Extraordinary General Meeting Of Unitholders Of CapitaMall Trust

Transcription

MISCELLANEOUS
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* Asterisks denote mandatory information
Name of Announcer *
CAPITAMALL TRUST
Company Registration No.
N.A.
Announcement submitted on
behalf of
CAPITAMALL TRUST (“CMT”)
Announcement is submitted with CAPITAMALL TRUST
respect to *
Announcement is submitted by *
Kannan Malini
Designation *
Company Secretary, CapitaMall Trust Management Limited (as manager of CMT)
Date & Time of Broadcast
24-Mar-2010 07:26:09
Announcement No.
00007
>> ANNOUNCEMENT DETAILS
The details of the announcement start here ...
Announcement Title *
Extraordinary General Meeting Of Unitholders Of CapitaMall Trust And Despatch Of
Unitholders’ Circular
Description
The attached announcement issued by CMT on the above matter is for information.
Attachments
CMT_Circular_Annoucement_24_March_2010.pdf
CMT_Circular_24_March_2010.pdf
Total size = 2023K
(2048K size limit recommended)
(Constituted in the Republic of Singapore
pursuant to a trust deed dated 29 October 2001 (as amended))
ANNOUNCEMENT
EXTRAORDINARY GENERAL MEETING OF UNITHOLDERS OF CAPITAMALL
TRUST AND DESPATCH OF UNITHOLDERS’ CIRCULAR
The Board of Directors of the Manager wishes to announce that the Manager has today issued
the Unitholders’ Circular to Unitholders setting out the details of, and other relevant information
pertaining to, the Clarke Quay Acquisition, together with a notice of the EGM, for the purpose of
seeking Unitholders’ approval for the Clarke Quay Acquisition.
The Unitholders’ Circular is in the process of being despatched to Unitholders and the EGM will
be held on Wednesday, 14 April 2010 at 10.30 a.m. (or as soon thereafter as the annual general
meeting of CMT to be held at 10.00 a.m. on the same day and at the same place is concluded or
adjourned) at the STI Auditorium, 168 Robinson Road, Level 9, Capital Tower, Singapore 068912.
Definitions:
Clarke Quay
Acquisition
The proposed acquisition of the property located at Nos. 3A, 3B, 3C, 3D and
3E River Valley Road, Singapore 179020, 179021, 179022, 179023 and
179024, known as Clarke Quay (including the plant and equipment located at
Clarke Quay)
CMT
CapitaMall Trust
EGM
The extraordinary general meeting of Unitholders to be held on Wednesday,
14 April 2010 at 10.30 a.m. (or as soon thereafter as the annual general
meeting of CMT to be held at 10.00 a.m. on the same day and at the same
place is concluded or adjourned) at the STI Auditorium, 168 Robinson Road,
Level 9, Capital Tower, Singapore 068912
Manager
CapitaMall Trust Management Limited, as manager of CMT
SGX-ST
Singapore Exchange Securities Trading Limited
Unitholder
A holder of Unit(s)
Unitholders’
Circular
The circular issued to Unitholders dated 24 March 2010
Units
A unit representing an undivided interest in CMT
BY ORDER OF THE BOARD
CapitaMall Trust Management Limited
(Company Registration No. 200106159R)
as manager of CapitaMall Trust
Kannan Malini
Company Secretary
Singapore
24 March 2010
IMPORTANT NOTICE
The past performance of CMT and the Manager is not necessarily indicative of their respective future performances.
The value of Units and the income from them may fall as well as rise. Units are not obligations of, deposits, 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 the Manager to redeem their Units while the Units are listed. It is intended that
Unitholders may only deal in their Units through trading on the SGX-ST. Listing of the Units on the SGX-ST does not
guarantee a liquid market for the Units.
CAPITAMALL TRUST
Clarke Quay
Circular Dated 24 March 2010
This Circular is important and requires your immediate attention.
Clarke Quay is an integrated food and beverage,
entertainment and lifestyle riverfront destination. It is
located along the Singapore River and at the fringe
of the CBD. It is within walking distance of the Clarke
Quay MRT station, making it easily accessible by
public transportation.
East West Line
North South Line
Sembawang
Station
North East Line
Sembawang
Shopping
Centre
Circle Line
Sengkang
Station
Choa Chu Kang
Station
Lot One Shoppers’
Mall
Rivervale Mall
Bukit Panjang
Plaza
Hougang
Station
Bishan
Interchange
Hougang
Plaza
Tampines
Tampines Mall
Station
Junction 8
Imm
Building
Jurong East
Interchange
Circular dated 24 March 2010 (Clarke Quay)
Jurong Entertainment
Centre
Bugis
Station
The Atrium@Orchard
Plaza Singapura
Bugis Junction
Raffles City Singapore
Dhoby Ghaut
Interchange
City Hall Interchange
Clarke Quay
Funan Digitalife
Mall
Existing Properties
Clarke Quay
Circular to Unitholders
in relation to:
The Proposed Acquisition of Clarke Quay
MRT station
MANAGED BY
CAPITAMALL TRUST MANAGEMENT LIMITED
A wholly-owned subsidiary of
A member of
Orchard
MRT
O
kit
Me
ia
ge
Br
id
St
Rd
St
Rd
Br
as
Ba
sa
hR
id
ge
Rd
d
Funan
Digitalife
Mall
Ne
w
Rd
Br
y
Raffles
Place MRT
Cro
ss
OUtram Park
MRT
Central Business
District
Tanjong
Pagar MRT
St
Marina Bay
MRT
Raffles Blvd
Raffles Ave
ressway
ey
Chinatown
MRT
t Rd
nmen
rah
way
wa
ss
re
xp
Canto
Bu
ress
Va
ll
bin
Sh
so
en
ton n R
Wa d
y
Ce
lan
er
Ro
t ra
lE
Ce
n
r Delta Rd
Lo
we
Ja
Exp
Riv
Clarke Quay
MRT
am Rd
Outr
Tiong Bahru Rd
y
wa
igh
ll H
co
Ni
ge
d
Ganges Ave
l
ra
nt
City
Hall
MRT
rid
nR
Meanings of capitalised terms may be found in the Glossary
of this Circular.
Rd
Zio
STI Auditorium
168 Robinson Road
Level 9, Capital Tower
Singapore 068912
for
dR
d
Clarke Quay
Tiong Bahru
MRT
Rd
am
ng
Place of EGM
If you have sold or transferred all your units in CMT, you should
immediately forward this Circular, together with the Notice of EGM
and the accompanying Proxy Form in this Circular, to the purchaser or
transferee or to the bank, stockbroker or other agent through whom the
sale or transfer was effected for onward transmission to the purchaser
or transferee.
Rd
14 April 2010 at 10.30 a.m.
(or as soon thereafter as the Annual
General Meeting of CMT to be held
at 10.00 a.m. on the same day and
at the same place is concluded
or adjourned)
lta
Date and time of EGM
The SGX-ST takes no responsibility for the accuracy of any statements
or opinions made, or reports contained, in this Circular. If you are in
any doubt as to the action you should take, you should consult your
stockbroker, bank manager, solicitor, accountant or other professional
adviser immediately.
St
Rd
th
B
d
12 April 2010 at 10.30 a.m.
De
Last date and time for
lodgement of Proxy Forms
Dhoby Ghaut
MRT
Se
nR
Kim
tha
Date and Time
Valley
Bugis
Junction
Ayer Rajah Exp
River
Be
Independent Financial Adviser to the Independent Directors and
Audit Committee of CapitaMall Trust Management Limited
Plaza
Singapura
M
idd
le
No
rth
Grange Rd
Na
Event
Somerset
MRT
So
u
IMPORTANT DATES AND TIMES for Unitholders
THE ATRIUM@
oRCHARD
Rd
or
hard
vd
ct
Orc
Bl
Vi
ar
d
nc
oo
len
rc
h
CAPITAMALL TRUST
Clarke Quay
East West Line
North South Line
Sembawang
Station
North East Line
Sembawang
Shopping
Centre
Circle Line
Sengkang
Station
Choa Chu Kang
Station
Lot One Shoppers’
Mall
Rivervale Mall
Bukit Panjang
Plaza
Hougang
Station
Bishan
Interchange
Hougang
Plaza
Tampines
Tampines Mall
Station
Junction 8
Imm
Building
Jurong East
Interchange
Centre
Bugis
Station
The Atrium@Orchard
Plaza Singapura
Bugis Junction
Dhoby Ghaut
Interchange
Clarke Quay
Funan Digitalife
Mall
Existing Properties
Clarke Quay
in relation to:
MRT station
MANAGED BY
A member of
Orchard
MRT
O
kit
Me
ia
ge
Br
id
St
Rd
St
Rd
Br
as
Ba
sa
hR
id
ge
Rd
d
Funan
Digitalife
Mall
Ne
w
Rd
Br
y
Raffles
Place MRT
Cro
ss
OUtram Park
MRT
Central Business
District
Tanjong
Pagar MRT
St
Marina Bay
MRT
Raffles Blvd
Raffles Ave
ressway
ey
Chinatown
MRT
t Rd
nmen
rah
way
wa
ss
re
xp
Canto
Bu
ress
Va
ll
bin
Sh
so
en
ton n R
Wa d
y
Ce
lan
er
Ro
t ra
lE
Ce
n
r Delta Rd
Lo
we
Ja
Exp
Riv
Clarke Quay
MRT
am Rd
Outr
Tiong Bahru Rd
y
wa
igh
ll H
co
Ni
ge
d
Ganges Ave
l
ra
nt
City
Hall
MRT
rid
nR
of this Circular.
Rd
Zio
STI Auditorium
168 Robinson Road
Singapore 068912
for
dR
d
Clarke Quay
Tiong Bahru
MRT
Rd
am
ng
Place of EGM
or transferee.
Rd
14 April 2010 at 10.30 a.m.
or adjourned)
lta
St
Rd
th
B
d
12 April 2010 at 10.30 a.m.
De
Dhoby Ghaut
MRT
Se
nR
Kim
tha
Date and Time
Valley
Bugis
Junction
Ayer Rajah Exp
River
Be
Plaza
Singapura
M
idd
le
No
rth
Grange Rd
Na
Event
Somerset
MRT
So
u
THE ATRIUM@
oRCHARD
Rd
or
hard
vd
ct
Orc
Bl
Vi
ar
d
nc
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h
Overview
The overview section is qualified in its entirety by, and should be read
in conjunction with, the full text of this Circular.
Proposed Acquisition of Clarke Quay
CMT is proposing to acquire Clarke Quay. On 9 February 2010,
HSBC Institutional Trust Services (Singapore) Limited, as trustee
of CMT, entered into a conditional sale and purchase agreement
to acquire Clarke Quay, which includes the plant and equipment
located at Clarke Quay, at the Purchase Consideration of
S$268.0 million.
Benefits to Unitholders
2. Competitive Strengths of Clarke Quay
1.The Acquisition fits the Manager’s Investment Strategy
The Manager believes that the Acquisition at a property
yield of approximately 5.9%(1) will be accretive and
Unitholders will enjoy a higher DPU due to the acquisition
of Clarke Quay at a price reflective of the attractive cash
flows that it generates. The overall yield accretion resulting
from the Acquisition, combined with the proposed debt
and/or equity financing plan, is illustrated below.
Shopper Traffic at Clarke Quay
The total cost of the Acquisition, comprising the Purchase
Consideration, the acquisition fee payable to the Manager, as well
as the estimated professional and other fees and expenses incurred
by CMT in connection with the Acquisition, is estimated to be
approximately S$272.7 million.
Scenario A:
Method of Financing the Acquisition
Assuming the Acquisition is fully funded through
100.0% debt financing and CMT’s Aggregate
Leverage is increased to approximately 33.1%
The Manager intends to adopt an optimal financing plan to finance
the Acquisition, so as to ensure that the Acquisition will provide overall
yield accretion to Unitholders. Depending on the market conditions,
the Manager may either fully fund the Acquisition through (i) debt
financing or (ii) a combination of debt and equity financing.
The Manager believes that Clarke Quay is a popular destination
among Singapore residents, expatriates and tourists, as
evidenced by its shopper traffic which held up well despite the
economic downturn with approximately 11.0 million visitors in
2009, compared to approximately 10.8 million visitors in 2008.
The committed occupancy of Clarke Quay as at 31 December
2009 is 94.9% and has been above 90.0% for the past three
years following the completion of the repositioning of Clarke
Quay in December 2006.
The Acquisition will enlarge and diversify CMT’s network of
retailers across the different segments of the retail market, and
concurrently strengthen CMT’s portfolio of retail malls catering to
the different consumer markets in Singapore and allow CMT to
capitalise on the expected increase in tourism in Singapore.
Forecast DPU (Cents)
(Number of persons in millions)
10.8
9.05
+0.09
9.14
2008
11.0
2009
4.Enhancement of Rental Revenue
3.Segmental Diversification
Existing Portfolio
Enlarged Portfolio
Scenario B:
Assuming the Acquisition is fully funded through a
combination of 50.0% debt financing and 50.0%
equity financing, at an issue price of S$1.70 per new
Unit and CMT’s Aggregate Leverage is increased to
approximately 31.3%
9.05
+0.04
9.09
The Manager believes that the competitive strengths of Clarke
Quay will allow CMT to capitalise on the growing lifestyle and
entertainment demand in Singapore arising from (i) the expected
increase in tourism in Singapore and (ii) the economic recovery
and improvement in consumer sentiment. The Acquisition will
not significantly change the asset profile of the CMT Group as its
Enlarged Properties continue to comprise primarily of retail malls
which cater to necessity shopping.
Percentage of Portfolio(1) by Gross Revenue
Existing Properties (2)
Existing Portfolio
Enlarged Properties (3)
Enlarged Portfolio
20.9%
The Acquisition is in line with the Manager’s principal
investment strategy to invest in quality income-producing
real estate and real estate assets so as to deliver stable
distributions and sustainable total returns to Unitholders.
The Acquisition will also further strengthen CMT’s position
as the largest REIT by asset size in Singapore. Following
the completion of the Acquisition, the CMT Group’s asset
size is expected to increase from approximately S$7.4
billion (as at 31 December 2009) to approximately S$7.6
billion(2).
Notes:
(1) The property yield is computed by dividing Clarke Quay’s
annualised Net Property Income for the Forecast Period
2010 by the Purchase Consideration of S$268.0 million.
(2) The asset size excludes CMT’s distributable income for the
quarter ended 31 December 2009.
79.1%
Necessity Shopping (4)
25.1%
74.9%
Discretionary Spending (5)
Notes:
(1) Excludes The Atrium@Orchard which consists primarily of office
space and Jurong Entertainment Centre which has ceased
operations in preparation for asset enhancement works.
(2) Based on gross revenue for FY2009.
(3) Based on gross revenue for FY2009, except for Clarke Quay which
is based on Clarke Quay’s annualised gross revenue for the Forecast
Period 2010.
(4) Comprises Tampines Mall, Junction 8, IMM Building, Plaza Singapura,
Bugis Junction, Hougang Plaza, Sembawang Shopping Centre, Lot
One Shoppers’ Mall, Bukit Panjang Plaza and Rivervale Mall.
(5) Comprises Raffles City Singapore (40.00% interest) and Funan
DigitaLife Mall for the Existing Properties. Comprises Raffles City
Singapore (40.00% interest), Funan DigitaLife Mall and Clarke Quay
for the Enlarged Properties.
The Manager believes the Acquisition will provide potential for
rental upside when leases become due for renewal in the next
few years given the growth potential in the Singapore retail,
entertainment and tourism market. In addition, the Manager
believes that there are opportunities to enhance the rental
revenue of Clarke Quay through reconfiguration of lettable area
and improvement of the existing tenant mix.
5.Income Diversification
The Acquisition is expected to benefit Unitholders by improving
income diversification and reducing the reliance of the CMT
Group’s income stream on any single property. The Manager
expects that the maximum contribution to the CMT Group’s Net
Property Income by any single property within the CMT Group’s
property portfolio will decrease from approximately 15.0% to
approximately 14.4% following the Acquisition.
Overview
The overview section is qualified in its entirety by, and should be read
in conjunction with, the full text of this Circular.
Proposed Acquisition of Clarke Quay
CMT is proposing to acquire Clarke Quay. On 9 February 2010,
HSBC Institutional Trust Services (Singapore) Limited, as trustee
of CMT, entered into a conditional sale and purchase agreement
to acquire Clarke Quay, which includes the plant and equipment
located at Clarke Quay, at the Purchase Consideration of
S$268.0 million.
Benefits to Unitholders
2. Competitive Strengths of Clarke Quay
1.The Acquisition fits the Manager’s Investment Strategy
The Manager believes that the Acquisition at a property
yield of approximately 5.9%(1) will be accretive and
Unitholders will enjoy a higher DPU due to the acquisition
of Clarke Quay at a price reflective of the attractive cash
flows that it generates. The overall yield accretion resulting
from the Acquisition, combined with the proposed debt
and/or equity financing plan, is illustrated below.
The total cost of the Acquisition, comprising the Purchase
Consideration, the acquisition fee payable to the Manager, as well
as the estimated professional and other fees and expenses incurred
by CMT in connection with the Acquisition, is estimated to be
approximately S$272.7 million.
Scenario A:
Assuming the Acquisition is fully funded through
100.0% debt financing and CMT’s Aggregate
Leverage is increased to approximately 33.1%
The Manager intends to adopt an optimal financing plan to finance
the Acquisition, so as to ensure that the Acquisition will provide overall
yield accretion to Unitholders. Depending on the market conditions,
the Manager may either fully fund the Acquisition through (i) debt
financing or (ii) a combination of debt and equity financing.
The Manager believes that Clarke Quay is a popular destination
among Singapore residents, expatriates and tourists, as
evidenced by its shopper traffic which held up well despite the
economic downturn with approximately 11.0 million visitors in
2009, compared to approximately 10.8 million visitors in 2008.
The committed occupancy of Clarke Quay as at 31 December
2009 is 94.9% and has been above 90.0% for the past three
years following the completion of the repositioning of Clarke
Quay in December 2006.
The Acquisition will enlarge and diversify CMT’s network of
retailers across the different segments of the retail market, and
concurrently strengthen CMT’s portfolio of retail malls catering to
the different consumer markets in Singapore and allow CMT to
capitalise on the expected increase in tourism in Singapore.
Forecast DPU (Cents)
10.8
9.05
+0.09
9.14
2008
11.0
2009
4.Enhancement of Rental Revenue
3.Segmental Diversification
Existing Portfolio
Enlarged Portfolio
Scenario B:
Assuming the Acquisition is fully funded through a
combination of 50.0% debt financing and 50.0%
equity financing, at an issue price of S$1.70 per new
Unit and CMT’s Aggregate Leverage is increased to
approximately 31.3%
9.05
+0.04
9.09
The Manager believes that the competitive strengths of Clarke
Quay will allow CMT to capitalise on the growing lifestyle and
entertainment demand in Singapore arising from (i) the expected
increase in tourism in Singapore and (ii) the economic recovery
and improvement in consumer sentiment. The Acquisition will
not significantly change the asset profile of the CMT Group as its
Enlarged Properties continue to comprise primarily of retail malls
which cater to necessity shopping.
Existing Properties (2)
Existing Portfolio
Enlarged Properties (3)
Enlarged Portfolio
20.9%
The Acquisition is in line with the Manager’s principal
investment strategy to invest in quality income-producing
real estate and real estate assets so as to deliver stable
distributions and sustainable total returns to Unitholders.
The Acquisition will also further strengthen CMT’s position
as the largest REIT by asset size in Singapore. Following
the completion of the Acquisition, the CMT Group’s asset
size is expected to increase from approximately S$7.4
billion (as at 31 December 2009) to approximately S$7.6
billion(2).
Notes:
(1) The property yield is computed by dividing Clarke Quay’s
annualised Net Property Income for the Forecast Period
(2) The asset size excludes CMT’s distributable income for the
quarter ended 31 December 2009.
79.1%
Necessity Shopping (4)
25.1%
74.9%
Discretionary Spending (5)
Notes:
(1) Excludes The Atrium@Orchard which consists primarily of office
space and Jurong Entertainment Centre which has ceased
operations in preparation for asset enhancement works.
(2) Based on gross revenue for FY2009.
(3) Based on gross revenue for FY2009, except for Clarke Quay which
is based on Clarke Quay’s annualised gross revenue for the Forecast
Period 2010.
(4) Comprises Tampines Mall, Junction 8, IMM Building, Plaza Singapura,
Bugis Junction, Hougang Plaza, Sembawang Shopping Centre, Lot
One Shoppers’ Mall, Bukit Panjang Plaza and Rivervale Mall.
(5) Comprises Raffles City Singapore (40.00% interest) and Funan
DigitaLife Mall for the Existing Properties. Comprises Raffles City
Singapore (40.00% interest), Funan DigitaLife Mall and Clarke Quay
for the Enlarged Properties.
The Manager believes the Acquisition will provide potential for
rental upside when leases become due for renewal in the next
few years given the growth potential in the Singapore retail,
entertainment and tourism market. In addition, the Manager
believes that there are opportunities to enhance the rental
revenue of Clarke Quay through reconfiguration of lettable area
and improvement of the existing tenant mix.
5.Income Diversification
The Acquisition is expected to benefit Unitholders by improving
income diversification and reducing the reliance of the CMT
Group’s income stream on any single property. The Manager
expects that the maximum contribution to the CMT Group’s Net
Property Income by any single property within the CMT Group’s
property portfolio will decrease from approximately 15.0% to
CAPITAMALL
TRUST
First and Largest REIT in Singapore
CMT is the first REIT listed on SGX-ST in July 2002. As at 31
December 2009, CMT is also the largest REIT in Singapore
by asset size and market capitalisation at approximately
S$7.4 billion and S$5.7 billion respectively. CMT has been
assigned an “A2” rating by Moody’s. The “A2” rating is the
highest rating assigned to a Singapore REIT — see page 18
of this Circular for further details.
CMT owns and invests in quality income-producing assets
which are used, or predominantly used, for retail purposes
primarily in Singapore. As at 31 December 2009, CMT
Group’s portfolio comprised a diverse list of over 2,300
leases with local and international retailers and achieved a
committed occupancy of close to 100.0%. CMT Group’s
14 quality retail properties are strategically located in the
suburban areas and downtown core of Singapore. CMT also
owns an approximately 19.70% stake in CapitaRetail China
Trust, the first China shopping mall REIT listed on SGX-ST in
December 2006.
CMT is managed by an external manager, CapitaMall Trust Management
Limited, which is a wholly-owned subsidiary of CapitaMalls Asia
Limited, one of Asia’s largest listed shopping mall developers, owners
and managers.
Enlarged Properties (Comprising Clarke Quay and the Existing Properties)
The table below sets out selected information on the Enlarged Properties as at 31 December 2009 (unless otherwise indicated).
Net Lettable Area (sq ft)
Number of Leases
Shopper Traffic in 2009
(million)
Valuation (S$ million)
Clarke Quay
Existing Properties
Enlarged Properties
294,610
4,542,598(2)
4,837,208(2)
55
2,304(2)
2,359(2)
11.0
214.4(3)
225.4(3)
270.0 (CBRE)(1)
268.0 (Knight Frank)(1)
6,920.5(4)
7,188.5(4)(5)
Notes:
(1) As at 3 February 2010.
(2) Excludes Jurong Entertainment Centre which has ceased operations in preparation for asset enhancement works. Includes Raffles City Singapore as a
whole and not CMT’s 40.00% interest in Raffles City Singapore.
(3) Excludes Jurong Entertainment Centre which has ceased operations in preparation for asset enhancement works, as well as Hougang Plaza and The
Atrium@Orchard for which figures are not available.
(4) Includes CMT’s 40.00% interest in Raffles City Singapore.
(5) The valuation for the Enlarged Properties is based on the aggregate of the valuation of the Existing Properties and Knight Frank’s valuation of Clarke
Quay.
