Extraordinary General Meeting 19 June 2012 ARA-CWT Trust Management (Cache) Limited
Important Notice This presentation does not constitute an offer, invitation or solicitation of securities in Singapore or any other jurisdiction nor should it or any part of it form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. 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 and the continued availability of financing in the amounts and the terms necessary to support future business. Investors are cautioned not to place undue reliance on these forward-looking statements, which are based on the current views of management on future events. The value of units in Cache Logistics Trust ( Cache, and units in Cache, Units ) and the income derived from them, if any, may fall or rise. Units are not obligations of, deposits in, or guaranteed by, ARA-CWT Trust Management (Cache) Limited, as the manager of Cache (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 should note that they will have no right to request the Manager to redeem or purchase their Units for so long as the Units are listed on Singapore Exchange Securities Trading Limited (the SGX-ST ). It is intended that holders of Units may only deal in their Units through trading on the SGX-ST. The listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. The past performance of Cache is not necessarily indicative of the future performance of Cache. 2
Section 1 Summary of Resolutions Sought ARA-CWT Trust Management (Cache) Limited
Summary of Resolutions Sought Resolution 1 (Ordinary Resolution) 1 The Proposed Acquisition and Master Lease of Pandan Logistics Hub ( the Property or PLH ) ) Seeks approval from Unitholders for the proposed acquisition of the Property from 49 Pandan Pte. Ltd., a wholly-owned subsidiary of CWT Limited (the Acquisition ) Upon completion of the acquisition ( Completion ), CWT Limited shall enter into a master lease agreement to lease the whole of the Property for three years ( Master Lease ) ) Resolution 2 (Ordinary Resolution) 1 The Proposed Agreement for Lease and Escrow Leases in Relation to Pandan Logistics Hub Upon Completion, CWT Limited will also enter into an agreement for leases ( AFL ) to lease the First Storey Premises and Fifth Storey Premises of the Property for four and two years, respectively The two leases under the AFL will be held in escrow and commence upon the expiry of the Master Lease ( Escrow Leases ) Resolutions 1 and 2 are inter-conditional Note:(1) Rule 919 of the Listing Manual prohibits interested persons and their associates from voting on a resolution in relation to a matter in respect of which such persons are interested in at the Extraordinary General Meeting ( EGM ) 4
Section 2 REIT Overview ARA-CWT Trust Management (Cache) Limited
REIT Overview Listed on SGX-ST on 12 April 2010 Market cap of S$724.4m 1 as at 31 May 2012 Cache Outperformance of Market 11 quality logistics properties 115% 4.5m sf GFA valued at approx. S$878.0m 2 Strong sponsorship by CWT Limited Achievements since IPO Asset enhancement added value to the portfolio and extended WALE Growth by way of 5 acquisitions in both Singapore and China Proposed acquisition of Pandan Logistics Hub Lowering overall cost of debt going forward Total return of 35.7% since IPO 4 Rebased to 100% 110% 105% 100% 95% Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Total Return Cache FTSE ST Index 1Jan 2012 to 31May12 =134% 13.4% 3 IPO (12Apr10) to 31May12 = 35.7% 4 Notes: (1) Based on market closing unit price of S$1.035 on 31 May 2012 (2) As at 31 December 2012 (3) Bloomberg, based on market closing unit price of S$0.950 on 30 Dec 2011 and S$1.035 on 31 May 2012 (4) Bloomberg, based on opening price of S$0.88 per unit and market closing unit price of S$1.035 on 31 May 2012 6
