Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — Mapletree Commercial Trust — Merger or Acquisition (May 2022)
70 slides from Singapore Exchange's merger presentation, May 23, 2022
Slide 1: Extraordinary General Meeting: Proposed Merger of MCT and MNACT
Extraordinary General Meeting Proposed Merger of Mapletree Commercial Trust and Mapletree North Asia Commercial Trust (the “Merger”) 23 May 2022 1 RESTRICTED
Slide 2: Important Notice
Important Notice NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION. THIS PRESENTATION SHALL NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SE
Slide 3: Notice of EGM
Notice of EGM THIS CIRCULAR 1S IIPORTANT AND REQUIRES YOUR MIMEDIATE ATTENTION mapleiree ‘commercial MAPLETREE COMMERCIAL TRUST (cnet ep ero pe nt Mepletree Commercial Trust Ltd. TCoagety Repatana a, savoddscey COMMERCIAL TRUST ("MCT") IU RELATION TO THE PROPOSED MERGER OF mapleiree 4 mapleiree comm
Slide 4: Content
Content A. Transaction Summary Page 5 B. Rationale and Key Benefits of the Merger Page 14 C. Post-Merger Strategy of the MCT Manager Page 28 D. Required Approvals Page 31 E. IFA Opinion and Directors’ Recommendations Page 33 F. Timeline and Next Steps Page 36 G. Appendix I – Overview of MCT, MNACT a
Slide 5: A. Transaction Summary
A. Transaction Summary
Slide 6: Transformative Merger Combining Strength and Growth
Transformative Merger Combining Strength and Growth Creating a flagship commercial REIT that provides stability and scale across key gateway markets of Asia Largest pure-play Singapore commercial REIT First and only North Asia focused REIT listed in with longstanding track record in delivering Singa
Slide 7: Overview of the Merged Entity
Overview of the Merged Entity Diversified and high quality portfolio anchored by best-in-class commercial assets 18 assets diversified Balanced across S$17.1bn across 5 markets sub asset classes South Korea AUM 2% 11.0m sq ft1 Japan 10% Festival 52% Business Walk, HK Parks Other SG SAR 21% NLA2 11%
Slide 8: Transaction Overview
Transaction Overview Three Scheme Consideration options for MNACT Unitholders MIPL1, as Sponsor of both MCT and MNACT, has elected to receive the Scrip-only Consideration Scheme Consideration Options Merger to be effected through the acquisition by MCT of Scrip-Only Cash-and-Scrip Cash-Only Transa
Slide 9: Preferential Offering by MCT to Fund Additional Cash Requirement
Preferential Offering by MCT to Fund Additional Cash Requirement MIPL, the Sponsor of MCT and MNACT, has undertaken to subscribe for the Maximum Preferential Offering Units of up to S$2.2 billion in support of the Merger (“MIPL Undertaking”) Up to S$2.2 billion to finance the additional cash require
Slide 10: Investment Mandate and Structure
Investment Mandate and Structure Merged Entity will be named Mapletree Pan Asia Commercial Trust (“MPACT”) Investment mandate will encompass key gateway markets of Asia Merged Entity’s Investment Mandate Merged Entity’s Structure MCT MNACT MIPL1 Unitholders2 Unitholders2 Diversified portfolio of inc
Slide 11: Strong Commitment from Sponsor and Alignment with Unitholders
Strong Commitment from Sponsor and Alignment with Unitholders MIPL, as Sponsor of MCT and MNACT, demonstrates its conviction and support for the Merger and the Trust Scheme as well as its confidence in the long term value and articulated strategy of the Merged Entity Sponsor has undertaken to subscr
Slide 12: Strong Commitment from Sponsor and Alignment with Unitholders (cont'd)
Strong Commitment from Sponsor and Alignment with Unitholders (cont’d) Well-supported by a strong Sponsor with an established global presence S$66.3bn >2,580 13 Total AUM Employees Markets Proven track record in Over 360 awards and Award-winning Established network real estate development, accolades
Slide 13: Resolution on New Management Fee Structure
Resolution on New Management Fee Structure to be Tabled and Considered Independently of the Merits of the Merger MCT MNACT Merged Entity Base Fee Performance Fee Base Fee Performance Fee Base Fee Performance Fee 0.25% p.a. of Total Assets 4.0% p.a. of Net Property Income 10.0% of Distributable 25.0%
Slide 14: B. Rationale and Key Benefits of the Merger
B. Rationale and Key Benefits of the Merger
Slide 15: Rationale and Key Benefits of the Merger
