ARA-CWT Trust Management (Cache) Limited Cache Logistics Trust Manager of PROPOSED ACQUISITION OF JINSHAN CHEMICAL WAREHOUSE 1. Introduction 1.1 The Acquisition The board of directors of ARA-CWT Trust Management (Cache) Limited, as manager of Cache Logistics Trust ( Cache, and as manager of Cache, the Manager ), wishes to announce that HSBC Institutional Trust Services (Singapore) Limited, in its capacity as trustee of Cache (the Trustee ), through Cache Singapore One Pte Ltd (a wholly-owned subsidiary of Cache), has entered into a share purchase agreement (the Share Purchase Agreement ) with CWT Cayman Holdings Limited (the Vendor ) and CWT International Private Limited (the Obligor ) in relation to the acquisition of the property known as Jinshan Chemical Warehouse located at No. 288 Gongchuang Road, Caojing Town, Jinshan District, Shanghai (the Property and the acquisition of the Property, the Acquisition ). 1.2 Disclosure Requirements under the Listing Manual and the Property Funds Appendix As at the date of this Announcement, CWT Limited ( CWT ) holds 40.0% of the Manager, and is therefore regarded as a controlling shareholder of the Manager under both the Listing Manual of Singapore Exchange Securities Trading Limited (the SGX-ST and the Listing Manual of the SGX-ST, the Listing Manual ) and the appendix for real estate investment trusts as found in Appendix 2 of the Code on Collective Investment Schemes (the Property Funds Appendix ). The Vendor is a wholly-owned subsidiary of CWT and thus is an associate of a controlling shareholder of the Manager for the purposes of Chapter 9 of the Listing Manual and the Property Funds Appendix. Likewise the Vendor is (for the purposes of the Listing Manual) an interested person and (for the purposes of the Property Funds Appendix) an interested party of Cache. The Manager is making this announcement as the Acquisition constitutes an interested person transaction under Chapter 9 of the Listing Manual as well as an interested party transaction under the Property Funds Appendix, when aggregated with all transactions entered into with the same interested person/party during the current financial year. Macquarie Capital Securities (Singapore) Pte. Limited, Standard Chartered Securities (Singapore) Pte. Limited and DBS Bank Ltd were the joint global coordinators, bookrunners and underwriters to the Offering (the Joint Global Coordinators, Bookrunners and Underwriters ). The issue managers for the Offering are Macquarie Capital (Singapore) Pte. Limited, Standard Chartered Securities (Singapore) Pte. Limited and DBS Bank Ltd (together with the Joint Global Coordinators, Bookrunners and Underwriters, the Joint Global Coordinators, Bookrunners and Underwriters and Issue Managers ).
1.3 Information on the Property The Property is located in the Caojing Town, Jinshan District, Shanghai. It is situated within the Shanghai Chemical Industry Park ( SCIP ). SCIP is the first industrial zone in Shanghai specialising in the development of petrochemical and fine chemical sectors. The Property was developed by CWT and completed in 2007. The premises comprises of four single-storey chemical warehouse buildings, ancillary office space, loading bays and carparking. The total gross floor area is approximately 13,547 square metres. 2. Nature of the Transaction Pursuant to the terms of the Share Purchase Agreement, the Purchaser will acquire of the entire share capital of CWT Cayman (Jinshan) Limited (which will be renamed as Cache Cayman One Holdings Limited), which holds CWT Jinshan (Hong Kong) Pte Ltd (which will be renamed as Cache Hong Kong One (Jinshan) Pte Ltd) (the HK SPV ), and which in turn holds CWT Warehousing Transportation (Shanghai) Development Co., Ltd. (which will be renamed as Cache Chemical Warehouse (Jinshan) One Co., Ltd.) (the WFOE ) (collectively, the Group Companies ) which holds the Property. In connection with the Acquisition, the following agreement will also be entered into: (i) (ii) (iii) a deed of tax covenant (the Deed of Tax Covenant ) between the Vendor, the Obligor (and together with the Vendor, the Covenantors ); a property management agreement (the Property Management Agreement ) between the Manager, the Trustee and Cache Property Management Pte. Ltd. in relation to the management of the Property; and a lease agreement (the Lease Agreement ) between WFOE (which directly holds the Property) and CWT Logistics (Shanghai) Co., Ltd, in respect of the Property. 3. Valuation Two independent property valuers, CB Richard Ellis Limited and Knight Frank Petty Limited, were appointed by the Manager and the Trustee respectively, to value the Property. As at 31 March 2011, CB Richard Ellis valued the Property at RMB 77.0 million. Knight Frank Petty valued the Property at RMB 76.3 million as at the same date. Both valuations were arrived at using direct capitalisation as well as discounted cash flow approaches. The basis of the valuation is the estimated amount for which the property should exchange on the date of valuation between a willing buyer and willing seller in an arm s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. 2