Section 3 Acquisition of Pandan Logistics Hub ARA-CWT Trust Management (Cache) Limited
Transaction Summary Pandan Logistics Hub Located in the Jurong Industrial Estate at 49 Pandan Road 5-storey ramp-up logistics warehouse completed in 2011 GFA: approx. 329,000sf Transaction Sale and leaseback with CWT Limited Summary Purchase Price S$66.0m 1 Total acquisition cost of S$69.3m Contracted avg lease term of 4.3 yrs (incl AFL) 3-yr master lease with 2.5% pa rental step-up Approx. 7.6% Net Property Income (NPI) yield on starting rent Fully funded by bank borrowings 2 Note: (1) Lower of independent valuations of S$66.0m (Knight Frank) and S$66.5m (CKS Property Consultants) (2) Acquisition Fee to be paid in the form of units as required by the Property Funds Appendix 8
Enlarged Portfolio Post Acquisition Second Link (Tuas checkpoint) Jurong Island 2 Jurong Port Johor Causeway 1 Sembawang Wharves 1. CWT Commodity Hub Pulau Ubin 2. CWT Cold Hub Changi International 3. Kim Heng Warehouse* Airport 11 9 10 6 4. Pandan Logistics Hub 7 5 8 3 5. Schenker Megahub 4 6. Hi-Speed Logistics Centre Pasir Panjang Terminal 7. C&P Changi Districentre Sentosa Pandan Logistics Hub Keppel Terminal 8. C&P Changi Districentre 2 9. APC Distrihub* 10.Pan Asia Logistics Centre* 11.Air Market Logistics Centre* 12. Jinshan Chemical Warehouse (China)* * - Denotes properties acquired since IPO 9
Rationale for the Transaction Competitive Strengths of Pandan Logistics Hub Strategically located property Modern and attractive technical specifications Enhances quality of Portfolio Increases market share of ramp-up logistics warehouses in Singapore Improves lease expiry profile Reduces overall building age of the enlarged portfolio Provides end-user and income diversification Master leased and full occupancy provides predictable cash flow Locked-In rental escalation Large scale acquisition - noticeably increases Portfolio Size Further strengthens platform for acquisition growth 10
Method of Financing Capital Management Exercise Existing S$203.0m secured loan and S$40.0m unsecured loan to be refinanced with new S$375.0m 1 bank facility (secured against existing collateral) Enables acquisition of Pandan Logistics Hub without providing further security and thus increases pool of unsecured assets The effective interest rate for the existing S$203.0m loan is 3.1% plus Swap Offer Rate ( SOR ) as opposed to 2.8% plus SOR for the new $375.0m bank facility Post completion, aggregate leverage of Cache will increase from 27.7% to approx 32.5% (2) Notes: (1) New bank facility comprises a S$313m term loan and a $62m revolving credit facility provided by Standard Chartered Bank and DBS Bank. (2) Assuming that the Manager borrowed S$79.6 million to finance the Acquisition and the refinancing costs, and taking into account the 60,000,000 units issued as a result of a private placement exercise concluded in March 2012, the completion of the acquisition of Pan Asia Logistics Centre and the capital management exercise 11
Rationale for the Transaction Portfolio Size Noticeably Increases investment property base 1 Rental Escalation Higher locked in rental escalation compared to existing portfolio and industry norm 2 960 940 944 3.0% 2.5% 2.50% 2.50% 920 2.0% 1.50% 900 880 878 1.5% 1.0% 860 0.5% 840 Property base prior to acquisition (S$m) Property base post acquisition (S$m) 0.0% Bottom range of Cache existing portfolio and industry norm Top range of Cache existing portfolio and industry norm PLH In line with Manager s Investment Strategy and provides Further Exposure to High-Growth Logistics Sector NPI of 7.6% on starting rent in line with existing portfolio s avg NPI yield Notes: (1) Based on valuations of the Cache s existing portfolio of properties as at 31 December 2011 and the costs of the recently completed Pan Asia Logistics Centre and Pandan Logistics Hub (2) Based on publicly available information of the actual transactions involved in IPOs as well as subsequent transactions between REITs and their respective lessee 12
