Acquisition of Wilkie Edge Extraordinary General Meeting 23 November 2007
Important Notice THIS PRESENTATION IS AVAILABLE ONLY TO PERSONS WHO ARE NON-U.S. PERSONS, PERSONS WITH ADDRESSES OUTSIDE THE U.S. AND CANADA, AND TO EXISTING UNITHOLDERS IN JAPAN The information contained in this presentation is for information purposes only and does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for units in CapitaCommercial Trust ( CCT, and units in CCT, Units ) in Singapore or any other jurisdiction nor should it or any part of it form the basis of, or be relied upon in any connection with, any contract or commitment whatsoever. The past performance of the Units and CapitaCommercial Trust Management Limited (the CCT Manager ) is not indicative of the future performance of CCT and the CCT Manager. Predictions, projections or forecasts of the economy or economic trends of the markets are not necessarily indicative of the future or likely performance of CCT. The value of the Units and the income derived from them may fall as well as rise. Units are not obligations of, deposits in, or guaranteed by, the CCT Manager. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Investors have no right to request that the CCT Manager redeem or purchase their Units while the Units are listed. Unitholders may only deal in their Units through trading on Singapore Exchange Securities Trading Limited (the SGX-ST ). Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. A circular dated 5 November 2007 (the Circular ) setting out the details of the proposed acquisition of the Property known as Wilkie Edge (as defined in the Circular), together with the notice of an extraordinary general meeting of the holders of Units ( Unitholders ), has been despatched to Unitholders. This presentation is qualified in its entirety by, and should be read in conjunction with, the full text of the Circular. Terms not defined in this presentation adopt the meanings in the Circular. 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 limitation) 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, changes in operating expenses (including employee wages, benefits and training costs), 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 CCT Manager s current view of future events. All forecasts are based on the CCT Manager s assumptions as explained in Appendix 1 of the Circular. The major assumptions are certain expected levels of property rental income and property expenses over the relevant periods, which are considered by the CCT Manager to be appropriate and reasonable as at the date of the Circular. The forecast financial performance of CCT is not guaranteed and there is no certainty that it can be achieved. Investors should read the whole of the Circular for details of the forecasts and projections and consider the assumptions used and make their own assessment of the future performance of CCT. This presentation has been prepared by the CCT Manager. The information in this presentation has not been independently verified. No representation, warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information and opinions in this presentation. None of the CCT Manager or any of its agents or advisers, or any of their respective affiliates, advisers or representatives, shall have any liability (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. 2
Approval Sought by CCT (Ordinary Resolution) To seek unitholders approval for: (a) (b) (c) Acquisition of the Property known as Wilkie Edge from CapitaLand Selegie Private Limited ( CSPL ) for a purchase consideration of S$182.7 million (excluding the Serviced Apartments Component) or (in the event that The Ascott Group Limited fails to obtain the approval of its shareholders for the Lease of the Serviced Apartments Component or the agreement for lease dated 29 August 2007 made between the Trustee, CSPL and Ascott Scotts Pte Ltd is annulled or terminated or deemed annulled or terminated pursuant to the provisions thereof thereby resulting in the Trustee ceasing to be obliged to enter into the Lease) S$262.0 million, on the terms and conditions set out in the sale and purchase agreement dated 20 July 2007 made between HSBC Institutional Trust Services (Singapore) Limited, in its capacity as trustee of CCT (the Trustee ) and CSPL; The grant of an option to CSPL to require the Trustee to enter into an agreement for lease to facilitate the grant of a lease of the Serviced Apartments Component of the Property, to Ascott Scotts Pte Ltd, be and is hereby approved, confirmed and ratified; and The CCT Manager, any director of the CCT Manager and the Trustee be and are hereby severally authorised to complete and do all such acts and things to give effect to the acquisition of Wilkie Edge. 4
