VinaLand Limited David Blackhall Deputy Managing Director VinaLand Investor Update US/ Europe/ Japan 31 Oct 9 Nov 2011 1 1
Contents 1. Macroeconomic impacts on real estate market 2. VNL overview and performance 3. Top holdings 4. Shareholder feedback and action plan 5. Wrap up 2
1. Macro-economic impact on real estate market 3
Macro-economic impact on real estate market Foreign and local investors/developers closely monitoring: High inflation (23% in August). Limited liquidity (cap on non-productive credit ratio by year end). High interest rates (deposit rates at 14-17%, commercial lending at 19-22%). Currency volatility (depreciation or devaluation). General caution amongst developers and home buyers. 4
Real estate market Residential Condominium market difficult High interest rates have forced owners to divest into secondary market. Supply outstripping demand in new areas for mid-high end units and secondary sales have forced pricing down by approx 25%. Challenges to remain until Q2 2012. Older established suburbs will fare better than new areas. Landed property remains attractive Good-value, well-located landed property projects (land and house packages) continue to sell. Local buyers prefer landed property over condominiums. HCM City condo supply, FY2011 Units 25,000 20,000 15,000 10,000 5,000 0 High-end Mid-end Affordable Existing Supply New Completion New Launch Price 2010 Price 2011 Rate USD/m2 $2,000 $1,600 $1,200 $800 $400 Source: CBRE data, Q2 2011 VNL adjusted its strategy 2 years ago to focus on landed property developments due to: Stronger market demand Low debt requirements (funding from pre-sales) Flexibility in construction in phasing Only 2 condominium towers under development $0 5
Real estate market Hotels Significant increase in room supply Significant increase in supply: 3-5 star rooms in HCM City and Hanoi up 4% and 22% y-o-y, respectively. International arrivals up to Aug 2011 are up 18.4% year-on-year. Vietnam is considered a low cost and safe holiday destination Supply increase and slower economic growth has created persistent challenges. Occupancy rates improved slightly but average daily rate (ADR) decreased. Outlook: supply forecast to increase, however some new hotel projects will not start as previously programmed given economic conditions. Hanoi hotel supply and average daily rate (ADR) Q2 2010 Q2 2011 Rooms 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Q2 Q3 Q4 Q1 Q2 2010 2011 Rooms ADR ADR Source: CBRE data, Q2 2010 Q2 2011 VNL has completed refurbishment of the hotels and is focused on adding value through driving up NOI via increased business and operational efficiencies : Mixed performance, notwithstanding improved GOP several hotels are not achieving budgets such as Sheraton N.T. and Movenpick Saigon. Objective is to seek coinvestment partners for the hotel assets enabling VNL to redeploy the capital. $78 $77 $76 $75 $74 $73 $72 $71 $70 6
Real estate market Retail and office Retail sales hit by inflation, however medium term fundamentals are strong Large population and strong retail sales market growing at 10% yearly (AT Kearney). Despite very strong retail sales growth over past few years, the monthly retail sales growth for the last three consecutive months has been negative. Strong growth coming from Tier 1 and Tier 2 cities (HCM City, Hanoi and Danang). Increased retail space available has resulted in lower rents and higher vacancies. Foreign retail operators still interested given the long-term potential. Office sector remains over supplied Current supply is approx. 1.8 million sq.m GFA, with rental rates down 8-10% in 2011; space taking longer to fill. Future supply (to 2014) estimated at 1.3 million sq.m GFA, of which some 40% is under construction. WTC Danang project has signed MOU s for pre leases totaling approx 25,000sq.m of space over last 4 mths demonstrating demand from large foreign and local retailers is present as the long term view is very positive VNL will only commence development after signing anchor tenants or an equity co-investment partner. VNL has very low exposure to the office market 7
2. VNL overview and performance 8
