Circular to Unitholders in relation to: The Proposed Acquisition of Clarke Quay

Transcription

1 CAPITAMALL TRUST Circular dated 24 March 2010 (Clarke Quay) Circular Dated 24 March 2010 This Circular is important and requires your immediate attention. (Constituted in the Republic of Singapore pursuant to a trust deed dated 29 October 2001 (as amended)) Circular to Unitholders in relation to: The Proposed Acquisition of Clarke Quay MANAGED BY CAPITAMALL TRUST MANAGEMENT LIMITED A wholly-owned subsidiary of A member of IMPORTANT DATES AND TIMES for Unitholders Independent Financial Adviser to the Independent Directors and Audit Committee of CapitaMall Trust Management Limited Event Last date and time for lodgement of Proxy Forms Date and time of EGM Place of EGM Date and Time 12 April 2010 at a.m. 14 April 2010 at a.m. (or as soon thereafter as the Annual General Meeting of CMT to be held at a.m. on the same day and at the same place is concluded or adjourned) STI Auditorium 168 Robinson Road Level 9, Capital Tower Singapore 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. 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. Meanings of capitalised terms may be found in the Glossary of this Circular.

2 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. Sembawang Station Sembawang Shopping Centre East West Line North South Line North East Line Circle Line Lot One Shoppers Mall Jurong East Interchange Jurong Entertainment Centre Choa Chu Kang Station Bukit Panjang Plaza Imm Building The Plaza Singapura Bishan Interchange Dhoby Ghaut Interchange Clarke Quay Junction 8 Bugis Station Sengkang Station Hougang Station City Hall Interchange Rivervale Mall Hougang Plaza Tampines Station Tampines Mall Bugis Junction Raffles City Singapore Funan Digitalife Mall Existing Properties Clarke Quay MRT station Grange Rd Orchard MRT Orchard Blvd Orchard Rd Somerset MRT Plaza Singapura THE ATRIUM@ orchard Dhoby Ghaut MRT Middle Rd Bencoolen St Victoria St North Bridge Rd Bugis Junction Nicoll Highway Lower Delta Rd Delta Rd Nathan Rd Ganges Ave Tiong Bahru MRT Zion Rd Tiong Bahru Rd Kim Seng Rd Central Expressway Jalan Bukit Merah River Valley Rd Clarke Quay Outram Rd Chinatown MRT Central Expressway OUtram Park MRT Cantonment Rd River Valley Rd Clarke Quay MRT Central Business District Tanjong Pagar MRT New Bridge Rd Stamford Rd South Bridge Rd City Hall MRT Raffles Place MRT Cross St Robinson Rd Shenton Way Raffles City Singapore Bras Basah Rd Funan Digitalife Mall Marina Bay MRT Raffles Blvd Raffles Ave Ayer Rajah Expressway

3 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. 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. Method of Financing the Acquisition 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. Benefits to Unitholders 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. Scenario A: Forecast DPU (Cents) Assuming the Acquisition is fully funded through 100.0% debt financing and CMT s Aggregate Leverage is increased to approximately 33.1% 9.05 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% Existing Portfolio Enlarged Portfolio 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.

4 2. Competitive Strengths of Clarke Quay 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 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 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. Shopper Traffic at Clarke Quay (Number of persons in millions) Segmental Diversification 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) Enlarged Properties (3) 4. Enhancement of Rental Revenue 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. 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 (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.

5 CAPITAMALL TRUST First and Largest REIT in Singapore CMT is the first REIT listed on SGX-ST in July 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$5.7 billion respectively. CMT has been assigned an A2 rating by Moody s. The A2 rating is the highest rating assigned to a Singapore REIT see page 18 of this Circular for further details. CMT owns and invests in quality income-producing assets which are used, or predominantly used, for retail purposes primarily in Singapore. As at 31 December 2009, CMT Group s portfolio comprised a diverse list of over 2,300 leases with local and international retailers and achieved a committed occupancy of close to 100.0%. CMT Group s 14 quality retail properties are strategically located in the suburban areas and downtown core of Singapore. CMT also owns an approximately 19.70% stake in CapitaRetail China Trust, the first China shopping mall REIT listed on SGX-ST in December CMT is managed by an external manager, CapitaMall Trust Management Limited, which is a wholly-owned subsidiary of CapitaMalls Asia Limited, one of Asia s largest listed shopping mall developers, owners and managers. Enlarged Properties (Comprising Clarke Quay and the Existing Properties) The table below sets out selected information on the Enlarged Properties as at 31 December 2009 (unless otherwise indicated). Clarke Quay Existing Properties Enlarged Properties Net Lettable Area (sq ft) 294,610 4,542,598 (2) 4,837,208 (2) Number of Leases 55 2,304 (2) 2,359 (2) Shopper Traffic in 2009 (million) (3) (3) Valuation (S$ million) (CBRE) (1) (Knight Frank) (1) 6,920.5 (4) 7,188.5 (4)(5) Notes: (1) As at 3 February (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.

