Assumptions Acquisition of SJ Infinite 1 (Equinox) Office
Transaction Rationales High Quality Asset Freehold asset in foreseeable prime location of BKK Building specification comparable to Grade-A office Unique cluster of energy and airline industry Close to mass transit and expressway Close to one of Bangkok s largest green area Upside potential from land price appreciation 7 10% per annum* Value Appreciation of Freehold Asset Transaction Rationales Maintain Financial Discipline Improve overall financial strength by optimization of Debt to Equity while ensuring the maximization of sale value Off-balance sheet technique from REIT stand point Ability to Grow Recurring Income with Asset-Light Model Secured additional recurring income via REIT management fee and dividend received from REIT Diversify business risk to REIT Platform to grow office REIT in the future with optimal exposure to office asset Remarks: *Sourced from Agency for Real Estate Affairs (AREA) 2
Asset Information Equinox Office Tower Building Details : Grade A Attributes Construction Start End of 2010 Completion July 2014 2 No. of Storeys Land Area Gloss Floor Area Net Leasable Area Car Park No. of Lifts Floor Plate Air-Condition Other Features 30 (1 st -31 st floor/skip 13 th floor) 3-1-45.5 rais 45,044 sqm. 21,200 sqm. Office: 19,400 sqm. Retail: 1,800 sqm. Approx. 330 spaces 8 passenger lifts and 1 car park lift 848 927 sqm. Air cooled package with VRF system Floor to floor height Office: 4.0 m Retail: 6.0 m Floor to ceiling height Office: 2.9 m Retail: 4.0 m 3
Strategic Location The asset is situated in the prime location with easy access from BTS, MRT and expressway and surrounded by headquarters of well-known firms in energy and airline industries PTT Headquarter Central Equinox TMB Bangkok Airways BTS Mhorchit Union Mall MRT Paholyothin Sun Tower Rasa Tower Thai Airways Office buildings Shopping centers Public transport 800 m from BTS Mhorchit 3.5 km from Kampangpetch expressway 5.8 km from Din Daeng expressway 16 km from Don Muang airport 31 km from suwannaphum airport 4
Office Floor Plate Layout Office Low Zone (Fl. 8 20) Office High Zone (Fl. 21 31) Low Zone Lift High Zone Lift 5
Grade A Office Building 6
Grade A Office Building 7 7
Transaction Milestones Due Diligence Construction Completed Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 Sep 2014 Oct 2014 Jun 2015 25 Apr 14 23 Jun 14 23 Jul 14 Sign MOU Sign SPA Transfer of Possessory Right Transfer Asset to REIT 5% Payment 5% Payment 89% Payment with remaining 1% subject to pre-agreed carrying cost 1% with carrying cost Payment WHA to recognize asset in its balance sheet and performance in Income Statement 8
Transaction Structure 3 MJD/MJP Transfer of Possession Another 89% payment 1 2 Transaction Structure MOU 5% Payment SPA 5% Payment Remaining 1% payment Remark: MJD is the current owner of building MJP is the current owner of land and utilities 4 WHA Transfer of Ownership Proceeds to acquire assets WHA Office REIT 1 2 3 4 WHA pays 5% of the total proceeds upon signing of MOU WHA pays 5% of the total proceeds upon signing of SPA WHA makes another 89% payment, totaling 99% of the total payment. In return, MJD/MJP transfers the possession of assets to WHA. All contracts between MJD/MJP and other parties will be novated to WHA. WHA will then act as the owner of the assets. WHA Office REIT makes a total payment to WHA in return for the transfer of ownership in assets while WHA pays the remaining 1% of the total payment to MJD/MJP. 9
Justification of Acquisition Price The acquisition price at THB 2,050 mm is justifiable based on replacement cost basis. In other words, if we were to constructed such asset today by ourselves, it would incur the cost of approximately THB 2,300 mm Replacement Cost Unit: THB mm Hard costs 1,389 Site, building, utilities and parking based on appreciated actual cost /1 Soft costs 208 Third-party consultants and permits (15% of hard costs) Contingency costs 42 Overrun and unforeseen expenses (3% of hard costs) Land prices 501 Based on appreciated actual land price /2 Financing costs 160 Assume 5% interest rate and 3-year construction period /3 Total costs 2,300 Remarks: /1 based on actual investment cost in 2010 and assume 5% increase p.a. in construction material /2 based on actual land price acquired in 2010 and assume 10% increase p.a. in land price (adjacent to mass transit) referring to CBRE and AREA research per details below; 12.5% 4Y-avg land price appreciation for area close to up and running stations 10.7% 4Y-avg land price appreciation for area close to under construction stations 7.5% 4Y-avg land price appreciation for area close to foreseeable stations that haven t been yet constructed /3 based on withdrawal according to construction timeline 10
Recent Transactions In the past few years, there are a number of comparable office building transactions set out below: Transaction year 2014 2014 2013 2013 2013 2013 2013 2013 2011 2011 2010 Building Equinox SiriPinyo Liberty Square KPN Tower CP Tower Silom Fortune CP Tower I-Tower UBC II Ploenchit Center Chai Tower Tenor FH FH FH FH 30 Y- LH 30 Y- LH 30 Y- LH FH 30 Y- LH 14 Y- LH FH Land Area (sq wah) 1,345 1,113 494 1,014 1,303 6,304 1,600 2,359 1,162 2,276 547 NLA (sqm) 21,860 /1 18,364 19,498 25,978 44,304 72,385 15,226 16,753 34,339 40,632 14,900 Purchase price (baht) 2,050 1,700 1,800 1,800 3,982 4,753 854 723 1,920 1,500 690 baht per sqm 93,779 92,572 92,317 69,289 89,879 65,663 56,088 43,156 55,913 36,917 46,309 FH Conversion Factor - - - - 0.7 0.7 0.7-0.7 0.5 - FH Price Equivalent (baht/sqm) 93,779 92,572 92,317 69,289 128,399 93,804 80,126 43,156 79,876 73,833 46,309 Remarks: /1 This figure is inclusive of the club floor area of 660 sqm. 11
WHA Corporation PCL. 1121 Moo.3 Theparak Rd., Theparak, A. Muang, Samutprakarn 10270 Thailand Tel. +66 (0) 2 753 3750 Fax. +66 (0) 2 753 2750 e-mail: info@wha.co.th Website: www.wha.co.th 12