Fund background Current projects stretch across most asset classes and four key urban centres of Vietnam. The size of the portfolio is impressive; no other foreign investors or developers in Vietnam hold such a portfolio. The Fund acquired this portfolio between 2006 and 2009. The development phase involves master planning and licensing whereby value is added that then allows construction to commence or divestment. This licensing phase has taken longer than anticipated ; the start of on-site development or divestment for some projects has been delayed. These delays coupled with the financial crisis of 2008 have resulted in the exit phase of some projects being pushed back, impacting on cashflow and delayed shareholder distributions. 9
Fund milestones and performance VNL milestones (30 Sep 2011) AIM inception 6 March 2006 Two rounds of fundraising: USD198m in 2006 and USD395m in 2007. AUM: NAV (Sep 11): USD594m USD675m Acquisition phase: 2006-2009, 46 investments in total, diversified by geography and real estate sector Development/divestment phase: 2009-present, 9 project divestments and a partial exit in addition to residential sales to local buyers (apartments, villas). Total Assets: 37 Leverage (Bank Debt): Fund: Nil Project Portfolio: 11% Trading highlights: NAV high watermark: USD1.61 Current NAV per share: USD1.35 Share price discount: 50.4% (47.4% as at 28 th Oct 2011) Performance history 39.2% increase in NAV/share since inception. (0.7%) 2011 YTD (Sep 2011) 2.3% 2010 (11.3%) 2009 (due to unrealised writedowns) 14.8% 2008 33.8% 2007 Investment objective Continue to focus primarily on residential sector and niche segments within the retail sector while divesting hotel assets : Residential: landed (land & house) property is most attractive. Retail: only proceed with development after precommitment from anchor tenants / equity investors Township/land bank assets : subdivide parcels and seek co-investment 10
NAV vs. share price (30 Sep 2011) $3.0 $2.5 $2.0 $1.5 1.35 NAV $1.0 0.67 SP $0.5 $0.0 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Vietnam Index (Rebased) Dividend Adjusted NAV Dividend Adjusted Price Source: LCF Edmond De Rothschild Securities 11
Fund Development Strategy Value add to existing projects Proceed with master planning, licensing and approvals to add value to land holdings and progress to development and/or exit Commence infrastructure and start up initial phase of larger township projects to facilitate sales and/or divestment to third party sub developers Strategic exits Focus on project divestment Secure investment partners to co-invest with VNL Hotels/commercial large equity commitment mixed use projects Township and land bank assets Residential sales Proceed with development and sale of landed property projects Continue with sales of the 2 condominium projects under construction Focus on affordable well-located townhouses and villas Repatriate revenue to the fund level from residential sales 12
Portfolio by geographic region Performance by region (30 June 11) NAV by region (30 June 11) USDm $600 7% Hanoi region $500 $400 $300 $200 Danang 25% Central provinces $100 Nha Trang $0 North Central South Total Investment Total NAV Bank Debt (Project level) 68% HCM City region Ho Chi Minh 13
Portfolio by sector 11.8% Hospitality (Hotels and resorts) 27.5% Mixed-use (Retail, office, some residential) 13 assets 7 assets Performance by sector (30 June 11) USDm $300 $250 38.8% Residential (Predominantly residential for sale) 11 assets $200 $150 $100 $50 21.9% Township (Large-scale integrated residential) 6 assets $0 Hospitality Mixed Use Residential Township Total Investment NAV Bank Debt (Project level) 14
NAV movement since inception VNL net asset value movement since inception (as at 30 June 2011) USDm $1,200 499 (278) $1,000 $800 $600 $400 395 Upward valuations Downward valuations (22) 12 Tax provision Working capital (116) Management & performance fees 689 $200 198 $0 Inception Q1 2006 2nd fund-raising NAV Q2 2011 Q2 2011 Unaudited figures Working capital is the current assets (cash, short-term investments, trade receivables, short-term loan receivables, other current assets) minus current liabilities (short-term borrowings & debts, trade and other liabilities, and accrual for operating expenses such as professional/consulting fees) 15
