Proposed Acquisition of the TT International Tradepark
21 November 2003
Agenda
• The Property• Impact on A-REIT
– Pro forma Financial Effect
– Portfolio Diversification
– Lease Expiry Profile
– Property Yield
• Timetable for Completion • Acquisition Summary
2
TT International Tradepark
pp1]
3
TT International Tradepark
10 Toh Guan Road
TT International TradeparkProperty Details
7.87% Property Yield (1)
(before acquisition costs)
S$3.8mAcquisition Costs
S$92.0m (S$8.8m deferred for a period of three yrs)Purchase Price
S$92.0m by CB Richard Ellis (Pte) LtdValuation (as at 1 November 2003)
Leasehold of 30 years commencing 16 October 1995, with an option to renew for a further 30 years
Title
20,876 sqm (subject to survey)Site Area
42,765 sqmNet Lettable Area
A ten-storey office building and a six-storey warehouse with an automated storage and retrieval system
Building type
4
The Property
Impact on A-REIT
Timetable for Completion
(1) Calculation excludes deferred component. Forecasted yield on payment of the deferred component is 7.8%
Acquisition Summary
TT International TradeparkLeasing Details
S$6.6mAnnual Rent
100%Occupancy
Stepped rental increases of 9% (year 4), 6% (year 7) and 9% (year 10)
Rent Escalation
Estimated to be March 2004Commencement Date
T.T. International Tradepark Pte LtdTenant(s)
10 yrsLease Term
Lease management cost to be paid by lessor(A-REIT).
All property tax, land rent, maintenance and utility expenses to be paid by lessee (T.T. International Tradepark Pte Ltd).
Outgoings
5
The Property
Impact on A-REIT
Timetable for Completion
Acquisition Summary
Agenda
• The Property• Impact on A-REIT
– Pro forma Financial Effect
– Portfolio Diversification
– Lease Expiry Profile
– Property Yield
• Timetable for Completion • Acquisition Summary
6
Distribution Per Unit (“DPU”) Positive
Note:*Calculated based on A-REIT holding the property for six months ended 30 September 2003 and assuming that the acquisition is funded at an optimal gearing level of 30 per cent. debt / 70 per cent. equity.
7
The Property
Impact on A-REIT
Timetable for Completion
Acquisition Summary0.06
0.12
DPU Impact (Based on possible
debt/equity funding of 30/70)*
DPU Impact(proforma impact on 6 mthsended 30 September 2003)
DPU annualised impact
TT International Tradepark
Agenda
• The Property • Impact on A-REIT
– Pro forma Financial Effect
– Portfolio Diversification
– Lease Expiry Profile
– Property Yield
• Timetable for Completion • Acquisition Summary
8
Well Located, Diversified Portfolio
Honeywell Building at Changi Business Park
Techlink at Kaki Bukit Ave 3
The Alpha, Aries, Capricorn and Gemini at Singapore Science Park II
Techplace II at Ang Mo Kio Ave 5 Techplace I at
Ang Mo Kio Ave 10
OSIM Building at Ubi Ave 1
Ghim Li Building at Changi South Ave 2
9
Ultro Building at ChangiBusiness Park
Proposed acquisition of Infineon Technologies Building at Kallang Sector (building expected to be completed by August 2004) *
IDS HQ at JalanAhmad Ibrahim(purchase expected to complete in or before March 2004)
TT International Tradepark at Toh Guan Rd
The Property
Impact on A-REIT
Timetable for Completion
Acquisition Summary
* A-REIT has an option to acquire the Infineon Building
Ultro3%
Gemini9%
Capricorn12%
Aries6%
Alpha7%
OSIM4%
TT Int'l Tradepark
8%
IDS HQ5%
Techlink9%
Ghim Li2%
Honeywell6%
Techplace II16%
Techplace I13%
Diversifies LeasesBefore Acquisition After Acquisition
28%Long term leases
The Property
Impact on A-REIT
Timetable for Completion
Acquisition Summary
Note : Calculated using net property income as at 30 September 2003. Assumes all existing properties in the portfolio as well as new acquisitions are held for the full six months ended 30 September 2003.
