CAPITAMALLS MALAYSIA TRUST

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1 CAPITAMALLS MALAYSIA TRUST Malaysia s Largest Pure-Play Shopping Mall REIT Presentation Slides for CIMB Retail Investors Selangor 10 November 2010

2 Disclaimer The information in this presentation is qualified in its entirety by, and is subject to, the more detailed information set out in the Prospectus dated 28 June 2010 registered with the Securities Commission of Malaysia and any subsequent announcements released by CMMT thereafter. The past performance of CMMT is not indicative of the future performance of CMMT. Similarly, the past performance of CapitaMalls Malaysia REIT Management Sdn. Bhd. (formerly known as CapitaRetail Malaysia REIT Management Sdn. Bhd. (the Manager ) is not indicative of the future performance of the Manager. The value of units in CMMT (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 holders of Units may only deal in their Units through trading on Bursa Securities. Listing of the Units on Bursa Securities does not guarantee a liquid market for the Units. These materials 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. 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. 2

3 Contents Brief Introduction on REITs Introduction Financial Highlights Operations Review Asset Enhancement Initiatives 3

4 Brief Introduction on REITs 4

5 What is a REIT? A collective investment scheme where funds from investors are pooled and invested towards a specified goal. A fund that invests in a portfolio of income producing real estate assets or real estate-related assets. These real estate assets generate income from rent collected from tenants, which is then, net of expenses, distributed to investors at regular intervals. 5

6 Why invest in listed REITs? Regular distribution of income Long-term capital growth Compared to direct investment in property: Less capital commitment More liquidity Professional management Tax efficiency 6

7 Tax Treatment of Unitholders Type of Unitholder Resident a) Corporate b) Other than corporate Withholding Tax Tax flow through, no withholding tax 10% Non-resident c) Corporate d) Institutional investors e) Individuals 25% 10% 10% 7

8 Introduction 8

9 CapitaMalls Malaysia Trust (CMMT) Largest listed pure-play shopping mall REIT in Malaysia 1 Three shopping malls valued at RM2.13 billion 2 Total retail space of approximately 1.88 million square feet of net lettable area Geographically diversified portfolio within Malaysia Access to Sponsor s unique integrated retail and capital management platform 1 Based on information on Listed Malaysian REITs as at 30 September Based on valuations of Gurney Plaza, Sungei Wang Plaza Property and The Mines as at 28 February 2010, 31 March 2010 and 31 March 2010 respectively, commissioned by AmTrustee Berhad, trustee of CMMT. 9

Ownership of Assets (Vested in Trustee) Knight Frank Property Management Fees ¹ The REIT Manager is 30.

10 Structure of CMMT Other Unitholders 30.00% 70.00% 41.74% 58.26% CapitaMalls Malaysia REIT Management Sdn. Bhd. 1 Management Services Management Fees Acts on behalf of Unitholders Trustee Fees Property Management Services Gross Rental Income & Other Income Ownership of Assets (Vested in Trustee) Knight Frank Property Management Fees ¹ The REIT Manager is 30.00% owned by Malaysian Industrial Development Finance Berhad, a wholly-owned subsidiary of Permodalan Nasional Berhad providing services in its three core businesses namely, investment banking, asset management and development finance. 10

Strategically Located Portfolio of Shopping Malls in Malaysia Gurney Plaza, Penang 1 NLA (sq ft) 2 : 707,425 Valuation (RM) 3 : : Occupancy (%) 4 : 98% Penang s premier lifestyle mall Located at