176
632
Leasehold
tenure of 99
years with
effect from 1
September
1992
777.0
100.0%
25.4
Number of
Leases
Number of
Car Park
Lots
Title /
Leasehold
Estate
Expiry
Valuation
(S$ million)
Committed
Occupancy
(%)
Shopper
Traffic
in 2009
(million)
28.8
100.0%
570.0
Leasehold
tenure of 99
years with
effect from 1
September
1991
327
165
246,721
Junction 8
9.6
99.3%
326.0
Leasehold
tenure of 99
years with
effect from
12 December
1979
339
189
297,698
Funan
DigitaLife
Mall
699
229
498,679
Plaza
Singapura
1,000.0
17.8
Non-retail:
97.6%
24.2
Retail: 99.7% 100.0%
650.0
Leasehold
Freehold
tenure of 30
+ 30 years
with effect
from 23
January 1989
90 (heavy
vehicles)
1,313 (cars)
Non-retail:
382
Retail: 240
Non-retail:
534,020
Retail:
408,128
IMM
Building
36.4
100.0%
798.0
Leasehold
tenure of
99 years
with effect
from 10
September
1990
648(1)
231
421,539
Bugis
Junction
4.5
99.5%
136.5
Leasehold
tenure of 999
years with
effect from 26
March 1885
161
84
128,320
Sembawang
Shopping
Centre
N.A.(2)
N.A.(2)
122.0
Leasehold
tenure of 99
years with
effect from 1
March 1991
N.A.(2)
N.A.(2)
N.A.(2)
Jurong
Entertainment
Centre
N.A.(3)
Retail: 100.0%
100.0%
31.4
Office: 98.6%
2,550.0
Leasehold
tenure of 99
years with
effect from 16
July 1979
1,065
Hotels &
Convention
Centre: 1
Office: 46
Retail: 200
Office: 380,310
Retail: 403,209
Raffles City
Singapore(4)
39.0
Leasehold
tenure of 99
years with
effect from 1
March 1991
154
10
75,353
Hougang
Plaza
17.2
99.9%
428.0
Leasehold
tenure of 99
years with
effect from
1 December
1993
318
154
217,713
Lot One
Shoppers’
Mall(5)
12.1
99.8%
248.0
Leasehold
tenure of 99
years with
effect from
1 December
1994
332
109
148,469
Bukit Panjang
Plaza(5)
7.0
100.0%
92.0
Leasehold
tenure of 99
years with
effect from
6 December
1997
178(1)
68
81,130
Rivervale
Mall(5)
N.A.(3)
99.1%
714.0
Leasehold
tenure of 99
years with
effect from 15
August 2008
106
Office :12
Retail : 8
Office: 357,354
Retail: 16,318
The Atrium@
Orchard
(1) The car park lots are owned by the management corporations of Bugis Junction and Rivervale Mall.
(2) Not applicable as Jurong Entertainment Centre has ceased operations in preparation for asset enhancement works.
(3) Figures are not available.
(4) Information shown is in relation to Raffles City Singapore as a whole and not CMT’s 40.00% interest in Raffles City Singapore.
(5) On 1 January 2010, pursuant to the CRS Restructuring, the CRS Properties are now held directly by CMT. Prior to that, CMT had held 100.00% of the beneficial interest in the property portfolio of CapitaRetail Singapore Limited
which comprised the CRS Properties.
Notes:
327,637
NLA
(sq ft)
Tampines
Mall
The table below sets out selected information on the Existing Properties as at 31 December 2009.
Existing Properties
TABLE OF CONTENTS
Page
CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ii
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
INDICATIVE TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
LETTER TO UNITHOLDERS
1.
The Proposed Acquisition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
2.
Rationale for the Acquisition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
3.
Details of the Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
4.
Method of Proposed Financing and Profit Forecast. . . . . . . . . . . . . . . . . . . . . . . . . . . .
18
5.
Recommendation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21
6.
Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21
7.
Abstentions from Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21
8.
Action to be Taken by Unitholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
9.
Directors’ Responsibility Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
10. Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
11.
Documents on Display . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
IMPORTANT NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
APPENDICES
Appendix A
Details of Clarke Quay and the Existing Properties . . . . . . . . . . . . . . . . . . . .
A-1
Appendix B
Profit Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-1
Appendix C
Independent Accountants’ Report on the Profit Forecast . . . . . . . . . . . . . . . .
C-1
Appendix D
Valuation Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D-1
Appendix E
Independent Financial Adviser’s Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
E-1
Appendix F
Existing Interested Person Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-1
Appendix G
Directors’ and Substantial Unitholders’ Interest . . . . . . . . . . . . . . . . . . . . . . .
G-1
NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . .
H-1
PROXY FORM
i
CORPORATE INFORMATION
Directors of CapitaMall
Trust Management
Limited
(the manager of
CapitaMall Trust
(“CMT”, and the
manager of CMT,
the “Manager”))
:
Mr James Koh Cher Siang (Chairman & Independent Non-Executive
Director)
Mr Liew Mun Leong (Deputy Chairman & Non-Executive Director)
Mr Ho Chee Hwee Simon (Chief Executive Officer & Executive Director)
Mr James Glen Service (Independent Non-Executive Director)
Mr David Wong Chin Huat (Independent Non-Executive Director)
Mr S. Chandra Das (Independent Non-Executive Director)
Mr Kee Teck Koon (Non-Executive Director)
Mr Lim Tse Ghow Olivier (Non-Executive Director)
Mr Lim Beng Chee (Non-Executive Director)
Registered Office of
the Manager
:
39 Robinson Road
#18-01 Robinson Point
Singapore 068911
Trustee of CMT
(the “Trustee”)
:
HSBC Institutional Trust Services (Singapore) Limited
21 Collyer Quay
#10-01 HSBC Building
Singapore 049320
Legal Adviser for the
Acquisition and to
the Manager
:
Allen & Gledhill LLP
One Marina Boulevard #28-00
Singapore 018989
Legal Adviser to
the Trustee
:
Shook Lin & Bok LLP
1 Robinson Road
#18-00 AIA Tower
Singapore 048542
Unit Registrar
:
Boardroom Corporate & Advisory Services Pte. Ltd.
50 Raffles Place
#32-01 Singapore Land Tower
Singapore 048623
Independent Financial
Adviser to the
Independent Directors
and Audit Committee of
the Manager (the “IFA”)
:
ANZ Singapore Limited
1 Raffles Place
#32-00 OUB Centre
Singapore 048616
Independent
Accountants
:
KPMG LLP
16 Raffles Quay
#22-00 Hong Leong Building
Singapore 048581
Independent Valuers
:
CB Richard Ellis (Pte) Ltd
6 Battery Road #32-01
Singapore 049909
Knight Frank Pte Ltd
16 Raffles Quay
#30-00 Hong Leong Building
Singapore 048581
ii
SUMMARY
The following summary is qualified in its entirety by, and should be read in conjunction with, the full text
of this Circular. Meanings of defined terms may be found in the Glossary on pages 25 to 29 of this
Circular.
Any discrepancies in the tables included herein between the listed amounts and totals thereof are due
to rounding.
THE PROPOSED ACQUISITION OF CLARKE QUAY (ORDINARY RESOLUTION)
The Manager seeks approval from the unitholders of CMT (“Unitholders”) for the proposed acquisition
of Clarke Quay which is located at River Valley Road (“Clarke Quay”, and the proposed acquisition of
Clarke Quay, the “Acquisition”) at a purchase consideration of S$268.0 million (the “Purchase
Consideration”).
Clarke Quay is an integrated food and beverage, entertainment and lifestyle riverfront destination. It is
located along the Singapore River and at the fringe of Singapore’s Central Business District (“CBD”).
It is within walking distance of the Clarke Quay mass rapid transit (“MRT”) station, making it easily
accessible by public transportation. Clarke Quay has a net lettable area (“NLA”) of approximately
294,610 square feet (“sq ft”) as at 31 December 2009.
On 9 February 2010, the Trustee entered into a conditional sale and purchase agreement (the “Sale
and Purchase Agreement”) with Clarke Quay Pte Ltd (the “Vendor”) to acquire Clarke Quay (which
includes the plant and equipment located at Clarke Quay) at the Purchase Consideration of S$268.0
million.
The Purchase Consideration was arrived at on a willing-buyer and willing-seller basis after taking into
account the independent valuations of Clarke Quay. The Manager has commissioned an independent
property valuer, CB Richard Ellis (Pte) Ltd (“CBRE”), and the Trustee has commissioned an
independent property valuer, Knight Frank Pte Ltd (“Knight Frank”, together with CBRE, the
“Independent Valuers”), to value Clarke Quay. CBRE, in its report dated 3 February 2010, stated that
the open market value of Clarke Quay is S$270.0 million and Knight Frank, in its report dated 3
February 2010, stated that the open market value of Clarke Quay is S$268.0 million.
The total cost of the Acquisition (the “Total Acquisition Cost”) is currently estimated to be
approximately S$272.7 million, comprising:
(i)
the Purchase Consideration of S$268.0 million;
(ii)
the acquisition fee payable to the Manager for the Acquisition (the “Acquisition Fee”) which
amounts to approximately S$2.7 million; and
(iii)
the estimated professional and other fees and expenses incurred by CMT in connection with the
Acquisition which amount to approximately S$2.0 million.
As the Acquisition will constitute an “interested party transaction” under the Property Funds Appendix
in Appendix 2 of the Code on Collective Investment Schemes (the “Property Funds Appendix”) issued
by the Monetary Authority of Singapore (the “MAS”), the Acquisition Fee will be in the form of units in
CMT (“Units”), which shall not be sold within one year from the date of issuance.
1
Interested Person Transaction and Interested Party Transaction in connection with the
Acquisition
As at 18 March 2010, being the latest practicable date prior to the printing of this Circular (the “Latest
Practicable Date”), CapitaMalls Asia Limited (“CMA”) held an aggregate indirect interest in
950,077,146 Units, which is equivalent to approximately 29.87% of the total number of Units then in
issue (“Existing Units”), and is therefore regarded as a “controlling Unitholder” of CMT 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 Property Funds Appendix1. In addition, as the
Manager is a wholly-owned subsidiary of CMA, CMA is therefore regarded as a “controlling
shareholder” of the Manager under both the Listing Manual and the Property Funds Appendix.
As the Vendor is a wholly-owned subsidiary of CMA, for the purposes of Chapter 9 of the Listing Manual
and the Property Funds Appendix, the Vendor (being a subsidiary of a “controlling Unitholder” and a
“controlling shareholder” of the Manager) is (for the purposes of the Listing Manual) an “interested
person” and (for the purposes of the Property Funds Appendix) an “interested party” of CMT.
Therefore, the Acquisition will constitute an “interested person transaction” under Chapter 9 of the
Listing Manual as well as an “interested party transaction” under the Property Funds Appendix, in
respect of which the approval of Unitholders is required.
(See paragraph 3.3 of the Letter to Unitholders for further details.)
Rationale for the Proposed Acquisition
The Acquisition fits the Manager’s Investment Strategy
The Manager believes that the Acquisition at a property yield of approximately 5.9%2 will be accretive
and Unitholders will enjoy a higher distribution per Unit (“DPU”) due to the acquisition of Clarke Quay
at a price reflective of the attractive cash flows that it generates as described in this Circular. (See
paragraph 2.1 of the Letter to Unitholders for further details regarding the yield accretion resulting from
the Acquisition.)
The Acquisition is in line with the Manager’s principal investment strategy to invest in quality
income-producing real estate and real estate assets so as to deliver stable distributions and
sustainable total returns to Unitholders. (See paragraph 3 of the Letter to Unitholders for further details
regarding the financial impact of the Acquisition.)
The Acquisition will also further strengthen CMT’s position as the largest real estate investment trust
(“REIT”) by asset size in Singapore. Following the completion of the Acquisition, the CMT Group’s3
asset size is expected to increase from approximately S$7.4 billion (as at 31 December 2009) to
approximately S$7.6 billion4.
1
The Manager has on 18 March 2010 disposed 1,000,000 Units. It should be noted that the Register of Unitholdings would
not at the Latest Practicable Date reflect this disposal of Units by the Manager as the disposal is conditional upon completion
of settlement. However, for good corporate governance, the unitholdings of CapitaLand Limited and CMA in this Circular
reflects this disposal of Units by the Manager.
2
The property yield is computed by dividing Clarke Quay’s annualised Net Property Income (as defined herein) for the
Forecast Period 2010 (as defined herein) by the Purchase Consideration of S$268.0 million.
3
“CMT Group” means CMT and its subsidiaries.
4
The asset size excludes CMT’s distributable income for the quarter ended 31 December 2009.
2
Competitive Strengths of Clarke Quay
Clarke Quay, which is located along the Singapore River and at the fringe of the CBD, is positioned as
an integrated food and beverage, entertainment and lifestyle riverfront destination. It is also within
walking distance of the Clarke Quay MRT station, making it easily accessible by public transportation.
The Manager believes that Clarke Quay is a popular destination among Singapore residents,
expatriates and tourists, as evidenced by its shopper traffic which held up well despite the economic
downturn with approximately 11.0 million visitors in 2009, compared to approximately 10.8 million
visitors in 2008. The committed occupancy of Clarke Quay as at 31 December 2009 is 94.9% and has
been above 90.0% for the past three years following the completion of the repositioning of Clarke Quay
in December 2006.
Segmental Diversification
The Manager believes that as a result of the competitive strengths of Clarke Quay, CMT will be able
to capitalise on the growing lifestyle and entertainment demand in Singapore arising from (i) the
expected increase in tourism in Singapore (by catering to the increasing tenancy demands arising from
the Singapore Government’s commitment to grow the tourism industry and the rejuvenation plan for the
city centre area) and (ii) the economic recovery and improvement in consumer sentiment.
The Acquisition will not significantly change the asset profile of the CMT Group as its enlarged portfolio
of properties (the “Enlarged Properties”) continues to comprise primarily of retail malls which cater to
necessity shopping.
The Acquisition will enlarge and diversify CMT’s network of retailers across the different segments of
the retail market, and concurrently strengthen CMT’s portfolio of retail malls catering to the different
consumer markets in Singapore and allow CMT to capitalise on the expected increase in tourism in
Singapore.
Enhancement of Rental Revenue
The Manager believes that there is potential for rental upside when leases become due for renewal in
the next few years given the growth potential in the Singapore retail, entertainment and tourism market.
In addition, the Manager believes that there are opportunities to enhance the rental revenue of Clarke
Quay through reconfiguration of lettable area and improvement of the existing tenant mix.
Income Diversification
The Acquisition is expected to benefit Unitholders by improving income diversification and reducing the
reliance of CMT Group’s income stream on any single property. The Manager expects that the
maximum contribution to CMT Group’s Net Property Income by any single property within the CMT
Group’s property portfolio will decrease from approximately 15.0% to approximately 14.4% following
the Acquisition.
(See paragraph 2 of the Letter to Unitholders for further details.)
3
The Manager intends to adopt an optimal financing plan to finance the Acquisition, so as to ensure that
the Acquisition will provide overall yield accretion to Unitholders. Depending on the market conditions,
the Manager may either fully fund the Acquisition through (i) debt financing or (ii) a combination of debt
and equity financing. The current intention of the Manager is that it is unlikely that the Acquisition will
be fully funded through 100.0% equity financing given that the CMT Group’s Aggregate Leverage1 is
30.5% (as at 31 December 2009). (See paragraph 4 of the Letter to Unitholders for further details.)
The table below sets out the change to the CMT Group’s Aggregate Leverage through two different
funding scenarios purely for illustrative purposes. There is no assurance that the actual financing plan
will be similar to either Scenario A or Scenario B.
CMT Group’s Aggregate Leverage
Method of Financing
Before the Acquisition(1)
After the Acquisition
(2)
Scenario A:
100.0% Debt Financing
Scenario B:
50.0% Debt Financing and
50.0% Equity Financing
30.5%
30.5%
33.1%
31.3%
Notes:
(1)
As at 31 December 2009.
(2)
Based on the assumption that the Acquisition was completed on 31 December 2009.
1
The ratio of the value of borrowings and deferred payments (if any) to the value of deposited property of the CMT Group
(the “Deposited Property”).
4
INDICATIVE TIMETABLE
The timetable for the event which is scheduled to take place after the Extraordinary General Meeting
(the “EGM”) is indicative only and is subject to change at the Manager’s absolute discretion.
Event
Date and Time
Last date and time for lodgement of Proxy Forms
:
Monday, 12 April 2010 at 10.30 a.m.
Date and time of the EGM
:
Wednesday, 14 April 2010 at 10.30 a.m. (or as
soon thereafter as the Annual General Meeting of
CMT to be held at 10.00 a.m. on the same day and
at the same place is concluded or adjourned)
If the approval for the Acquisition is obtained at the EGM:
Target date for completion of the Acquisition
:
5
1 July 2010 or such other date as may be agreed in
writing between the Trustee and the Vendor
CAPITAMALL TRUST
pursuant to a trust deed dated 29 October 2001 (as amended) (the “Trust Deed”))
Directors of the Manager
Registered Office
Mr James Koh Cher Siang (Chairman & Independent
Non-Executive Director)
Mr Liew Mun Leong (Deputy Chairman & Non-Executive Director)
Mr Ho Chee Hwee Simon (Chief Executive Officer & Executive Director)
Mr James Glen Service (Independent Non-Executive Director)
Mr David Wong Chin Huat (Independent Non-Executive Director)
Mr S. Chandra Das (Independent Non-Executive Director)
Mr Kee Teck Koon (Non-Executive Director)
Mr Lim Tse Ghow Olivier (Non-Executive Director)
Mr Lim Beng Chee (Non-Executive Director)
39 Robinson Road
Singapore 068911
24 March 2010
To: Unitholders of CapitaMall Trust
Dear Sir/Madam
1.
THE PROPOSED ACQUISITION
1.1 Description of Clarke Quay
Clarke Quay is an integrated food and beverage, entertainment and lifestyle riverfront destination.
It is located along the Singapore River and at the fringe of the CBD. It is within walking distance
of the Clarke Quay MRT station, making it easily accessible by public transportation. Clarke Quay
has a NLA of approximately 294,610 sq ft as at 31 December 2009.
(See Appendix A of this Circular for further details about Clarke Quay.)
1.2 Details of the Acquisition
On 9 February 2010, the Trustee entered into the Sale and Purchase Agreement with the Vendor
to acquire Clarke Quay at the Purchase Consideration of S$268.0 million which was arrived at on
a willing-buyer and willing-seller basis after taking into account the independent valuations of
Clarke Quay. The Manager has commissioned an independent property valuer, CBRE, and the
Trustee has commissioned an independent property valuer, Knight Frank, to value Clarke Quay.
CBRE, in its report dated 3 February 2010, stated that the open market value of Clarke Quay is
S$270.0 million and Knight Frank, in its report dated 3 February 2010, stated that the open market
value of Clarke Quay is S$268.0 million.
The principal terms of the Sale and Purchase Agreement include, among others, the following
conditions precedent:
(i)
the approval of the President of the Republic of Singapore (the “Head Lessor”) for the sale
of Clarke Quay by the Vendor to the Trustee;
(ii)
the approval of the Head Lessor for (a) the mortgage and/or charge of Clarke Quay by the
Trustee and (b) the entry into by the Trustee of leases and/or licences in respect of Clarke
Quay or any part(s) thereof; and
(iii)
the approval of Unitholders for the Acquisition.
6
The Trustee undertakes to take all steps within its power to convene the EGM for the purpose of
seeking the approval of Unitholders for the Acquisition. As at the Latest Practicable Date, the
conditions precedent set out in paragraphs 1.2(i) and (ii) above have been fulfilled.
If the conditions precedent are not obtained by 15 June 2010 (or such other date as the Trustee
and the Vendor may agree in writing), the Trustee or the Vendor may by notice in writing to the
other party terminate the Sale and Purchase Agreement.
1.3 Estimated Acquisition Cost
The current estimated Total Acquisition Cost is approximately S$272.7 million, comprising:
(i)
the Purchase Consideration of S$268.0 million;
(ii)
the Acquisition Fee payable to the Manager which amounts to approximately S$2.7 million;
and
(iii)
the estimated professional and other fees and expenses incurred by CMT in connection with
the Acquisition which amount to approximately S$2.0 million.
As the Acquisition will constitute an “interested party transaction” under the Property Funds
Appendix, the Acquisition Fee payable to the Manager will be in the form of Units, which shall not
be sold within one year from the date of issuance. Apart from the Acquisition Fee which will be
paid in the form of Units, the rest of the Total Acquisition Cost will be paid in cash. The Acquisition
Fee will be payable as soon as practicable after the completion of the Acquisition.
2.
RATIONALE FOR THE ACQUISITION
2.1 The Acquisition fits the Manager’s Investment Strategy
The Manager believes that the Acquisition at a property yield of approximately 5.9%1 will be
accretive and Unitholders will enjoy a higher DPU due to the acquisition of Clarke Quay at a price
reflective of the attractive cash flows that it generates as described in this Circular.
To illustrate the overall yield accretion resulting from the Acquisition, combined with the proposed
debt and equity financing plan, the tables below show CMT’s forecast DPU in relation to the
Existing Portfolio (as defined herein) and the Enlarged Portfolio (as defined herein) based on the
following circumstances:
(i)
Scenario A: where the Acquisition is fully funded through 100.0% debt financing; and
(ii)
Scenario B: where the Acquisition is fully funded through a combination of 50.0% debt
financing and 50.0% equity financing.
The current intention of the Manager is that it is unlikely that the Acquisition will be fully funded
through 100.0% equity financing given that the CMT Group’s Aggregate Leverage is 30.5% (as at
31 December 2009).
The forecast on the tables below must be read together with the detailed Profit Forecast in
Appendix B of this Circular, and the Independent Accountants’ Report on the Profit Forecast in
Appendix C of this Circular.
1
The property yield is computed by dividing Clarke Quay’s annualised Net Property Income for the Forecast Period 2010 by
the Purchase Consideration of S$268.0 million.
7
Scenario A
Forecast Period 2010
DPU (cents)
Existing Portfolio
Enlarged Portfolio
9.05
9.14
Increase over Existing Portfolio
1.0%
Scenario B
Issue Price per
New Unit
DPU (cents)
Existing Portfolio
Enlarged Portfolio
9.05
9.07
S$1.60
DPU (cents)
0.2%
9.05
9.09
S$1.70
DPU (cents)
0.4%
9.05
9.11
S$1.80
0.7%
The Acquisition is in line with the Manager’s principal investment strategy to invest in quality
income-producing real estate and real estate assets so as to deliver stable distributions and
sustainable total returns to Unitholders. (See paragraph 3 of the Letter to Unitholders for further
details regarding the financial impact of the Acquisition.)
The Acquisition will also further strengthen CMT’s position as the largest REIT by asset size in
Singapore. Following the completion of the Acquisition, the CMT Group’s asset size is expected
to increase from approximately S$7.4 billion (as at 31 December 2009) to approximately S$7.6
billion1.
1
The asset size excludes CMT’s distributable income for the quarter ended 31 December 2009.
8
2.2 Competitive Strengths of Clarke Quay
Clarke Quay, which is located along the Singapore River and at the fringe of the CBD, is
positioned as an integrated food and beverage, entertainment and lifestyle riverfront destination.
It is also within walking distance of the Clarke Quay MRT station, making it easily accessible by
The Manager believes that Clarke Quay is a popular destination among Singapore residents,
expatriates and tourists, as evidenced by its shopper traffic which held up well despite the
economic downturn with approximately 11.0 million visitors in 2009, compared to approximately
10.8 million visitors in 2008 — see chart below. Based on an independent survey commissioned
by the Vendor, more than 40.0% of visitors to Clarke Quay are tourists. The committed occupancy
of Clarke Quay as at 31 December 2009 is 94.9% and has been above 90.0% for the past three
years following the completion of the repositioning of Clarke Quay in December 2006.
11.0
10.8
2009
2008
(See Appendix A of this Circular for more details about Clarke Quay and the Existing Properties
(as defined herein).)