Wilkie Edge A Mixed Development Artist s Impression subject to authorities approval 8 Wilkie Road, Singapore 228095 Proposed 12-storey mixed development comprising office, retail, serviced apartments with basement carpark and ancillary facilities 6
Details of Wilkie Edge Land Area Land Title Gross Floor Area Net Lettable Area Serviced Apartment Units Car Park Lots Valuation (excluding Serviced Apartments Component) Temporary Occupation Permit 7,097 sq m Leasehold estate expiring 20 February 2105 Total: 29,812 sq m Commercial: 20,412 sq m Serviced Apartments: 9,370 sq m Total: 20,680 sq m Office 9,588 sq m Retail 3,341sq m (1) Serviced Apartments 7,751 sq m (2) 154 Approximately 215 CB Richard Ellis (Pte) Ltd (dated 16 July 2007): S$182.7 million Jones Lang LaSalle Property Consultants P/L (dated 17 July 2007): S$180.0 million Expected to be issued by end October 2008 Notes: (1) Excludes approximately 155 sq m of outdoor refreshment area (2) Includes 736 sq m of front-of-house and back-of-house facilities 7
Rationale 1: Yield Accretion The Property, when completed, is expected to generate strong cash flows at the price it was purchased On a stabilised basis, the Property (excluding the Serviced Apartments Component) is expected to generate an annualised property yield (1) of approximately 4.5% Stabilised Basis assuming: Office Component s average occupancy is 95.0% and rental rate is approximately S$6.70 per sq ft per month Retail Component s average occupancy is 100.0% and rental rate is approximately S$6.60 per sq ft per month by 2010 (15 months from the commencement of its operations) Note: (1) In the event that The Ascott Group fails to obtain the approval of its shareholders for the Lease of the Serviced Apartments Component or the Agreement for Lease is annulled or terminated or deemed annulled or terminated pursuant to the provisions thereof thereby resulting in the Trustee ceasing to be obliged to enter into the Lease, CCT will acquire Wilkie Edge (including the Serviced Apartments Component) at the Initial Purchase Consideration of S$262.0 million (see paragraph 2.8 of the Circular for more details), and the property yield in relation to the Acquisition will be 4.3%. This is based on the assumption that the Serviced Apartments Component is at an average occupancy rate of 85.0% and the average daily room rate is approximately S$130.0 per room. 8
Rationale 2: Acquisition Fits the Manager s Investment Strategy The CCT Manager s principal investment strategy to invest in quality commercial assets which will provide yield accretion and value creation opportunities to deliver stable distribution and sustainable total return to the Unitholders In line with the target to grow asset size of CCT to between S$5b and S$6b by 2009 S$'billion 6.0 5.0 4.0 3.0 2.0 1.0 0.0 S$2.0b S$0.2b S$2.2b S$1.3b S$3.9b Acquisition of Wilkie Edge S$4.7b S$0.2b S$4.9b S$5.0b to 6.0b 2004 2005 2006 2007 2008 2009F Acquisitions Total Asset Size 9
Rationale 3: Competitive Strengths of The Property Located in Central Area Major civic, arts and cultural centre Near educational institutions Within the Arts, Culture, Learning and Entertainment hub Good connectivity Lack of new and modern office developments in the area Well positioned to capture strong demand for space when completed 10
Rationale 4: Income Diversification Net property income contribution Before the Acquisition (1) After the Acquisition 4.4% 4.3% 2.8% 16.9% 2.7%4.6% 4.2% 16.1% 2.9% 4.1% 5.6% 2.8% 5.1% 16.0% 5.3% 4.9% 15.2% 42.0% 40.1% Capital Tower Raffles City(2) Starhub Centre Bugis Village Market Street Car Park 11 6 Battery Road HSBC Building Robinson Point Golden Shoe Car Park (3) Wilkie Edge Notes: (1) Based on the actual Net Property Income for the period 1 January 2007 to 30 June 2007 and the CCT Manager s forecast Net Property Income for the period 1 July 2007 to 31 December 2007 (2) Based on CCT s 60.0% interest in Raffles City (3) Represents the annual Net Property Income on a Stabilised Basis for the Property (excluding the Serviced Apartments Component)
Rationale 5: Geographical Diversification 10 10 Further diversify CCT s portfolio of properties geographically, such that it can cater to different tenancy demands in different parts of Singapore s Central Area Reinforces CCT s position as one of the leading office landlords within the Central Area 12
Rationale 6: Economies of Scale Acquisition will enlarge the portfolio of properties owned by CCT Benefit from the economies of scale which the CCT Manager and the CCT Property Manager will enjoy in their dealings with suppliers, resulting in cost savings 13