11 Strategically Located Portfolio of Shopping Malls in Malaysia Gurney Plaza, Penang 1 NLA (sq ft) 2 : 707,425 Valuation (RM) 3 : : Occupancy (%) 4 : 98% Penang s premier lifestyle mall Located at Gurney Drive Large middle/upper income catchment population 850 million 1,202 psf Suburban shopping mall with Venetian-like canal Part of Mines Resort City, an integrated retail, entertainment & business destination Accessible via highways and public transport The Mines, Selangor NLA (sq ft) 2 : 719,944 Valuation (RM) 3 : : 540 million 750 psf Occupancy (%) 4 : 98.3% Sungei Wang Plaza Property 5, Kuala Lumpur Unique shopping mall with wide range of products & services Strategically located within KL s CBD Easily accessible via SMART tunnel and monorail Penang Malaysia Kuala Lumpur Portfolio details NLA: 1,877,877 sq ft 2 Occupancy: 98.3% 4 Valuation: RM2,130 million 3 11 NLA (sq ft) 2 : 450,508 Valuation (RM) 3 : : 740 million 1,643 psf Occupancy (%) 4 : 98.7% Selangor 1 Excludes Gurney Plaza Extension. 2&4 As at 30 September Based on valuations of Gurney Plaza, Sungei Wang Plaza Property and The Mines as at 28 February 2010, 31 March 2010 and 31 March 2010 respectively, commissioned by AmTrustee Berhad, trustee of CMMT. 5 CMMT has interest in approximately 61.9% of the aggregate retail floor area of Sungei Wang Plaza and approximately 1,298 car park bays within Sungei Wang Plaza. All information in this presentation pertains solely to CMMT s strata area.

12 CMMT is the Largest Pure-Play Shopping Mall REIT in Malaysia Market Total Free 1 Free Malaysian REITS Cap. Assets Float Float (RM mil) (RM mil) (%) (RM mil) Sunway REIT CMMT 1, , Sunway Reit 2, , Starhill 1, , CMMT Axis Al-Hadharah Boustead Al-'Aqar KPJ , CMMT Amanahraya Atrium Starhill Axis Boustead Al -Aqar KPJ AmanahRaya UOA Hektar AmFIRST Quill Tower AmFirst , Hektar Quill UOA Tower Atrium Amanah Harta Tanah M-REITS Simple Average , M-REITS Median Source: Company filings, Bloomberg as of 30 September 2010 Note: Size of bubble represents value of free float of each M-REIT 1 According to Bloomberg, excludes sponsor/vendor shares Total 10, ,

13 CMMT Unit Price and Trading Volume Information (16 July to 30 September 2010) & Trading Statistics CMMT: Trading Volume and Closing Price Units 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000, Sep 2010: RM Jul Jul-10 3-Aug Aug Aug Aug-10 7-Sep Sep Sep-10 Trading Volume (LHS) Closing Price (RHS) RM per Unit First trading day of 3Q Jul 10 RM0.98 Last trading day of 3Q Sep 10 RM1.10 High RM1.14 Low RM0.97 Average Daily Volume 1,636,051 units Source: Bloomberg 13

14 CMMT s Strategy Enhancing value through proactive asset management and asset enhancement strategies Actively pursuing acquisition opportunities Leveraging on CapitaMalls Asia s extensive network of strategic and local partners, and local industry knowledge Optimising capital management strategy 14

15 10 th Malaysia Plan ( ) to build foundation for next phase of growth Economic roadmap to transform Malaysia into a high-income nation by 2020, with annual GDP growth target of 6%. 12 National Key Economic Areas (NKEAs) identified to generate high income, including oil and gas, palm oil, financial services, tourism, education, healthcare and infrastructure development. Highlig ghts Slew of initiatives to promote private investment and also public-private partnerships. New policy measures to develop and retain human capital and improve quality of education in Malaysia. Aim to create 3.3 million high-income jobs. A total of USD 444 billion in funding budgeted for 10 th Malaysia Plan, 92% of which is expected to come from private sector. 15

16 Bright Prospects for Organised Retail Sales Malaysia s 2010 retail sales growth revised upwards to 6.1% Total estimated sales turnover of RM75.3 billion Growth in organised retail sales Rising consumer affluence Demand for one-stop shopping malls Global operators looking for opportunity for growth Changing retail landscape in Malaysia 16

