CapitaLand Integrated Commercial Trust · SGX:C38U
CapitaLand Integrated Commercial Trust — CapitaMall Trust — Conference Presentation (September 2006)
76 slides from CapitaLand Integrated Commercial Trust's conference presentation, Sep 13, 2006
Slide 1: The Singapore Retail Landscape & CMT's Growth Strategies
The Singapore Retail Landscape & CMT’s Growth Strategies Mr Pua Seck Guan CEO, CapitaMall Trust Management Limited 13 September 2006
Slide 2: Singapore's Retail Landscape & REITs' Industry
Singapore’s Retail Landscape & REITs’ Industry
Slide 3: SREITs Total Market Capitalisation
SREITs Total Market Capitalisation Significant Growth from 2 REITs (S$1.2 billion) in 2002 to 13 REITs (S$16.0 billion) in 2006 (YTD) 18,000 16,021 16,000 14,000 S$million 12,000 10,748 10,000 8,000 7,036 6,000 4,000 2,431 2,000 1,217 0 2002 2003 2004 2005 2006 (YTD) Source : Citigroup Singapore REI
Slide 4: SREITs Ranked by Market Capitalisation
SREITs Ranked by Market Capitalisation CMT is the Largest SREIT by Market Capitalisation 4,000 3,745 3,500 3,000 2,640 2,600 2,500 S$million 2,000 1,556 1,500 995 894 1,000 698 664 628 508 418 500 338 337 0 IT IT IT ge T ne o T T T P c ee E FC M C R te llc M E RE R id u tr C A R C un M A rt H le br
Slide 5: Acceptance of SREITs Narrows Yield Spreads
Acceptance of SREITs Narrows Yield Spreads Narrowing of yield spreads as a result of SREITs continued distribution per unit growth, improved understanding and general acceptance of REITs as a viable asset class by the investing public. Source : BNP Paribas Singapore REITs Report, 28 June 2006 5
Slide 6: SREITs Total Returns
SREITs Total Returns (as at 1 Sept 2006) Other than Yield, Investors are also Looking for Total Return Source : JP Morgan REITs Update, 1 September 2006 6
Slide 7: Strengthening of Retail Rents (Prime & Suburban)
Strengthening of Retail Rents (Prime & Suburban) Suburban Rents are Typically more Resilient, even during the Asian Financial Crisis Source : BNP Paribas Singapore REITs Report, 28 June 2006 7
Slide 8: Increasing Retail Supply Over Next Few Years
Increasing Retail Supply Over Next Few Years In 2006, approx 1.1 million sq ft from VivoCity, the largest destination mall in Singapore scheduled to be opened in October 2006 In 2007, approx. 350,000 sq ft from SLF retail development in Ang Mo Kio In 2008, − Approx. 690,000 sq ft from Orchard
Slide 9: Low Average Retail Floor Space Per Capita
Low Average Retail Floor Space Per Capita Average Retail Floor Space per Capita 45 40 38.2 35 30 25 (Sq ft) 22.1 20 15 13.8 13.2 10.5 11.2 10 5 0 Singapore United States Australia United Hong Kong Japan Kingdom Source: Retail Market Report on Parco Bugis Junction Overview prepared by Urbis JHD dated
Slide 10: Some Challenges Ahead...
Some Challenges Ahead... Stagnating population growth inhibits generation of new demand Limited pool of established retailers / brand names in the local market Big brand names eyeing sizeable retail markets with huge growth potential ie. China & India Increasing retail supply coming on-strea
Slide 11: Overview of CapitaMall Trust
Overview of CapitaMall Trust
Slide 12: Overview of CapitaMall Trust (CMT)
Overview of CapitaMall Trust (CMT) Largest REIT by Market Capitalisation & Asset Size in Singapore Pioneered 1st Real Estate Investment Trust (REIT) in Singapore, and also the first in Asia (exclude Japan) when it was listed in July 2002 10 properties with total asset value of approximately S$4.