Rationale and Key Benefits of the Merger 1 Proxy to Key Gateway Markets of Asia 2 Enhanced Diversification Anchored by High Quality Portfolio 3 Leapfrogs to one of the Top 10 Largest REITs in Asia 4 Enlarged Platform Better Positioned to Unlock Upside Potential 5 Attractive Financial Returns to Unit
Slide 16: Proxy to Key Gateway Markets of Asia
1 Proxy to Key Gateway Markets of Asia 18 commercial properties across five key gateway markets of Asia with total AUM of over S$17 billion Festival Walk, Hong Kong SAR MBC, Singapore Contribution by AUM1 (%) 10% Japan | 9 assets Gateway Plaza, Beijing 2% South Korea | 1 asset2 VivoCity, Singapore 1
Slide 17: Proxy to Key Gateway Markets of Asia
1 4 Proxy to Key Gateway Markets of Asia Combining regional and local operational capabilities with domain expertise to enhance future growth Assets under Management Assets under Management 10.9 years CAGR +11.0% 9.1 years CAGR +7.4% (IPO to Mar 2022) (IPO to Mar 2022) NAV per unit NAV per unit 10.9
Slide 18: Proxy to Key Gateway Markets of Asia
1 Proxy to Key Gateway Markets of Asia A ready launchpad for Asian expansion, enabling the Merged Entity to establish footholds in multiple markets swiftly Established network with strong local expertise Proven track record in investment and asset management Capitalise on Sponsor’s strength an
Slide 19: Proxy to Key Gateway Markets of Asia
1 Proxy to Key Gateway Markets of Asia Deep liquidity in key gateway markets of Asia providing growth opportunities Total transaction volume of US$106.4bn in 2021 across key gateway markets of Asia Tapping into some of the largest and most (US$bn) established real estate markets in Asia 40 Continued
Slide 20: Proxy to Key Gateway Markets of Asia
1 Proxy to Key Gateway Markets of Asia Benefits from the long-term rise of Asia by capitalising on the resilient growth of key markets Continued importance as gateway between mainland China and the world One of the world’s key trade, logistics and financial hubs as economy recovers Retail Office / R
Slide 21: Enhanced Diversification Anchored by High Quality Portfolio
2 Enhanced Diversification Anchored by High Quality Portfolio Diversification across geographies and reduced single asset concentration strengthens portfolio resilience MCT MNACT Merged Entity KR The Pinnacle 2% Gangnam JP Other SG Japan 3% Properties 10% HK SAR Properties VivoCity 21% 36% 20% CN 26
Slide 22: Enhanced Diversification Anchored by High Quality Portfolio
2 Enhanced Diversification Anchored by High Quality Portfolio Improved cashflow stability from high quality tenants while reducing income concentration Top 10 tenants by GRI1 GRI contribution1 10.5% 3.1% 2.8% 2.4% MCT 2.0% 1.9% 1.9% 1.7% 1.5% - 27.7% Google BoA Undisclosed HSBC IMDA SAP Asia MIPL NT
Slide 23: Enhanced Diversification Anchored by High Quality Portfolio
2 Enhanced Diversification Anchored by High Quality Portfolio Continues to maintain high portfolio occupancy and well-staggered lease expiry profile Maintains high occupancy at 97.2%1 Maintains healthy WALE of 2.52 years 36.5% 97.0% 97.4% 97.2% 27.5% 22.4% 22.1% 22.1% 22.1% 19.8% 20.2% 19.4% 19.6% 1
Slide 24: Leapfrogs to one of the Top Largest REITs in Asia
3 Leapfrogs to one of the Top 10 Largest REITs in Asia Secures position as a flagship commercial REIT with one of the broadest Asian mandate Top 10 REITs in Asia by market capitalisation Top REITs in Asia by market capitalisation 24.7 #7 (S$bn) 13.3 13.2 12.7 12.3 #13 #29 10.6 10.51 10.4 9.4 8.9 8.7
Slide 25: Leapfrogs to one of the Top Largest REITs in Asia
3 Leapfrogs to one of the Top 10 Largest REITs in Asia The Merged Entity will have a free float size equivalent to or greater than MCT’s and will remain a constituent of key indices The Merged Entity remains one of the top 5 largest Potential improvement in trading liquidity S-REITs in terms of free
Slide 26: Enlarged Platform Better Positioned to Unlock Upside Potential
4 Enlarged Platform Better Positioned to Unlock Upside Potential Enhanced financial flexibility to pursue more growth opportunities Greater flexibility to pursue Strengthens overall ability to Larger development headroom to larger acquisitions and capital compete for inorganic growth undertake
Slide 27: Attractive Financial Returns for MCT Unitholders