Exit performance USDm VNL Projects fully divested $70 $60 $50 Cash received Cash out NAV at exit $40 $30 $20 $10 $0 Bai Dong Hilton Hanoi Opera Hotel Central Garden *Mandarin Gardens Oasis Golden Westlake **Quoc Te **Bai Dai S-Tower Exit Date Q2 2009 Q2 2009 Q2 2009 Q2 2009 Q4 2009 Q4 2009 Q4 2010 Q2 2011 Q3 2011 Exit IRR (post-tax/fees) 10% 21% 10% 32% 22% 20% 20% 17% 16% Above excludes partial divestment of Danang World Trade Centre Phase 1: 49% sale (IRR 262%) * 2nd phase of divestment: pending receipt of final payment ** Under Contract: pending conclusion of conditions precedent
Investments carried at cost No Project Location Type Site Area (ha) Remarks 1 Long An South Township 1,925 Pending final investment licence - negotiations underway to divest 2 Hoi An South Central Township 1,538 Pending new master plan and revision of project phasing 3 Vung Bau (Phu Quoc) South Hospitality 238 Pending investment licence 4 Trinity Park South Residential 34 Pending completion of infrastructure and land use rights 5 Green Park Estate South Mixed-use 27 Pending approval of revised master plan for retail/commercial use (not residential) 6 Long Truong South Residential 20 Pending investment licence 7 Hao Khang South Residential 4.8 Pending investment licence - negotiations underway with coinvestor Total NAV (30 Jun 2011) of projects carried at cost: USD81m 17
VNL hotel portfolio performance Hotel Location Combined Ownership (VNL + VOF) VNL Ownership Bank debt (adjusted % holding of VNL) Jun 2011 (USD) Actual (%) Occupancy YTD Sep 2011 % Change to YTD Sep 2010 Budget Variance Available Room Rate YTD Sep 2011 Actual (USD) % Change to YTD Sep 2010 Budget Variance Movenpick Hanoi Hanoi 74.10% 55.58% $ 9,150,015 71.6% 0.1% -0.6% $ 102.3 3.8% -1.5% Mercure La Gare Hanoi 100.00% 100.00% $ 5,162,909 64.5% -4.3% -18.1% $ 70.7 0.1% -3.1% Movenpick Saigon HCMC 70.00% 52.50% $ 5,229,000 53.8% 11.4% -10.3% $ 86.6 14.2% -13.5% Legend HCMC 26.60% 19.95% 60.2% -2.3% -2.9% $ 121.4 11.6% 4.3% Sheraton Nha Trang Central 81.23% 62.90% $ 26,946,968 37.6% 16.3% -9.6% $ 103.5 1.6% -8.6% Saigon Quy Nhon Central 15.00% 15.00% $ 13,835 35.5% -2.8% -3.8% $ 23.3 3.2% 6.1% Saigon Phu Yen Central 16.24% 16.24% 15.7% -5.1% -14.3% $ 9.6 40.5% -12.5% Romana Central 50.00% 50.00% $ 234,697 51.3% 5.0% -4.1% $ 64.6-2.8% -1.5% Total debt of Hotel portfolio: USD46.7m (64% total bank debt across portfolio) Overall VNL hotel portfolio performance has improved compared with last 12 months however still not achieving budget Increased competition due to additional room supply = lower occupancy rates Limited domestic flights affect performance of hotels in regional areas (Sheraton Nha Trang in particular) Global economic factors are again impacting on the hospitality business. US and Europe debt issues have impacted travel and leisure in Asia including Vietnam. Vietnam is however still regarded as a safe, stable and low cost holiday destination 18
Development program Investment Type The Garland Residential Danang Beach Resort Residential WTC Danang Mixed use Ceana Villas and Resort Residential My Gia Township Dai Phuoc Lotus Township Hao Khang* Residential VinaSquare* Mixed-use Trinity Park (previously HUD)* Residential Pavilion Square* Mixed-use Aqua City* Century 21* Township Residential 2011 2012 2013 2014 2015 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Under Construction Proposed Construction Notes : (*): seeking co-investment partner or divestment Should there be a partial divestment or full divestment then development programs will alter and bring forward completion dates / exit dates Where a mixed use project has residential and commercial use then only construction of the residential component may be programmed to commence 19
VinaLiving - residential brand for VNL VNL s residential sales have been good leveraging off the VinaLiving brand despite a very challenging macro and real estate environment. VinaLiving created by VinaCapital is Vietnam s first residential lifestyle brand that provides a tailored-living product dedicated to the Vietnamese home buyers. This brand was recently awarded Best Development Marketing Vietnam for Danang Beach Resort project by Bloomberg Asia Pacific Property Awards 2011. VNL will continue to sell residential projects (land, houses, condominiums) under this brand. 20