Gemini10%
Capricorn13%
Aries6%
Alpha7%
Ghim Li2%
OSIM4%
IDS HQ6%
Techlink10%
Honeywell7%
Ultro3%
Techplace II18%
Techplace I14%
22%Long term leases
Information Technology7%
Electronics 28%
Logistics9%
Others17%
Telecom 4%
Healthcare5%
R&D13%
Engineering17%
Diversifies Tenant Industry Mix
Notes:(1) Calculated using net lettable area leased as at 30 September 2003 including Ghim Li and Ultro Buildings acquired on 13 and 30 October 2003 respectively.(2) Includes electrical products & components(3) Includes fabricated metal products, machinery & equipmentSource : Ascendas-MGM Funds Management Limited
Information Technology6%
Electronics 38%
Logistics7%
Others15%
Telecom 3%
Healthcare5%
R&D11%
Engineering15%
Before Acquisition After Acquisition
(2)
(3)
(2)
(3)
The Property
Impact on A-REIT
Timetable for Completion
Acquisition Summary
Agenda
• The Property • Impact on A-REIT
– Pro forma Financial Effect
– Portfolio Diversification
– Lease Expiry Profile
– Property Yield
• Timetable for Completion • Acquisition Summary
12
Extends Lease Expiry Profile
A-REIT Lease Expiry Profile
8.7% 14
.9% 26
.5%
18.8
%
7.9%
3.0%
3.5%
4.6%
6.3%
4.7%
1.0%
7.1% 12
.2% 21
.7%
15.4
%
6.4%
2.5%
2.8%
3.7%
23.3
%
3.8%
0.8%
0%
5%
10%
15%
20%
25%
30%
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Existing 11 Properties Existing 11 Properties + IDS HQ + Tradepark
The Property
Impact on A-REIT
Timetable for Completion
Acquisition Summary
% o
f NLA
Financial Year
Note : A-REIT’s financial year end is 31 March.Source : Ascendas-MGM Funds Management Limited (information as at 30 September 2003)
Agenda
• The Property • Impact on A-REIT
– Pro forma Financial Effect
– Portfolio Diversification
– Lease Expiry Profile
– Property Yield
• Timetable for Completion • Acquisition Summary
14
Yield-Accretive
7.87% *Yield Before Acquisition Costs (for year one)
6.55Net Income
0.07Property Expenses
6.62Income
TT International Tradepark($ million)
For Year One
15
Source : Ascendas-MGM Funds Management Limited
The Property
Impact on A-REIT
Timetable for Completion
Acquisition Summary
* Based on partly paid purchase price of S$83.2m to be paid at settlement. Remainder of S$8.8m to be paid at the end of year 3 whereupon the rent also increases commensurately to S$7.2m.
Agenda
• The Property • Impact on A-REIT
– Pro forma Financial Effect
– Portfolio Diversification
– Lease Expiry Profile
– Property Yield
• Timetable for Completion • Acquisition Summary
16
Timetable for Completion
Signed Put and Call Option AgreementNov 2003
TT International Tradepark
• Exercise option • Execution of Sale and Purchase and Lease
Agreement • Completion
Mar 2004
TT International Limited (holding company of T.T. International Tradepark Pte Ltd) to hold EGM to obtain approval for sale of property
Dec 2003/ Jan 2004
17
The Property
Impact on A-REIT
Timetable for Completion
Acquisition Summary
Agenda
• The Property • Impact on A-REIT
– Pro forma Financial Effect
– Portfolio Diversification
– Lease Expiry Profile
– Property Yield
• Timetable for Completion • Acquisition Summary
18
Acquisition Summary
19
The Property
Impact on A-REIT
Timetable for Completion
Acquisition Summary
• Well located property • Diversifies property portfolio• Strengthens tenancy profile• Diversifies tenant mix and industry type• Extends lease expiry profile• Yield-accretive• DPU positive
• The value of units in A-REIT (“Units”) and the income 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 A-REIT is not necessarily indicative of the future performance of A-REIT.
This release 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, property expenses and governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. You are cautioned not to place undue reliance on these forward looking statements, which are based on current view of management on future events.
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