5 Attractive Financial Returns for MCT Unitholder FY21/22 Pro DPU Forma and DPU NAV 1,2,3accretive and NAV14,5,6 to MCT accretive Unitholders to MCT Unitholders Pro forma NAV per Unit (ex-distribution8)7 Pro forma DPU (FY21/22)7 (31 Mar 2022) Singapore cents S$ +6.8%9 10.18 +7.1%10 1.81 9.53 1.69 As
Slide 28: C. MPACT Post-Merger Strategy
C. MPACT Post-Merger Strategy
Slide 29: "4R" Asset and Capital Management Strategy
“4R” Asset and Capital Management Strategy Post-Merger, the MCT Manager will adopt a tailored “4R” Asset and Capital Management Strategy to drive growth Singapore South Korea Core and Stability Step-Up and Grow Will remain a core market to provide Favourable market dynamics makes it Recharge und
Slide 30: Reaffirming Our Commitment to Sustainability
Reaffirming Our Commitment to Sustainability Making a positive impact to our stakeholders and the environment while delivering long-term value Where we are now Our journey forward Aligned to United Nations Sustainable Development Incorporating wider ESG issues into policies and Goals Overall ESG
Slide 31: D. Required Approvals
D. Required Approvals
Slide 32: Unitholders' Approvals Required for MCT
Unitholders’ Approvals Required for MCT The Merger is conditional on the MCT Unitholders' approval of Resolutions 1, 2 and 3 Resolution 4 is not a condition for the Merger to proceed Approvals Requirements Parties to abstain At the MCT EGM 1 Proposed Merger of MCT and MNACT by More than 50% of the
Slide 33: E. IFA Opinion and Directors' Recommendations
E. IFA Opinion and Directors’ Recommendations
Slide 34: Opinion of the MCT IFA
Opinion of the MCT IFA “ Based upon, and having considered, among others, the factors described in the MCT IFA Letter and the information that has been made available to the MCT IFA as at the Latest Practicable Date, the MCT IFA is of the opinion that as at the Latest Practicable Date: Recommendat
Slide 35: Recommendation of the MCT Independent Directors
Recommendation of the MCT Independent Directors “ Having considered the relevant factors, including the terms of the Merger (as set out in paragraph 5 and Schedule 3 of the Circular) and the rationale for the Merger (as set out in paragraph 3 of the Circular) and the MCT Manager's strategy for the M
Slide 36: F. Timeline and Next Steps
F. Timeline and Next Steps
Slide 37: Indicative Timeline
Indicative Timeline Key Event Expected Date / Time Last Date and Time for MCT Unitholders to Lodge Proxy Forms 10.00 a.m. on Friday, 20 May 2022 MCT’s EGM 10.00 a.m. on Monday, 23 May 2022 MNACT’s EGM 2.30 p.m. on Monday, 23 May 2022 3.00 p.m. on Monday, 23 May 2022 MNACT’s Trust Scheme Meeting (or
Slide 38: Transformative Merger Combining Strength and Growth
Transformative Merger Combining Strength and Growth Creating a flagship commercial REIT that provides stability and scale across key gateway markets of Asia Largest pure-play Singapore commercial REIT First and only North Asia focused REIT listed in with longstanding track record in delivering Singa
Slide 39: Thank You
tree commercial maple au: Thank You 39
Slide 40: G. Appendix I: Overview of MCT, MNACT and Market Outlook
G. Appendix I: Overview of MCT, MNACT and Market Outlook
Slide 41: Overview of Mapletree Commercial Trust
Overview of Mapletree Commercial Trust Listed in 2011 with three assets, MCT’s portfolio now comprises 5 prime properties in Singapore, with an established position in the Greater Southern Waterfront, a location earmarked for urban transformation S$8.8bn 5.0m sq ft 97.0% 2.6 years 33.5% Assets under
Slide 42: Overview of Mapletree North Asia Commercial Trust
Overview of Mapletree North Asia Commercial Trust Listed in 2013, MNACT’s portfolio comprises 13 high quality properties in key gateway markets of Asia S$8.3bn 5.9m sq ft 97.4% 2.4 years 41.5% Assets under Aggregate Leverage NLA Portfolio Occupancy1 WALE Management Ratio Proven track record in pursu
Slide 43: Assets in Singapore
Assets in Singapore VivoCity Mapletree Business City (comprising MBC I and MBC II) MBC I: 10, 20, 30 Pasir Panjang Road Address 1 HarbourFront Walk MBC II: Part 20, 40, 50, 60, 70 and 80 Pasir Panjang Road Asset type Retail Business Park, Office and Retail MBC I: 2016 Year of acquisition 2011 (IPO)
Slide 44: Assets in Singapore