Slide 13: CMT Performance since IPO (Jul 2002) to Sep 2006
CMT Performance since IPO (Jul 2002) to 1 Sep 2006 9 149% Unit Price Appreciation 9 385% Growth in Total Asset Size 9 187% Total Return 9 426% Growth In Market Cap 9 64% Growth in Annualised DPU (2Q 20061 actual vs IPO 2002 forecast) 9 Outperformed STI & Property Stocks % change in unit price/index
Slide 14: CMT's Structure
CMT’s Structure Regulatory Mechanisms • Property Funds Guidelines in Externally Managed the Code on Collective Model Investment Schemes Unitholders • Securities and Futures Act • Trustee’s Act • SGX Listing Rules Investment in CMT Distributions Asset management Acts on behalf services of unitholders
Slide 15: CMT's Growth Strategies
Cap/taMall P Trust CMT’s Growth Strategies
Slide 16: Current Three-Pronged Growth Strategy
Current Three-Pronged Growth Strategy Acquisitions Asset Enhancement Active Leasing Acquisition, Asset Enhancement & Active Leasing form Core Components of Growth Asset 2 11.11 ¢ CRS Investment Enhancement/ Reconfiguration 3% 22% Upfront Payment of IMM Land Premium 7% Acquisitions 49% Active Leasing
Slide 17: Is the Current 3-Pronged Strategy Sustainable?
Is the Current 3-Pronged Strategy Sustainable? Early phase of rapid DPU growth largely driven by yield accretive acquisitions and innovative asset enhancements With more new REIT entrants, acquisitions will become more competitive, particularly for “New Comers”. As the size of a REIT grows, ev
Slide 18: (1) Acquisitions
Cap/taMall P Trust (1) Acquisitions
Slide 19: Potential for Growth Domestically
Potential for Growth Domestically Abundant investment grade retail assets outside of CMT’s portfolio provides significant potential for further acquisition growth CMT’s significant share in the Singapore retail space provides it with increased leverage, management expertise and knowledge to capi
Slide 20: CMT's Target Asset Size Growth in Singapore
CMT’s Target Asset Size Growth in Singapore Confident to Achieve S$7.0 billion by 2009 S$billion 8.0 7.0 7.0 6.0 6.0 5.0 4.3 4.0 3.0 2.0 1.0 0.0 With CM T RC 2008 Target 2009 Target 1 Acquisition 1. Includes the 40% interest in Raffles City 20
Slide 21: Acquisition of a 40% Interest in Raffles City
Acquisition of a 40% Interest in Raffles City RAFFLES CITY (‘RC’) Raffles City Shopping Centre One of Singapore’s prime Raffles City Tower (“RC Shopping Centre”) landmark integrated developments (“RC Office Tower”) 4-storey shopping complex 42-storey office tower with with 301,824 sq ft of retail NL
Slide 22: Acquisition Structure
Acquisition Structure Raffles City Building Raffles City Purchase Capital Expenditure & Property Related Price Asset Enhancement Liabilities S$2,085.0 million Works S$40.0 million S$41.0 million Total Purchase Consideration S$2,166.0 million Total Acquisition Cost (Including Estimated Acquisition Co
Slide 23: Joint Ownership Structure (A First in Singapore)
Joint Ownership Structure (A First in Singapore) Acquisition and Joint Ownership of Raffles City 1 Management Appoints 40% Committee2 Appoints 60% of MC members of MC members (“MC”) manages 40% 60% RCS Trust ownership ownership owns Notes: 1 The acquisition of Raffles City is made through a joint ow
Slide 24: Financing Structure
Financing Structure Equity Fund Raising (“EFR”) Proceeds from EFR of between S$240 million to S$420.0 million to be carried out at such time to be determined by the CMT Manager, to be used to repay the RC Bridge Loan, & balance for working capital purposes. RC Bridge Loan Long Term Borrowings S$223.