17 Reputable Sponsor with Proven Track Record CapitaMalls Asia Sponsor of CMMT Real Estate Hospitality Fin. Services Retail Australia Residential Singapore China Commercial Integrated Developments Serviced Residences Financial 29.8% 41.7% Commercial Non-Retail Fund & REIT Management Effective interest 27.3% Denotes listed entities Retail Fund & REIT Management The sponsor of CMMT is CapitaMalls Asia, a member of the CapitaLand group of companies CapitaLand is Asia s REIT pioneer, having listed CapitaMall Trust in July 2002 CapitaLand is one of Asia s largest real estate companies with operations spanning more than 110 cities in over 20 countries 9 listed companies with total group market capitalisation of S$41.7bn Manages S$49.9bn 1 of real estate assets CapitaLand owns/manages ~RM3.7bn of assets in Malaysia * As at 30 September Value of all real estate assets managed by CapitaLand Group entities stated at 100% of the property carrying value. 17

18 Sponsor s Proven Record of Strong Growth and Localisation Aggregate property value in which CapitaMalls Asia has interest in and manages Effective interest in the property values of CapitaMalls Asia s portfolio As at (in S$bn) Properties Employees ,844 Significant expansion of staff with focus on localising business through the development of talent in overseas markets Countries Singapore Singapore, China, Japan Singapore, China, Japan, India Singapore, China, Japan, India Three shopping malls located in KL, Selangor and Penang Malaysia Malaysia Total valuation of RM2.13bn 169 on-the-ground staff 1 Source: CapitaMalls Asia 1 As of 31 May

19 CMMT and Tenants Benefit from Sponsor s Extensive Tenant Network International and Domestic Retailers CapitaMalls Asia model Benefits tenants Benefits CMMT Tenant intelligence and relationship Active mall management Proactive leasing and marketing strategy Leveraging on CapitaMalls Asia s scale and scalability Rapid franchise expansion Higher shopper traffic Higher sales Proven retail mall management expertise Network effects of 89 retail properties across 5 countries with about 7,700 leases 1 Shopping mall focused Sponsor with financial capacity 1 As at 30 September

20 Integrated Retail and Capital Management Platform Retail Real Estate Management Retail Real Estate Capital Management Property Management Mall Management & Operational Leasing Strategic Marketing Design & Development Management Asset Management Strategic Planning & Investment Fund Structuring & Management Pan Asian retail mall management platform and delivery capabilities Strategic partnerships and extensive international network of brand name retailers Professional management to drive shopper traffic and retail sales Professional design team to create attractive shopping ambiance One of the few REITs in Asia to have an internalised lease and design management function 20

21 Financial Highlights 21

22 3Q 2010 Financial Results 3Q 2010 YTD 2010 Actual 1 Forecast 2 Change Actual 1 Forecast 2 Change (Unaudited) % (Unaudited) % Income available for distribution 3 (RM '000) 21,092 20, ,092 20, Available DPU (sen) Available DPU (sen) - annualised Annualised distribution yield (%) (Based on IPO price of RM0.98 on 16 July 2010) Annualised distribution yield (%) (Based on market price of RM1.10 on 30 Sept 2010) Annualised distribution yield (%) (Based on market price of RM1.11 on 15 Oct 2010) Q and YTD 2010 actual results refer to period from 14 July 2010 to 30 September Q and YTD 2010 forecast refer to period from 14 July 2010 to 30 September 2010 and is extracted from the profit forecast for 8-month period ending 31 December 2010 as disclosed in the prospectus of CapitaMalls Malaysia Trust ( CMMT ) dated 28 June 2010 ( the Prospectus ). 3 As disclosed in the Prospectus, CMMT intends to distribute 100% of its amount available for distribution to its unitholders for the financial period ending 31 December 2010 and financial year ending 31 December The first distribution will be for the period from the completion date of the sales and purchase agreements of the properties, i.e. 14 July 2010 to 31 December The distribution will be paid within two months from 31 December 2010, or any earlier date at the Manager s discretion. 22

23 Attractive Yield versus Other Investments 1 Source: Bloomberg (30 September 2010) 1 Based on annualised available distribution per unit of 7.22 sen for the period 1 July to 30 September and the unit closing price of RM1.10 on 30 September