2.3 Segmental Diversification
The Manager believes that as a result of the competitive strengths of Clarke Quay, CMT will be
able to capitalise on the growing lifestyle and entertainment demand in Singapore arising from:
(i)
1
the expected increase in tourism in Singapore (by catering to the increasing tenancy
demands arising from the Singapore Government’s commitment to grow the tourism industry
and the rejuvenation plan for the city centre area) — the Singapore Tourism Board has on
5 March 2010 announced that its forecast for tourist arrivals to Singapore in 2010 is between
11.5 million to 12.5 million tourist arrivals1. There were 9.7 million tourist arrivals to
Singapore in 20091; and
Source: Singapore Tourism Board media release on 5 March 2010 (in relation to the 2010 tourist arrival forecast) and fact
sheet dated 9 February 2010 (in relation to the 2009 tourist arrivals). The Singapore Tourism Board has not provided its
consent and is therefore not liable for such information. While the Manager has taken reasonable action to ensure that this
information has been reproduced in its proper form and context, and that it has been extracted accurately and fairly, neither
the Manager nor any other party has conducted an independent review of, nor verified the accuracy of, such information.
9
(ii)
the economic recovery and improvement in consumer sentiment — the Ministry of Trade and
Industry announced on 19 February 2010 that it expects the Singapore economy to grow by
4.5% to 6.5% in 2010, being an upgrade from its earlier forecast of 3.0% to 5.0%1.
The Acquisition will not significantly change the asset profile of the CMT Group as its Enlarged
Properties continue to comprise primarily of retail malls which cater to necessity shopping.
Existing Properties(2)
Enlarged Properties(3)
20.9%
25.1%
79.1%
74.9%
Necessity Shopping(4)
Discretionary Spending(5)
Notes:
(1)
Excludes The Atrium@Orchard which consists primarily of office space and Jurong Entertainment Centre which has
ceased operations in preparation for asset enhancement works.
(2)
Based on gross revenue for FY2009.
(3)
Based on gross revenue for FY2009, except for Clarke Quay which is based on Clarke Quay’s annualised gross
revenue for the Forecast Period 2010.
(4)
Comprises Tampines Mall, Junction 8, IMM Building, Plaza Singapura, Bugis Junction, Hougang Plaza, Sembawang
Shopping Centre, Lot One Shoppers’ Mall, Bukit Panjang Plaza and Rivervale Mall.
(5)
Comprises Raffles City Singapore (40.00% interest) and Funan DigitaLife Mall for the Existing Properties. Comprises
Raffles City Singapore (40.00% interest), Funan DigitaLife Mall and Clarke Quay for the Enlarged Properties.
The Acquisition will enlarge and diversify CMT’s network of retailers across the different segments
of the retail market, and concurrently strengthen CMT’s portfolio of retail malls catering to the
different consumer markets in Singapore and allow CMT to capitalise on the expected increase
in tourism in Singapore.
The Existing Properties are strategically located and well spread out across the eastern, central
and western suburban areas of Singapore, as well as the CBD. The table below sets out the
locations of the Existing Properties and their target positioning.
1
Source: Ministry of Trade and Industry press release dated 19 February 2010. The Ministry of Trade and Industry Singapore
has not provided its consent and is therefore not liable for such information. While the Manager has taken reasonable action
to ensure that this information has been reproduced in its proper form and context, and that it has been extracted accurately
and fairly, neither the Manager nor any other party has conducted an independent review of, nor verified the accuracy of,
such information.
10
Property
Description
Tampines Mall
Tampines Mall, located in the densely populated residential area of
Tampines, is one of Singapore’s leading suburban malls. Tampines
Mall offers a varied mix of shopping, dining and entertainment options
for middle-income consumers living and working around the
Tampines regional centre.
Junction 8
Junction 8 is located in the densely populated residential area of
Bishan. It is a one-stop shopping, dining and entertainment
destination catering to the needs of residents from the surrounding
housing estates, office workers in the area and students from nearby
schools.
Funan DigitaLife Mall
Funan DigitaLife Mall is situated in an excellent location in the
downtown core and tourist belt of Singapore. Together with a unique
mix of reputable retailers that offer genuine products and quality
customer service, Funan DigitaLife Mall is one of Singapore’s choice
destinations for information technology, gaming, digital and lifestyle
products. The mall attracts many professionals, managers,
executives, businessmen (“PMEBs”) and tourists.
IMM Building
IMM Building is located in the western part of Singapore. Besides its
proximity to the surrounding residential estates, IMM Building is close
to major office and industrial developments like the International
Business Park and JTC Summit. Together with its five distinct retail
clusters, including home furnishing, information technology and
appliances, children, fashion as well as food and beverage, IMM
Building is uniquely positioned to cater to both the needs of PMEBs
and families.
Plaza Singapura
Plaza Singapura is located along Orchard Road, Singapore’s main
shopping street. The mall’s broad-based positioning, coupled with its
strong focus on basic consumer goods and services, differentiates
itself from other malls along Orchard Road, and allows it to attract a
wide range of shoppers — families, youths and working adults —
from all over Singapore.
Bugis Junction
Bugis Junction is located in the heart of Singapore’s Civic and
Cultural District. In line with its close proximity to the Singapore
Management University, LASALLE College of the Arts and School of
the Arts, Bugis Junction is positioned as a modern fashion, dining,
and entertainment destination mall targeted at young adults and
PMEBs.
Sembawang Shopping
Centre
Sembawang Shopping Centre is situated in close proximity to the
Yishun and Sembawang MRT stations. With its positioning as a
one-stop family-oriented necessity shopping destination, the mall
targets to serve residents from the surrounding estates, uniformed
personnel from nearby military camps, as well as workers from the
neighbouring industrial parks.
Jurong Entertainment Centre
Jurong Entertainment Centre is situated in the heart of Jurong Lake
District. Asset enhancement works have commenced and are
targeted to be completed in the first quarter of 2012. When
completed, the mall will boast more than 200,000 sq ft of NLA and will
house an Olympic-sized ice-skating rink.
Hougang Plaza
Hougang Plaza is strategically located in Hougang Central. Hougang
Plaza is positioned as a neighbourhood mall catering to the basic
shopping and entertainment needs of the residents in the vicinity.
11
Property
Description
40.00% interest in Raffles
City Singapore
Raffles City Singapore is a large integrated development in
Singapore. It is located in the downtown core at the fringe of CBD.
The mall is directly connected to City Hall MRT interchange station,
and its connectivity will be further enhanced with the opening of a link
from basement 2 to the upcoming Esplanade MRT station which is
expected to take place by the third quarter of 2010.
Lot One Shoppers’ Mall(1)
Lot One Shoppers’ Mall is situated in the heart of Choa Chu Kang
housing estate. The mall enjoys a large shopper catchment,
comprising residents in Choa Chu Kang, Bukit Panjang, Bukit Batok
and Upper Bukit Timah precincts, uniformed personnel from military
camps in the vicinity as well as students from nearby schools.
Bukit Panjang Plaza(1)
Bukit Panjang Plaza is located in the high-density residential area of
Bukit Panjang New Town, in the north-western region of Singapore.
Besides the surrounding estates of Bukit Panjang, Cashew Park,
Chestnut Drive and Hillview, the mall also caters to families and
residents in Teck Whye, Choa Chu Kang and Upper Bukit Timah
precincts.
Rivervale Mall(1)
Rivervale Mall is located at the junction of Rivervale Drive and
Rivervale Crescent in Sengkang New Town. With its accessible
location, the mall is a popular and convenient shopping destination for
residents living in the vicinity.
The Atrium@Orchard
The Atrium@Orchard is currently a mixed-use development
comprising two Grade A office towers and ground floor retail space.
The development enjoys direct connectivity to the Dhoby Ghaut MRT
interchange station, which connects three main train lines, including
the upcoming Circle Line MRT which is expected to commence
operations in 2010.
Note:
(1)
On 1 January 2010, following an internal restructuring exercise (the “CRS Restructuring”), Lot One Shoppers’ Mall,
90 out of 91 strata lots in Bukit Panjang Plaza and Rivervale Mall (the “CRS Properties”) are now held directly by
CMT. Prior to the CRS Restructuring, CMT held 100.00% of the beneficial interest in the property portfolio of
CapitaRetail Singapore Limited which comprised the CRS Properties.
2.4 Enhancement of Rental Revenue
When the repositioning of Clarke Quay was completed in December 2006, some leases were
entered into at below market rent due to the lack of an established track record of operations then.
Recent lease renewals at Clarke Quay have achieved rental increase over the preceding rents.
As at 31 December 2009, the average monthly gross rental rate of Clarke Quay is approximately
S$6.98 per sq ft. The Manager believes that there is potential for rental upside when leases
become due for renewal in the next few years given the growth potential in the Singapore retail,
entertainment and tourism market. In addition, the Manager believes that there are opportunities
to enhance the rental revenue of Clarke Quay through reconfiguration of lettable area and
improvement of the existing tenant mix.
2.5 Income Diversification
The Acquisition is expected to benefit Unitholders by improving income diversification and
reducing the reliance of the CMT Group’s income stream on any single property. The Manager
expects that the maximum contribution to the CMT Group’s Net Property Income by any single
property within the CMT Group’s property portfolio will decrease from approximately 15.0% to
12
Existing Properties(1)
Tampines Mall
Enlarged Properties(1)
12.1%
11.6%
Junction 8
8.8%
8.4%
5.2%
5.0%
IMM Building
13.0%
12.5%
Plaza Singapura
14.5%
14.0%
Bugis Junction
12.4%
11.9%
The Atrium@Orchard
5.6%
5.4%
Sembawang Shopping Centre, Hougang Plaza
and Jurong Entertainment Centre
1.8%
1.7%
40.00% interest in Raffles City Singapore
15.0%
14.4%
Lot One Shoppers’ Mall, Bukit Panjang Plaza
and Rivervale Mall
11.6%
11.1%
Clarke Quay
4.0%
Total
100.0%
100.0%
Note:
(1)
3.
Based on Net Property Income for FY2009, except for Clarke Quay which is based on Clarke Quay’s annualised Net
Property Income for the Forecast Period 2010.
DETAILS OF THE ACQUISITION
3.1 Certain Financial Information Relating to the Acquisition
The following table presents, in summary, certain selected financial information in relation to the
Acquisition, based on the assumption that the Acquisition is to be completed on 1 July 2010 and
the income from Clarke Quay accrues to the CMT Group from 1 July 2010.
(1 July 2010 to
31 December 2010)
Gross Revenue (S$’000)
14,550
Property Operating Expenses (S$’000)
6,583
Net Property Income (S$’000)
7,967
Property Yield
5.9%(1)
Note:
(1)
The property yield is computed by dividing Clarke Quay’s annualised Net Property Income for the Forecast Period
The assumptions for the forecast information included in the table above are set out in Appendix
B of this Circular.
3.2 Pro Forma Financial Effects of the Acquisition
The pro forma financial effects of the Acquisition on the DPU and net asset value (“NAV”) per Unit
presented below are strictly for illustrative purposes and were prepared based on the audited
consolidated financial statements of the CMT Group for the financial year ended 31 December
2009 (the “CMT Group Audited Financial Statements”) as well as the audited financial
13
statement of the Vendor for the financial year ended 31 December 2009, taking into account the
Total Acquisition Cost, and assuming that:
(i)
approximately 1.6 million new Units are issued for the Acquisition Fee payable to the
Manager at an illustrative price of S$1.70 per new Unit (purely for illustrative purposes
only); and
(ii)
additional borrowings of S$274.1 million are taken to finance the Acquisition and the CMT
Group’s Aggregate Leverage will increase from approximately 30.5% (as at 31 December
2009) to approximately 33.1%1.
3.2.1 Pro Forma DPU of the Acquisition
The pro forma financial effects of the Acquisition on CMT’s DPU for the financial year
ended 31 December 2009, as if the CMT Group had purchased Clarke Quay on 1 January
2009, and held and operated Clarke Quay through to 31 December 2009, are as follows:
Effects of the Acquisition
Before the Acquisition
Net Income before Share of Profit of
Associate (S$’000)
236,297
238,691
Distributable Income (S$’000)
281,966
285,632(1)
3,179,268(2)
Issued Units (’000)
DPU (cents)
8.85
3,180,844(3)
8.97
Notes:
(1)
Adding back the amortisation of debt issuance expenses of S$0.8 million and other non tax deductible items.
(2)
Number of Units issued as at 31 December 2009.
(3)
Includes approximately 1.6 million new Units issuable as payment of the Acquisition Fee payable to the
Manager at an illustrative price of S$1.70 per new Unit (purely for illustrative purpose only).
3.2.2 Pro Forma NAV of the Acquisition
The pro forma financial effects of the Acquisition on the NAV per Unit as at 31 December
2009, as if the Acquisition was completed on 31 December 2009, are as follows:
Effects of the Acquisition
Before the Acquisition
NAV (S$’000)
4,893,113(1)
4,894,983(2)
Issued Units (’000)
3,180,193(3)
3,181,769(4)
NAV per Unit (S$)
1.54
1.54
Notes:
1
(1)
Adjusted for the distribution paid on 26 February 2010 of CMT’s distributable income for the period from 1
October 2009 to 31 December 2009.
(2)
Includes debt issuance expenses of S$4.1 million.
(3)
Number of Units issued as at 31 December 2009 and taking into account the 925,179 Units issued as
payment of the management fee (for the period from 1 October 2009 to 31 December 2009).
(4)
Includes approximately 1.6 million new Units issuable as payment of the Acquisition Fee payable to the
Manager at an illustrative price of S$1.70 per new Unit (purely for illustrative purpose only).
14
3.2.3 Pro Forma Capitalisation of the Acquisition
The following table sets forth the pro forma capitalisation of the CMT Group as at
31 December 2009, as if the CMT Group had completed the Acquisition on 31 December
2009.
Actual
(S$ million)
As Adjusted for the
Acquisition
(S$ million)
Short-term debt:
Secured debt
125.0
125.0
Unsecured debt
315.0
315.0
Total short-term debt
440.0
440.0
Long-term debt:
1,803.0(1)
Secured debt
Unsecured debt
2,077.1
—
—
Total long-term debt
1,803.0
2,077.1
Total debt:
2,243.0
Unitholders’ funds
4,893.1
Expenses relating to debt issuance
—
2,517.1
(2)
4,895.8
(0.8)
Total Unitholders’ funds
4,893.1
4,895.0
Total Capitalisation
7,136.1
7,412.1
Notes:
(1)
Amount excludes unamortised transaction cost and the Convertible Bonds (as defined herein) are stated at
principal amount of S$650.0 million.
(2)
After adjusting for the distribution paid on 26 February 2010 of CMT’s distributable income for the period from
1 October 2009 to 31 December 2009.
3.3 Requirement of Unitholders’ Approval: Interested Person Transaction and Interested Party
Transaction
Under Chapter 9 of the Listing Manual, where CMT proposes to enter into a transaction with an
interested person and the value of the transaction (either in itself or when aggregated with the
value of other transactions, each of a value equal to or greater than S$100,000, with the same
interested person during the same financial year) is equal to or exceeds 5.0% of the CMT Group’s
latest audited net tangible assets (“NTA”), Unitholders’ approval is required in respect of the
transaction. Based on the CMT Group Audited Financial Statements, the NTA of the CMT Group
was S$4,969.6 million as at 31 December 2009. Accordingly, if the value of a transaction which
is proposed to be entered into in the current financial year by CMT with an interested person is,
either in itself or in aggregation with all other earlier transactions (each of a value equal to or
greater than S$100,000) entered into with the same interested person during the current financial
year, equal to or in excess of S$248.5 million, such a transaction would be subject to Unitholders’
approval. Given the Purchase Consideration of S$268.0 million (which is 5.4% of the NTA of the
CMT Group as at 31 December 2009), the value of the Acquisition exceeds the said threshold.
Paragraph 5 of the Property Funds Appendix also imposes a requirement for Unitholders’
approval for an interested party transaction by CMT whose value exceeds 5.0% of the CMT
15
Group’s latest audited NAV. Based on the CMT Group Audited Financial Statements, the NAV of
CMT was S$4,969.6 million as at 31 December 2009. Accordingly, if the value of a transaction
which is proposed to be entered into by CMT with an interested party is equal to or greater than
S$248.5 million, such a transaction would be subject to Unitholders’ approval. Given the Purchase
Consideration of S$268.0 million, the value of the Acquisition exceeds the said threshold.
As at the Latest Practicable Date, CMA held an aggregate indirect interest in 950,077,146 Units,
which is equivalent to approximately 29.87% of the total number of Units in issue, as at the Latest
Practicable Date, and is therefore regarded as a “controlling Unitholder” of CMT under both the
Listing Manual and the Property Funds Appendix1. In addition, as the Manager is a wholly-owned
subsidiary of CMA, CMA is therefore regarded as a “controlling shareholder” of the Manager
under both the Listing Manual and the Property Funds Appendix.
As the Vendor is a wholly-owned subsidiary of CMA, for the purposes of Chapter 9 of the Listing
Manual and the Property Funds Appendix, the Vendor (being a subsidiary of a “controlling
Unitholder” and a “controlling shareholder” of the Manager) is (for the purposes of the Listing
Manual) an “interested person” and (for the purposes of the Property Funds Appendix) an
“interested party” of CMT.
Therefore, the Acquisition will constitute “interested person transactions” under Chapter 9 of the
Listing Manual as well as “interested party transactions” under the Property Funds Appendix.
Prior to the Latest Practicable Date, CMT had entered into several interested person transactions
with entities within Temasek Holdings (Private) Limited and its subsidiaries and associates during
the course of the current financial year (the “Existing Interested Person Transactions”). Details
of the Existing Interested Person Transactions, which are subject of aggregation pursuant to Rule
906 of the Listing Manual, may be found in Appendix F of this Circular.
3.4 Advice of the Independent Financial Adviser
The Manager has appointed ANZ Singapore Limited as the IFA to advise the independent
directors of the Manager (the “Independent Directors”) and the audit committee of the Manager
(the “Audit Committee”) in relation to the Acquisition. A copy of the letter from the IFA to the
Independent Directors and members of the Audit Committee (the “IFA Letter”), containing its
advice in full, is set out in Appendix E of this Circular and Unitholders are advised to read the IFA
Letter carefully.
Having considered the factors and the assumptions set out in the IFA Letter, and subject to the
qualifications set out therein, the IFA is of the opinion that from a financial point of view the
Acquisition is based on normal commercial terms and is not prejudicial to the interests of CMT and
its minority Unitholders.
The IFA is of the opinion that the Independent Directors can recommend that Unitholders vote in
favour of the resolution in connection with the Acquisition to be proposed at the EGM.
3.5 Interests of Directors and Controlling Unitholders
As at the Latest Practicable Date, certain directors of CMA collectively hold an aggregate direct
and indirect interest in 2,314,398 Units and certain directors of the Manager (including those of
the aforementioned directors of CMA who are also directors of the Manager) collectively hold an
aggregate direct and indirect interest in (i) 2,796,098 Units and (ii) 1,149,000 shares in CMA. Mr
1
16
Liew Mun Leong is the chairman and a non-executive director of CMA and is also the deputy
chairman and a non-executive director of the Manager. Mr Lim Beng Chee is the chief executive
officer and an executive director of CMA and is also a non-executive director of the Manager. Mr
Lim Tse Ghow Olivier is a non-executive director of CMA and the Manager. Further details of the
interests in Units of Directors and Substantial Unitholders1 are set out in Appendix G of this
Circular.
Through Albert Complex Pte Ltd (“Albert Complex”), Pyramex Investments Pte Ltd (“Pyramex”),
Premier Healthcare Services International Pte Ltd (“Premier”) and the Manager, CMA has an
indirect interest in 950,077,146 Units (comprising approximately 29.87% of the Existing Units) as
at the Latest Practicable Date. The Manager itself holds 37,659,996 Units2.
Save as disclosed above and based on information available to the Manager as at the Latest
Practicable Date, none of the directors of the Manager or the “controlling Unitholders” has an
interest, direct or indirect, in the Acquisition.
3.6 Directors’ Service Contracts
No person is proposed to be appointed as a director of the Manager in connection with the
Acquisition or any other transactions contemplated in relation to the Acquisition.
3.7 Property Management Agreement
Under the terms of the master property management agreement entered into between the
Trustee, the Manager and CapitaLand Retail Management Pte Ltd as the property manager of
CMT (the “Property Manager”) on 28 June 2002 (the “Master Property Management
Agreement”), any properties acquired thereafter by CMT will (for a period of 10 years from 28
December 2001) be managed by the Property Manager in accordance with the terms of the
Master Property Management Agreement. If CMT acquires Clarke Quay, the Property Manager
will enter into an individual property management agreement with the Trustee and the Manager
in relation to Clarke Quay (the “CQ PMA”), pursuant to which the Property Manager will provide
property management services for Clarke Quay.
The fees payable pursuant to the CQ PMA, which is in accordance with the fee structure of the
Master Property Management Agreement, will be as follows:
(i)
2.0% gross revenue of Clarke Quay;
(ii)
2.0% net property income of Clarke Quay; and
(iii)
0.5% per annum of the net property income of Clarke Quay in lieu of leasing commissions.
Under the CQ PMA, the Property Manager will be fully reimbursed for (i) the employment costs
and remuneration relating to centre management and other personnel engaged solely for the
provision of services for Clarke Quay and (ii) the allocated employment costs and remuneration
relating to the centralised team of personnel engaged exclusively to provide group services for all
properties of CMT under its management, as approved in each annual budget by the Trustee
following the recommendation of the Manager, in accordance with the reimbursables in the Master
Property Management Agreement.
1
“Substantial Unitholder” means a person with an interest in Units constituting not less than 5.00% of the total number of
Units in issue.
2
17
4.
METHOD OF PROPOSED FINANCING AND PROFIT FORECAST
4.1 The Proposed Financing Plan
The Manager intends to adopt an optimal financing plan to finance the Acquisition, so as to ensure
that the Acquisition will provide overall yield accretion to Unitholders. Depending on the market
conditions, the Manager may either fully fund the Acquisition through (i) debt financing or (ii) a
combination of debt and equity financing. The current intention of the Manager is that it is unlikely
that the Acquisition will be fully funded through 100.0% equity financing given that the CMT
Group’s Aggregate Leverage is 30.5% (as at 31 December 2009).
The table below sets out the change to the CMT Group’s Aggregate Leverage1 through two
different funding scenarios purely for illustrative purposes. There is no assurance that the actual
financing plan will be similar to either Scenario A or Scenario B.
CMT Group’s Aggregate Leverage
Method of Financing
Before the Acquisition(1)
(2)
Scenario A:
100.0% Debt Financing
Scenario B:
50.0% Debt Financing and
50.0% Equity Financing
30.5%
30.5%
33.1%
31.3%
Notes:
(1) As at 31 December 2009.
(2)
4.2 Corporate Rating
CMT is currently rated “A2” by Moody’s Investors Service (“Moody’s”)2, the highest corporate
rating assigned to a REIT in Singapore which reflects the CMT Group’s strong leadership and
franchise value which are supported by strong recurring income, quality assets with good tenant
diversification, and a track record in asset enhancement and tenant management.
The Property Funds Appendix also provides that the Aggregate Leverage of the CMT Group may
exceed 35.0% of the value of the Deposited Property (up to a maximum of 60.0%) if a credit rating
of the REIT from Fitch, Inc., Moody’s or Standard & Poor’s is obtained and disclosed to the public.
4.3 Profit Forecast
Based on the proposed financing plan described under paragraph 4.1, the tables on the following
pages summarise the CMT Group’s forecast consolidated statements of total return and
distributable income of the Enlarged Portfolio for the Forecast Period 2010 based on the following
circumstances:
(i)
Scenario A: where the Acquisition is fully funded through 100.0% debt financing; and
(ii)
Scenario B: where the Acquisition is fully funded through a combination of 50.0% debt
financing and 50.0% equity financing.
The current intention of the Manager is that it is unlikely that the Acquisition will be fully funded
through 100.0% equity financing given that the CMT Group’s Aggregate Leverage is 30.5% (as at
31 December 2009). There is no assurance that the actual financing plan will be similar to either
Scenario A or Scenario B.
1
2
The ratio of the value of borrowings and deferred payments (if any) to the value of the Deposited Property.