Slide 25: CMT RC Acquisition is Overall Yield Accretive
CMT RC Acquisition is Overall Yield Accretive1 Forecast Period Projection Year (1 September - 31 December 2006) (annualised) 2 (Financial year ending 31 December 2007) Existing Properties and Existing Properties and Issue Price Existing Properties CMT RC Acquisition Existing Properties Target Proper
Slide 26: Value Creation Opportunities at Raffles City
Value Creation Opportunities at Raffles City Estimated Breakdown by GFA 1 Estimated Breakdown by NPI 2 RC Office Tower RC Car Park and other income 15% RC Office 3% Tower Hotels and RC 14% convention Shopping Centre Centre Hotels and 40% 15% RC convention Shopping Centre Centre 70% 43% Note: 1 Area
Slide 27: Proposed Asset Enhancement Plan at Raffles City
Proposed Asset Enhancement Plan at Raffles City Potential to increase retail Net Lettable Area (NLA) of between 150,000 sq ft to 200,000 sq ft through shifting lower yielding spaces to higher yielding spaces Additional space can be used to strengthen retail offering on Basement 1 and to create t
Slide 28: (2) Asset Enhancements
Cap/taMall (2) Asset Enhancements
Slide 29: Completed AEI - Junction 8
Cap/taMall Completed AEI - Junction 8
Slide 30: Completed Asset Enhancement at Junction 8
Completed Asset Enhancement at Junction 8 Successfully transferred 70,000 sq ft of Gross Floor Area from the Junction 8 Office Tower to create retail space on Basement, Level 1 and Level 2 of the mall. Office Tower handed over to National Council of Social Service on 29 March 2005 to further our
Slide 31: Extension of Retail Space on Basement 1
Extension of Retail Space on Basement 1 After Before Carpark Area converted to retail units Food Kiosks After After After 31
Slide 32: Extended Retail Space on Level 1
Extended Retail Space on Level 1 Extended footprint amalgamates mall with Bishan MRT Station Approx 14,000 sqft of newly created space from decantation of office space 32
Slide 33: Extension of Retail Space on Level 2
Extension of Retail Space on Level 2 Approx 35,000 sqft of newly created space from decantation of office space 33
Slide 34: Increase in Average Rentals
Increase in Average Rentals Revenue increased by $4.2 million p.a. Average rent has increased by 47.8% since July 2002: As at Jul 2002 - $8.00 psf pm As at Dec 2003 - $9.97 psf pm As at Dec 2004 - $11.82 psf pm 34
Slide 35: Value Creation at Junction 8
Value Creation at Junction 8 Gross Floor Capital Start Date Completion Area (sf) Expenditure Date IPO 51,652 S$21.5m 2003 2004 Revised 74,434 S$27.0m Phase 1 (B1 & L1) S$15.5m May 2003 Nov 2003 Phase 2 (L1 & L2) S$12.2m1 Jan 2004 Dec 2004 Phase 1 and 2 Budget Estimated Stabilised Basis Gross Revenue
Slide 36: On-Going AEI - IMM Building
Cap/taMall On-Going AEI - IMM Building
Slide 37: 2-Storey Retail Extension Block at IMM
2-Storey Retail Extension Block at IMM Key AEI works include: New 2-storey extension annex with an event area and garden on the roof Reconfiguration of existing retail areas Conversion of L5 warehouse area to covered car park and addition of Artist Impression coil ramp connecting from L1 to L5
Slide 38: Commercial GFA Increased from 26.8% to 40.0%
Commercial GFA Increased from 26.8% to 40.0% Differential Premium will be paid to regularise the commercial GFA by way of increasing the commercial quantum of the building from 26.8% to 40.0% Additional costs will be recovered through the following sources of revenue: a. Additional Rental Revenu
Slide 39: IMM Building – Planned AEI Works (Level 1)