Perception for value for money Competitors in residential development in Vietnam High VinaLand Low Developer Reputation High Note: Developers offering landed products are circled in red 21
3. Top holdings 22
Top 10 investments by portfolio NAV Total NAV (30 June 2011) of Top 10 investments: USD459m (64% of total portfolio NAV) No Investment Location Development Type VNL Ownership VOF Ownership Site area (ha) NAV % VNL NAV (USDm) Bank Debt (VNL Portion) Outstanding VNL Investment Commitment 1 Century 21 South Residential 75.00% 25.00% 30 12% 88 - - 2 Danang Beach Resort Central Residential 75.00% 25.00% 260 11% 78 15-3 Dai Phuoc Lotus South Township 54.00% 18.00% 200 8% 57-7 4 Pavilion Square South Mixed Use 90.00% 0.00% 1.4 7% 48 1 8 5 VinaSquare South Mixed Use 46.50% 15.50% 3.1 6% 44 - - 6 Times Square Hanoi North Mixed Use 65.00% 0.00% 4.0 5% 34-5 7 Aqua City South Township 40.00% 0.00% 250 4% 29 - - 8 My Gia Township Central Township 53.25% 17.75% 158 4% 29 7-9 Trinity Park South Residential 75.00% 25.00% 34 4% 27-4 10 Movenpick Hotel Saigon South Hospitality 52.50% 17.50% 0.8 3% 25 5 - Total Top 10 Investments (USD million) 64% 459 28 24 Remaining Investments (USD million) 36% 259 45 104 Total Portfolio (USD million) 100% 718 73 128 23
Century 21 Residential Project summary Type Location Area History Legal status Investment Rationale Residential (25ha) and retail (5ha) District 2, Ho Chi Minh City 30ha. Estimated GFA: 570,000sq.m Investment date: Jun 2006 Target IRR at investment: 20% Current NAV: USD88m Cleared and fully compensated site Revised Investment Licence application submitted in Dec 2010 Masterplan submitted and awaiting revised approval The project licensing and restructuring of ownership delayed this project in the early stages. The site is located in a new suburban area that will soon be connected to the CBD by a tunnel - expected to open in late November 2011. CBD Existing roads Future roads Thu Thiem Urban zone Century 21 The opening of the Dist 1- Dist 2 tunnel in November 2011 will make the site very accessible to the CBD. 24
Century 21 Residential Strategy - next 6 months Obtain a revised Investment Licence and 1:500 masterplan approval by Q4 2011 Preliminary infrastructure plans are being designed Seek co-investment for both residential phase 1 and commercial phase 2 Estimated Stock Total villas Total condos 400 2,000 View to CBD View to neighbouring properties 25
Danang Beach Resort Residential Project summary Type Location Area History Legal status Investment Rationale Integrated resort with golf courses, hotels, retail centre including recreational amenities, resort residences (villas and condominiums) and supporting facilities Danang, Central Vietnam (10 km from international airport) 260ha Investment date: Jun 2006 Target IRR at investment: 18% Current NAV: USD78m Debt (VNL portion): USD15m Cleared site, under development. Investment Licence received Dec 2008. Construction permit received for The Ocean Villas phases 1-3, Norman Estates, Dune Residences and The Cham condominium block 1:500 revised masterplan awaiting approval Build and sell residential components, divest hotel site as well as other land parcels. Develop golf course and amenities to assist with marketing of residential property. 20km 27km Hoi An Town Vietnam s first world-class resort 2011 Asia Pacific Property Award winner Best Golf Course Development in Vietnam Best Development Marketing in Vietnam Best Golf Course Development in the Asia Pacific 26