24 Distribution Statement 3Q 2010 vs Forecast 3Q 2010 Distribution Statement Actual 1 Forecast 2 Variance (RM '000) (RM '000) (%) Gross revenue 43,385 43,381 - Less: Property operating expenses (13,078) (13,097) (0.1) Net property income 30,307 30, Interest income Change in fair value of investment properties 76,000 76,000 - Manager s management fee (2,979) (2,946) 1.1 Trustee's fee (91) (99) (8.1) Auditors' fee (37) (24) 54.2 Tax agent's fee (11) (32) (65.6) Valuation fee (15) (65) (76.9) Finance costs (7,921) (8,247) (4.0) Other non-operating expenses (14,256) (14,100) 1.1 Profit before taxation 81,285 80, Taxation Profit for the period 81,285 80, Distribution adjustments (60,193) (59,919) 0.5 Income available for distribution 21,092 20, Available DPU CMMT was established on 7 June 2010 and registered with the Securities Commission of Malaysia on 9 June The acquisition by CMMT of the properties was completed on 14 July 2010 and CMMT was listed on the Main Market of Bursa Malaysia Securities Berhad on 16 July The financial results reported refer to the period from 14 July 2010 to 30 September Q 2010 forecast refers to the period from 14 July 2010 to 30 September 2010 and is extracted from the profit forecast for 8-month period ending 31 December 2010 as disclosed in the Prospectus. 24

25 Healthy Balance Sheet As at 30 September 2010 RM million Non-current Assets 2,131 NAV (RM million) Current Assets before income available for distribution 1,407 Total Assets 2,237 - after income available for distribution 1,386 Current Liabilities 60 Non-current Liabilities 770 NAV per unit (RM) Total Liabilities before income available for distribution 1.04 Net Assets 1,407 - after income available for distribution 1.03 Total Unitholders' Funds 1,407 Number of Units in Circulation (in million units) 1,350 25

26 Debt Maturity Profile (as at 30 September 2010) No near term re-financing risk Loan Profile Debt Maturity Profile Floating 30% RM 'million Fixed 70% Q 2010 Unencumbered assets as % of total assets 37.9% Gearing ratio 33.5% Net debt / EBITDA (times) 6.0 Interest coverage (times) 3.5 Average term of maturity (years) 6.2 Average cost of debt 4.7% 26

27 Operations Review 27

28 Shopper Traffic Grew by 19% Shopper Traffic Increased by 19% from 3Q 2009 to 3Q 2010 Shopper Traffic ( 000) +19% 28

29 Vehicular Traffic Grew by 5% Vehicular Traffic Increased by 5% from 3Q 2009 to 3Q 2010 Vehicular Traffic ( 000) 29

30 Occupancy Rate Close to 100% As at As at 31 Dec Sep 10 Gurney Plaza 99.8% 98.0% The Mines 97.1% 98.3% Sungei Wang Plaza 97.5% 98.7% CMMT Portfolio 98.2% 98.3% 30

31 Positive Rental Reversion From 1 Jan 2010 to 30 Sep 2010 (Excluding Newly Created and Reconfigured Units) Property No. of Renewals (plus new leases) Retention Rate Net Lettable Area Area (sq ft) Percentage of Mall Increase in Current Rental vs Preceding Rental Gurney Plaza 71 75% 137, % 6.6% The Mines 67 94% 105, % 6.1% Sungei Wang Plaza 83 78% 74, % 2.5% CMMT Portfolio % 317, % 4.9% 31

32 Asset Enhancement Initiatives 32

33 Overview of Asset Enhancement Initiatives Completed Asset Enhancement Initiatives Gurney Plaza, Penang Sungei Wang Plaza, Kuala Lumpur The Mines, Selangor Conversion of ground floor food and beverage ( F&B ) units to retail lots. Reconfiguration of common area on 4 th floor Conversion of low-yielding temporary kiosk space in Basement 1 to open F&B and retail kiosks Conversion of anchor tenant space on concourse level into higher yielding specialty and F&B lots Repositioning of IT focused section on Level 3 to restaurants and F&B kiosks Construction of three-storey extension block Creation of roof top open plaza with Splash Park Creation of new clustered kiosk concepts the Market Place concept and the DigitaMart The Optimisation of space usage and improvement in tenant mix Established track record in enhancing values of shopping malls 33 33

Sungei Wang Plaza Concourse Reconfiguration Converted low-yielding anchor tenant space into higher yielding specialty outlets Description Incremental NPI per annum Capital Expenditure Impact of works