IMM Building – Planned AEI Works (Level 1) Approximately additional 36,300 sq ft of prime retail NLA created from the decanted secondary corridor retail space on L2, L3 & L5 Current After AEI1 After AEI1 (decanted space) (Before (After Regularisation) Regularisation) Average Rental S$6.39 S$17.00 S$
Slide 40: IMM Building – Planned AEI Works (Level 2)
IMM Building – Planned AEI Works (Level 2) DECANTED AREA Approximately 28,500 sq ft of prime retail NLA created from decanting the secondary corridor retail space Current After AEI1 After AEI1 (decanted (Before (After space) Regularisation) Regularisation) Average Rental psf S$6.39 S$14.00 S$14.00 p
Slide 41: IMM Building – Planned AEI Works (Level 3)
IMM Building – Planned AEI Works (Level 3) NEW RETAIL NEW RETAIL NEW RETAIL NEW RETAIL NEW RETAIL NEW RETAIL NEW RETAIL FOOD COURT NEW RETAIL New Extension/Open Terrace (non GFA) New Retail Area Secondary Retail Area to be Decanted and Converted to Warehouse/Ancillary Area 41
Slide 42: IMM Building – Planned AEI Works (Level 5)
IMM Building – Planned AEI Works (Level 5) Secondary Retail Area to be Decanted and Converted to Warehouse/Ancillary Area 42
Slide 43: Successful Relocation of Open-Air Carpark to Level 5
Successful Relocation of Open-Air Carpark to Level 5 Open-air carpark on Level 1 has been relocated to Level 5, whilst maintaining the total number of carpark lots. Circular carpark ramp and electronic carpark guidance system will be put in place to help shoppers locate available carpark lots wi
Slide 44: Value Creation of Planned Initiatives
Value Creation of Planned Initiatives Capital Expenditure Start Date Completion Date S$92.5 mil 1st Qtr 2006 1st Qtr 2008 AEI Budget* Gross Revenue S$ 12.1 mil (net of rental loss from decanted retail space) Net Property Income S$ 9.3 mil Capital Expenditure (includes Differential Premium) S$ 92.5 m
Slide 45: Net Property Income Growth of IPO Assets
Net Property Income Growth of IPO Assets Proactive Asset Management has Grown Junction 8’s Net Property Income by close to 35% in 3 years IPO Portfolio NPI (S$mn) NPI (S$mn) NPI (S$mn) NPI (S$mn) Growth % of Assets 2002 2003 2004 2005 (2005 vs 2002) Tampines Mall 31.4 33.4 34.1 34.9 11.1 Junction 8
Slide 46: Strong Track Record in Value Creation
Strong Track Record in Value Creation 1 Property Acquisition Date Asset Value Valuation Growth (S$million) (as at 1 Jun 2006) (%) Junction 8 IPO 295.0 477.0 61.7 Tampines Mall IPO 409.0 635.0 55.3 Funan DigitaLife Mall IPO 191.0 252.0 31.9 IMM Building Jun 2003 247.4 433.0 75.0 Plaza Singapura Aug 2
Slide 47: CMT Portfolio's Valuation and Property Yield
CMT Portfolio’s Valuation and Property Yield As at 30 June 2006 Previous Valuation Property Valuation1 20062 Variance Yield3 S$ million Tampines Mall 633.0 635.0 2.0 5.8% Junction 8 473.0 477.0 4.0 5.8% Funan 247.5 252.0 4.5 5.6% DigitaLife Mall IMM Building 400.0 433.0 33.0 6.5% Plaza Singapura 803
Slide 48: Strong Pipeline of Quality Assets
Strong Pipeline of Quality Assets
Slide 49: Ability to Identify Quality Assets Strengthens Pipeline
Ability to Identify Quality Assets Strengthens Pipeline Sembawang Shopping Centre Approval to convert 45,267 sq ft of Residential GFA to Retail GFA Finalising enhancement plan which will be launched in 2007 Hougang Plaza Obtained approval to increase plot ratio from 1.4 to 3.0 for full residen
Slide 50: (3) Active Leasing
Cap/taMall (3) Active Leasing
Slide 51: Strong Renewals Achieved Year-on-Year
Strong Renewals Achieved Year-on-Year Net Lettable Area Increase/Decrease in Year No. of Current Rental Rates Vs Renewals/ New Leases Area % of Total Forecast Preceding (Sq Ft) NLA1 Rental Rates Rental Rates CMT Portfolio for 20052 189 401,263 23.2% 6.8%3 12.6% CMT Portfolio for 2004 248 244,408 14.