Danang Beach Resort Residential Marriot Hotel Site Development update Heritage Golf Course and associated residential hubs The Point Dunes Golf Course Dune Residences Dunes South Norman Estates The Ocean Villas The Cham Condo Danang Beach Resort villas had a ground breaking in January 2008 The Dunes Course, the first 18 hole golf course and clubhouse opened in April 2010 Phase 1 and 2 of the Ocean Villas have been handed over to the owners and phase 3 will be handed over in Q4 2011 The beach clubhouse is opened and the villa rental pool is operational Norman Estates branded villas were launched in June 2011 and are expected to be completed Q1 2013 The Dunes Residences began selling in September 2010, all sold and will be handed over in Q2 2012 The Cham condominium block A has a completed superstructure and negotiations are underway with potential investors for the hotel site 27
Danang Beach Resort Residential Total units Units Sold % Sold The Ocean Villas 110 100 91% Norman Estates 33 9 27% Dune Residences 15 15 100% The Point* 40 20 50% The Cham Condos (Phase 1) 45 18 40% *50% sold via reservation, converting to contract subject to foundation completed in Nov 2011 28
Danang Beach Resort Residential 29
Danang Beach Resort Residential Strategy: next 6 months Complete construction of all villas at The Dune Residences and Norman Estates as well as the sea wall for remaining breach front villas of the Ocean Villas. For remaining beachfront villas, VNL will complete full design, commence construction, and finish sea wall. Seek co-investor for individual parcels such as Temple club as well as entire site. Complete the Cham first apartment Block A. Relaunch sales programme. Finalise design and complete construction on The Cham Management Building. 30
Dai Phuoc Lotus Township Project summary Type Location Area History Legal status Investment Rationale Township (integrated residential) Dong Nai Province, outskirts of HCM City Site area: 200ha. Approved GFA: 1,758,975sq.m Investment date: Jun 2007 Target IRR at investment: 20% Current NAV: USD57m Investment Licence received May 2007 Land Use Rights issued for all zones, except for Zone 8 and CBD 1:500 masterplan and construction permit for Zone 5 received Initial licensing and approvals delayed commencement of the development however resultant approvals were significantly better than original approvals Development of six zones over period of 5-7 years and early partial wholesale divestment to co-investor Dai Phuoc Lotus Dai Phuoc Lotus Travel time by waterway takes 30 minutes or 1.5 hours by car to District 1, HCM City Zone 5 (villas) Total stock Units released Units Sold % Sold (released) 332 232 163 70% 31
Dai Phuoc Lotus Township Development update Construction and sales of Zone 5 townhouses underway The zone has a total of 332 villas 247 ground floor concrete slabs are complete 185 villas proceed to completion (bare-shell) The show village opened in April 2011 Zone 5 officially launched in early Apr 2011 and to date has released 232 out of 332 villas, with 163 villas sold so far. Implemented land lot sales strategy on Phase 4 under Decree 71 (Capital Contribution Agreement) Strategy: next 6 months Dai Phuoc Lotus Show village completed Zone 5 under construction Complete the ground floor concrete slab and the villa structures for all units that have a sales and purchase agreement with 15% cash deposit. Finish all Zone 5 infrastructure currently underway and tender and award works package for the remainder of the Zone. 32
Pavilion Square Mixed-use Project summary Type Location Area History Legal status Investme nt strategy Mixed-use (residential and retail) District 1, HCM City Site area: 1.4ha. Estimated GFA: 156,800sqm Investment date: Jan 2007 Target IRR at investment: 26% Current NAV: USD48m Debt (VNL portion): USD1m Compensation in progress. Investment Licence received 2007, updated 2010 Planning parameters approved. Land compensation by authorities has been slower than anticipated however has progressed significantly during Q3 2011. Source co-investment partner. Re-assess program when site is handed over to VNL. Subject to market undertake mktg to commence pre-selling residential units. Seek strategic partnership with retail investor/operator for the retail podium. In discussions with anchor tenant for 20,000sq.m of retail space. 1km Pavilion Square CBD Ben Thanh Market Located in District 1, this mid to upper mid tier residential project with retail centre is situated in the city centre 33