Based on Moody’s affirmation on 10 February 2009. Moody’s has also on 10 February 2009 affirmed that its outlook for CMT
remains negative.
18
19
281,966
Distributable Income to Unitholders
3,183,176
9.05
9.05
288,535
244,293
34,254
9,988
—
248,431
248,431
—
248,431
—
—
244,293
4,138
377,056
117
(34,152)
(4,382)
—
(94,346)
554,814
(177,758)
Forecast Year 2010(2)
3,183,176
4.56
9.05
145,427
123,762
16,671
4,994
—
125,831
125,831
—
125,831
—
—
123,762
2,069
191,347
47
(17,084)
(2,191)
—
(48,357)
277,700
(86,353)
Existing Portfolio
7,967
14,550
(6,583)
Clarke Quay
(1 July 2010 − 31 December 2010)
3,184,753
4.61
9.14
147,245
124,967
17,284
4,994
—
127,036
127,036
—
127,036
—
—
124,967
2,069
199,314
48
(17,856)
(2,251)
—
(54,288)
292,250
(92,936)
Total
Notes:
(1) The forecast is based on 100.0% debt to finance the Acquisition. The Manager has assumed the interest rate to be 4.00% per annum.
(2) Based on the Manager’s forecast of the CMT Group’s results from 1 January 2010 to 31 December 2010.
(3) Relates to distribution income from CapitaRetail China Trust (“CRCT”) which is an associate of CMT.
(4) On 1 January 2010, pursuant to the CRS Restructuring, the CRS Properties are now held directly by CMT. Prior to that, CMT had held 100.00% of the beneficial interest in the property portfolio of CapitaRetail Singapore
Limited which comprised the CRS Properties.
(5) Inclusive of the Manager’s forecast of Units to be issued in payment of: (i) the performance component of the management fee for the Existing Properties and (ii) the Acquisition Fee. In preparing the Profit Forecast,
the Manager has assumed that none of the Convertible Bonds are converted into Units between 1 January 2010 and 31 December 2010.
3,179,268
8.85
8.85
236,297
41,561
10,258
(6,150)
Units in issue (’000)(5)
DPU (cents)
Annualised DPU (cents)
(65,185)
Distribution Statements
Net income before share of profit of associate
Net effect of non-tax deductible/(chargeable) items
Distribution income from associate(3)
Net income from subsidiary(4)
240,435
(1,534)
(302,187)
Net Income
Net change in fair value of financial derivatives
Net change in fair value of investment properties
Total return
236,297
4,138
Share of profit of associate
(63,286)
(1,899)
376,768
1,038
(34,178)
(5,704)
3,402
(105,029)
Net property income
Interest income
Asset management fees
Trust expenses
Foreign exchange gain — realised
Finance costs
Total return before income tax
Income tax expense
552,700
(175,932)
Actual 2009
Gross Revenue
Property Operating Expenses
(S$’000)
Existing Portfolio
Scenario A: Forecast Consolidated Statements of Total Return and Distributable Income — Existing Portfolio and Enlarged Portfolio
(100.0% Debt Financing(1))
20
281,966
3,183,176
9.05
9.05
288,535
244,293
34,254
9,988
—
248,431
248,431
—
248,431
—
—
244,293
4,138
377,056
117
(34,152)
(4,382)
—
(94,346)
554,814
(177,758)
3,183,176
4.56
9.05
145,427
123,762
16,671
4,994
—
125,831
125,831
—
125,831
—
—
123,762
2,069
191,347
47
(17,084)
(2,191)
—
(48,357)
277,700
(86,353)
Existing Portfolio
7,967
14,550
(6,583)
Clarke Quay
(1 July 2010 − 31 December 2010)
3,266,151
4.58
9.09
150,011
127,936
17,081
4,994
—
130,005
130,005
—
130,005
—
—
127,936
2,069
199,314
48
(17,853)
(2,251)
—
(51,322)
292,250
(92,936)
Total
Notes:
(1) The forecast is based on 50.0% debt and 50.0% equity fund raising to finance the Acquisition. The Manager has assumed the interest rate to be 4.00% per annum and approximately 81.4 million new Units are issued
at an issue price of S$1.70 per new Unit pursuant to the Scenario B Equity Fund Raising (as defined herein).
(3) Relates to distribution income from CRCT which is an associate of CMT.
(5) Inclusive of the Manager’s forecast of Units to be issued in payment of: (i) the performance component of the management fee for the Existing Properties and (ii) the Acquisition Fee. In preparing the Profit Forecast,
the Manager has assumed that none of the Convertible Bonds are converted into Units between 1 January 2010 and 31 December 2010.
3,179,268
8.85
8.85
236,297
41,561
10,258
(6,150)
DPU (cents)
(65,185)
240,435
(1,534)
(302,187)
Net Income
Total return
236,297
4,138
(63,286)
(1,899)
376,768
1,038
(34,178)
(5,704)
3,402
(105,029)
Net property income
Interest income
Trust expenses
Finance costs
Income tax expense
552,700
(175,932)
Actual 2009
Gross Revenue
(S$’000)
Existing Portfolio
Scenario B: Forecast Consolidated Statements of Total Return and Distributable Income — Existing Portfolio and Enlarged Portfolio
(50.0% Debt Financing and 50.0% Equity Financing(1))
In the preparation of the above forecast consolidated statements of total return and distributable
income, specific non-cash items which have no impact on distributable income have been
excluded in the presentation of the distributable income to Unitholders. The Profit Forecast is set
out in Appendix B in this Circular.
The above forecast consolidated statements of total return and distributable income must be read
together with the detailed Profit Forecast in Appendix B of this Circular, and the Independent
Accountants’ Report on the Profit Forecast in Appendix C of this Circular.
5.
RECOMMENDATION
Based on the opinion of the IFA (as set out in the IFA Letter in Appendix E of this Circular) and
the rationale for the Acquisition as set out in paragraph 2 above, the Independent Directors1
believe that the Acquisition would not be prejudicial to the interests of CMT and its minority
Unitholders.
Accordingly, the Independent Directors recommend that Unitholders vote at the EGM in favour of
the resolution to approve the Acquisition.
6.
EXTRAORDINARY GENERAL MEETING
The EGM will be held on Wednesday, 14 April 2010 at 10.30 a.m. (or as soon thereafter as the
Annual General Meeting of CMT to be held at 10.00 a.m. on the same day and at the same place
is concluded or adjourned) at the STI Auditorium, 168 Robinson Road, Level 9, Capital Tower,
Singapore 068912, for the purpose of considering and, if thought fit, passing with or without
modification, the resolution set out in the Notice of EGM, which is set out on page H-1 of this
Circular. The purpose of this Circular is to provide Unitholders with relevant information about the
resolution. Approval by way of an Ordinary Resolution (as defined herein) is required in respect
of the resolution.
A Depositor shall not be regarded as a Unitholder entitled to attend the EGM and to speak and
vote thereat unless he is shown to have Units entered against his name in the Depository
Register, as certified by The Central Depository (Pte) Limited (“CDP”) as at 48 hours before the
time fixed for the EGM.
7.
ABSTENTIONS FROM VOTING
7.1 Relationship between CMA, Albert Complex, Pyramex, Premier and the Manager
Through Albert Complex, Pyramex, Premier and the Manager, CMA has an indirect interest in
950,077,146 Units, comprising approximately 29.87% of the total number of Units in issue, as at
the Latest Practicable Date. The Manager itself holds 37,659,996 Units2.
7.2 Abstain from Voting
Given that Clarke Quay will be acquired from a wholly-owned subsidiary of CMA, CMA, Albert
Complex, Pyramex and Premier will abstain from voting at the EGM on the resolution relating to
the Acquisition. Being a wholly-owned subsidiary of CMA, the Manager will also abstain from
voting on such resolution.
1
For good corporate governance, Mr James Koh Cher Siang abstained from taking part in any decisions or recommendations
relating to the Acquisition as he is a director of CapitaLand Limited, which is a substantial shareholder of CMA.
2
21
8.
ACTION TO BE TAKEN BY UNITHOLDERS
Unitholders will find enclosed in this Circular the Notice of EGM and a Proxy Form.
If a Unitholder is unable to attend the EGM and wishes to appoint a proxy to attend and vote on
his behalf, he should complete, sign and return the enclosed Proxy Form in accordance with the
instructions printed thereon as soon as possible and, in any event, so as to reach the Manager’s
registered office at 39 Robinson Road, #18-01 Robinson Point, Singapore 068911 not later than
Monday, 12 April 2010 at 10.30 a.m., being 48 hours before the time fixed for the EGM. The
completion and return of the Proxy Form by a Unitholder will not prevent him from attending and
voting in person at the EGM if he so wishes.
Persons who have an interest in the approval of the resolution must decline to accept appointment
as proxies unless the Unitholder concerned has specific instructions in his Proxy Form as to the
manner in which his votes are to be cast in respect of such resolution.
9.
DIRECTORS’ RESPONSIBILITY STATEMENT
The directors of the Manager collectively and individually accept responsibility for the accuracy of
the information given in this Circular and confirm, having made all reasonable enquiries, that to
the best of their knowledge and belief, the facts stated and opinions expressed in this Circular are
fair and accurate in all material respects as at the date of this Circular and there are no material
facts the omission of which would make any statement in this Circular misleading in any material
respect. Where information has been extracted or reproduced from published or otherwise
publicly available sources, the sole responsibility of the directors of the Manager has been to
ensure through reasonable enquiries that such information is accurately extracted from such
sources or, as the case may be, reflected or reproduced in this Circular.
The forecast consolidated financial information set out in paragraph 4.3 above and in Appendix
B of this Circular have been stated by the directors of the Manager after due and careful enquiry.
10. CONSENTS
Each of the IFA, KPMG LLP as the independent accountants (the “Independent Accountants”)
and the Independent Valuers have given and have not withdrawn each of their written consents to
the issue of this Circular with the inclusion of each of their names and, respectively, the IFA Letter,
the Independent Accountants’ Report on the Profit Forecast and the valuation certificates and all
references thereto, in the form and context in which they are included in this Circular.
11.
DOCUMENTS ON DISPLAY
Copies of the following documents are available for inspection during normal business hours at
the registered office of the Manager1 at 39 Robinson Road, #18-01 Robinson Point, Singapore
068911 from the date of this Circular up to and including the date falling three months after the
date of this Circular:
1
(i)
the Sale and Purchase Agreement;
(ii)
the IFA Letter;
(iii)
the Independent Accountants’ Report on the Profit Forecast;
Prior appointment with the Manager (telephone: +65 6536 1188) will be appreciated.
22
(iv) the valuation report on Clarke Quay issued by CBRE;
(v)
the valuation report on Clarke Quay issued by Knight Frank;
(vi) the CMT Group Audited Financial Statements; and
(vii) the written consents of each of the IFA, the Independent Accountants and the Independent
Valuers.
The Trust Deed will also be available for inspection at the registered office of the Manager for so long
as CMT is in existence.
Yours faithfully
(as manager of CapitaMall Trust)
Company Registration No. 200106159R
Mr James Koh Cher Siang
Chairman & Independent Non-Executive Director
23
IMPORTANT NOTICE
The value of 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 the Manager to redeem their Units while the Units are listed. It is
intended that Unitholders may only deal in their Units through trading on the SGX-ST. Listing of the
Units on the SGX-ST does not guarantee a liquid market for the Units.
The past performance of CMT is not necessarily indicative of the future performance of CMT.
This Circular may contain forward-looking statements that involve risks and uncertainties. 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 include (without limitation) general industry and economic conditions, interest rate
trends, cost of capital and capital availability, competition from similar developments, shifts in expected
levels of property rental income, changes in operating expenses (including employee wages, benefits
and training costs), property expenses and governmental and public policy changes. You are cautioned
not to place undue reliance on these forward-looking statements, which are based on the Manager’s
current view of future events. All forecasts are based on a specified range of issue prices per Unit and
on the Manager’s assumptions as explained in Appendix B of this Circular. Such yields will vary
accordingly for investors who purchase Units in the secondary market at a market price higher or lower
than the issue price range specified in this Circular. The major assumptions are certain expected levels
of property income and property expenses over the relevant periods, which are considered by the
Manager to be appropriate and reasonable as at the date of this Circular. The forecast financial
performance of CMT is not guaranteed and there is no certainty that it can be achieved. Investors
should read the whole of this Circular for details of the forecasts and consider the assumptions used
and make their own assessment of the future performance of CMT.
If you have sold or transferred all your Units, you should immediately forward this Circular, together with
the Notice of EGM and the accompanying Proxy Form, to the purchaser or transferee or to the bank,
stockbroker or other agent through whom the sale or transfer was effected for onward transmission to
the purchaser or transferee.
This Circular is not for distribution, directly or indirectly, in or into the United States. It is not an offer of
securities for sale into the United States. The Units may not be offered or sold in the United States or
to, or for the account or benefit of, U.S. persons (as such term is defined in Regulation S under the
United States Securities Act of 1933, as amended) unless they are registered or exempt from
registration. There will be no public offer of securities in the United States.
24
GLOSSARY
In this Circular, the following definitions apply throughout unless otherwise stated:
Acquisition
:
The proposed acquisition of Clarke Quay
Acquisition Fee
:
The acquisition fee of approximately S$2.7 million which the
Manager will be entitled to receive from CMT upon completion
of the Acquisition
Aggregate Leverage
:
The ratio of the value of borrowings and deferred payments (if
any) to the value of the Deposited Property
Albert Complex
:
Albert Complex Pte Ltd
Audit Committee
:
The audit committee of the Manager, being Mr James Koh
Cher Siang (Chairman), Mr James Glen Service and Mr David
Wong Chin Huat
CBD
:
Central Business District of Singapore
CBRE
:
CDP
:
The Central Depository (Pte) Limited
Circular
:
This circular to Unitholders dated 24 March 2010
Clarke Quay
:
The property located at Nos. 3A, 3B, 3C, 3D and 3E River
Valley Road, Singapore 179020, 179021, 179022, 179023 and
179024, known as Clarke Quay (including the plant and
equipment located at Clarke Quay)
CMA
:
CapitaMalls Asia Limited
CMT
:
CapitaMall Trust
CMT Group
:
CapitaMall Trust and its subsidiaries
CMT Group Audited
Financial Statements
:
The audited financial statements of the CMT Group for the
financial year ended 31 December 2009
Controlling Unitholder
:
A person with an interest in Units constituting not less than
15.00% of all outstanding Units
Convertible Bonds
:
The S$650,000,000 1.0% convertible bonds due 2013 issued
by the Trustee
CRCT
:
CapitaRetail China Trust
CRS Properties
:
Lot One Shoppers’ Mall, 90 out of 91 strata lots in Bukit
Panjang Plaza and Rivervale Mall
CRS Restructuring
:
The internal restructuring exercise involving the CRS
Properties which was completed on 1 January 2010
CQ PMA
:
The property management agreement to be entered into
between the Property Manager, the Trustee and the Manager
for the management of Clarke Quay by the Property Manager
25
Deposited Property
:
The gross assets of the CMT Group, including all its authorised
investments held or deemed to be held upon the trust under
the Trust Deed
DPU
:
Distribution per Unit
EGM
:
The extraordinary general meeting of Unitholders to be held on
Wednesday, 14 April 2010 at 10.30 a.m. (or as soon thereafter
as the Annual General Meeting of CMT to be held at 10.00
a.m. on the same day and at the same place is concluded or
adjourned) at the STI Auditorium, 168 Robinson Road, Level
9, Capital Tower, Singapore 068912, to approve the matters
set out in the Notice of Extraordinary General Meeting on page
H-1 of this Circular
Enlarged Portfolio
:
The Existing Portfolio and Clarke Quay
Enlarged Properties
:
The Existing Properties and Clarke Quay
Existing Interested Person
Transactions
:
The transactions with interested persons entered into between
CMT and entities within Temasek Holdings (Private) Limited
and its subsidiaries and other interested persons of CMT
during the course of the current financial year
Existing Properties
:
Comprising Tampines Mall, Junction 8, Funan DigitaLife Mall,
IMM Building, Plaza Singapura, Hougang Plaza, Sembawang
Shopping Centre, Jurong Entertainment Centre, Bugis
Junction, 40.00% interest in Raffles City Singapore, Lot One
Shoppers’ Mall, 90 out of 91 strata lots in Bukit Panjang Plaza,
Rivervale Mall and The Atrium@Orchard
Existing Portfolio
:
Comprising the Existing Properties and the 122.7 million units
in CRCT which are held by CMT
Existing Properties
(Excluding Raffles City
Singapore)
:
Comprising the Existing Properties but excluding CMT’s
40.00% interest in Raffles City Singapore
Existing Units
:
The 3,180,895,775 Units in issue as at the Latest Practicable
Date
:
The financial period from 1 July 2010 to 31 December 2010
Forecast Year 2010
:
The financial year from 1 January 2010 to 31 December 2010
Gross Rental Income
:
Comprises base rents, service charges, turnover rent and
advertising and promotion levy (if applicable)
Gross Revenue
:
Comprises Gross Rental Income, car park income and other
income
Head Lessor
:
The President of the Republic of Singapore
IFA
:
IFA Letter
:
The letter from the IFA to the Independent Directors and Audit
Committee of the Manager containing its advice as set out in
Appendix E of this Circular
26
Independent Accountants
:
KPMG LLP
Independent Directors
:
The independent directors of the Manager, being Mr James
Koh Cher Siang, Mr James Glen Service, Mr David Wong Chin
Huat and Mr S. Chandra Das
Independent Valuers
:
CBRE and Knight Frank
Knight Frank
:
Knight Frank Pte Ltd
Latest Practicable Date
:
18 March 2010, being the latest practicable date prior to the
printing of this Circular
Listing Manual
:
The Listing Manual of the SGX-ST
Manager
:
CapitaMall Trust Management Limited, in its capacity as
manager of CMT
MAS
:
Monetary Authority of Singapore
Master Property
Management Agreement
:
The master property management agreement entered into
between the Trustee, the Manager and the Property Manager
on 28 June 2002
Moody’s
:
Moody’s Investors Service
MRT
:
Mass Rapid Transit
MTN
:
Medium Term Note
MTN Programme
:
The S$2.0 billion MTN programme established by Silver Maple
NAV
:
Net asset value
Net Property Income
:
Means the property income less the property expenses
NLA
:
Net lettable area
NTA
:
Net tangible assets
Ordinary Resolution
:
A resolution proposed and passed as such by a majority being
greater than 50.0% or more of the total number of votes cast
for and against such resolution at a meeting of Unitholders
convened in accordance with the provisions of the Trust Deed
Per cent. or %
:
Per centum or Percentage
PMEBs
:
Professionals, managers, executives and businessmen
Premier
:
Premier Healthcare Services International Pte Ltd
Profit Forecast
:
The forecast of the Existing Portfolio and the Enlarged
Portfolio together with the accompanying key assumptions
and sensitivity analysis as set out in Appendix B of this
Circular
Property Funds Appendix
:
The Property Funds Appendix in Appendix 2 of the Code on
Collective Investment Schemes issued by the MAS
Property Manager
:
CapitaLand Retail Management Pte Ltd
27
Purchase Consideration
:
The purchase consideration of S$268.0 million for the
Acquisition
Pyramex
:
Pyramex Investments Pte Ltd
RCF
:
The S$164.0 million revolving credit facilities under the facility
agreement between Silver Oak Ltd. and RCS Trust
RC Hotels and Convention
Centre
:
Raffles City Singapore’s Hotels and Convention Centre
RCS Trust
:
The joint ownership vehicle in the form of an unlisted special
purpose sub-trust, with CMT holding an interest of 40.00%
REIT
:
Real estate investment trust
S$ and cents
:
Singapore dollars and cents
Sale and Purchase
Agreement
:
The conditional sale and purchase agreement entered into
between the Trustee and the Vendor on 9 February 2010
Scenario A
:
Refers to the scenario where the Acquisition is fully funded
through 100.0% debt financing
Scenario B
:
Refers to the scenario where the Acquisition is fully funded
through a combination of 50.0% debt financing and 50.0%
equity financing
Scenario B Equity Fund
Raising
:
Refers to the equity fund raising as described in Scenario B
wherein 50.0% of the Acquisition is funded from the proceeds
of such equity fund raising
SGX-ST
:
Singapore Exchange Securities Trading Limited
Silver Maple
:
Silver Maple Investment Corporation Ltd
sq ft
:
Square feet
Substantial Unitholder
:
A person with an interest in Units constituting not less than
5.00% of the total number of Units in issue
Total Acquisition Cost
:
The total cost of the Acquisition which is currently estimated to
be approximately S$272.7 million
28
Trust Deed
:
The deed of trust dated 29 October 2001 constituting CMT, as
amended and supplemented by the First Supplemental Deed
dated 26 December 2001, the Second Supplemental Deed
dated 28 June 2002, the Amending and Restating deed dated
29 April 2003, the Fourth Supplemental Deed dated 18 August
2003, the Second Amending and Restating Deed dated 9 July
2004, the Sixth Supplemental Deed dated 18 March 2005, the
Seventh Supplemental Deed dated 21 July 2005, the Eighth
Supplemental Deed dated 13 October 2005, the Ninth
Supplemental Deed dated 20 April 2006, the Third Amending
and Restating Deed dated 25 August 2006, the Eleventh
Supplemental Deed dated 15 February 2007, the Twelfth
Supplemental Deed dated 31 July 2007 and the Thirteenth
Supplemental Deed dated 20 May 2008, all entered into
between the Trustee and the Manager, and as may be
amended, varied, or supplemented from time to time
Trustee
:
HSBC Institutional Trust Services (Singapore) Limited, in its
capacity as trustee of CMT
Unit
:
A unit representing an undivided interest in CMT
Unitholder
:
The registered holder for the time being of a Unit, including
person so registered as joint holders, except where the
registered holder is CDP, the term “Unitholder” shall, in relation
to Units registered in the name of CDP, mean, where the
context requires, the Depositor whose Securities Account with
CDP is credited with Units
Unsecured MTN
:
CMT’s S$2.5 billion unsecured medium term note programme
through its wholly-owned subsidiary, CMT MTN Pte. Ltd.
Vendor
:
Clarke Quay Pte Ltd
The terms “Depositor” and “Depository Register” shall have the meanings ascribed to them respectively
in Section 130A of the Companies Act, Chapter 50 of Singapore.
Words importing the singular shall, where applicable, include the plural and vice versa and words
importing the masculine gender shall, where applicable, include the feminine and neuter genders.
References to persons shall include corporations.
Any reference in this Circular to any enactment is a reference to that enactment for the time being
amended or re-enacted.
Any reference to a time of day in this Circular shall be a reference to Singapore time unless otherwise
stated.
Any discrepancies in the tables, graphs and charts between the listed amounts and totals thereof are
due to rounding.
29
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APPENDIX A
DETAILS OF CLARKE QUAY AND THE EXISTING PROPERTIES
1.
CLARKE QUAY
1.1 Description of Clarke Quay
Clarke Quay, which is zoned as a commercial development within a conservation area, is an
integrated food and beverage, entertainment and lifestyle riverfront destination. It is located along
the Singapore River and at the fringe of the CBD. It is within walking distance of the Clarke Quay
MRT station, making it easily accessible by public transportation.
The table below sets out a summary of selected information on Clarke Quay as at 31 December
2009 (unless otherwise indicated).
Site Area
291,756 sq ft
Gross Floor Area
361,595 sq ft
NLA
294,610 sq ft
Committed Occupancy
94.9%
Number of Leases
55
Car Park Lots
409
Title
Leasehold tenure of 99 years with effect from 13 January 1990
Valuation
(as at 3 February 2010)
CBRE (commissioned by the Manager): S$270.0 million
Knight Frank (commissioned by the Trustee): S$268.0 million
Forecast Period 2010 (1 July 2010 to 31 December 2010)
(S$’000)
Gross Revenue
S$14,550
Net Property Income
S$7,967
1.2 Lease Expiry Profile for Clarke Quay
The graph below illustrates the committed lease expiry profile of Clarke Quay by monthly Gross
Rental Income as percentage of total Gross Rental Income (based on committed Gross Rental
Income for the month of December 2009 and excludes turnover rent).