Slide 52: Summary of Renewals / New Leases
Summary of Renewals / New Leases As at 30 June 2006 From 1 January to 30 June 2006 (Excluding Newly Created Units) Increase in Current Rental Rates No. of Net Lettable Area VS. Property Renewals/ New Leases Forecast Rental Preceding Rental Area (sq ft) % Total NLA Rates Rates Tampines Mall 17 12,382
Slide 53: Active Leasing Drives Rental Growth
Active Leasing Drives Rental Growth Tampines Mall’s & Junction 8’s Average Rental Increased 22.72 % and 37.28% respectively since Acquisition Ave. Rental Rate Ave. Rental Rate Ave. Rental Rate Property (As at 31 Dec 20011) (As at 30 Apr 2004) (As at 31 Mar 2005) Tampines Mall $9.42 S$11.11 (+17.94%)
Slide 54: High Committed Occupancy Rates at All Malls
High Committed Occupancy Rates at All Malls Occupancy Rates1 Close to 100% as at 30 Jun 2006 As at As at As at As at As at As at 31 Mar 05 30 Jun 05 30 Sept 05 31 Dec 05 31 Mar 06 30 Jun 06 Tampines Mall 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Junction 8 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% F
Slide 55: Shopper's Traffic Analysis
Shopper’s Traffic Analysis Increase Shopper’s Traffic by 21% Since 2003 2,500 Shopper Traffic (By Month) Number of Shoppers Junction 8 2,000 Tampines Mall Tampines Mall Plaza Singapura 1,500 Plaza Singapura Junction 8 IMM Building 1,000 IMM Building 500 Funan DigitaLife Mall Funan DigitaLife Mall 0
Slide 56: CapitaRetail Singapore Limited
CapitaRetail Singapore Limited
Slide 57: Warehouse Quality Assets to Create Pipeline
Warehouse Quality Assets to Create Pipeline CapitaRetail Singapore Limited (CRS) Private retail property fund sponsored by CapitaLand Limited. S$558 million portfolio comprises 3 suburban malls: Rivervale Mall − Lot One Shoppers’ Mall − Bukit Panjang Plaza − Rivervale Mall Malls were non-accre
Slide 58: Strong Renewal Achieved for 3rd Party Asset
Strong Renewal Achieved for 3rd Party Asset CRS is on Target to Deliver 8.5% Coupon Rate From Acquisition to 30 June 2006 (Excluding Newly Created Units) Increase in Current No. of Net Lettable Area Rental Rates VS. Renewals/ Property New % Total Forecast Preceding Leases Area (sq ft) 1 NLA Rental R
Slide 59: Replication of Value Creation Capabilities
Replication of Value Creation Capabilities As at 30 Jun 2006 S$ million Valuation Valuation Variance Property 20041 20052 Yield Lot 1 275 280 5 6.4% Bukit Panjang Plaza 195 207 12 5.8% Rivervale Mall 70 71 1 6.6% 540 558 18 6.1% Less additions in 2005 16.9 Net Increase in Valuations 1.1 Add revaluat
Slide 60: Strategy for Sustainable Growth
Strategy for Sustainable Growth
Slide 61: Extended Five-Pronged Growth Strategy
Extended Five-Pronged Growth Strategy Deliver Long-Term Growth to Unitholders New Wings of Growth : Extended 2-Pronged Strategy Invest up to 20% Stake in Participation in Local CapitaLand’s Proposed Development Projects China Retail REIT Overall Yield Accretive Innovative Asset Active Leasing Acquis
Slide 62: Investment in Proposed China Retail REIT
Investment in Proposed China Retail REIT
Slide 63: Invest up to 20% Stake in Proposed China Retail REIT
Invest up to 20% Stake in Proposed China Retail REIT CapitaLand, as Sponsor of CMT, has offered CMT up to 20% stake in proposed China Retail REIT at pre-listing stage Proposed China Retail REIT, to be listed in Singapore by end 20061, is expected to own 7 assets, worth over S$800 million Propo