550 0 4 5 0 0 3 6 0 0 3 1 0 0 3 1 0 0 3 1 0 0 3 1 0 0 1 5 0 0 Pavilion Square Mixed-use Development update Site compensation is 40% complete The residential portion of clearance is expected to finish by Q1 2012 and the commercial area by Q3 2012. The schematic design has been submitted and is pending approval by the authorities. VNL will revise construction design based on the latest feasibility study. RESIDE NTIAL FOR SALE 27 STOREY S RESETTLE MENT TOWER Strategy: next 6 months TRANSFER LEVEL Complete compensation of the residential parcel P5 RESIDENTIAL PARKING P4 RESIDENTIAL PARKING Obtain final schematic design approval P3 RESIDENTIAL PARKING P2 RESIDENTIAL PARKING VNL will seek to divest the retail component (initial discussions underway) CAR RAM P APARTMENT LOBBY RETAIL RETAIL PLAZA COURTYARD TRANSFER LEVEL RETAIL LOBBY Total condos PARKING BASEMENT Estimated Stock 1,092 34
VinaSquare Mixed-use Project summary Type Mixed-use (residential, retail, office and hotel) CBD Location Area History Legal status Investment strategy District 5, HCM City Site area: 3.1ha. Estimated GFA: 278,748sq.m Over 1,280 apartments Investment date: May 2007 Target IRR at investment: 22% Current NAV: USD44m Demolition commenced Q1 2011 (Residential Site only) Investment Licence received Oct 2008 1:500 masterplan approved Oct 2010 Seeking investment partner. Will only commence residential apartments once market conditions improve. Marketing suite design completed for residential component ready to go once conditions improve. Chinatown VinaSquare A mixed-use commercial/residential development in densely populated Chinatown of HCM City 35
VinaSquare Mixed-use Development update Relocation of the existing factory in progress and due to be completed by end Q4 2011. Construction of the residential sales showroom on hold. Subject to market conditions and securing of a debt facility the soft sales launch will begin Q2 2012. Subject to start date, complete the residential portion by 2015 in conjunction with sourcing a co-investment partner. Strategy: next 6 months Revise the 1/500 masterplan. Complete factory relocation. Revise the investment licence for structuring purposes. Transfer the Land Use Right to JV Company. Continue with discussion to partially divest. Total condos Estimated Stock 1,280 36
Times Square Hanoi Mixed-use Project summary Type Location Area History Legal status Investment strategy Mixed-use (residential, retail, hotel and office) My Dinh the future second CBD of Hanoi 40,000sq.m. Estimated GFA: 351,140sq.m. Investment date: Apr 2007 Target IRR at investment: 29% Current NAV: USD34m Investment Licence received May 2008 and revised July 2010 Planning Approval No.763/QHKT-P1 dated 17 Mar 2010 from Hanoi Department of Planning and Architecture Approvals and licensing have delayed commencement Seeking co-investment to develop the office, retail and hotel. Conversion of residential for lease to for sale at later date. To Airport My Dinh Area Times Square Hanoi Old Quarter Proposed mixed-use commercial development in new urban centre in western Hanoi (My Dinh) Total condos Estimated Stock 1,332 37
Times Square Hanoi Mixed-use Development update Seeking pre-commit prior to commencing basement construction in Q1 2012. Discussions underway with potential operators and coinvestors for the retail, office, hotel, and serviced apartment parcels. Total apartments for lease Estimated Stock 1,332 Strategy: next 6 months Obtain concept design approval Seek a buyer for the serviced apartment/hotel land and an operator/investor for the retail parcel Basic pre-construction site works will be commenced 38
Aqua City Township Project summary Type Township with marina Bien Hoa Location Area History Legal status Investment strategy Dong Nai Province, bordering District 9 of HCM City Site area: 250ha. Estimated GFA: 1,419,460sq.m Investment date: Jan 2008 Target IRR at investment: 20% Current NAV: USD29m Pre-Investment Licence received Apr 2008 1:2,000 masterplan approved Dec 2008 Final MP1:500 submitted to Dong Nai Authority on 1 April 2011 Land Use Rights Certificate for 87ha obtained Nov 2009 Cleared and fully compensated site Progressing slowly with basic infrastructure. Commencing residential villas first but after mkt strengthens Seek co-investor /sub developer as partial exit. CBD Aqua City Proposed International Airport Riverfront township bordering District 9, HCM City 39