(%)
50.0
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
31.6%
22.2%
21.4%
11.5%
2010
2011
2012
A-1
2013
13.3%
2014 and
Beyond
1.3 Trade Sector Analysis for Clarke Quay
The chart below provides a breakdown by monthly Gross Rental Income of the different trade
sectors represented in Clarke Quay (based on committed Gross Rental Income for the month of
December 2009 and excludes turnover rent).
2.4%
1.5%
0.5%
Leisure & Entertainment
Food & Beverage
Office
Beauty & Health
Gifts & Specialty
Services
6.0%
50.3%
39.3%
1.4 Top Ten Tenants of Clarke Quay
The table below sets out selected information about the top ten tenants of Clarke Quay by monthly
Gross Rental Income (based on committed Gross Rental Income for the month of December 2009
and excludes turnover rent):
No.
Tenant
Trade Sector
Percentage of
Monthly Gross
Rental Income
1
Luminox Pte. Ltd.
14.3%
2
Shanghai Dolly Pte. Ltd.
5.8%
3
The Pump Room Pte. Ltd.
4.0%
4
MMS Communications Singapore Pte. Ltd.
Office
3.8%
5
The Arena Entertainment Pte. Ltd.
3.8%
6
Attica Private Ltd.
3.7%
7
Owling Enterprises Pte Ltd
Food & Beverage
3.6%
8
Tomo Izakaya Pte. Ltd.
Food & Beverage
2.8%
9
Spring Spa Pte. Ltd.
Beauty & Health
2.4%
10
Xiao Ping Holdings Pte. Ltd.
2.2%
Top Ten Tenants
46.4%
Other Tenants
53.6%
Total
100.0%
A-2
A-3
2.
176
632
Leasehold
tenure of 99
years with
effect from
1 September
1992
777.0
100.0%
25.4
Number of
Leases
Number of Car
Park Lots
Title/Leasehold
Estate Expiry
Valuation
(S$ million)
Committed
Occupancy (%)
Shopper
Traffic in 2009
(million)
28.8
100.0%
570.0
Leasehold
tenure of 99
years with
effect from
1 September
1991
327
165
246,721
Junction 8
9.6
99.3%
326.0
Leasehold
tenure of 99
years with
effect from
12 December
1979
339
189
297,698
Funan
DigitaLife
Mall
17.8
Non-retail:
97.6%
Retail:
99.7%
650.0
Leasehold
tenure of
30 + 30
years with
effect from
23 January
1989
90 (heavy
vehicles)
1,313 (cars)
Non-retail:
382
Retail: 240
Non-retail:
534,020
Retail:
408,128
IMM
Building
24.2
100.0%
1,000.0
Freehold
699
229
498,679
Plaza
Singapura
36.4
100.0%
798.0
Leasehold
tenure of 99
years with
effect from
10 September
1990
648(1)
231
421,539
Bugis
Junction
4.5
99.5%
136.5
Leasehold
tenure of
999 years
with effect
from
26 March
1885
161
84
128,320
Sembawang
Shopping
Centre
7.0
100.0%
92.0
Leasehold
tenure of 99
years with
effect from
6 December
1997
178(1)
68
81,130
Rivervale
Mall(5)
N.A.(3)
99.1%
714.0
Leasehold
tenure of 99
years with
effect from
15 August
2008
106
Office:12
Retail: 8
Retail:
16,318
Office:
357,354
The Atrium
@Orchard
Information shown is in relation to Raffles City Singapore as a whole and not CMT’s 40.00% interest in Raffles City Singapore.
On 1 January 2010, pursuant to the CRS Restructuring, the CRS Properties are now held directly by CMT. Prior to that, CMT had held 100.00% of the beneficial interest in the property portfolio
of CapitaRetail Singapore Limited which comprised the CRS Properties.
12.1
99.8%
248.0
Leasehold
tenure of 99
years with
effect from
1 December
1994
332
109
148,469
Bukit
Panjang
Plaza(5)
(4)
(5)
17.2
99.9%
428.0
Leasehold
tenure of 99
years with
effect from
1 December
1993
318
154
217,713
Lot One
Shoppers’
Mall(5)
Not applicable as Jurong Entertainment Centre has ceased operations in preparation for asset enhancement works.
Figures are not available.
31.4
Office:
98.6%
Retail:
100.0%
2,550.0
Leasehold
tenure of 99
years with
effect from
16 July
1979
1,065
Hotels &
Convention
Centre: 1
Office: 46
Retail: 200
Office:
380,310
Retail:
403,209
Raffles City
Singapore(4)
(2)
(3)
N.A.(3)
100.0%
N.A. (2)
N.A.(2)
39.0
Leasehold
tenure of 99
years with
effect from
1 March
1991
154
10
75,353
Hougang
Plaza
122.0
Leasehold
tenure of 99
years with
effect from
1 March 1991
N.A. (2)
N.A. (2)
N.A. (2)
Jurong
Entertainment
Centre
Notes:
(1) The car park lots are owned by the management corporations of Bugis Junction and Rivervale Mall.
327,637
NLA (sq ft)
Tampines
Mall
The table below sets out selected information about the Existing Properties (as at 31 December 2009).
EXISTING PROPERTIES
2.1 Lease Expiry Profile for the Existing Properties
The graph below illustrates the committed lease expiry profile of the Existing Properties by
monthly Gross Rental Income as percentage of total Gross Rental Income (based on committed
Gross Rental Income for the month of December 2009 and excludes turnover rent). The lease
expiry profile excludes Jurong Entertainment Centre which has ceased operations in preparation
for asset enhancement works. For CMT’s 40.00% interest in Raffles City Singapore, it takes into
account only Raffles City Singapore’s retail and office leases, and excludes the hotel and
convention lease as well as the areas in Raffles City Singapore affected by asset enhancement
works at Basement 1 and Basement 2.
(%)
50.0
45.0
40.0
32.7%
35.0
30.0
32.3%
26.0%
25.0
20.0
15.0
10.0
5.1%
5.0
3.9%
0.0
2010
2011
2012
2013
2014 and
Beyond
2.2 Trade Sector Analysis for Existing Properties
sectors of tenants represented in the Existing Properties (based on committed Gross Rental
Income for the month of December 2009 and excludes turnover rent). The trade sector analysis
excludes Jurong Entertainment Centre which has ceased operations in preparation for asset
enhancement works. For CMT’s 40.00% interest in Raffles City Singapore, it takes into account
only Raffles City Singapore’s retail and office leases, and excludes the hotel and convention lease
as well as the areas in Raffles City Singapore affected by asset enhancement works at Basement
1 and Basement 2.
2.9%
2.8%
3.1%
3.2%
3.3%
Food & Beverage
Fashion
Office
Beauty & Health
Services
Department Store
Supermarket
Gifts/Toys & Hobbies/Books/Sporting Goods
Leisure & Entertainment/Music & Video
Jewellery & Watches
Electrical & Electronics
Houseware & Furnishings
Shoes & Bags
Information Technology
Others
23.5%
3.4%
3.6%
4.6%
5.2%
14.0%
5.8%
6.9%
9.1%
8.6%
A-4
2.3 Top Ten Tenants of the Existing Properties
The table below sets out selected information about the top ten tenants of the Existing Properties
by monthly Gross Rental Income (based on committed Gross Rental Income for the month of
December 2009 and excludes turnover rent). The analysis of top ten tenants excludes Jurong
Entertainment Centre which has ceased operations in preparation for asset enhancement works
and includes CMT’s 40.00% interest in Raffles City Singapore.
No.
Tenant
Trade Sector
1
RC Hotels (Pte) Ltd
2
BHG (Singapore) Pte. Ltd.
3
Cold Storage Singapore (1983) Pte Ltd
4
Temasek Holdings (Private) Limited
5
Hotel
3.6%
Department Store
2.9%
Supermarket/Beauty &
Health/Services/Warehouse
2.9%
Office
2.6%
NTUC Fairprice Co-operative Ltd
Health/Food Court/Services
2.5%
6
Barclays Capital Services Limited
Singapore Branch
Office
2.4%
7
Kopitiam Investment Pte Ltd
Food Court/Food &
Beverage
1.9%
8
Wing Tai Holdings Limited
Fashion/Food & Beverage
1.9%
9
Golden Village Multiplex Pte Ltd
1.7%
10
Best Denki (Singapore) Pte Ltd
Electronics & Warehouse
1.4%
Top Ten Tenants
23.8%
Other Tenants
76.2%
Total
3.
Percentage of
Monthly Gross
Rental Income
100.0%
ENLARGED PROPERTIES
The table below sets out selected information on the Enlarged Properties as at 31 December 2009
(unless otherwise indicated).
Clarke Quay
NLA (sq ft)
Existing Properties
294,610
4,542,598
Enlarged Properties
(2)
4,837,208(2)
Number of Leases
55
2,304(2)
2,359(2)
Shopper Traffic in
2009 (million)
11.0
214.4(3)
225.4(3)
Valuation (S$ million)
270.0 (CBRE)(1)
268.0 (Knight Frank)(1)
6,920.5(4)
7,188.5(4),(5)
Notes:
(1)
As at 3 February 2010.
(2)
Excludes Jurong Entertainment Centre which has ceased operations in preparation for asset enhancement works.
Includes Raffles City Singapore as a whole and not CMT’s 40.00% interest in Raffles City Singapore.
(3)
Excludes Jurong Entertainment Centre which has ceased operations in preparation for asset enhancement works,
as well as Hougang Plaza and The Atrium@Orchard for which figures are not available.
(4)
Includes CMT’s 40.00% interest in Raffles City Singapore.
(5)
The valuation for the Enlarged Properties is based on the aggregate of the valuation of the Existing Properties and
Knight Frank’s valuation of Clarke Quay.
A-5
3.1 Lease Expiry Profile for the Enlarged Properties
The graph below illustrates the committed lease expiry profile of the Enlarged Properties as
percentage of total Gross Rental Income (based on committed Gross Rental Income for the month
of December 2009 and excludes turnover rent).
(%)
50.0
45.0
40.0
35.0
32.4%
32.2%
25.7%
30.0
25.0
20.0
15.0
10.0
5.4%
5.0
4.3%
0.0
2010
2011
2012
2013
2014 and
Beyond
3.2 Trade Sector Analysis for Enlarged Properties
sectors of tenants represented in the Enlarged Properties (based on committed Gross Rental
Income for the month of December 2009 and excludes turnover rent).
2.8%
2.9% 2.7%
3.1%
3.1%
Food & Beverage
Fashion
Office
Beauty & Health
Services
Department Store
Supermarket
Gifts/Toys & Hobbies/Books/Sporting Goods
Leisure & Entertainment/Music & Video
Jewellery & Watches
Electrical & Electronics
Houseware & Furnishings
Shoes & Bags
Information Technology
Others
24.2%
3.2%
5.8%
4.5%
13.3%
4.9%
5.6%
6.6%
8.3%
9.0%
A-6
3.3 Top Ten Tenants of the Enlarged Properties
The table below sets out the top ten tenants of the Enlarged Properties by monthly Gross Rental
Income (based on committed Gross Rental Income for the month of December 2009 and excludes
turnover rent).
No.
Tenant
1
RC Hotels (Pte) Ltd
2
BHG (Singapore) Pte. Ltd.
3
Cold Storage Singapore (1983) Pte Ltd
4
Temasek Holdings (Private) Limited
5
Trade Sector
Percentage of
Monthly Gross
Rental Income
Hotel
3.4%
Department Store
2.8%
Health/Services/Warehouse
2.8%
Office
2.5%
NTUC Fairprice Co-operative Ltd
Health/Food Court/Services
2.4%
6
Barclays Capital Services Limited
Singapore Branch
Office
2.3%
7
Kopitiam Investment Pte Ltd
Food Court/Food &
Beverage
1.8%
8
Wing Tai Holdings Limited
Fashion/Food & Beverage
1.8%
9
Golden Village Multiplex Pte Ltd
1.6%
10
Best Denki (Singapore) Pte Ltd
Electronics & Warehouse
1.3%
Top Ten Tenants
22.7%
Other Tenants
77.3%
Total
100.0%
A-7
APPENDIX B
PROFIT FORECAST
Statements contained in this section, which are not historical facts, may be forward-looking statements.
Such statements are based on the assumptions set forth in this section and are subject to certain risks
and uncertainties which could cause actual results to differ materially from those forecasted. Under no
circumstances should the inclusion of such information herein be regarded as a representation,
warranty or prediction with respect to the accuracy of the underlying assumptions by the Manager or
any other person nor that these results will be achieved or are likely to be achieved.
The following tables set out (i) the forecast consolidated statements of total return and distributable
income of the Existing Portfolio for the forecast year from 1 January 2010 to 31 December 2010 (the
“Forecast Year 2010”) and (ii) the forecast consolidated statements of total return and distributable
income of the Enlarged Portfolio for the forecast period from 1 July 2010 to 31 December 2010 (the
“Forecast Period 2010”).
The Profit Forecast has been examined by the Independent Accountants and should be read together
with their report contained in Appendix C of this Circular as well as the assumptions and sensitivity
analysis set out below.
B-1
B-2
519,416
14,149
21,249
554,814
(20,848)
(50,103)
(106,807)
(177,758)
377,056
117
(34,152)
(4,382)
—
(94,346)
244,293
4,138
248,431
—
—
248,431
—
248,431
244,293
34,254
9,988
—
288,535
3,183,176
9.05
9.05
(20,839)
(49,283)
(105,810)
(175,932)
376,768
1,038
(34,178)
(5,704)
3,402
(105,029)
236,297
4,138
240,435
(1,534)
(302,187)
(63,286)
(1,899)
(65,185)
236,297
41,561
10,258
(6,150)
281,966
3,179,268
8.85
8.85
513,710
14,317
24,673
552,700
Actual 2009
123,762
16,671
4,994
—
145,427
3,183,176
4.56
9.05
(10,491)
(25,453)
(50,409)
(86,353)
191,347
47
(17,084)
(2,191)
—
(48,357)
123,762
2,069
125,831
—
—
125,831
—
125,831
259,941
7,112
10,647
277,700
Existing Portfolio
(495)
(1,163)
(4,925)
(6,583)
7,967
12,880
605
1,065
14,550
Clarke Quay
(1 July 2010 − 31 December 2010)
124,967
17,284
4,994
—
147,245
3,184,753
4.61
9.14
(10,986)
(26,616)
(55,334)
(92,936)
199,314
48
(17,856)
(2,251)
—
(54,288)
124,967
2,069
127,036
—
—
127,036
—
127,036
272,821
7,717
11,712
292,250
Total
Notes:
(1) The forecast is based on 100.0% debt to finance the Acquisition. The Manager has assumed the interest rate to be 4.00% per annum.
(5) Inclusive of the Manager’s forecast of Units to be issued in payment of: (i) the performance component of the management fee for the Existing Properties and (ii) the Acquisition Fee. In preparing the Profit Forecast, the Manager
has assumed that none of the Convertible Bonds are converted into Units between 1 January 2010 and 31 December 2010.
Gross Revenue
Gross rental income
Car park income
Other income
Total Gross Revenue
Property management fees
Property tax
Other property operating expenses
Total Property Operating Expenses
Net property income
Interest income
Trust expenses
Finance costs
Net Income
Income tax expense
Total return
DPU (cents)
(S$’000)
Existing Portfolio
Scenario A: Forecast Consolidated Statements of Total Return and Distributable Income — Existing Portfolio and Enlarged Portfolio
(100.0% Debt Financing(1))
B-3
519,416
14,149
21,249
554,814
(20,848)
(50,103)
(106,807)
(177,758)
377,056
117
(34,152)
(4,382)
—
(94,346)
244,293
4,138
248,431
—
—
248,431
—
248,431
244,293
34,254
9,988
—
288,535
3,183,176
9.05
9.05
(20,839)
(49,283)
(105,810)
(175,932)
376,768
1,038
(34,178)
(5,704)
3,402
(105,029)
236,297
4,138
240,435
(1,534)
(302,187)
(63,286)
(1,899)
(65,185)
236,297
41,561
10,258
(6,150)
281,966
3,179,268
8.85
8.85
513,710
14,317
24,673
552,700
Actual 2009
123,762
16,671
4,994
—
145,427
3,183,176
4.56
9.05
(10,491)
(25,453)
(50,409)
(86,353)
191,347
47
(17,084)
(2,191)
—
(48,357)
123,762
2,069
125,831
—
—
125,831
—
125,831
259,941
7,112
10,647
277,700
Existing Portfolio
(495)
(1,163)
(4,925)
(6,583)
7,967
12,880
605
1,065
14,550
Clarke Quay
(1 July 2010 − 31 December 2010)
127,936
17,081
4,994
—
150,011
3,266,151
4.58
9.09
(10,986)
(26,616)
(55,334)
(92,936)
199,314
48
(17,853)
(2,251)
—
(51,322)
127,936
2,069
130,005
—
—
130,005
—
130,005
272,821
7,717
11,712
292,250
Total
Notes:
(1) The forecast is based on 50.0% debt and 50.0% equity fund raising to finance the Acquisition. The Manager has assumed the interest rate to be 4.00% per annum and approximately 81.4 million new Units are issued at an
issue price of S$1.70 per new Unit pursuant to the Scenario B Equity Fund Raising.
(5) Inclusive of the Manager’s forecast of Units to be issued in payment of: (i) the performance component of the management fee for the Existing Properties and (ii) the Acquisition Fee. In preparing the Profit Forecast, the Manager
has assumed that none of the Convertible Bonds are converted into Units between 1 January 2010 and 31 December 2010.
Gross Revenue
Gross rental income
Car park income
Other income
Total Gross Revenue
Property management fees
Property tax
Other property operating expenses
Total Property Operating Expenses
Net property income
Interest income
Trust expenses
Finance costs
Net Income
Income tax expense
Total return
DPU (cents)
(S$’000)
Existing Portfolio
Scenario B: Forecast Consolidated Statements of Total Return and Distributable Income — Existing Portfolio and Enlarged Portfolio
(50.0% Debt Financing and 50.0% Equity Financing(1))
SECTION A: ASSUMPTIONS — DEFINITION OF EXISTING PORTFOLIO AND CLARKE QUAY
The forecast consolidated statements of total return and distributable income for the Enlarged Portfolio
are based on the aggregate of income earned from the following properties:
(a)
the Existing Portfolio which comprises:
(1)
Tampines Mall, Junction 8, Funan DigitaLife Mall, IMM Building, Plaza Singapura,
Sembawang Shopping Centre, Hougang Plaza, Jurong Entertainment Centre, Bugis
Junction, CMT’s 40.00% interest in Raffles City Singapore1, Lot One Shoppers’ Mall, 90 out
of 91 strata lots in Bukit Panjang Plaza, Rivervale Mall and The Atrium@Orchard (the
“Existing Properties”); and
(2)
forecast distributable income earned from the 122.7 million units in CRCT which CMT holds.
CRCT is an associate of CMT.
The major assumptions made in preparing the Gross Revenue and Net Property Income of
Existing Properties, as well as the forecast consolidated statements of total return and
distributable income of the Existing Portfolio, are set out under Section B: Assumptions —
Existing Portfolio; and
(b)
Clarke Quay — The major assumptions made in preparing the Gross Revenue and Net Property
Income of Clarke Quay, are set out under Section C: Assumptions — Clarke Quay.
SECTION B: ASSUMPTIONS — EXISTING PORTFOLIO
The major assumptions made in preparing the profit forecast for the Existing Portfolio are set out below.
The Manager considers these assumptions to be appropriate and reasonable as at the date of this
Circular.
The definitions used in this section will not apply to the other sections of the Circular unless the context
otherwise requires. However, the definitions in the Glossary may apply in this section unless the context
otherwise requires.
1.1
Gross Revenue
Gross Revenue is the aggregate of gross rental income (“Gross Rental Income”), car park
income and other income earned from the Existing Properties. A summary of the assumptions
used in calculating the Gross Revenue is set out below:
1.1.1 Gross Rental Income
The Gross Rental Income comprises base rents, service charges, turnover rent and advertising
and promotion levy (if applicable) earned from the Existing Properties.
In order to forecast the Gross Rental Income, rents payable under the committed leases
(including letters of offer which are signed by the parties) for Existing Properties as at 31
December 2009 are used.
1
Raffles City Singapore is held by RCS Trust, a joint ownership vehicle in the form of an unlisted special purpose sub-trust,
in which CMT and CapitaCommercial Trust hold interests of 40.00% and 60.00% respectively.
B-4
Following the expiry of a committed lease during the period from 1 January 2010 and 31
December 2010, the following process is used to forecast the Gross Rental Income for the
period following such expiry:
(a)
Market Rent
The market rent for each portion of lettable area as at 31 December 2009 has been
assessed. The market rent is the rent which is believed can be achieved if each lease was
renegotiated as at 31 December 2009 and is estimated with reference to (i) the rental
payable pursuant to comparable leases for tenancies that have recently been negotiated,
(ii) the effect of competing shopping centres, (iii) assumed tenant retention rate, (iv) likely
market conditions, (v) inflation levels and (vi) tenant demand levels. If a committed lease
expires in the period between 1 January 2010 and 31 December 2010, the rental rate for
a new lease (or a lease renewal) which commences in the period between 1 January 2010
and 31 December 2010 is assumed to be the market rent.
(b)
Lease Renewals and Vacancy Allowances
For leases under the Existing Properties expiring between 1 January 2010 and 31
December 2010, where the actual vacancy periods are already known pursuant to
commitments or preliminary indication by the tenants to leases which are in place as at 31
December 2009, the actual vacancy periods have been used in the forecast.
(c)
•
Retail Leases: For the other retail leases expiring between 1 January 2010 and 31
December 2010, it has been assumed that leases will experience a half-month
vacancy period before rent becomes payable under a new lease.
•
Office Leases (at IMM Building, The Atrium@Orchard and Raffles City
Singapore): For the office leases it has been assumed that leases expiring will
experience a vacancy period of between one-and-a-half month and six months before
renewal or before a new lease commences. Also, for the office leases at IMM Building
and The Atrium@Orchard, all existing vacant spaces are assumed to continue to be
vacant.
•
Warehouse Leases (at IMM Building): For the other warehouse leases at IMM
Building, it has been assumed that leases expiring between 1 January 2010 and 31
December 2010 will experience a three-month vacancy period before renewal or
before a new lease commences. Also, all existing vacant spaces are assumed to
continue to be vacant.
Turnover Rent
Certain tenants have provisions in their leases for the payment of turnover rent in addition
to the base rent, service charge and advertising & promotion levy (if applicable). In order
to forecast turnover rent for the Existing Properties, the average historical turnover rent
figures for each tenant that pays turnover rent have been reviewed. Where historical
turnover rent figures are not available, an estimate of the tenant’s expected turnover is
made based on information provided by the tenant and other factors such as the outlook
for retail sales. The forecast of the turnover rent for the Forecast Year 2010 is based on this
assessment.
B-5
(d)
(e)
Gross Rental Income from Asset Enhancement Works
•
The asset enhancement works for Raffles City Singapore and Jurong Entertainment
Centre have either commenced or are expected to be carried out in 2010. The Profit
Forecast has taken into account the potential revenue loss during the period when the
asset enhancement works are being carried out as well as the additional revenue
arising from some asset enhancement works which are expected to be completed
within the Forecast Year 2010. However, the impact of the additional revenue
resulting from the completion of the asset enhancement works would not be fully
reflected in the Forecast Year 2010.
•
For Raffles City Singapore, asset enhancement works to revamp the layout and
optimise the rental income as well as to enhance the retail offering have commenced
in end 2009 and are targeted to be completed by end 2010.
•
Jurong Entertainment Centre has ceased operations in preparation for asset
enhancement works which are targeted to be completed in the first quarter of 2012.
It is assumed that there would be no rental income arising from Jurong Entertainment
Centre between 1 January 2010 and 31 December 2010.