Slide 64: CapitaRetail China Development Fund
CapitaRetail China Development Fund (“Development Fund”) Will invest in retail projects in the People’s Republic of China (“PRC”) Fund size of US$600 million (S$948 million) CapitaLand invested approx. 45% in the Development Fund Pipeline include portfolio of 21 Wal-Mart anchored malls under
Slide 65: CapitaRetail China Incubator Fund
CapitaRetail China Incubator Fund (“Incubator Fund”) Will warehouse retail projects with the potential to generate quality income after repositioning of the property, enhancing the asset or on completion of leasing activities Fund size of US$425 million (S$671 million) CapitaLand invested appr
Slide 66: CapitaLand's Extensive Retail Pipeline in China
CapitaLand’s Extensive Retail Pipeline in China Retail Mall Business Presence in China Approx. 30 assets in 25 cities measuring over 16 million sq ft Heilongjiang Changchun Beijing Nei Mongol Liaoning Tianjin Gansu Beijing Zibo Xinjiang Tianjin Mianyang Hebei Weifang Qinghai Ningxia Shanxi 2 cities
Slide 67: Investment Structure
Investment Structure Investors CapitaLand Investors approx. approx. approx. approx. 70% share 30% share 45% share 55% share of equity of equity of equity of equity INCUBATOR FUND DEVELOPMENT FUND Fund Size US$425 m (S$671 m) Fund Size US$600m (S$948m) Right of first refusal to acquire assets from De
Slide 68: Participation in Development Projects in Singapore
Participation in Development Projects in Singapore
Slide 69: Participation in Local Development Projects
Participation in Local Development Projects CMT’s asset size will increase from approx. S$3.5 bn1 to S$4.3 bn post acquisition of Raffles City Property Funds’ guidelines allow development projects up to 10% of the REIT’s asset size Intends to capitalise on significant asset size to take on dev
Slide 70: Capital Management
Cap/taMall P Trust Capital Management
Slide 71: Debt Capital Information as at Jun 2006
Debt Capital Information as at 30 Jun 2006 Debt Maturity Profile Key Statistics 450 433 400 Gearing Ratio 32.0% 350 335 38.6% 300 250 Interest Cover 5.4 times 29.8% 200 172 S$ million 150 125 Average Cost 3.1% 100 58 15.3% of Debt S$125mn 50 11.1% 5.2% 0 Revolving 2007 2009 2010 2012 Credit & Bridge
Slide 72: Debt Structure Post-CMT RC Acquisition
Debt Structure Post-CMT RC Acquisition CMT has One of the Most Conservative Debt Structure Among SREITs with Maturity up to 2012 1,200 Existing Gearing Ratio 36.7% 1,000 CMBS to finance the CMT RC Acquisition1 Bridge Loan2 800 Drawn Down Loan S$m 600 173.0 400 346.4 433.0 200 335.0 114.3 30.0 172.0
Slide 73: Critical Success Factors
Cap/taMall Critical Success Factors
Slide 74: Critical Success Factors
Critical Success Factors Key Success Factors Our Capability To Deliver 9 Strong Sponsor & Committed CapitaLand is a long-term investor who is committed to grow CMT. Ability to warehouse quality assets as well as its extensive retail portfolio in Asia will provide CMT with a strong growth pipeline.
Slide 75: Critical Success Factors
Critical Success Factors Key Success Factors Our Capability To Deliver 9 Competitive Cost of Capital Clearly articulated strategies coupled with a strong pipeline to deliver growth result in a lower cost of capital 9 Efficient Capital Management Optimal capital management strategy cum relatively
Slide 76: THE END
THE END 76
CapitaMall Trust — Conference Presentation (September 2006) on 6ix