Assets in Singapore Bank of America mTower Mapletree Anson Merill Lynch HarbourFront Address 460 Alexandra Road 60 Anson Road 2 HarbourFront Place Asset type Office and Retail Office Office Year of acquisition 2011 (IPO) 2013 2011 (IPO) Title Leasehold 99 years from 1 October 1997 Leasehold 99 years
Slide 45: Assets in Hong Kong SAR, China and Seoul
Assets in Hong Kong SAR, China and Seoul Festival Walk, Gateway Plaza, Sandhill Plaza, The Pinnacle Gangnam1, Hong Kong SAR Beijing, China Shanghai, China Seoul, South Korea Blocks 1 to 5 and 7 to 9, No.80 Tat Chee Avenue, No.18 Xiaguangli, East 3rd Ring Address No.2290 Zuchongzhi Road, 343, Hakdong
Slide 46: Assets in Greater Tokyo
Assets in Greater Tokyo IXINAL Monzen-nakacho Higashi-nihonbashi 1-chome TS Ikebukuro Building, ABAS Shin-Yokohama Building, Tokyo, Japan Building, Tokyo, Japan Tokyo, Japan Building, Yokohama, Japan 5-4, Fukuzumi 4-6, Higashi-Nihonbashi 63-4, Higashi-Ikebukuro 6-1, Shin-Yokohama 2-chome, Address 2-
Slide 47: Assets in Greater Tokyo
Assets in Greater Tokyo Hewlett-Packard mBAY POINT SII Makuhari Building, Fujitsu Makuhari Omori Prime Building, Japan Headquarters Makuhari, Chiba, Chiba, Japan Building, Chiba, Japan Tokyo, Japan Building, Tokyo, Japan Japan 8, Nakase 1-chome, 9-3, Nakase 1-chome, 6, Nakase 1-chome, 21-12, Minami-
Slide 48: Market Outlook: Singapore
Market Outlook: Singapore One of the world’s key global trade, logistics and financial hubs Underpinned by world-class Retail sales expected to gradually return to Business parks located in the Rest of infrastructure, a stable and pre-COVID levels by end-2023 in tandem Central Region enjoy rental
Slide 49: Market Outlook: China
Market Outlook: China World’s second largest economy and the only major economy to post GDP growth in 2020 Underpinned and driven by the Beijing’s Lufthansa Grade A office market Strong demand from IT and biomedical output of its Tier 1 cities expected to recover by early 2023 sectors to outstrip
Slide 50: Market Outlook: Hong Kong SAR
Market Outlook: Hong Kong SAR Continued importance as gateway between mainland China and the world as economy recovers Pivotal role in serving as a Retail market and consumer sentiments Leasing demand expected to improve and gateway connecting Mainland expected to improve and gather pace once rent
Slide 51: Market Outlook: Japan
Market Outlook: Japan World’s third largest economy supported by strong core industries World’s 3rd largest economy Resilient demand expected for offices in Growing popularity of satellite offices and has one of the most decentralised and suburban areas given located in peripheral areas outside of
Slide 52: Market Outlook: South Korea
Market Outlook: South Korea Resilient economy through COVID-19; good recovery momentum expected 10th largest global economy Gangnam Business District office sector No new supply in GBD with record low and the 4th largest in Asia by continues to outperform given strong vacancies GDP demand from tec
Slide 53: H. Appendix II: Further Information on the Merger
H. Appendix II: Further Information on the Merger
Slide 54: Funding by MCT of the Merger
Funding by MCT of the Merger Assuming all MNACT Unitholders Assuming MNACT Unitholders Assuming MNACT Unitholders elect to receive the Scrip-Only except MIPL elect to receive the except MIPL elect to receive the Consideration – Cash-and-Scrip Consideration – Cash-Only Consideration – Total S$4,247.6
Slide 55: Pro forma Financial Effects for MCT
Pro forma Financial Effects for MCT Pro forma DPU FY20/21 FY21/22 Assumes the Merger was completed on 1 April 2020, and that Assumes the Merger was completed on 1 April 2021, and that MCT held and operated the properties of MNACT for the MCT held and operated the properties of MNACT for the financia
Slide 56: Pro forma Financial Effects for MCT
Pro forma Financial Effects for MCT Pro forma DPU – Sensitivity for FY21/22 The MCT Manager wishes to set out below the possible impact on the Merged Entity’s pro forma DPU due to changes in the Merged Entity’s financing costs. For a 50 basis points increase in the all-in cost of debt per annum and
Slide 57: Pro forma Financial Effects for MCT
Pro forma Financial Effects for MCT Pro forma DPU – Sensitivity for FY20/21 The MCT Manager wishes to set out below the possible impact on the Merged Entity’s pro forma DPU due to changes in the Merged Entity’s financing costs. For a 50 basis points increase in the all-in cost of debt per annum and