4. Estimated Acquisition Cost The current estimated total cost of the Acquisition is RMB 76.0 million ( Acquisition Cost ) which comprises: (i) the purchase consideration of approximately RMB 72.4 million (the Purchase Consideration ); (ii) (iii) the acquisition fee payable to the Manager in units in Cache ( Units ) pursuant to the trust deed dated 1 April 2010 constituting Cache (the Trust Deed ); and the professional and other fees and expenses in connection with the Acquisition, is estimated to be approximately RMB 3.6 million (the Acquisition Expenses ). The Purchase Consideration was negotiated on a willing-buyer and willing-seller basis, and is based on the valuation of the Property and estimated net asset adjustments. 5. Method of Financing and Aggregate Leverage The Manager intends to finance the Acquisition Cost through bank borrowings available by way of the existing revolving credit facility. Upon completion of the transaction, expected to be within June 2011, the Aggregate Leverage, as defined in the Property Funds Appendix, will rise from the present 27.9% as at the date of this announcement to 29.2%. 6. Certain Principal Terms of the Agreement The key principal terms of the Agreement are: (i) (ii) the Purchase Consideration, which is subject to adjustments based on the net assets of the Group Companies, includes the property consideration of RMB 71.0 million and is subject to audit upon completion; and the lease of the Property to CWT Logistics (Shanghai) Co, Ltd for a period of three years from completion of the transaction, with an option for a further three years thereafter, commencing at a starting triple-net rental of RMB 1.30 per square metres per day for the first year and increased by 2 per cent. per annum thereafter. Any extension of the lease will be on the same lease terms, save for rental and associated increase which will be at the fair market rate. 7. Rationale for the Acquisition The Manager believes that the Acquisition will bring the following benefits to Cache: 7.1 Opportunity to purchase attractive and high quality property The Acquisition represents an opportunity for Cache to acquire an attractive and high quality warehouse in a growing and resilient sector of the Chinese economy. The Property is of an excellent standard and caters to a variety of chemical warehousing classes. The Property offers end-users 10-metre floor-to-ceiling height, 10 dock-levellers and six 5-ton overhead cranes. 3
7.2 Geographical Diversification The Acquisition will enhance the geographic diversification of Cache s portfolio. This is in line with the Manager s investment strategy of investing in income-producing real estate used for logistics purposes in Asia-Pacific 1. The emerging and rapidly expanding China market has received significant levels of foreign direct investments, which are expected to result in growth in the logistics sector. The Property benefits from the location within the successful SCIP development which is one of four major industrial production bases in Shanghai. SCIP is also one of the largest and fully-integrated petrochemical bases in Asia. The Acquisition will enable Cache to capitalise on the economic growth in the region and in particular the resilient chemical and commodity logistics businesses. Concurrently, by diversifying into a different market, Cache is expected to benefit from risk diversification from the Property and the economic cycles where Cache s portfolio is located. 7.3 Income Diversification The acquisition is expected to benefit Unitholders by providing a secure cash flow and improving income diversification while reducing the reliance of Cache s income stream on any single country or property. 8. Audit Committee Statement Having considered the terms and conditions of the Share Purchase Agreement, the Deed of Tax Covenant, the Property Management Agreement and the Lease Agreement (the Transaction Documents ) as well as the rationale for the entry into the Transaction Documents, the audit committee of the Manager is of the view that the entry into the Transaction Documents are on normal commercial terms and would not be prejudicial to the interests of Cache and its minority Unitholders in respect of the interested party nature of the transaction. 