Gross Rental Income from Hotels and Convention Centre
•
Raffles City Singapore’s Hotels and Convention Centre (the “RC Hotels and
Convention Centre”) are leased to RC Hotels (Pte) Ltd. Under the lease, RC Hotels
(Pte) Ltd pays a gross rental income which includes a step-up minimum rent
structure, a service charge component and a variable rent component based on a
percentage of gross operating revenue earned from the RC Hotels and Convention
Centre.
•
Based on the lease terms of the RC Hotels and Convention Centre, the step-up
minimum rent increases from S$42.0 million per annum to S$44.0 million per annum
on 7 November 2010.
•
Based on the lease terms of the RC Hotels and Convention Centre, the variable rent
will be 8.5% of gross operating revenue up to S$250.0 million and 13.0% of gross
operating revenue over S$250.0 million.
•
The minimum rent revenue forecast is based on the committed lease structure. To
derive the variable rent revenue for the Forecast Year 2010, the percentage of gross
operating revenue earned from the RC Hotels and Convention Centre is based on the
committed lease structure. In order to forecast the variable rent, the historical gross
operating revenue figures earned from the RC Hotels and Convention Centre have
been reviewed and the outlook for the Singapore hotel sector has been assessed.
1.1.2 Car Park Income
Car park income includes revenue generated from the operations of the car parks at the Existing
Properties, with the exception of Bugis Junction and Rivervale Mall which are operated by the
management corporations. The assessment of car park income is based on historical income
collection.
B-6
1.1.3 Other Income
Other income includes signage licence fees, casual leasing and other miscellaneous income
earned from the Existing Properties. The other income for the Forecast Year 2010 is forecast
based on historical income and licence agreements committed as at 31 December 2009, as well
as outlook for casual leasing for each of the properties, and takes into account any potential
reconfiguration of area for casual leasing space in the properties.
1.2
1.2.1 Property Tax
It has been assumed that property tax for the Existing Properties will be the higher of: (a) 10.0%
of the Gross Revenue after deducting the service charge and advertising and promotion levy (if
applicable) or (b) 10.0% of annual value as at 31 December 2009. As no rental income is
expected for Jurong Entertainment Centre, property tax is assumed to be paid on 10.0% of the
annual value.
1.2.2 Property Management Fee
For the Existing Properties (Excluding Raffles City Singapore), the property management fee is
based on 2.0% per annum of gross revenue plus 2.0% per annum of net property income and
0.5% per annum of net property income in lieu of leasing commissions otherwise payable to the
Property Manager and/or third party agents.
For Raffles City Singapore, the property management fee is based on 2.0% per annum of gross
revenue plus 2.5% per annum of net property income of Raffles City Singapore (inclusive of
leasing and/or marketing commissions).
1.2.3 Other Property Operating Expenses (utilities, repairs and maintenance, and reimbursable
staff costs)
In order to forecast the other property operating expenses for the Forecast Year 2010, an
assessment has been made on the basis of historical operating costs and the service contracts
which were committed as at 31 December 2009.
1.2.4 Marketing Expenses
It is assumed that a total of approximately S$5.7 million will be incurred as marketing expenses
for the Forecast Period 2010 for the Existing Properties. This is estimated after taking into
account the historical marketing expenses and the plans on advertising and promotions for each
of the Existing Properties.
1.3
Management Fee
The base component of the management fee for the Existing Properties (Excluding Raffles City
Singapore) is 0.25% per annum of the Deposited Property (less the value of CMT’s 40.00%
interest in Raffles City Singapore) and is accrued daily. In addition, there is also a performance
component of the management fee, being 2.85% per annum of Gross Revenue of the Existing
Properties (Excluding Raffles City Singapore), which is accrued daily. Both components are paid
quarterly in accordance with the Trust Deed.
B-7
For Raffles City Singapore, the base component of the management fee is 0.25% per annum of
the value of the deposited property of RCS Trust. In addition, there is also a performance
component of the management fee, being 4.0% of the Net Property Income of Raffles City
Singapore.
It is assumed that the performance component of the management fee for Tampines Mall,
Junction 8, Funan DigitaLife Mall, IMM Building, Plaza Singapura, Jurong Entertainment Centre,
Bugis Junction, Lot One Shoppers’ Mall, Bukit Panjang Plaza, Rivervale Mall and The
Atrium@Orchard will be paid in the form of cash for the Forecast Year 2010. It is assumed the
performance component of the management fee for Hougang Plaza and Sembawang Shopping
Centre will be paid in the form of Units for the Forecast Year 2010. The base component of the
management fee will be paid in the form of cash for the Forecast Year 2010. It is assumed that
the management fee for CMT’s 40.00% interest in Raffles City Singapore will be paid in the form
of Units for the Forecast Year 2010. It is further assumed that the 10-day volume weighted
average traded price to be S$1.70 per Unit for the Forecast Year 2010 for the purpose of
computing the number of Units for the performance component of the management fee payable
in Units.
1.4
Other Expenses
Other expenses of the Existing Properties include recurring operating expenses such as the
Trustee’s fee, annual listing fees, valuation fees, legal fees, registry and depository charges,
accounting, audit and tax adviser’s fees, postage, printing and stationery costs, costs associated
with the preparation of annual reports, investor communication costs and other miscellaneous
expenses.
1.5
Capital Expenditure
A provision of cashflow payments for the forecasted capital expenditure for the Existing
Properties has been included in Forecast Year 2010. It has been assumed that capital
expenditure will be funded by bank borrowings and/or revolving loan arrangement. Capital
expenditure incurred is capitalised as part of the Deposited Property and has no impact on the
statements of total return and distributable income other than affecting the base component of
the management fee, the Trustee’s fee and the financing costs.
(1 July 2010 to 31 December 2010)
S$ million
Expansion and renovation(1)
85.7
Regular capital expenditure
17.6
Total capital expenditure
103.3
Note:
(1)
1.6
For asset enhancement works and major building capital expenditure forecasted for the Existing Properties.
Interest Income/Share of Profit of Associate
It has been assumed that the amount of interest earned on CMT’s cash and other short term
investments will be 0.10% per annum.
As at 31 December 2009, CMT holds 122.7 million units in CRCT, which is its associate. For its
share of distribution income in the Forecast Year 2010, a distribution income of 8.14 cents per
unit in CRCT per annum based on CRCT’s total distribution of 8.14 cents per unit in CRCT for
the financial year ended 31 December 2009 has been assumed.
B-8
1.7
Financing Cost
Silver Maple Investment Corporation Ltd (“Silver Maple”) has established a S$2.0 billion
medium term note programme (“MTN Programme”). Under the MTN Programme, Silver Maple
has raised funds through issuance of floating rate notes equivalent to S$908.0 million. This is
on-lent to CMT under the term loan facility agreement between Silver Maple and CMT at a fixed
rate. As at the Latest Practicable Date, Silver Maple has granted CMT a total fixed rate term loan
facility of S$908.0 million as summarised in the table below.
Term Loan
Term
Commencement
Maturity
Tranche B: S$125.0 million
7-year
June 2003
June 2010
Tranche D: S$433.0 million
7-year
October 2005
October 2012
Tranche E: S$350.0 million
5.7-year
February 2007
October 2012
CMT has also put in place a S$2.5 billion unsecured medium term note programme
(“Unsecured MTN”) through its wholly owned subsidiary, CMT MTN Pte. Ltd. As at the Latest
Practicable Date, an aggregate of S$515.0 million has been issued as summarised in the table
below.
Term Loan
Term
Commencement
Maturity
S$155.0 million
2-year
April 2008
April 2010
S$160.0 million
2-year
April 2008
April 2010
S$100.0 million
5-year
January 2010
January 2015
S$100.0 million
7-year
March 2010
March 2017
CMT has a 40.00% interest in RCS Trust. Under the facility agreement between Silver Oak Ltd.
and RCS Trust, Silver Oak Ltd. has granted a total facility of S$1,030.0 million consisting of a
S$866.0 million term loan and a S$164.0 million revolving credit facilities (“RCF”). As at Latest
Practicable Date, RCS Trust has drawn down the S$866.0 million term loan and S$62.0 million
from RCF. CMT’s 40.00% interest thereof is S$346.4 million and S$24.8 million of term loans and
RCF respectively.
CMT has issued secured bonds convertible into new Units in CMT of five-year maturity with an
aggregate principal amount of S$650.0 million.
For the S$440.0 million borrowings due for refinancing in 2010, S$200.0 million would be
refinanced through the S$100.0 million five-year fixed rate notes (at an interest rate of 3.288%)
and S$100.0 million seven-year fixed rate notes (at an interest rate of 3.85%) recently issued
through the Unsecured MTN. For the balance S$240.0 million borrowings due for refinancing in
2010, the bank borrowings or revolving loan arrangement to fund the capital expenditure of the
Existing Properties and working capital, it is assumed that the interest rate will be 4.00% per
annum (including margin and excluding debt issuance expenses) for the Forecast Year 2010.
The interest rate assumption is believed to be reasonable based on the current Singapore dollar
swap rates. As at the Latest Practicable Date, the five-year swap offer rate was approximately
2.13% per annum.
The accretion of the Convertible Bonds interest and the amortisation of debt issuance expenses
is assumed to be S$12.9 million for the Forecast Period 2010. As the accretion and amortisation
are non-cash items, they are added back to the distributable income through net tax
adjustments.
B-9
1.8
Investment Properties
It is assumed that the carrying amount of the Existing Properties as at 31 December 2009 is
S$6,920.5 million. It has been assumed that the value of the Existing Portfolio will only increase
by the amount of capital expenditure forecasted to be incurred from 1 January 2010 onwards.
The assumption is applied when estimating the value of the Deposited Property for the purposes
of forecasting the base component of the management fee for Existing Properties and the
Trustee’s fee.
1.9
Accounting Policies
It has been assumed that there has been no significant change in applicable accounting policies
or other financial reporting requirements that may have a material effect on CMT Group’s
forecast consolidated statements of total return and distributable income. A summary of the
significant accounting policies of CMT Group may be found in the CMT Group Audited Financial
Statements.
1.10
Other Assumptions
The following additional assumptions have been made in preparing the financial forecast:
•
no new Units will be issued by CMT other than for the (i) payment of the performance
component of the management fee for Hougang Plaza and Sembawang Shopping Centre;
and (ii) payment of the management fee for RCS Trust. In preparing the Profit Forecast, it
is assumed that none of the Convertible Bonds are converted into Units during the
Forecast Year 2010;
•
there will be no material change in taxation legislation or other legislation;
•
there will be no material change to the existing tax rulings for CMT and RCS Trust;
•
all leases are enforceable and will be performed in accordance with their terms;
•
fair value of any derivative financial instruments are assumed to be unchanged over the
Forecast Year 2010;
•
as distribution income is receivable from CRCT on a semi-annual basis, for the Forecast
Period 2010, it is assumed that approximately S$5.0 million of distribution income
receivable from CRCT; and
•
for Raffles City Singapore, it is assumed that 100.0% of the distributable income is
distributed from RCS Trust for the Forecast Year 2010.
B-10
SECTION C: ASSUMPTIONS — CLARKE QUAY
It is assumed that the Acquisition will be completed on 1 July 2010. The major assumptions made in
preparing the forecast for Clarke Quay for the Forecast Period 2010 are set out below. The Manager
considers these assumptions to be appropriate and reasonable as at the date of this Circular.
2.1
Gross Revenue
Gross Revenue is the aggregate of Gross Rental Income, car park income and other income
earned from Clarke Quay. A summary of the assumptions used in calculating the Gross Revenue
is set out below.
2.1.1 Gross Rental Income
The Gross Rental Income comprises base rents, service charges, turnover rent and advertising
and promotion levy (if applicable) earned from Clarke Quay.
In order to forecast the Gross Rental Income, rents payable under the committed leases
(including letters of offer which are signed by the parties) for Clarke Quay as at 31 December
2009 are used.
Following the expiry of a committed lease during the period from 1 July 2010 to 31 December
2010, the following process is used to forecast the Gross Rental Income for the period following
such expiry:
(a)
Market Rent
The market rent for each portion of lettable area as at 31 December 2009 has been
assessed. The market rent is the rent which is believed can be achieved if each lease was
renegotiated as at 31 December 2009 and is estimated with reference to (i) the rental
payable pursuant to comparable leases for tenancies that have recently been negotiated,
(ii) the effect of competing shopping centres, (iii) assumed tenant retention rate, (iv) likely
market conditions, (v) inflation levels and (vi) tenant demand levels. If a committed lease
expires in the period between 1 July 2010 and 31 December 2010, the rental rate for a new
lease (or a lease renewal) which commences in the period between 1 July 2010 and 31
December 2010 is assumed to be the market rent.
(b)
Lease Renewals and Vacancy Allowances
For leases expiring between 1 July 2010 and 31 December 2010, where the actual vacancy
periods are already known pursuant to commitments or preliminary indication by the
tenants to leases which are in place as at 31 December 2009, the actual vacancy periods
have been used in the forecast.
For the other leases expiring between 1 July 2010 and 31 December 2010, it has been
assumed that leases will experience two-month vacancy period before rent becomes
payable under a new lease.
(c)
Turnover Rent
Certain tenants have provisions in their leases for the payment of turnover rent in addition
to the base rent, service charge and advertising & promotion levy (if applicable). In order
to forecast turnover rent for Clarke Quay, the average historical turnover rent figures for
each tenant that pays turnover rent have been reviewed. Where historical turnover rent
B-11
figures are not available, an estimate of the tenant’s expected turnover is made based on
information provided by the tenant and other factors such as the outlook for retail sales.
The forecast of the turnover rent for the Forecast Year 2010 is based on this assessment.
2.1.2 Car Park Income
Car park income includes revenue earned from the operations of the car park at Clarke Quay.
The assessment of car park income is based on historical income collection.
2.1.3 Other Income
Other income includes signage licence fees, casual leasing and other miscellaneous income
earned from Clarke Quay. The other income for the Forecast Period 2010 is forecast based on
historical income and licence agreements committed as at 31 December 2009, as well as
outlook for casual leasing for Clarke Quay.
2.2
2.2.1 Property Tax
It has been assumed that property tax for Clarke Quay will be the higher of: (a) 10.0% of the
Gross Revenue after deducting the service charge and advertising and promotion levy (if
applicable) or (b) 10.0% of annual value as of 31 December 2009.
2.2.2 Property Management Fee
The Property Management Fee is based on 2.0% per annum of gross revenue of Clarke Quay
plus 2.5% per annum of net property income of Clarke Quay.
2.2.3 Other Property Operating Expenses (utilities, repairs and maintenance, and reimbursable
staff costs)
In order to forecast the other property operating expenses for the Forecast Period 2010, an
assessment has been made on the basis of historical operating costs and the service contracts
which were committed as at 31 December 2009.
2.2.4 Marketing Expenses
It is assumed that a total of approximately S$0.8 million will be incurred as marketing expenses
for the Forecast Period 2010. This is estimated after taking into account the historical marketing
expenses and the plans on advertising and promotions for Clarke Quay.
2.3
Management Fee
The base component of the management fee for Clarke Quay is 0.25% per annum of the value
of Clarke Quay and is accrued daily. In addition, there is also a performance component of the
management fee, being 2.85% per annum of Gross Revenue of Clarke Quay.
It is assumed that both the base component and performance component of the management
fee for Clarke Quay will be paid in the form of cash for the Forecast Period 2010.
B-12
2.4
Capital Expenditure
A provision of cashflow payments for the forecasted capital expenditure for Clarke Quay has
been included in the Forecast Period 2010. It has been assumed that capital expenditure will be
funded by bank borrowings and/or revolving loan arrangement. Capital expenditure incurred is
capitalised as part of the Deposited Property and has no impact on the statements of total return
and distributable income other than affecting base component of the management fee, the
Trustee’s fees and the financing costs.
S$ million
Regular capital expenditure
2.5
2.0
Financing Cost
For the debt taken to fully finance the acquisition of Clarke Quay under Scenario A and part
finance the acquisition of Clarke Quay under Scenario B, it is assumed that the interest rate will
be 4.00% per annum. For bank borrowings or revolving loan arrangement to fund the capital
expenditure for Clarke Quay, it is assumed that the interest rate will be 4.00% per annum
(including margin). The Manager believes the interest rate assumption is reasonable based on
the current Singapore dollar swap rates. As at the Latest Practicable Date, the five-year swap
offer rate was approximately 2.13% per annum.
2.6
Investment Property
It is assumed that the carrying amount of Clarke Quay would be S$272.7 million as at the
assumed completion date of 1 July 2010, and will only increase by the amount of capital
expenditure forecasted to be incurred from 1 July 2010 onwards. The above assumption is used
for the purposes of forecasting the base component of the management fee for Clarke Quay and
the Trustee’s fee.
2.7
Other Assumptions
The following additional assumptions have been made in preparing the financial forecast:
•
approximately 81.4 million new Units are issued at an issue price of S$1.70 per new Unit
pursuant to the Scenario B Equity Fund Raising;
•
there will be no material change in taxation legislation or other legislation;
•
there will be no material change to the existing tax ruling for CMT; and
•
all leases are enforceable and will be performed in accordance with their terms.
B-13
SECTION D: SENSITIVITY ANALYSIS
The Profit Forecast is based on a number of key assumptions that have been outlined earlier in this
Appendix.
Unitholders should be aware that future events cannot be predicted with any certainty and deviations
from the figures forecast in this Appendix are to be expected. To assist Unitholders in assessing the
impact of these assumptions on the Profit Forecast, sensitivity of the DPU to changes in the key
assumptions are set out below.
The sensitivity analysis is intended to provide a guide only, and variations in actual performance could
exceed the ranges shown. Movements in other variables may offset or compound the effect of a change
in any variable beyond the extent shown.
The sensitivity analysis has been prepared using the same assumptions as those set out earlier in this
Appendix.
3.1
Gross Revenue
Changes in the Gross Revenue will impact the Net Property Income of the Enlarged Portfolio
and, consequently, the distributable income. The assumptions for Gross Revenue have been set
out earlier in this section. The effect of variations in such Gross Revenue on the distributable
income is set out below:
Impact on DPU Pursuant to Changes in Gross Revenue
DPU
Forecast Period 2010 (Annualised)
(cents)
Scenario A
Scenario B
Gross Revenue is 0.5% above base case
Base case
(1)
Gross Revenue is 0.5% below base case
9.22
9.17
9.14
9.09
9.06
9.01
Note:
(1) DPU as shown in the Profit Forecast.
3.2
Changes in the property operating expenses (excluding the property management fee) will
impact the Net Property Income of the Enlarged Portfolio and, consequently, the distributable
income. The assumptions for property operating expenses have been set out earlier in this
Appendix. The effect of variations in the property operating expenses on the DPU is set out
below:
Impact on DPU Pursuant to Changes in Property Operating Expenses
DPU
(cents)
Scenario A
Scenario B
2.5% above base case’s operating expenses
Base case
(1)
2.5% below base case’s operating expenses
Note:
B-14
9.02
8.97
9.14
9.09
9.26
9.21
3.3
Finance Costs
Changes in interest rates will impact net income of the Enlarged Portfolio and, consequently, the
distributable income. The interest rate assumptions have been set out earlier in this Appendix.
The effect of the variation in the Enlarged Portfolio’s finance costs on the DPU is set out below:
Impact on DPU Pursuant to Changes in Finance Costs
DPU
(cents)
Scenario A
Scenario B
Interest rates are 25 basis points above base
case
9.10
9.07
Base case(1)
9.14
9.09
Interest rates are 25 basis points below base
case
9.18
9.11
Note:
3.4
Conversion of Convertible Bonds
Conversion of the Convertible Bonds will impact the number of Units in issue and consequently,
the DPU. The effect of conversion of the Convertible Bonds on the DPU is set out below based
on the conversion price of S$3.39 as at the Latest Practicable Date.
Impact on DPU Pursuant to Conversion of the Convertible Bonds
DPU
(cents)
Scenario A
Scenario B
Base case(1)
9.14
9.09
Conversion of 50.0% of the Convertible Bonds
8.99
8.93
Conversion of 100.0% of the Convertible Bonds
8.83
8.77
Note:
3.5
Issue Price of Units Issued Pursuant to the Scenario B Equity Fund Raising
Changes in the issue price of Units issued pursuant to the Scenario B Equity Fund Raising will
impact the DPU.
Impact on DPU Pursuant to Change in the Issue Price of Units Issued Pursuant to the
Scenario B Equity Fund Raising
DPU
(cents)
S$1.60 per new Unit
Base case (S$1.70 per new Unit)
9.07
(1)
9.09
S$1.80 per new Unit
9.11
Note:
B-15
APPENDIX C
INDEPENDENT ACCOUNTANTS’ REPORT ON THE PROFIT FORECAST
The Board of Directors
(in its capacity as manager of CapitaMall Trust)
39 Robinson Road
Singapore 068911
(in its capacity as trustee of CapitaMall Trust)
21 Collyer Quay
Singapore 049320
24 March 2010
Dear Sirs
Letter from the Independent Accountants on the Profit Forecast of CapitaMall Trust and its
subsidiaries (“CMT Group”)
This letter has been prepared for inclusion in the unitholders’ circular to be issued (the “Circular”) by
CapitaMall Trust Management Limited (“CMTML”) in relation to the proposed acquisition of Clarke
Quay.
The directors of CMTML (the “Directors”) are responsible for the preparation and presentation of the
forecast consolidated Statements of Total Return and Distributable Income of the Existing Portfolio for
the period from 1 January 2010 to 31 December 2010 and the Enlarged Portfolio for the period from
1 July 2010 to 31 December 2010, (together the “Profit Forecast”) as set out on pages B-2 to B-3 of the
Circular, which have been prepared on the basis of the assumptions as set out on pages B-4 to B-13
of the Circular (the “Assumptions”).
We have examined the Profit Forecast of CMT Group as set out on pages B-2 to B-3 of the Circular in
accordance with Singapore Standard on Assurance Engagements applicable to the examination of
prospective financial information. The Directors are solely responsible for the Profit Forecast including
the Assumptions on which it is based.
Based on our examination of the evidence supporting the Assumptions, nothing has come to our
attention which causes us to believe that the Assumptions do not provide a reasonable basis for the
Profit Forecast. Further, in our opinion the Profit Forecast, so far as the accounting policies and
calculations are concerned, is properly prepared on the basis of the Assumptions, is consistent with the
accounting policies normally adopted by CMT Group and is presented in accordance with the relevant
presentation principles of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts”
(but not all the required disclosures for the purposes of this letter) issued by the Institute of Certified
Public Accountants of Singapore, which is the framework adopted by CMT Group in the preparation of
its financial statements.
C-1
Events and circumstances frequently do not occur as expected. Even if the events anticipated under
the hypothetical assumptions described above occur, actual results are still likely to be different from
the Profit Forecast since other anticipated events frequently do not occur as expected and the variation
may be material. The actual results may therefore differ materially from the Profit Forecast. For the
reasons set out above, we do not express any opinion as to the possibility of achievement of the Profit
Forecast.
Attention is drawn, in particular, to the sensitivity analysis of the Profit Forecast as set out on pages
B-14 to B-15 of the Circular.
KPMG LLP
Public Accountants and Certified Public Accountants
(Partner-in-charge: Ronald Tay)
Singapore
C-2
APPENDIX D
VALUATION CERTIFICATES
Valuation & Advisory Services
6 Battery Road #32-01
Singapore 049909
T (65) 6224 8181
F (65) 6225 1987
www.cbre.com.sg
Co. Reg. No.: 197701161R
VALUATION CERTIFICATE
Property:
Clarke Quay
3A/B/C/D/E River Valley Road
Singapore 179020/1/2/3/4
Client:
CapitaMall Trust Management Limited (as Manager of
CapitaMall Trust)
Trust:
CapitaMall Trust
Purpose:
Interest Valued:
Acquisition
Leasehold for a term of 99 years commencing from
13-1-1990. Balance term 78.94 years.
Basis of Valuation:
Market Value subject to existing tenancies and occupational
arrangements.