Slide 58: Pro forma Financial Effects for MCT
Pro forma Financial Effects for MCT Pro forma NAV and Aggregate Leverage As at 31 March 2021 As at 31 March 2022 Assumes Merger was completed on 31 March 2021 Assumes Merger was completed on 31 March 2022 After Merger After Merger Assuming all Assuming all Assuming all Assuming all MNACT MNACT Assum
Slide 59: Pro forma Financial Effects for MCT
Pro forma Financial Effects for MCT Pro forma NAV – Sensitivity for FY21/22 MNACT and the Merged Entity are mainly exposed to movement in the HKD, RMB and JPY foreign currencies. As such, the MCT Manager wishes to set out below the possible impact on NAV per unit due to foreign exchange movements, w
Slide 60: Pro forma Financial Effects for MCT
Pro forma Financial Effects for MCT Pro forma NAV – Sensitivity for FY20/21 MNACT and the Merged Entity are mainly exposed to movement in the HKD, RMB and JPY foreign currencies. As such, the MCT Manager wishes to set out below the possible impact on NAV per unit due to foreign exchange movements, w
Slide 61: Pro forma Financial Effects for MCT
Pro forma Financial Effects for MCT Pro forma Aggregate Leverage – Sensitivity for FY21/22 MNACT and the Merged Entity are mainly exposed to movement in the HKD, RMB and JPY foreign currencies. As such, the MCT Manager wishes to set out below the possible impact on aggregate leverage due to foreign
Slide 62: Pro forma Financial Effects for MCT
Pro forma Financial Effects for MCT Pro forma Aggregate Leverage – Sensitivity for FY20/21 MNACT and the Merged Entity are mainly exposed to movement in the HKD, RMB and JPY foreign currencies. As such, the MCT Manager wishes to set out below the possible impact on aggregate leverage due to foreign
Slide 63: I. Appendix III: MPACT Post-Merger Strategy
I. Appendix III: MPACT Post-Merger Strategy
Slide 64: "4R" Asset and Capital Management Strategy
“4R” Asset and Capital Management Strategy Recharge • Drive NPI and DPU growth by incorporating best practices to maximise operational performance • Optimise tenant mix and pursue active asset management, accretive asset enhancement and redevelopment opportunities Reconstitute Recharge • Optimise po
Slide 65: MPACT will embark on a proactive and tailored strategy to realise benefits
MPACT will embark on a proactive and tailored strategy to realise benefits from the Merger Drive NPI and DPU growth through cross-pollination of teams and active asset management while capitalising on market recovery Unlock value through selective strategic divestments at an opportune time Focus on
Slide 66: Singapore
Singapore Core and Stability Market View Asset Level View Post Merger Strategy • Retail sales expected to gradually return to pre- 5 Singapore assets • Singapore will remain a core COVID levels by end-2023 in tandem with easing market to provide underlying • VivoCity and Mapletree Business City (“MB
Slide 67: Hong Kong SAR
Hong Kong SAR Recovery Market View Asset Level View Post Merger Strategy • One of the world’s largest real estate markets with high levels of global Festival Walk • To focus on putting Festival investor demand Walk back on track towards • Highly regarded and popular among local • Despite the size of
Slide 68: China
China Harvest and Grow Market View Asset Level View Post-Merger Strategy • One of the world’s fastest growing economies underpinned by Gateway Plaza (Beijing) • Maintain high occupancy levels the new “dual circulation” development strategy • High quality Grade A office building through further diver
Slide 69: Japan
Japan Rebalance Market View Asset Level View Post Merger Strategy • Resilient demand expected for offices in 9 Japan Properties • Provides lower cost of funding for the decentralised and suburban areas given Merged Entity and act as a hedge against • Comprises mainly decentralised offices that are r
Slide 70: South Korea
South Korea Step-up and Grow Market View Asset Level View Post Merger Strategy • South Korea’s Grade A office sector has shown strong growth in The Pinnacle Gangnam2 • Given South Korea’s 2021 despite the uncertainty caused by COVID-19 favourable market dynamics, • Expected to continue to benefit fr
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