Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — CapitaLand — Merger or Acquisition (March 2021)
37 slides from Singapore Exchange's merger presentation, Mar 22, 2021
Slide 1: Strategic Restructuring of CapitaLand Limited and Listing of CapitaLand Investment Management
Strategic Restructuring of CapitaLand Limited and Listing of CapitaLand Investment Management 22 March 2021
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking statements. 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 incl
Slide 3: Rationale and Transaction Summary
Rationale and Transaction Summary Singapore Science Park
Slide 4: CapitaLand 3.0 Execution on Track
CapitaLand 3.0 Execution on Track Significant progress made since January 2019 (1) Delivering ROE Pivot towards Consistently Top 10 global Strengthened above COE “new economy” exceed capital REIMs(4) best-in-class asset classes recycling target REITs • Double digit ROE • Business Parks, • Annual pre
Slide 5: Restructuring to Sharpen Focus on Strategic Growth
Restructuring to Sharpen Focus on Strategic Growth… CapitaLand Investment Management Fund Management Lodging • Asset and capital efficient • Scalability through Fee Related Earnings (“FRE”) and Fund Public AUM (“FUM”) growth • Full stack investment and operating capabilities CapitaLand Development D
Slide 6: …And Create Shareholder Value
…And Create Shareholder Value Historical P/NAV(1) Forward P/E(1) 4.0x CapitaLand 40.0x CapitaLand REIMs(2) REIMs (4) (3) (5) SG+HK Developers (ex CapitaLand) SG+HK+CN Developers (ex CapitaLand) 3.0x 30.0x 2.6x 19.4x 2.0x 20.0x 15.8x 1.0x 0.8x 10.0x 9.3x 0.6x 0.0x 0.0x 2016 2017 2018 2019 2020 2021 2
Slide 7: Distinct Entities to Optimise Growth
Distinct Entities to Optimise Growth CapitaLand Development CapitaLand Investment Management Development Fund Management Lodging • Development of residential, commercial and integrated • REITs/BTs, PE Funds, Property and SR management platform development • Stakes in 6 listed REITs/BTs and >20 PE Fu
Slide 8: Proposed Transaction
Proposed Transaction Strategic restructuring to be carried out through Scheme of Arrangement Current Structure(1) Post-transaction Structure(1) CLA Real Estate Eligible CLA Real Estate Eligible Holdings (“CLA”) Shareholders Holdings (“CLA”) Shareholders 51.8%(2) 48.2%(2) 100.0% 51.8%(2) 48.2%(2) (Li
Slide 9: Implied Consideration of S$4.102 for Eligible Shareholders
Implied Consideration of S$4.102 for Eligible Shareholders S$0.158(2),(3),(4)/CICT Unit 8% CICT Eligible Shareholder’s pro-rata entitlement 0.075 CICT Units Units S$0.170(2),(3),(4)/CICT Unit Offeror’s entitlement distributed in favour of the Eligible Shareholders of 0.080 CICT Units Implied CLA con
Slide 10: Proposed Transaction Implies a Significant Premium to CapitaLand’s Share Price
Proposed Transaction Implies a Significant Premium to CapitaLand’s Share Price 24% – 28% premium to Implied Consideration for Eligible Shareholders (S$/share) CapitaLand’s FY 2020 dividends of S$0.09 per share is not part of the Implied Consideration and will still be S$4.102(1) payable to sharehold
Slide 11: Strategic Restructuring Preserves CapitaLand Group’s Valuable Ecosystem
Strategic Restructuring Preserves CapitaLand Group’s Valuable Ecosystem ✓ Multi-sector development capability ✓ Long-term asset pipeline ✓ Incubator for new businesses ✓ Capital and investment partner • Strategic arrangements for asset recycling and co-investment opportunities Development • Shared s
Slide 12: Introducing CapitaLand Investment Management
Introducing CapitaLand Investment Management Capital Tower, Singapore
Slide 13: A Leading Global Real Estate Investment Manager
A Leading Global Real Estate Investment Manager
Slide 14: Optimally Structured for Sustainable Growth
Optimally Structured for Sustainable Growth Investments Investment Management (“IM”) 1 Stakes in REITs/BTs and 1 Funds Management private funds • Leading Global REIM with ~11% • Stable, high quality recurring FUM CAGR (FY 2015 – FY 2020) income base • Largest S-REIT/BTs platform on • REITs/BTs stake
Slide 15: Full Stack of Investment and Operating Capabilities
Full Stack of Investment and Operating Capabilities Multi-sector operating capabilities Commercial/Integrated New Economy(1) Lodging Alternative Assets(2) FY 2020 FUM DM/ - Listed Global S$52B REITs/BTs Country - - focused Funds management • RCCIV • RCCN JV • RCCIP III • CMCIF I, II, III • ACBPF 4(3