34 Sungei Wang Plaza Concourse Reconfiguration Converted low-yielding anchor tenant space into higher yielding specialty outlets Description Incremental NPI per annum Capital Expenditure Impact of works RM2.04 mil RM1.5 mil Return on Investment 136% Before: NLA: 25,532 sq ft / Ave Rent: RM5.15 per sq ft per month Sungei Wang Plaza, Kuala Lumpur After: NLA: 19,070 sq ft / Ave Rent: RM17.97 per sq ft per month Note: CMA owns approximately 61.9% of the aggregate surveyed retail floor area of Sungei Wang Plaza and 1,298 car park bays within Sungei Wang Plaza. All information pertains solely to CMA s strata area 34 34

35 Sungei Wang Plaza Upgrading of 2nd Main Entrance and Corridor Completed in Mar 2010 Completed in Jul 2010 Before 35 After

36 Sungei Wang Plaza Carpark Guidance System, Epoxy Flooring and Upgrading of Lift Lobbies at Carpark Completed in Sep 2010 Before Completed in Aug 2010 After 36

The Mines Asset Enhancement Initiatives ( AEI ) 2008-2009 L4 L3 L3 (Main Entrance) L2 L1 Carpark from L1 to L2.

block Reconfiguration of NLA New retail concepts Link bridges New escalators Splash Park L3 Established Fashion and F&B L2 Electrical, Home, Wellness and Local Fashion

37 The Mines Asset Enhancement Initiatives ( AEI ) L4 L3 L3 (Main Entrance) L2 L1 Carpark from L1 to L2.5 L1(Lower Entrance) L5 Splash Park, Leisure/Entertainment and F&B L4 Leisure /Entertainment, Lifestyle and IT Digital The Mines Asset Enhancement Initiatives Extension block Reconfiguration of NLA New retail concepts Link bridges New escalators Splash Park L3 Established Fashion and F&B L2 Electrical, Home, Wellness and Local Fashion L1 Supermarket, Services, Conveniences, F&B and Lifestyle BEFORE AFTER Description Impact of works Additional NLA created ~ 80,000 sq ft Incremental NPI per annum RM7.5 mil Capital Expenditure RM87 mil Return on Investment 9% 37 37

38 The Mines Upgrading of Information Counter & New Taxi Stand Completed in Feb 2010 Before Completed in Mar 2010 After 38

Gurney Plaza Basement F&B and Retail Kiosks Created F&B and retail kiosks to improve tenant mix and increase rental returns Description Incremental NPI per annum Capital Expenditure

39 Gurney Plaza Basement F&B and Retail Kiosks Created F&B and retail kiosks to improve tenant mix and increase rental returns Description Incremental NPI per annum Capital Expenditure Impact of works RM0.32 mil RM0.75 mil BEFORE: NLA: 706 sq ft / Av. Rent: RM17 per sq ft per month Return on Investment 43% AFTER: NLA: 2,715 sq ft ; Av. Rent: RM20 per sq ft per month 39 39

Gurney Plaza Future Asset Enhancement Initiatives Level 5 and 6 Atrium Works

Create continuous retail activities from Level 4 to Level 7, which will boost

Specialty fashion/retail stores targeted at the young Level 6: Restaurants and

40 Gurney Plaza Future Asset Enhancement Initiatives Level 5 and 6 Atrium Works Convert atrium and car park space at Levels 5 and 6 into F&B and retail lots Create continuous retail activities from Level 4 to Level 7, which will boost shopper traffic flow Current Convert atrium and car park space into: Level 5: Specialty fashion/retail stores targeted at the young Level 6: Restaurants and specialty food AEI Plan Note: Proposed works are subject to the approval of the local authorities 40 40

41 Gurney Plaza Upgrading of Toilets Completed in Sep 2010 Before Completed in Sep 2010 After 41

42 Thank You 42

CAPITAMALLS MALAYSIA TRUST (CMMT)

CAPITAMALLS MALAYSIA TRUST (CMMT) Malaysia s Largest Pure-Play Shopping Mall REIT Asian Investment Conference & Exhibition, Singapore AICE 23 2011 July *23 July 2011 2011* Disclaimer The information in