linked financing: RM490.0 million

Total space under management: 13.4 million sq. ft.
Major AEI completed: 1
Development project completed: 1
Successfully raised tenant occupancy rate by 2 percentage points to 97% and achieved a positive rental reversion of 5.8%
Secured renewals for 1.53 million sq. ft. of space (representing 97% tenant retention rate) and commenced new tenancies for 1.91 million sq. ft. of space during the year
Obtained final green building certification for 1 property and provisional green building certifications for 2 buildings

Total number of beneficiaries of our community investment initiatives: 85
Proportion of qualified suppliers that are local entities: 100%
Total number of suppliers increased by 8.4%
Total procurement value (excluding government-related expenses) increased by 136% to RM205.6 million
No. of suppliers and/or contractors removed from our panel due to non-compliance with the Supplier Code of Conduct: 4
Annual tenant satisfaction survey average score: 7.61 out of 10 (target score: 7 out of 10)
No. of green lease (i.e., tenancy agreement featuring ESG considerations): 1
Incorporated ESG components into the fit-out and refurbishment guide of the Renovation Manual

Total employee training hours: 957.5 hours
Average training hours per employee: 12 hours
Proportion of employees receiving regular performance and career development reviews: 100%
New hires rate: 5%
Employee turnover rate: 2%
Gender pay ratio for middle and senior management (male to female): 1.0 : 1.1
No. of work-related fatalities, lost time injuries (LTI), restricted work, medical treatment cases, or first aid cases: 0
No. of fines or sanctions for non-compliance with OHS-related laws and regulations: 0

Proportion of employees who underwent PDPA-related training: 100%
Proportion of employees who underwent cybersecurity-related training: 70%
No. of cases of cybersecurity breaches: 0
Hello Axis tenant satisfaction ratings average score: 4.31 out of 5 (target score: 4 out of 5)
Responded to 91% of service request tickets raised from multi-tenanted properties and 97% of tickets from single-tenanted properties within 24 hours