Slide 16: A Leading Global Real Estate Investment Manager
A Leading Global Real Estate Investment Manager Asia-centric global leader in Real Proven fund management 1 Estate Investment Management 2 track record Investment Experienced Investment and Management 5 Asset Management team 3 Highly scalable pipeline Distinctive lodging 4 management platform 16
Slide 17: Top Global Real Estate Investment Managers
1 Top 15 Global Real Estate Investment Managers By RE AUM(1) (S$B) Flag Global Headquarters Listed companies Asia’s largest REIM 3rd largest listed global REIM 358 229 197 197 183 175 144 141 140 130 125 115 114 110 108 Brookfield Blackstone Hines PGIM MetLife Nuveen AXA IM - Real UBS AM CBRE Global
Slide 18: Global Player with Strong Asian Presence
1 Global Player with Strong Asian Presence Coverage in over 230 cities across more than 30 countries >80% of Assets Under Management are in Asia RE AUM(3) % Of FUM(3) % Of Retail New Economy(1) Integrated Office Lodging(2) (S$B) Total (S$B) Total Singapore 39 34% 33 42% China 43 37% 27 35% India 3 3
Slide 19: Proven Track Record of Diversifying and Growing Our FUM
2 Proven Track Record of Diversifying and Growing Our FUM… Evolution of CLIM’s FUM (S$B) FY 2015 FY 2020 Residential New Economy(2) Retail 3% 26% Lodging 24% 11% Retail 53% Integrated FUM: 2015-20 CAGR: ~11% Residential FUM: Development 1% 19% S$46B 2017-20 CAGR: ~15% S$78B Lodging(1) 10% Office Off
Slide 20: …Together With Growth of Fee Income and Healthy Margins
2 …Together With Growth of Fee Income and Healthy Margins Double-digit FUM growth track record and Growing fee income from REITs and stable fee income/FUM rate Fund Management(1) (S$B) (S$M) ~40bps(2) Fee income/FUM ~56%(2) EBITDA margin 350 1 300 0.5 250 0 200 -0.5 74 78 150 293 306 54 217 226 -1 5
Slide 21: Disciplined Capital Recycling and Third-party Capital Raising
2 Disciplined Capital Recycling and Third-party Capital Raising Gross divestments since 2018(1) Cumulative third-party equity raises since 2018 (S$M) CapitaLand REITs/BTs (S$M) REITs/BTs Private Funds Average premium above fair value of 5,932 26% ~11% achieved (2) 755 3,995 S$3B 764 3,041 recycling
Slide 22: Highly Reputable Investment Manager With Established High Quality Capital Partners
2 Highly Reputable Investment Manager With Established High Quality Capital Partners Long-term and permanent capital forms majority Strong relationship with blue-chip capital partners of FUM >5 years • Diverse LP investor base across geographies 3% • Top tier global institutions (Pension funds and S
Slide 23: Attractive Pipeline With Strong Visibility and Entrenched Ecosystem to Support Growth
3 Attractive Pipeline With Strong Visibility and Entrenched Ecosystem to Support Growth • Visible, near-term monetisation potential • Liquid markets and attractive portfolio yield characteristics Asset and geographical breakdown Integrated Other DM Development Lodging 31% 7% 22% Retail Singapore 29%
Slide 24: Multiple Engines to Drive FUM and FRE Growth
3 Multiple Engines to Drive FUM and FRE Growth Evolution of CLIM’s FUM and future opportunities (S$B) Fee Income/FUM (1): ~40bps CapitaLand Development Strategic pipeline of M&A ~S$7.6B(2) Third-party 1.0 CLIM pipeline acquisitions of ~S$10.1B(2) ~S$1.0bn of net investments(3) 77.6 77.6 announced 77
Slide 25: Lodging Management as A Distinctive Engine of Fee Income Growth
4 Lodging Management as A Distinctive Engine of Fee Income Growth Dual mechanism driving lodging growth • Recurring fee income • Recurring fee income from AM(1) business • Strong brand value Real Estate Platform (REITs and Private Funds) and global operational • Delivers returns through expertise ac
Slide 26: Consistent Track Record of Scaling Up the Lodging Platform
4 Consistent Track Record of Scaling Up the Lodging Platform Lodging units under management Operational Under development ✓• ROE-accretive model with >80% units (’000 units) under management contracts and Fees for Operational units under management franchise deals as a % of RE AUM: ~70bps(2) ✓• S$20
Slide 27: Effectively Leveraging Our Core Lodging Expertise Into Adjacent Sectors
4 Effectively Leveraging Our Core Lodging Expertise Into Adjacent Sectors to Augment FUM growth Deep and growing untapped market potential identified from adjacent markets Purpose-Built Multi- Serviced Student family/Private residence Accommodation Rental Sector Market potential: US$10.2B(1) in U.S.