Rationale for the Transaction Overall Enhancements to Portfolio Market share of ramp-up warehouse in Singapore Lowers average age of portfolio 24% 4.65 22.9% 23% 4.60 4.6 23% 4.55 22% 4.50 22% 21.2% 2% 44 4.45 21% 21% 20% Market Share prior to acquisition Market share post acquisition rs yea 4.40 4.35 4.30 Existing Portfolio 4.4 Enlarged Portfolio Improved lease expiry profile Further income diversification 60% 50% 40% 30% 20% 10% 0% 1.8% 1.7% 6.4% 5.9% 34.6% 36.4% 33 3.4% 31.1% 1.5% 7.3% 8.0% 16.5% 15.4% 2013 2014 2015 2016 2017 2018 2019 2020 and beyond Existing portfolio Enlarged portfolio 45% 43% 41% 39% 37% 43.7% Contribution to Cache NPI from CWT Commodity Hub before acquisition 40.6% Contribution to Cache NPI from CWT Commodity Hub after acquisition 13
Financial Effects PRO-FORMA DPU ACCRETION 1 - FOR ILLUSTRATIVE PURPOSE ONLY - FY 2011 as if Cache had purchased the Property on 1 Jan 2011 and held and operated the Property through to 31 Dec 2011 1Q2012 2 as if Cache had purchased the Property on 1 Jan 2012 and held and operated the Property through to 31 Mar 2012 8.5 8.471 2.2 8.5 8.4 8.4 2.1 2.1 2.148 8.3 8.3 8.2 8.235 2.1 2.1 2.086 8.2 21 2.1 8.1 2.0 DPU (cents) before DPU (cents) post acquisition DPU (cents) before acquisition DPU (cents) post acquisition acquisition Notes: (1) DPU Accretion calculation assumes the new bank facility had been in place at the time of each respective DPU accretion scenario as well as the issuance of units to the Manager as consideration for the fees payable in respect of the acquisition of the Property and the payment of all management fees (2) The DPU included the advanced distribution of 2.044 cents per Unit made to existing unitholders, being the unitholders registered with CDP on 29 March 2012, the day immediately prior to the date on which the new units were issued. 14
Proposed AFL and Escrow Leases Triple New Lease Rental (S$ million pa) 1 st Year 2 nd Year 3 rd Year 4 th Year 5 th Year 6 th Year 7 th Year Master Lease 5.20 5.33 5.47 Escrow Leases Lease for First Storey Lease for Fifth Storey % of GFA covered by Escrow Leases - - - 1.20 1.23 1.26 1.29 - - - 1.32 1.35 - - - - - 44.2% 44.2% 21.0% 21.0% Duration of Master Lease Duration of Escrow Leases AFL leases to be held in escrow until the Master Lease expires Upon Master Lease expiry - Escrow Leases will come into effect Reduces leasing uncertainty for Cache while providing some potential for rental upside on remaining area to be leased 15
Summary Effects on Portfolio Portfolio before Acquisition Enlarged portfolio post Acquisition Assets under Management 11 12 GFA (approx) 4.50 million sf 4.83 million sf Feature Total no. of Tenants 7 - Ramp-up 2 - Cargo Lift 2 - Single Storey 8 - Ramp-up 2 - Cargo Lift 2 - Single Storey 10 Master Lessees 11 Master Lessees (triple-net rental) (triple-net rental) 2 Tenants in Multi-Tenanted 2 Tenants in Multi-Tenanted Property Property Portfolio Valuation S$878.0 million S$944.0 million 16
Summary of Resolutions Sought Resolution 1 The Proposed Acquisition and Master Lease of Pandan Logistics Hub (Ordinary Resolution) 1 Resolution 2 The Proposed Agreement for Lease and Escrow Leases in Relation to Pandan Logistics Hub (Ordinary Resolution) 1 Resolutions 1 and 2 are inter-conditional Note: (1) Rule 919 of the Listing Manual prohibits interested persons and their associates from voting on a resolution in relation to a matter in respect of which such persons are interested in at the EGM. 17
Thank you 18
Extraordinary General Meeting 19 June 2012 ARA-CWT Trust Management (Cache) Limited