9. Interested Person Transactions with CWT As at the date of this announcement, the value of all other interested person transactions between Cache and CWT and/or their subsidiaries and associates of CWT for the current financial year (including the Acquisition and the transactions contemplated in the Transaction Documents) is approximately S$27.6 million. As at the date of this announcement, other than as disclosed above, there are no other interested person transactions entered into for the current financial year. 1 For the purposes of the investment mandate of Cache, Asia-Pacific is defined as Singapore, Malaysia, Indonesia, Philippines, Thailand, Vietnam, China, India, Hong Kong, Macau, Taiwan, Japan, Korea, Australia and New Zealand. 4
10. Interests of Directors and Controlling Unitholders As at the date of this announcement, certain of the directors of the Manager collectively have an aggregate direct and indirect interest in approximately 15.84 million Units and certain of the directors of the Manager collectively have an aggregate direct and indirect interest in approximately 36.97 million shares in CWT. Mr Liao Chung Lik is non-executive director of the Manager and a non-executive director of CWT. Mr Jimmy Yim Wing Kuen is non-executive director of the Manager and the lead independent director of CWT. Save as disclosed above and based on the information available to the Manager as at the date of this announcement, none of the directors of the Manager or substantial Unitholders have an interest, direct or indirect, in the Acquisition and the Transaction Documents. 11. Documents for Inspection Copies of the Share Purchase Agreement and the valuation reports are available for inspection during normal business hours (prior appointment will be appreciated) at the registered office of the Manager at 6 Temasek Boulevard, #16-02 Suntec Tower Four, Singapore 038986 at for a period of three months commencing from the date of this Announcement. BY ORDER OF THE BOARD ARA-CWT TRUST MANAGEMENT (CACHE) LIMITED (AS MANAGER OF CACHE LOGISTICS TRUST) (Company registration no. 200919331H) Daniel Cerf Chief Executive Officer 1 June 2011 Important Notice 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 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 that the Manager redeem or purchase 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 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. The past performance of Cache is not necessarily indicative of the future performance of Cache. 5
ABOUT CACHE Cache is a real estate investment trust ( REIT ) constituted on 11 February 2010. Cache was listed on the main board of SGX- ST and commenced operations on 12 April 2010. Cache principally invests in income-producing real estate used for logistics purposes in Asia-Pacific, as well as real estate-related assets. Cache presently holds a portfolio of high quality logistics warehouse properties strategically located in Singapore s established logistics clusters. Cache is managed by ARA-CWT Trust Management (Cache) Limited. For more details, please visit www.cache-reit.com. ABOUT ARA-CWT TRUST MANAGEMENT (CACHE) LIMITED ARA-CWT Trust Management (Cache) Limited, is a joint-venture REIT management company between ARA Asset Management Limited ( ARA ) and CWT Limited ( CWT ). ARA, an affiliate of the Cheung Kong group, is a real estate fund management company listed on the main board of the Singapore Exchange. ARA currently manages REITs listed in Singapore, Hong Kong and Malaysia with a diversified portfolio spanning the office, retail, industrial/office and logistics sectors; private funds investing in real estate and real estate-related securities in Asia; and provides real estate management services, including property management services and convention & exhibition services; and corporate finance advisory services. For more details, please visit www.ara-asia.com. CWT Limited was set up in 1970 and listed on the Singapore Exchange in 1993. CWT has since grown and the principal businesses of CWT currently comprise integrated logistics solutions and engineering maintenance and facilities management services. Being the largest listed logistics company in Southeast Asia, CWT offers integrated logistics solutions to some of the world s leading brands in the chemical, commodities, automotive, marine, oil & gas, defence and industrial sectors. Through its global network, the CWT Group is able to connect customers to 120 ports and 1,200 destinations seamlessly around the world. For more information please visit www.cwtlimited.com. 6