Slide 28: Demonstrated Business Model Resiliency
4 Demonstrated Business Model Resiliency Sequential improvement in RevPAU(1) in 2020 ✓ • Diversified, long-stay portfolio cushioned COVID-19 impact on occupancies (S$) • Optimism towards gradual resumption of ✓ domestic travel and vaccine roll-out globally to drive recovery 120 121 84 • Capital recy
Slide 29: Highly Experienced Team of Professionals
5 Highly Experienced Team of Professionals Global scale and in-market presence drives competitive advantage in deal sourcing and market insights >400 IAM (2) Professionals Globally >100 Assets Across More Than 30 Countries Integrated Retail Singapore 2% International Development 15% >40 years in 54%
Slide 30: Conclusion
Conclusion Ascendas Xinsu Square, Suzhou, China
Slide 31: Conclusion
Conclusion • The proposed restructuring marks the next phase of CapitaLand’s strategic transformation • By restructuring our existing growth businesses into a separate private and public company, we will sharpen our strategic focus, and match each business’ risk-return profile with the appropriate c
Slide 32: Shareholder Resolutions To Be Approved
Shareholder Resolutions To Be Approved • All inter-conditional • CLA will abstain from voting at both the EGM and Scheme Meeting Shareholder resolutions Approvals thresholds EGM Approve capital reduction to: • Distribute CLIM shares to Eligible Shareholders • Distribute 6.0% CICT Units to Eligible S
Slide 33: Indicative Timetable
Indicative Timetable 22 March In or around 3Q 2021 • Announcement of transaction • EGM and Scheme Meeting In or around 3Q 2021 In or around 4Q 2021 • Despatch of Scheme document, • Completion – listing of CLIM and opinion of Independent Financial delisting of CapitaLand Adviser, CLIM introductory do
Slide 34: Appendix
Appendix Capital Tower, Singapore
Slide 35: Top 15 Investment Properties (Based on Effective Stake)
Top 15 Investment Properties(1) (Based on Effective Stake) CapitaLand Property Portfolio as at 31 Dec 2020 Assets Under CLIM Country Stake Asset Under CapitaLand Development Country Stake ION Orchard SINGAPORE 50% Raffles City Chongqing CHINA 100% 79 Robinson Road (former CPF building) SINGAPORE 65%
Slide 36: Glossary
Glossary Term Definition AM Asset Management FRE Fee Related Earnings COE Cost of Equity FUM Funds Under Management, or otherwise known as Fund AUM; refers to the proportionate share of total assets under REITs/funds managed by CapitaLand Investment Management IAM Investment and Asset Management IP
Slide 37: Thank You
Thank You For enquiries, please contact Ms Grace Chen, Head, Investor Relations Direct: (65) 6713 2883 Email: grace.chen@capitaland.com CapitaLand Limited (https://www.capitaland.com) 168 Robinson Road #30-01 Capital Tower Singapore 068912 Tel: (65) 6713 2888 Fax: (65) 6713 2999 Email: groupir@capit