Registered Owner:
Land Area:
Town Planning:
Clarke Quay Pte Ltd
27,104.8 sqm
Commercial and within Conservation Area
Brief Description:
The subject property comprises 5 fully refurbished and reconfigured multi-level shophouse which
and warehouse buildings which
collectively form Clarke Quay, one of Singapore’s premium dining and entertainment precincts. Clarke Quay
predominantly provides restaurant, bar and retail accommodation as well as a limited amount of office space. The various
buildings of the subject property have been periodically refurbished and extended. Car parking for approximately 409
vehicles including 3 handicap lots are also provided onsite.
Tenancy Profile:
Royal Selangor (S) Pte Ltd, Cocoon Bar & Supperclub Pte Ltd, Shanghai Dolly Pte Ltd, Luminox Pte Ltd, MMsS
Communications Singapore Pte Ltd and other specialty tenancies.
NLA (sqft):
GFA (sqft):
Car Space Ratio:
294,610
361,595
1.39 lots per 1,000 square feet of lettable area.
Valuation Approaches:
Date of Valuation:
Capitalisation Approach & Discounted Cash Flow Analysis
3 February 2010
Assessed Value:
S$270,000,000
(Two Hundred Seventy Million Dollars)
Assumptions,
Disclaimers,
Limitations &
Qualifications:
This valuation report is provided subject to the assumptions, qualifications, limitations and disclaimers detailed throughout
the valuation report which are made in conjunction with those included within the Assumptions, Qualifications, Limitations &
Disclaimers section located within the report. Reliance on the valuation report and extension of our liability is conditional
upon the reader's acknowledgement and understanding of these statements. This valuation is for the use only of the party
to whom it is addressed and for no other purpose. No responsibility is accepted to any third party who may use or rely on
the whole or any part of the content of this valuation. The valuer has no pecuniary interest that would conflict with the
proper valuation of the property.
Prepared By:
Per:
This valuation is exclusive of GST.
Li Hiaw Ho DipUrbVal (Auck) SNZPI FSISV
Appraiser's Licence, No. AD041-2445
Executive Director - Valuation & Advisory Services
D-1
Per:
Sim Hwee Yan BSc (Est. Mgt) Hons FSISV
Appraiser's Licence, No. AD041-2004155J
Executive Director - Valuation & Advisory Services
3A/B/C/D/E/ River Valley Road
“Clarke Quay”
Singapore 179020/1/2/3/4
3 February 2010
VALUATION CERTIFICATE
Property
:
3A/B/C/D/E/ River Valley Road
“Clarke Quay”
Singapore 179020/1/2/3/4
Client
:
as Trustee of CapitaMall Trust
21 Collyer Quay
Singapore 049320
Purpose
:
Acquisition and Corporate Finance purposes
Legal Description
:
Lot Nos.
Town Subdivision
Tenure
:
Leasehold 99 years with effect from 13 January 1990 (Balance of about 78.9
years as at 3 February 2010)
Basis Of Valuation
:
Market value subject to all existing and proposed leases and occupancy
arrangements
Registered Owner
:
Clarke Quay Pte Ltd
Site Area
:
27,104.8 sm (291,756 sf)
Master Plan 2008
:
“Commercial” and within Conservation Area
Brief Description
:
Clarke Quay is a conservation project comprising an integrated retail, food and
beverage, entertainment, office and lifestyle riverfront development. It comprises
5 blocks of 2 to 4-storeys (Blocks A to E) accommodating restaurants, wine bars,
entertainment spots, retail shops and offices, and a multi-storey car park (total
409 lots). The blocks are separated by pedestrianised shopping streets.
Tenancy Profile
:
Cocoon Bar & Supperclub Pte Ltd, Shanghai Dolly Pte Ltd, Luminox Pte Ltd,
MMS Communications Singapore Pte Ltd and retail specialty tenancies.
Gross Floor Area
:
33,593.0 sm (361,595 sf)
Lettable Floor Area
:
27,369.9 sm (294,610 sf)
Valuation Approach
:
Investment and Discounted Cash Flow
:
:
152T, 155N, 158C, 159M, 161C, 336C & 338W
9
Knight Frank Pte Ltd 16 Raffles Quay #30-00 Hong Leong Building Singapore 048581
Tel: (65) 6222 1333 Fax: (65) 6224 5843 www.knightfrank.com.sg Reg. No. 198205243Z
Other Offices:
Knight Frank Estate Management Pte Ltd 3 Lim Teck Kim Road #01-01/02 Singapore Technologies Building Singapore 088934
Knight Frank Shopping Centre Management Pte Ltd 16 Raffles Quay #30-00 Hong Leong Building Singapore 048581
KF Property Network Pte Ltd (Licensee) 167 Jalan Bukit Merah #06-10 Connection One Tower 5 Singapore 150167
D-2
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D-3
APPENDIX E
INDEPENDENT FINANCIAL ADVISER’S LETTER
ANZ SINGAPORE LIMITED
(Incorporated in the Republic of Singapore)
Company Registration Number: 198602937W
22 March 2010
The Independent Directors and Audit Committee of
CapitaMall Trust Management Limited (as Manager of CapitaMall Trust)
39 Robinson Road
Singapore 068911
Dear Sirs
THE PROPOSED ACQUISITION OF CLARKE QUAY
For the purpose of this letter, capitalised terms not otherwise defined shall have the meaning given to
them in the circular dated 24 March 2010 to the Unitholders of CapitaMall Trust (the “Circular”).
1.
INTRODUCTION
The Manager seeks approval from the unitholders of CMT (“Unitholders”) for the proposed
acquisition of Clarke Quay which is located at River Valley Road (“Clarke Quay”, and the
proposed acquisition of Clarke Quay, the “Acquisition”) at a purchase consideration of S$268.0
million (the “Purchase Consideration”).
Clarke Quay is an integrated food and beverage, entertainment and lifestyle riverfront destination.
It is located along the Singapore River, and at the fringe of Singapore’s Central Business District
(“CBD”). It is within walking distance of the Clarke Quay mass rapid transit (“MRT”) station,
making it easily accessible by public transportation. Clarke Quay has a net lettable area (“NLA”)
of approximately 294,610 square feet (“sq ft”) as at 31 December 2009.
On 9 February 2010, the Trustee entered into a conditional sale and purchase agreement (the
“Sale and Purchase Agreement”) with Clarke Quay Pte Ltd (the “Vendor”) to acquire Clarke
Quay (which includes the plant and equipment located at Clarke Quay) at the Purchase
Consideration of S$268.0 million.
The Purchase Consideration was arrived at on a willing-buyer and willing-seller basis after taking
into account the independent valuations of Clarke Quay. The Manager has commissioned an
independent property valuer, CB Richard Ellis (Pte) Ltd (“CBRE”), and the Trustee has
commissioned an independent property valuer, Knight Frank Pte Ltd (“Knight Frank”, together
with CBRE, the “Independent Valuers”), to value Clarke Quay. CBRE, in its report dated
3 February 2010, stated that the open market value of Clarke Quay is S$270.0 million and Knight
Frank, in its report dated 3 February 2010, stated that the open market value of Clarke Quay is
S$268.0 million.
E-1
As at 18 March 2010, being the latest practicable date prior to the printing of this Circular (the
“Latest Practicable Date”), CapitaMalls Asia Limited (“CMA”) held an aggregate indirect interest
in 950,077,146 Units, which is equivalent to approximately 29.87% of the total number of Units
then in issue (“Existing Units”), and is therefore regarded as a “controlling Unitholder” of CMT
under both the Listing Manual of the SGX-ST (the “Listing Manual”) and the Property Funds
Appendix1. In addition, as the Manager is a wholly-owned subsidiary of CMA, CMA is regarded as
a “controlling shareholder” of the Manager under both the Listing Manual and the Property Funds
Appendix.
As the Vendor is a wholly-owned subsidiary of CMA, for the purposes of Chapter 9 of the Listing
Manual and the Property Funds Appendix, the Vendor (being a subsidiary of a “controlling
Unitholder” and a “controlling shareholder” of the Manager) is (for the purposes of the Listing
Manual) an “interested person” and (for the purposes of the Property Funds Appendix) an
“interested party” of CMT.
Therefore, the Acquisition will constitute an “interested person transaction” under Chapter 9 of the
Listing Manual as well as an “interested party transaction” under the Property Funds Appendix, in
respect of which the approval of Unitholders is required.
Please refer to paragraph 3.3 of the Letter to Unitholders in the Circular for further details.
This letter sets out, inter alia, our opinion, from a financial point of view, on whether the proposed
Acquisition is on normal commercial terms and is not prejudicial to the interests of CMT and its
minority Unitholders.
2.
TERMS OF REFERENCE
ANZ has been appointed as the Independent Financial Adviser to the Independent Directors and
Audit Committee of the Manager to advise them, from a financial point of view, as to whether the
proposed Acquisition is on normal commercial terms and is not prejudicial to the interests of CMT
and its minority Unitholders.
We make no representations or warranties in relation to the merits of the Acquisition other than
to express an opinion, from a financial point of view, on whether the Acquisition is on normal
commercial terms and is not prejudicial to the interests of CMT and its minority Unitholders. Our
terms of reference do not require us to evaluate or comment on the strategic or commercial merits
or risks of the Acquisition or on the prospects of CMT Group or any of its respective related
companies (as defined in the Companies Act of Singapore). Such evaluations or comments
remain the responsibility of the Directors and management of the Manager.
We were neither a party to the negotiations entered into by the Manager in relation to the
Acquisition nor were we involved in the discussions leading up to the decision on the part of the
Directors to propose the Acquisition.
We have held discussions with the Directors and the management of the Manager and have
examined information provided by the Directors and the management of the Manager and other
publicly available information collated by us, upon which our view is based. We have not
independently verified such information, whether written or verbal, and accordingly, cannot and do
not make any representation or warranty in respect of, and do not accept any responsibility for,
the accuracy, completeness or adequacy of such information. We have nevertheless made
enquiries and have used our judgment as we deemed necessary or appropriate in assessing such
information and are not aware of any reason to doubt the reliability of the information.
1
The Manager has on 18 March 2010 disposed 1,000,000 Units. It should be noted that the Register of Unitholders would
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We have relied upon the assurances of the Directors that the Directors collectively and individually
accept responsibility for the accuracy of the information given and confirm, having made all
reasonable enquiries, that to the best of their knowledge and belief, the facts provided and
opinions expressed are fair and accurate in all material respects and there are no material facts
the omission of which would make any statement in this letter misleading in any material respect.
Where information has been extracted or reproduced from published or otherwise publicly
available sources, the sole responsibility of the Directors has been to ensure through reasonable
enquiries that such information is accurately extracted from such sources or, as the case may be,
reflected or reproduced in this letter.
We have not made an independent evaluation or appraisal of the assets and liabilities of CMT
Group and we have not been furnished with any such evaluation or appraisal valuation reports in
respect of the assets held by CMT Group and its respective related companies nor have we
evaluated the solvency of CMT Group under any applicable laws relating to bankruptcy,
insolvency or similar matters.
Accordingly, no representation or warranty, express or implied, is made and no responsibility is
accepted by us concerning the accuracy, completeness or adequacy of all information, provided
or otherwise made available to us or relied on by us as described above.
Furthermore, our terms of reference do not require us to express, and we do not express, an
opinion on the future growth prospects of CMT Group and its respective related companies. We
are therefore not expressing any opinion herein as to the future financial or other performance of
those companies.
Our opinion, as set out in this letter, is based upon the market, economic, industry, monetary and
other applicable conditions subsisting on, and the information made available to us, as at the
Latest Practicable Date. We assume no responsibility to update, revise or reaffirm our opinion in
the light of any subsequent development after the Latest Practicable Date that may in any way
affect our opinion contained herein. Unitholders of CMT should take note of any announcement
relevant to the Acquisition which may be released by or on behalf of CMT or the Manager after
the Latest Practicable Date.
In rendering our advice, we have not had regard to the specific investment objectives, financial
situation, tax position or individual circumstances of any individual Unitholder. As different
Unitholders would have different investment objectives and profiles, we would advise that
any individual minority Unitholder who may require specific advice in relation to his
investment portfolio should consult his stockbroker, bank manager, solicitor, accountant,
tax adviser or other professional advisers.
Our opinion in relation to the Acquisition should be considered in the context of the
entirety of this letter.
3.
CERTAIN TERMS OF THE ACQUISITION
Pursuant to the terms of the Sale and Purchase Agreement, the Vendor has agreed to sell Clarke
Quay (which includes the plant and equipment located at Clarke Quay), and the Trustee has
agreed to purchase Clarke Quay. The Purchase Consideration for the Acquisition is S$268.0
million.
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Conditions Precedent
The principal terms of the Sale and Purchase Agreement include, among others, the following
conditions precedent:
(i)
the approval of the President of the Republic of Singapore (the “Head Lessor”) for the sale
of Clarke Quay by the Vendor to the Trustee;
(ii)
the approval of the Head Lessor for (a) the mortgage and/or charge of Clarke Quay by the
Trustee and (b) the entry into by the Trustee of leases and/or licences in respect of Clarke
Quay or any part(s) thereof; and
(iii)
the approval of Unitholders for the Acquisition.
The Trustee undertakes to take all steps within its power to convene the extraordinary general
meeting (“EGM”) for the purpose of seeking the approval of Unitholders for the Acquisition. As at
the Latest Practicable Date, the conditions precedent set out in paragraph 3 (i) and (ii) above have
been fulfilled.
If the conditions precedent are not obtained by 15 June 2010 (or such other date as the Trustee
and the Vendor may agree in writing), the Trustee or the Vendor may by notice in writing to the
other party terminate the Sale and Purchase Agreement.
4.
EVALUATION OF THE ACQUISITION
For the purpose of arriving at our opinion in respect of the Acquisition, we have, as the
Independent Financial Adviser, taken into account the following:
(i)
the rationale for the Acquisition;
(ii)
the valuation reports prepared by the Independent Valuers;
(iii)
earnings-based valuation methodology;
(iv) other information relating to CMT Group and the Acquisition provided to ANZ both verbally
and in writing by the Directors and management of the Manager; and
(v)
5.
publicly available information collated by us.
RATIONALE FOR THE ACQUISITION
The Manager’s rationale for the Acquisition is summarised as follows:
(i)
the Acquisition fits the Manager’s investment strategy;
(ii)
competitive strengths of Clarke Quay;
(iii)
segmental diversification;
(iv) enhancement of rental revenue; and
(v)
income diversification.
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Please refer to paragraph 2 of the Letter to Unitholders in the Circular for full details on the
rationale for the Acquisition.
We note that the Acquisition is “in line with the Manager’s principal investment strategy to invest
in quality income-producing real estate and real estate assets so as to deliver stable distributions
and sustainable total returns to Unitholders”.
6.
VALUATION REPORTS
We believe that the most appropriate valuation methodology for evaluating the Acquisition is the
asset-based valuation method. This valuation method will involve establishing the open market
value of Clarke Quay.
Purchase Consideration for the Acquisition
The Purchase Consideration of S$268.0 million was arrived at on a willing-buyer and willing-seller
basis after taking into account the independent valuations of Clarke Quay.
The Manager has commissioned an independent property valuer, CBRE and the Trustee has
commissioned an independent property valuer, Knight Frank to value Clarke Quay. CBRE, in its
report dated 3 February 2010, stated that the open market value of Clarke Quay is S$270.0 million
and Knight Frank, in its report dated 3 February 2010, stated that the open market value of Clarke
Quay is S$268.0 million.
Clarke Quay
Clarke Quay, which is zoned as a commercial development within a conservation area, is an
integrated food and beverage, entertainment and lifestyle riverfront destination. It is located along
the Singapore River and at the fringe of the CBD. It is within walking distance of the Clarke Quay
MRT station, making it easily accessible by public transportation. We have been advised Clarke
Quay has a NLA of approximately 294,610 sq ft and has a committed occupancy rate of 94.9%
as at 31 December 2009.
Please refer to Appendix A of the Circular for further details about Clarke Quay.
7.
EARNINGS-BASED VALUATION METHODOLOGY
Valuation Methodology
In addition to the asset-based valuation methodology, we have considered an earnings-based
valuation methodology to assess the Acquisition. This valuation method is relevant as Clarke
Quay is made up of income-generating properties, and the property yield can be benchmarked
against the property yields of similar properties.
In our evaluation of the Purchase Consideration for the Acquisition, we have taken into account
the following relevant considerations:
(i)
the valuation from the professional valuation of Clarke Quay carried out by the Independent
Valuers;
(ii)
property yield generated by Clarke Quay compared with property yields generated from
broadly comparable retail real estate in Singapore;
(iii)
the occupancy levels achieved by Clarke Quay;
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(iv) the pro forma financial effects of the Acquisition; and
(v)
other considerations.
(I)
Valuation of Clarke Quay
The valuation methodologies applied by the Independent Valuers included capitalisation
approach, investment and discounted cashflow methods.
The valuations were based on the open market value of Clarke Quay, which is defined by
Knight Frank as “the best price at which the sale of an interest in property might reasonably
be expected to have been completed unconditionally for cash consideration on the date of
valuation, assuming:
(a)
a willing, but not anxious, buyer and seller;
(b)
that prior to the date of valuation there had been a reasonable period (having regard
to the nature of the property and the state of the market), for the proper marketing of
the interest, for the agreement of price and terms and for the completion of the sale;
(c)
that the state of the market, level of values and other circumstances were, on any
earlier assumed date of exchange of contracts, the same as on the date of valuation;
and
(d)
that no account is taken of any additional bid by a purchaser with a ‘special interest’.”
Please refer to Appendix D of the Circular for the Valuation Certificates.
We note that the Purchase Consideration of S$268.0 million is equivalent to Knight Frank’s
open market property valuation of S$268.0 million, and 0.74% lower than CBRE’s open
market property valuation of S$270.0 million.
(II)
Property Yield
We have examined the property yield generated by Clarke Quay compared to the property
yields generated from broadly comparable retail real estate in Singapore and the estimated
entry yield of recent market transactions involving retail real estate in Singapore.
The following table presents, in summary, certain selected financial information in relation to
the Acquisition, based on the assumption that the Acquisition is to be completed on 1 July
2010 and the income from Clarke Quay accrues to the CMT Group from 1 July 2010.
Gross Revenue (S$’000)
14,550
Property Operating Expenses (S$’000)
6,583
Net Property Income (S$’000)
7,967
Property Yield
5.9%(1)
Note:
(1)
The property yield is computed by dividing Clarke Quay’s annualised Net Property Income for the Forecast
Period 2010 by the Purchase Consideration of S$268.0 million.
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Please refer to Appendix B of the Circular for the assumptions for the forecast information
included in the table above.
In addition, the following table sets out the asset valuation, as at 31 December 2009, and
valuation capitalisation rates adopted by the independent valuers of CMT’s malls within the
CBD but outside the Orchard Planning Area (“OPA”), as defined by the Urban
Redevelopment Authority (“URA”).
Market Valuation
31 December 2009
(S$m)
Valuation Cap Rate
(%)
326.0
5.90%
Bugis Junction
798.0
5.75%
As at 31 December 2009, the property yields of CMT’s malls in the CBD but outside the
Orchard Planning Area are between 5.75% and 5.90% from reference to the valuation
capitalisation rates adopted by the independent valuers on those properties. Accordingly, the
annualised property yield for the Forecast Period 2010 of 5.9% for Clarke Quay falls within
the range of the property yields of CMT’s malls in the vicinity of Clarke Quay.
Comparing the Acquisition with recent market transactions, we note that the recent
completed acquisitions of Northpoint 2 and Yew Tee Point by Frasers Centrepoint Trust from
Frasers Centrepoint Limited are similar interested party transactions. The estimated entry
yields for Northpoint 2 and Yew Tee Point are 5.8% and 5.9% respectively based on the
information publicly announced by Frasers Centrepoint Trust. Accordingly, the annualised
property yield for the Forecast Period 2010 of 5.9% for Clarke Quay is in line with the
estimated entry yields for the completed acquisitions of Northpoint 2 and Yew Tee Point. In
addition, we have examined third party publicly disclosed assessments of recent retail
transaction property yields in Singapore. Accordingly, the annualised property yield for the
Forecast Period 2010 of 5.9% for Clarke Quay is within the range of recent third party
publicly disclosed assessments of recent retail transaction property yields in Singapore.
In addition, we note the following:
(i)
The property yields from broadly comparable retail real estate in Singapore and the
estimated entry yields of recent comparable market transactions are for illustrative
purposes only as these properties differ from Clarke Quay in terms of NLA and location;
and
(ii)
We highlight that general market property yield statistics are generally not readily
available from any reliable source, and the general market property yields set out
above are estimates only. Such market property yields will fluctuate over time
depending on the demand and supply for retail development space in Singapore. We
also recognise that there is no other property which we may consider to be identical to
Clarke Quay in terms of building component mix, composition of tenants, net lettable
area, location, track record, future prospects and other relevant criteria.
(III) Occupancy Rates
We are advised that Clarke Quay had a total committed occupancy of 94.9% as at
31 December 2009.
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The URA, in their latest release of the 4th quarter Singapore real estate statistics, notes that
the vacancy rate of the shop space sector in the Rest of Central Area1 (“RCA”), which is
where Clarke Quay is situated, was 7.3% in Q4 2009. This vacancy rate of 7.3% is
equivalent to an occupancy rate of 92.7% in Q4 2009.
The committed occupancy of Clarke Quay is higher than the occupancy rate of 92.7% for the
shop space sector in Singapore’s RCA.
(IV) Pro Forma Financial Effects of the Acquisition
The pro forma financial effects and the Profit Forecast of the Acquisition are favourable, and
are set out in paragraph 3.2 of the Letter to Unitholders and Appendix B respectively in the
Circular. We note that the pro forma financial effects are positive.
(V)
Other Considerations
Due Diligence Process
All transactions with interested persons, including the Acquisition, shall comply with the
applicable requirements of the Property Funds Appendix and/or the Listing Manual.
In general, the Manager has established internal control procedures to ensure that
transactions involving the Trustee, as the trustee of CMT, and a related party of the Manager
(“Interested Person Transactions”) are undertaken on an arm’s length basis and on
normal commercial terms, which are generally no more favourable than those extended to
unrelated third parties, and are not prejudicial to the interest of CMT or its minority
Unitholders.
In respect of such Interested Person Transactions, the Manager would have to demonstrate
to the Audit Committee that the Interested Person Transactions are undertaken on normal
commercial terms which may include obtaining (where applicable) quotations from parties
unrelated to the Manager, or obtaining valuations from independent valuers (in accordance
with the Property Funds Appendix).
In addition, the following procedures would generally be undertaken:
•
transactions (either individually or as part of a series or if aggregated with other
transactions involving the same interested party during the same financial year) equal
to or exceeding S$100,000 in value but below 3.0% of CMT’s net tangible assets will
be subject to review and approval of the Audit Committee;
•
to or exceeding 3.0% but below 5.0% of CMT’s net tangible assets will be subject to the
review and approval of the Audit Committee. Such approval shall only be given if the
transactions are on normal commercial terms and are not prejudicial to the interests of
CMT or its minority Unitholders, and consistent with similar types of transactions made
by the Trustee, as trustee of CMT, with third parties which are unrelated to the
Manager; and
•
to or exceeding 5.0% of CMT’s net tangible assets will be reviewed and approved by
the Audit Committee who may as it deems fit request advice on the transaction from
independent sources or advisers, including the obtaining of valuations from
professional valuers. Further, under the Listing Manual and the Property Funds
Appendix, such transactions would have to be approved by the Unitholders at a
meeting of Unitholders.
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Where matters concerning CMT relate to transactions entered into or to be entered into by
the Trustee, for and on behalf of CMT, with a related party of the Manager, the Trustee is
required to ensure that such transactions are conducted on normal commercial terms and
are not prejudicial to the interests of CMT or its minority Unitholders in accordance with the
applicable requirements of the Property Funds Appendix and/or the Listing Manual relating
to the transaction in question. Further, the Trustee, as trustee of CMT, has the ultimate
discretion under the Trust Deed to decide whether or not to enter into a transaction involving
an Interested Person of the Manager. If the Trustee is to sign any contract with a related
party of the Trustee or the Manager, the Trustee will review that contract to ensure that it
complies with applicable requirements relating to interested party transactions in the
Property Funds Appendix and the provisions of the Listing Manual relating to Interested
Person Transactions as well as other guidelines as may from time to time be prescribed by
the MAS and the SGX-ST or other relevant authority to apply to real estate investment trusts.