Proposed Financing Through Debt Purchase Consideration (1) Other Costs TOTAL Acquisition Cost S$m 182.7 1.9 184.6 To be funded through borrowings Minimal gearing impact (2) increase to 29.4% after the acquisition from 26.7% as at 30 September 2007 Notes: (1) In the event that The Ascott Group does not get the approval of its shareholders to proceed with the Agreement for Lease or the Agreement for Lease is annulled or terminated or deemed annulled or terminated pursuant to the provisions thereof thereby resulting in the Trustee ceasing to be obliged to enter into the Lease, CCT is obliged to pay the Initial Purchase Consideration of S$262.0 million as described in paragraph 2.8 of the Circular, and the total acquisition cost is estimated to be approximately S$264.8 million. (2) Assuming the scenario as described in Note (1), CCT acquires the Property at the Initial Purchase Consideration of S$262.0 million and funds the Acquisition wholly through borrowings, CCT s Gearing Level will be increased to approximately 30.6%. 14
CCT s 2H 2007 & 2008 Projection Forecast and Projected Consolidated Statements of Total Return and Distribution of the CCT Group (1) S$ 000 Actual for Financial year ended 31 Dec 2006 (2) Forecast for Financial year ending 31 Dec 2007 (3) Forecast Period 1 Jul 2007 to 31 Dec 2007 Projection year Financial year ending 31 Dec 2008 Total Gross Revenue 152,229 234,856 120,086 282,188 Total Property Operating Expenses (40,041) (66,361) (36,164) (83,525) Net Property Income 112,188 168,495 83,922 198,663 Net Income 70,115 101,533 50,434 128,015 Distributable income to Unitholders 78,872 118,345 59,819 139,328 Distribution Per Unit (cents) 7.33 (4) 8.55 (5) 4.32 10.04 Notes: (1) Based on the assumptions as set out in Appendix 1 of the Circular, including the assumption that CCT acquires Wilkie Edge (excluding the Serviced Apartments Component) at the Purchase Consideration of S$182.7 million. In the event that The Ascott Group does not get the approval of its shareholders to proceed with the Agreement for Lease or the Agreement for Lease is annulled or terminated or deemed annulled or terminated pursuant to the provisions thereof thereby resulting in the Trustee ceasing to be obliged to enter into the Lease, CCT is obliged to pay the Initial Purchase Consideration of S$262.0 million as described in paragraph 2.8 of the Circular. In such an event and based on the assumption that the operations of the Serviced Apartments Component will commence in 2009 under a management contract, the distributable income to Unitholders and DPU for the Projection Year will be S$138.7 million and 9.99 cents respectively. (2) Based on the CCT Audited Financial Statements and adjusted for the results of Aragorn being accounted for as other investment income. (3) Based on the CCT Group s actual results from 1 January 2007 to 30 June 2007 and the CCT Manager s forecast of the CCT Group s results from 1 July 2007 to 31 December 2007 and adjusted for the results of Aragorn being accounted for as other investment income. (4) Based on the weighted average number of approximately 1,076.6 million Units in issue for the year ended 31 December 2006. (5) Based on the weighted average number of approximately 1,384.1 million Units in issue for the year ending 31 December 2007. 15
Strong and Steady DPU Growth 17.4% 10.04 (2) DPU (cents) 9.50 8.00 6.50 6.32 (1) 7.8% 6.81 7.6% 7.33 16.6% 8.55 (2) 5.00 15 May to 31 Dec 2004 (Annualised) 1 Jan to 31 Dec 2005 1 Jan to 31 Dec 2006 FY 2007 Forecast FY 2008 Projection Notes: (1) Annualised based on DPU of 3.99 cents for the period 15 May 2004 to 31 December 2004 (2) Based on the forecast shown in the Circular dated 5 November 2007 for the proposed acquisition of Wilkie Edge including the assumption that CCT acquires Wilkie Edge (excluding the Serviced Apartments Component) at the Purchase Consideration of S$182.7 million. In the event that The Ascott Group does not get the approval of its shareholders to proceed with the Agreement for Lease or the Agreement for Lease is annulled or terminated or deemed annulled or terminated pursuant to the provisions thereof thereby resulting in the Trustee ceasing to be obliged to enter into the Lease, CCT is obliged to pay the Initial Purchase Consideration of S$262.0 million as described in paragraph 2.8 of the Circular. In such an event and based on the assumption that the operations of the Serviced Apartments Component will commence in 2009 under a management contract, the distributable income to Unitholders and DPU for the Projection Year will be S$138.7 million and 9.99 cents respectively. 16
Key Dates and Times Extraordinary General Meeting 23 November 2007 at 1:00 pm DBS Auditorium, Level 3 6 Shenton Way DBS Tower 1 Completion of the Acquisition Expected by 4th quarter of 2008 18