Aqua City Township Development update Infrastructure works commenced in Q4 2010 and basic earthworks scheduled to begin in Q2 2012. Basic design will be commenced in Q4 2011 as VNL seeks an investor/co-developer. Phase 1 of Zone 1 (36ha) will be the first parcel for development, comprising 526 villas and townhouses. Development of the Zone is expected to run through 2015. Strategy: next 6 months Obtain the LUR certificate and approval for the 1:500 masterplan. Once masterplan approval has been secured the Fund will commence basic product design. Total villas Zone 1 (Phase 1) 526 Proposed International Airport 40
My Gia Township Township Project summary Type Township Location Area History Legal status Investme nt strategy Nha Trang City, Khanh Hoa Province Site Area: 158ha. Estimated GFA: 962,982sq.m Investment Date: Jan 2008 Target IRR at investment: 18% Current NAV: USD29m Debt (VNL portion): USD7m Investment approval in 2008 Investment License and construction permit obtained Initial ownership and local partner difficulties slowed project commencement. Development of infrastructure and residential components to commence first. Seeking partial divestment to co-investor for remaining phases. 2km A township in Nha Trang City, the product on offer is a modern design on a small block at affordable prices suitable for local buyers. 41
My Gia Township Township Development update Design of infrastructure has been finished and the display village is under construction with completion expected in Q4 2011. The site is being filled and leveled. In December 2010, the soft sale launch was held in Hanoi and HCM City. To date, 489 lots have been converted to SPA (an addition of 98 lots reserved/ pending) out of the 638 that were released. The official sales launch is planned for October 2011. Strategy: next 6 months Complete the fill on parcel 2 by Q4 2011 and open the show village. Upon opening the show village in October 2011 the official sales launch will be held. The fund intends to begin mass construction of house foundations and have the revised 1:500 masterplan ready for submission by November 2011. Total stock Units released Units Sold % Sold (released) Phase 1 (villa lots) 1,095 638 489 76% 42
Trinity Park Residential Project summary Type Mixed use (residential and school) Location Area History Legal status Investment strategy District 9, HCM City Site Area: 33.7ha. Investment date: Nov 2007 Target IRR at investment: 22% 1:500 Masterplan approved Investment License application under submission. Compensation completed. Current NAV: USD27m Developing infrastructure to facilitate sales of residential lots and houses. Seeking coinvestment to jointly develop landed property packages. CBD 17km Trinity Park Long Thanh Dau Giay Highway Mid-range housing project in District 9, HCM City 43
Trinity Park Residential Development update The site has been restructured so that VNL has a majority ownership stake in a 34ha portion. The Investment Licence application has been submitted and is awaiting approval. Upon completion of the infrastructure design the soft sales launch will begin. VNL is currently seeking a co-investment partner for the project. CBD Strategy: next 6 months VNL intends to obtain the Investment License and seek a co-investment partner to jointly develop the site. The fund plans to construct display villas for the residential portion in order to launch a soft sales campaign while exiting the school parcel to an experienced industry player. Total villas Total condos Estimated Stock 510 1,000 44
Movenpick Hotel Saigon Operating hotel Project summary Type Location Current status 5-star hotel in operation Phu Nhuan District, HCM City 10 minute drive from Tan Son Nhat International airport and 20 minute drive from city centre Operating asset City Airport Land size Total key count 278 Facilities History 8,183sq.m 3 restaurants, 2 bars, banquet facilities, spa, pool, fitness center and gaming club Investment date: Nov 2006 Target IRR at Investment: :20% Current NAV: USD25m Debt (VNL portion): USD5m Movenpick Hotel CBD Performance Land use term Until 2032 Date of opening Operator Average room rate: USD87.13 Occupancy Rate: 52.1% 1994. Re-opened in Aug 2010 after major refurbishment Mӧvenpick Hotels and Resorts Management AG (15 years, 2008-2023) The only 5-star hotel serving the HCM City airport 45