All Interested Person Transactions will be subject to regular periodic reviews by the Audit
Committee.
The Manager’s internal control procedures are intended to ensure that Interested Person
Transactions are conducted at arm’s length and on normal commercial terms and are not
prejudicial to minority Unitholders’ interests. The Manager maintains a register to record all
Interested Person Transactions (and the basis, including the quotations obtained to support
such basis, on which they are entered into), which are entered into by CMT. The Manager
then incorporates into its internal audit plan a review of all Interested Person Transactions
entered into by CMT. The Audit Committee reviews the internal audit reports to ascertain that
the guidelines and procedures established to monitor Interested Person Transactions have
been complied with. In addition, the Trustees will also review such audit reports to ascertain
that the Property Funds Appendix has been complied with.
The Audit Committee periodically reviews Interested Person Transactions to ensure
compliance with the internal control procedures and with the relevant provisions of the
Listing Manual and the Property Funds Appendix. The review includes the examination of
the nature of the transaction and its supporting documents or such other data deemed
necessary by the Audit Committee.
If a member of the Audit Committee has an interest in a transaction, he is to abstain from
participating in the review and approval process in relation to that transaction.
The aggregate value as well as the details of Existing Interested Person Transactions
conducted in the current financial year has been disclosed in Appendix F of the Circular.
We note that for the Existing Interested Person Transactions 1 to 3, as shown in the table
in Appendix F, independent property consultants that have been commissioned by CMT
certified that the Existing Interested Person Transactions are at market level and the terms
of agreement of the Existing Interested Person Transactions are on normal commercial
terms.
With respect to Existing Interested Person Transaction 4, as shown in the table in Appendix
F, we note that the engagement of Sembwaste Pte Ltd was entered into in the ordinary
course of business and the amount of fees paid to Sembwaste Pte Ltd was on an arm’s
length basis and on normal commercial terms.
In addition, with respect to Existing Interested Person Transaction 5, as shown in the table
in Appendix F, the independent professional quantity surveyor that has been commissioned
by CMT found the fee to be within a reasonable range and on fair commercial terms.
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Accordingly, we are of the opinion that the terms of agreement of the Existing Interested
Person Transactions are reasonable, on normal commercial terms and not prejudicial to the
interests of CMT and its minority Unitholders.
The review procedures described above are to be applied by the Manager in relation to the
Acquisition.
8.
RECOMMENDATION
Based on the considerations set forth in this letter, we are of the opinion that, as at the Latest
Practicable Date, 18 March 2010, from a financial point of view, the Acquisition is on normal
commercial terms and is not prejudicial to the interests of CMT and its minority Unitholders,
having taken into consideration, inter alia, the following:
(i)
the rationale for the Acquisition;
(ii)
the Purchase Consideration of S$268.0 million is equivalent to Knight Frank’s open market
property valuation of S$268.0 million, and 0.74% lower than CBRE’s open market property
valuation of S$270.0 million;
(iii)
the annualised property yield for the Forecast Period 2010 of 5.9% for Clarke Quay is:
(a)
within the range of 5.75% to 5.90% for comparable CMT’s malls in the CBD but outside
the OPA;
(b)
in line with the estimated entry yields of 5.8% and 5.9% for the acquisitions of
Northpoint 2 and Yew Tee Point respectively;
(c)
within the range of recent third party publicly disclosed assessments of recent retail
transaction property yields in Singapore.
(iv) as at 31 December 2009, Clarke Quay had a total committed occupancy of 94.9%. In
comparison, occupancy rate for the shop space sector in the RCA is 92.7% in Q4 2009;
(v)
the positive financial effects of the Acquisition;
(vi) the compliance and review procedures set up by the Trustee and the Manager; and
(vii) the role of the Audit Committee in relation to the Acquisition.
Accordingly, from a financial point of view, ANZ is of the opinion that the Independent Directors
can recommend that Unitholders vote in favour of the Acquisition at the EGM.
Our opinion as disclosed in this letter is based upon the market, economic, industry, monetary and
other applicable conditions subsisting on, and the information made available to us as at the
Latest Practicable Date.
This opinion is addressed to the Independent Directors and Audit Committee of the Manager for
their benefit, in connection with, and for the purpose of, their consideration of the Acquisition, that
a copy of this opinion may be included in its entirety in the circular to the Unitholders on the
proposed Acquisition. This opinion does not constitute, and should not be relied on as a
recommendation to, or confer any rights upon, any Unitholder of CMT as to how to vote in relation
to the proposed Acquisition or any matter related thereto.
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This opinion is governed by, and construed in accordance with, the laws of Singapore, and is
strictly limited to the matters stated herein and does not apply by implication to any other matter.
Nothing herein shall confer or be deemed or is intended to confer any right or benefit to any third
party and the Contracts (Rights of Third Parties) Act, Chapter 53B of Singapore shall not apply.
Yours faithfully
For and on behalf of
Bill Foo
Managing Director
Glenn Porritt
Executive Director
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APPENDIX F
EXISTING INTERESTED PERSON TRANSACTIONS
The table below sets out details of all Existing Interested Person Transactions entered into between
CMT and entities within Temasek Holdings (Private) Limited and its subsidiaries and associates in the
current financial year, which are subject of aggregation pursuant to Rule 906 of the Listing Manual.
No.
Interested Person
Nature of Transaction
Value of
Transaction(1)
(S$’000)
1
Temasek Holdings (Private)
Limited
Lease of units #04-15A, #04-16 to #04-19,
#04-01 to #04-11, #04-31/32 at The
Atrium@Orchard
3,919
2
Fullerton Fund Management
Company Ltd
Renewal of lease for units #05-15 to 22 at The
Atrium@Orchard
2,301
3
StarHub Ltd
Renewal of lease for units #B2-17/18/18A at
Plaza Singapura
2,152
4
SembWaste Pte Ltd
Term contract for the provision of refuse disposal
services at Raffles City Singapore
480
5
CapitaLand Retail Project
Management Pte. Limited
Project management fee for asset enhancement
works at Junction 8
113
Total
8,965
Note:
(1)
Based on the total contracted value for the entire term of the lease/term contract.
These Existing Interested Person Transactions have been subject to the internal control procedures
established by the Manager to ensure that such transactions are undertaken on normal commercial
terms and are not prejudicial to the interest of CMT and its minority Unitholders. These procedures
include the review and approval of such transactions by the Audit Committee, as appropriate.
Details of the Existing Interested Person Transactions
(1)
Transactions with Temasek Holdings (Private) Limited
Two new leases at The Atrium@Orchard were signed with Temasek Holdings (Private) Limited.
The lease for units #04-15A and #04-16 to #04-19 commenced from 1 January 2010 to 30 April
2012 while the lease for units #04-01 to #04-11 and #04-31/32 will commence from 1 October
2010 (at the earliest) to 30 April 2012.
Prior to signing the lease agreement with Temasek Holdings (Private) Limited, the Manager
commissioned CB Richard Ellis (Pte) Ltd, an independent property consultant, to provide an
independent opinion on the reasonableness of the terms of the agreement and to ensure they are
on normal commercial terms.
F-1
(2)
Transaction with Fullerton Fund Management Company Ltd
Fullerton Fund Management Company Ltd is a subsidiary of Temasek Holdings (Private) Limited.
As such, Fullerton Fund Management Company Ltd is an interested person of the CMT Group.
The existing lease with Fullerton Fund Management Company Ltd for units #05-15 to #05-22 at
The Atrium@Orchard was renewed from 15 April 2010 to 30 April 2012.
Prior to signing the lease agreement with Fullerton Fund Management Company Ltd, the Manager
commissioned CB Richard Ellis (Pte) Ltd, an independent property consultant, to provide an
independent opinion on the reasonableness of the terms of the agreement and to ensure they are
on normal commercial terms.
(3)
Transaction with StarHub Ltd
StarHub Ltd is a subsidiary of Temasek Holdings (Private) Limited. As such, StarHub Ltd is an
interested person of the CMT Group.
The existing lease with StarHub for units #B2-17/18/18A at Plaza Singapura was renewed from
26 January 2010 to 25 January 2013.
Prior to signing the lease agreement with StarHub Ltd, the Manager commissioned CB Richard
Ellis (Pte) Ltd, an independent property consultant, to provide an independent opinion on the
reasonableness of the terms of the agreement and to ensure they are on normal commercial
terms.
(4)
Transaction with SembWaste Pte Ltd
SembWaste Pte Ltd is an associate of Temasek Holdings (Private) Limited. As such, SembWaste
Pte Ltd is an interested person of the CMT Group.
The term contract with SembWaste Pte Ltd for the provision of refuse disposal services at Raffles
City Singapore was renewed for two years from 1 January 2010 to 31 December 2011.
The engagement of SembWaste Pte Ltd was entered into in the ordinary course of business and
the amount of fees paid to SembWaste Pte Ltd was on an arm’s length basis, based on normal
commercial terms.
(5)
Transaction with CapitaLand Retail Project Management Pte. Limited
The Trustee had on 18 March 2010 approved the appointment of CapitaLand Retail Project
Management Pte. Limited as the project manager at a maximum fee of S$113,155 for the
proposed asset enhancement works at Junction 8.
Prior to the appointment of CapitaLand Retail Project Management Pte. Limited, the proposed
project management fee was reviewed by an independent professional quantity surveyor, Davis
Langdon & Seah, who found the fee to be within a reasonable range and on fair commercial
terms.
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APPENDIX G
DIRECTORS’ AND SUBSTANTIAL UNITHOLDERS’ INTEREST
1.
Directors
Based on the Register of Directors’ Unitholdings maintained by the Manager and save as
disclosed below, none of the Directors currently holds a direct or deemed interest in the Units as
at the Latest Practicable Date:
Direct Interest
Name of
Directors
No. of Units
Total no. of
Units held
No. of Units
%
Mr James Koh
Cher Siang
342,000
0.0108%
—
—
342,000
0.0108%
Mr Liew Mun
Leong
933,479
0.0294%
970,319
0.0305%
1,903,798
0.0599%
Mr Ho Chee
Hwee Simon
119,700
0.0038%
119,000
0.0037%
238,700
0.0075%
Mr David Wong
Chin Huat
114,000
0.0036%
57,000
0.0018%
171,000
0.0054%
66,500
0.0021%
74,100
0.0023%
140,600
0.0044%
Mr Lim Beng
Chee
2.
Deemed Interest
%
%
Substantial Unitholders1
Based on the Register of Substantial Unitholders’ Unitholdings maintained by the Manager, the
Substantial Unitholders of CMT and their interests in the Units as at the Latest Practicable Date
are as follows:
Name of
Substantial
Unitholders
No. of Units
Deemed Interest
%
No. of Units
%
Total no. of
Units held
%
Temasek
Holdings
(Private)
Limited(1)
—
—
953,684,175
29.98%
953,684,175
29.98%
CapitaLand
Limited
—
—
950,077,146(2)
29.87%
950,077,146(2)
29.87%
CapitaMalls
Asia Limited(3)
—
—
950,077,146(2)
29.87%
950,077,146(2)
29.87%
Pyramex
Investments Pte
Ltd(4)
570,417,150
17.93%
—
—
570,417,150
17.93%
Albert Complex
Pte Ltd(4)
279,300,000
8.78%
—
—
279,300,000
8.78%
NTUC Fairprice
Co-operative
Limited(5)
125,880,000
3.96%
1.51%
174,007,000
5.47%
—
—
8.89%
282,817,492
8.89%
The Capital
Group
Companies,
Inc.(7)
1
Direct Interest
48,127,000(6)
282,817,492
G-1
Notes:
(1)
Based on the information provided by Temasek Holdings (Private) Limited as at the Latest Practicable Date. The
Manager has on 18 March 2010 disposed 1,000,000 Units. It should be noted that the Register of Unitholdings would
not at the Latest Practicable Date reflect this disposal of Units by the Manager as the disposal is conditional upon
completion of settlement. For the avoidance of doubt, the unitholdings of Temasek Holdings (Private) Limited do not
reflect this disposal of Units.
(2)
279,300,000 Units held by Albert Complex Pte Ltd, 570,417,150 Units held by Pyramex Investments Pte Ltd,
62,700,000 Units held by Premier Healthcare Services International Pte Ltd and 37,659,996 Units held by the
Manager.
(3)
A subsidiary of CapitaLand Limited. CapitaLand Limited holds a direct interest of 65.50% in CapitaMalls Asia Limited.
(4)
A wholly-owned subsidiary of CapitaMalls Asia Limited.
(5)
Based on the information provided by NTUC Fairprice Co-operative Limited as at the Latest Practicable Date.
(6)
Held by Alphaplus Investments Pte Ltd, a wholly-owned subsidiary of NTUC Fairprice Co-operative Limited.
(7)
Based on the information provided by The Capital Group Companies, Inc. as at the Latest Practicable Date.
G-2
NOTICE OF EXTRAORDINARY GENERAL MEETING
NOTICE IS HEREBY GIVEN that an EXTRAORDINARY GENERAL MEETING of CapitaMall Trust
(“CMT”) will be held on Wednesday, 14 April 2010 at 10.30 a.m. (or as soon thereafter as the Annual
General Meeting of CMT to be held at 10.00 a.m. on the same day and at the same place is concluded
or adjourned) at the STI Auditorium, 168 Robinson Road, Level 9, Capital Tower, Singapore 068912,
for the purpose of considering and, if thought fit, passing, with or without modifications, the following
resolution:
ORDINARY RESOLUTION: THE PROPOSED ACQUISITION OF CLARKE QUAY
That:
(i)
approval be and is hereby given for the acquisition of Clarke Quay (the “Acquisition”) from Clarke
Quay Pte Ltd (the “Vendor”) for a purchase consideration of S$268.0 million, on the terms and
conditions set out in the sale and purchase agreement dated 9 February 2010 (the “Sale and
Purchase Agreement”) made between HSBC Institutional Trust Services (Singapore) Limited, as
trustee of CMT (the “Trustee”), and the Vendor;
(ii)
the entry into of the Sale and Purchase Agreement be and is hereby approved and ratified;
(iii)
approval be and is hereby given for the payment of all fees and expenses relating to the
Acquisition; and
(iv) CapitaMall Trust Management Limited, as manager of CMT (the “Manager”), any director of the
Manager, and the Trustee be and are hereby severally authorised to complete and do all such acts
and things (including executing all such documents as may be required) as the Manager, such
director of the Manager or, as the case may be, the Trustee may consider expedient or necessary
or in the interests of CMT to give effect to the Acquisition.
BY ORDER OF THE BOARD
(Company Registration No. 200106159R)
as manager of CapitaMall Trust
Kannan Malini
Company Secretary
Singapore
24 March 2010
Important Notice:
(1)
A unitholder of CMT entitled to attend and vote at the Extraordinary General Meeting is entitled to appoint not more than
two proxies to attend and vote in his/her stead. A proxy need not be a unitholder of CMT.
(2)
Where a unitholder of CMT appoints more than one proxy, the appointments shall be invalid unless he/she specifies the
proportion of his/her holding (expressed as a percentage of the whole) to be represented by each proxy.
(3)
The instrument appointing a proxy must be lodged at the Manager’s registered office at 39 Robinson Road, #18-01
Robinson Point, Singapore 068911 not less than 48 hours before the time appointed for the Extraordinary General Meeting.
H-1
IMPORTANT: PLEASE READ THE NOTES TO PROXY FORM BELOW
Notes to Proxy Form
1.
A unitholder of CMT (“Unitholder”) entitled to attend and vote at the Extraordinary General Meeting is entitled to appoint
one or two proxies to attend and vote in his/her stead.
2.
Where a Unitholder appoints more than one proxy, the appointments shall be invalid unless he/she specifies the proportion
of his/her holding (expressed as a percentage of the whole) to be represented by each proxy.
3.
A proxy need not be a Unitholder.
4.
A Unitholder should insert the total number of Units held. If the Unitholder has Units entered against his/her name in the
Depository Register maintained by The Central Depository (Pte) Limited (“CDP”), he/she should insert that number of Units.
If the Unitholder has Units registered in his/her name in the Register of Unitholders of CMT, he/she should insert that number
of Units. If the Unitholder has Units entered against his/her name in the said Depository Register and registered in his/her
name in the Register of Unitholders, he/she should insert the aggregate number of Units. If no number is inserted, this form
of proxy will be deemed to relate to all the Units held by the Unitholder.
5.
The instrument appointing a proxy or proxies (the “Proxy Form”) must be deposited at the Manager’s registered office at
39 Robinson Road #18-01 Robinson Point, Singapore 068911, not less than 48 hours before the time set for the
Extraordinary General Meeting.
6.
The Proxy Form must be executed under the hand of the appointor or of his/her attorney duly authorised in writing. Where
the Proxy Form is executed by a corporation, it must be executed either under its common seal or under the hand of its
attorney or a duly authorised officer.
7.
Where the Proxy Form is signed on behalf of the appointor by an attorney or a duly authorised officer, the power of attorney
or other authority (if any) under which it is signed, or a notarially certified copy of such power or authority must (failing
previous registration with the Manager) be lodged with the Proxy Form; failing which the Proxy Form may be treated as
invalid.
8.
The Manager shall be entitled to reject a Proxy Form which is incomplete, improperly completed or illegible or where the
true intentions of the appointor are not ascertainable from the instructions of the appointor specified on the Proxy Form. In
addition, in the case of Units entered in the Depository Register, the Manager may reject a Proxy Form if the Unitholder,
being the appointor, is not shown to have Units entered against his/her name in the Depository Register as at 48 hours
before the time appointed for holding the Extraordinary General Meeting, as certified by CDP to the Manager.
9.
All Unitholders will be bound by the outcome of the Extraordinary General Meeting regardless of whether they have attended
or voted at the Extraordinary General Meeting.
10. At any meeting, a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or
on the declaration of the result of the show of hands) demanded by the Chairman or by five or more Unitholders present
in person or by proxy, or holding or representing one-tenth in value of the Units represented at the meeting. Unless a poll
is so demanded, a declaration by the Chairman that such a resolution has been carried or carried unanimously or by a
particular majority or lost shall be conclusive evidence of the fact without proof of the number or proportion of the votes
recorded in favour of or against such resolution.
11. On a show of hands, every Unitholder who (being an individual) is present in person or by proxy or (being a corporation)
is present by one of its officers as its proxy shall have one vote. On a poll, every Unitholder who is present in person or by
proxy shall have one vote for every Unit of which he/she is the Unitholder. A person entitled to more than one vote need not
use all his/her votes or cast them the same way.
- - - - - -✂
--------------------------------------------------------------------------------------------------------------------------------------
CAPITAMALL TRUST
IMPORTANT
1. For investors who have used their CPF money to buy units
in CapitaMall Trust, this Circular is forwarded to them at the
request of their CPF Approved Nominees and is sent FOR
INFORMATION ONLY.
2. This Proxy Form is not valid for use by CPF Investors and
shall be ineffective for all intents and purposes if used or is
purported to be used by them.
3. CPF Investors who wish to attend the Extraordinary General
Meeting as observers have to submit their requests through
their CPF Approved Nominees within the time frame
specified. If they also wish to vote, they must submit their
voting instructions to the CPF Approved Nominees within
the time frame specified to enable them to vote on their
behalf.
4. PLEASE READ THE NOTES TO THE PROXY FORM.
PROXY FORM
EXTRAORDINARY GENERAL MEETING
I/We
(Name(s) and NRIC no./Passport no./Company Registration no.)
of
(Address)
being a unitholder/unitholders of CapitaMall Trust (“CMT”), hereby appoint:
Proportion of Unitholdings
Name
Address
NRIC/Passport No.
No. of Units
%
and/or (delete as appropriate)
Proportion of Unitholdings
Name
Address
NRIC/Passport No.
No. of Units
%
or, both of whom failing, the Chairman of the Extraordinary General Meeting as my/our proxy/proxies to attend and
to vote for me/us on my/our behalf and if necessary, to demand a poll, at the Extraordinary General Meeting of CMT
to be held on Wednesday, 14 April 2010 at 10.30 a.m. (or as soon thereafter as the Annual General Meeting of CMT
to be held at 10.00 a.m. on the same day and at the same place is concluded or adjourned) at the STI Auditorium,
168 Robinson Road, Level 9, Capital Tower, Singapore 068912 and any adjournment thereof. I/We direct my/our
proxy/proxies to vote for or against the resolution to be proposed at the Extraordinary General Meeting as indicated
hereunder. If no specific direction as to voting is given, the proxy/proxies will vote or abstain from voting at
his/her/their discretion, as he/she/they may on any other matter arising at the Extraordinary General Meeting.
Resolution
To be used on
a show of hands
For*
1
To be used in the
event of a poll
Against*
No. of Votes
For**
No. of Votes
Against**
To approve the Acquisition (Ordinary Resolution)
*
If you wish to exercise all your votes “For” or “Against”, please tick (公) within the box provided.
**
If you wish to exercise all your votes “For” or “Against”, please tick (公) within the box provided. Alternatively, please indicate
the number of votes as appropriate.
Dated this
day of
2010
Total number of Units held
Signature(s) of unitholder(s)/Common Seal
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1st fold here
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 2nd fold here
Affix
Postage
Stamp
The Company Secretary
(as manager of CapitaMall Trust)
39 Robinson Road
Singapore 068911
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 3rd fold here
CAPITAMALL TRUST
Clarke Quay
East West Line
North South Line
Sembawang
Station
North East Line
Sembawang
Shopping
Centre
Circle Line
Sengkang
Station
Choa Chu Kang
Station
Lot One Shoppers’
Mall
Rivervale Mall
Bukit Panjang
Plaza
Hougang
Station
Bishan
Interchange
Hougang
Plaza
Tampines
Tampines Mall
Station
Junction 8
Imm
Building
Jurong East
Interchange
Centre
Bugis
Station
The Atrium@Orchard
Plaza Singapura
Bugis Junction
Dhoby Ghaut
Interchange
Clarke Quay
Funan Digitalife
Mall
Existing Properties
Clarke Quay
in relation to:
MRT station
MANAGED BY
A member of
Orchard
MRT
O
kit
Me
ia
ge
Br
id
St
Rd
St
Rd
Br
as
Ba
sa
hR
id
ge
Rd
d
Funan
Digitalife
Mall
Ne
w
Rd
Br
y
Raffles
Place MRT
Cro
ss
OUtram Park
MRT
Central Business
District
Tanjong
Pagar MRT
St
Marina Bay
MRT
Raffles Blvd
Raffles Ave
ressway
ey
Chinatown
MRT
t Rd
nmen
rah
way
wa
ss
re
xp
Canto
Bu
ress
Va
ll
bin
Sh
so
en
ton n R
Wa d
y
Ce
lan
er
Ro
t ra
lE
Ce
n
r Delta Rd
Lo
we
Ja
Exp
Riv
Clarke Quay
MRT
am Rd
Outr
Tiong Bahru Rd
y
wa
igh
ll H
co
Ni
ge
d
Ganges Ave
l
ra
nt
City
Hall
MRT
rid
nR
of this Circular.
Rd
Zio
STI Auditorium
168 Robinson Road
Singapore 068912
for
dR
d
Clarke Quay
Tiong Bahru
MRT
Rd
am
ng
Place of EGM
or transferee.
Rd
14 April 2010 at 10.30 a.m.
or adjourned)
lta
St
Rd
th
B
d
12 April 2010 at 10.30 a.m.
De
Dhoby Ghaut
MRT
Se
nR
Kim
tha
Date and Time
Valley
Bugis
Junction
Ayer Rajah Exp
River
Be
Plaza
Singapura
M
idd
le
No
rth
Grange Rd
Na
Event
Somerset
MRT
So
u
THE ATRIUM@
oRCHARD
Rd
or
hard
vd
ct
Orc
Bl
Vi
ar
d
nc
oo
len
rc
h

Extraordinary General Meeting Of Unitholders Of CapitaMall Trust

Transcription

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