Movenpick Hotel Saigon Operating hotel Strategy: next 6 months VNL is investigating increase in capacity of the gaming facilities while growing revenue from core operating activities through marketing. Objective of hotel manager to improve occupancy and average room rates. 46
4. Shareholder feedback and Action plan 47
Shareholder feedback Following extensive shareholder consultation, the Board and Manager have implemented several initiatives designed to improve shareholder communication, enhance performance and returns for shareholders, instigate capital distributions and work towards to narrowing the share price trading discount Action Plan Communication Fund Performance Capital Distributions Shareholder Involvement 48
Communication Enhance Shareholder Communication the Board has focused on improving the level of reporting and transparency to ensure shareholders receive more information on the Fund s performance, assets and strategy for the next 4 years : New Quarterly Report launched - increase information and transparency. Improved website contains factsheet, monthly, quarterly and annual reports. Residential sales updates. Regular investor update briefings on a semi-annual basis in key financial centres in Europe and Asia, currently underway now : 31 st October to 9 th November 2011 : New York, Amsterdam, London, Geneva, Zurich and Tokyo. 49
Fund performance Key objectives for next 12 months and subsequent 36 months: Narrow share trading discount Increase cash position Commence and maintain capital distributions Increase share trading liquidity Grow fund NAV Increased market awareness of the fund 50
Board Resolutions During the recent VNL Board meeting in October 2011 it was resolved to : 1. Commence a share buyback program following the release of the 30 June 2011 financial statements Shares once purchased will be cancelled This buyback program will commence by no later than 31 st October 2011 2. Undertake a restructure of the Board composition with not less than two, and possibly three members of the current Board standing down, and the appointment of two or three new independent non executive directors. The AIM Nomad is currently undertaking the required due diligence on the proposed new directors and details of these individuals will be announced shortly after the due diligence process is finalised. This announcement is expected in early November 2011. 51
5. Wrap-up 52
Wrap-up Three years ago VNL modified it s strategy, moving away from commercial, office & industrial projects in order to target residential for sale projects which allows pre-sales, flexibility in product definition and phasing. This sector has proven to be the best performing sector in Vietnam property over recent years. Despite the 2008 GFC and now another challenging macroeconomic environment both globally and in Vietnam, VNL continues to has no leverage at fund level, and only 11% bank debt at project level which is extremely low for a property development fund. While there are macroeconomic and local property market challenges in Vietnam, the Board and Manager are cautiously optimistic that the market will strengthen in 2012 and the continued development of this unique portfolio of projects will result in returns to shareholders over the next 3 to 4 years. The Fund will expedite development and divestment of existing projects where the market permits to realise value with the objective to narrow the trading discount, grow NAV and ensure provision of distributions to shareholders. 53
Thank you Discussion and Questions 54
VinaCapital 17 th Floor, Sun Wah Tower 115 Nguyen Hue, District 1, Ho Chi Minh City, Vietnam P: (84 8) 3821 9930 F: (84 8) 3821 9931 Email: ir@vinacapital.com Website: www.vinacapital.com Ho Chi Minh City Hanoi Danang Nha Trang Singapore Phnom Penh 55