6 Existing Properties The table below sets out selected information on the Existing Properties as at 31 December Tampines Mall Junction 8 Funan DigitaLife Mall IMM Building Plaza Singapura Bugis Junction Sembawang Shopping Centre Jurong Entertainment Centre Hougang Plaza Lot One Raffles City Shoppers Singapore (4) Mall (5) Bukit Panjang Plaza (5) Mall (5) Orchard Rivervale The Atrium@ NLA (sq ft) 327, , ,698 Retail: 408,128 Non-retail: 534, , , ,320 N.A. (2) 75,353 Retail: 403,209 Office: 380, , ,469 81,130 Retail: 16,318 Office: 357,354 Number of Leases Retail: 240 Non-retail: N.A. (2) 10 Retail: 200 Office: 46 Hotels & Convention Centre: Retail : 8 Office :12 Number of Car Park Lots ,313 (cars) 90 (heavy vehicles) (1) 161 N.A. (2) 154 1, (1) 106 Title / Leasehold Estate Expiry Leasehold tenure of 99 years with effect from 1 September 1992 Leasehold tenure of 99 years with effect from 1 September 1991 Leasehold tenure of 99 years with effect from 12 December 1979 Leasehold tenure of years with effect from 23 January 1989 Freehold Leasehold tenure of 99 years with effect from 10 September 1990 Leasehold tenure of 999 years with effect from 26 March 1885 Leasehold tenure of 99 years with effect from 1 March 1991 Leasehold tenure of 99 years with effect from 1 March 1991 Leasehold tenure of 99 years with effect from 16 July 1979 Leasehold tenure of 99 years with effect from 1 December 1993 Leasehold tenure of 99 years with effect from 1 December 1994 Leasehold tenure of 99 years with effect from 6 December 1997 Leasehold tenure of 99 years with effect from 15 August 2008 Valuation (S$ million) , , Committed Occupancy (%) 100.0% 100.0% 99.3% Retail: 99.7% Non-retail: 97.6% 100.0% 100.0% 99.5% N.A. (2) 100.0% Retail: 100.0% Office: 98.6% 99.9% 99.8% 100.0% 99.1% Shopper Traffic in 2009 (million) N.A. (2) N.A. (3) N.A. (3) Notes: (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 % of the beneficial interest in the property portfolio of CapitaRetail Singapore Limited which comprised the CRS Properties.

7 TABLE OF CONTENTS Page CORPORATE INFORMATION... ii SUMMARY... 1 INDICATIVE TIMETABLE... 5 LETTER TO UNITHOLDERS 1. The Proposed Acquisition Rationale for the Acquisition Details of the Acquisition Method of Proposed Financing and Profit Forecast Recommendation Extraordinary General Meeting Abstentions from Voting Action to be Taken by Unitholders Directors Responsibility Statement Consents Documents on Display IMPORTANT NOTICE GLOSSARY 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

8 CORPORATE INFORMATION Directors of CapitaMall Trust Management Limited (the manager of CapitaMall Trust ( CMT, and the manager of CMT, the Manager )) Registered Office of the Manager Trustee of CMT (the Trustee ) Legal Adviser for the Acquisition and to the Manager Legal Adviser to the Trustee : 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 #18-01 Robinson Point Singapore : HSBC Institutional Trust Services (Singapore) Limited 21 Collyer Quay #10-01 HSBC Building Singapore : Allen & Gledhill LLP One Marina Boulevard #28-00 Singapore : Shook Lin & Bok LLP 1 Robinson Road #18-00 AIA Tower Singapore Unit Registrar : Boardroom Corporate & Advisory Services Pte. Ltd. 50 Raffles Place #32-01 Singapore Land Tower Singapore Independent Financial Adviser to the Independent Directors and Audit Committee of the Manager (the IFA ) Independent Accountants : ANZ Singapore Limited 1 Raffles Place #32-00 OUB Centre Singapore : KPMG LLP 16 Raffles Quay #22-00 Hong Leong Building Singapore Independent Valuers : CB Richard Ellis (Pte) Ltd 6 Battery Road #32-01 Singapore Knight Frank Pte Ltd 16 Raffles Quay #30-00 Hong Leong Building Singapore ii

9 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 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) (ii) (iii) the Purchase Consideration of S$268.0 million; the acquisition fee payable to the Manager for the Acquisition (the Acquisition Fee ) which amounts to approximately S$2.7 million; and 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

10 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 Appendix 1. 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 s 3 asset size is expected to increase from approximately S$7.4 billion (as at 31 December 2009) to approximately S$7.6 billion 4. 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

11 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 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 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

12 Method of Financing the Acquisition 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 1 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. Method of Financing Scenario A: 100.0% Debt Financing CMT Group s Aggregate Leverage Scenario B: 50.0% Debt Financing and 50.0% Equity Financing Before the Acquisition (1) 30.5% 30.5% After the Acquisition (2) 33.1% 31.3% Notes: (1) As at 31 December (2) Based on the assumption that the Acquisition was completed on 31 December 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

13 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 a.m. Date and time of the EGM : Wednesday, 14 April 2010 at a.m. (or as soon thereafter as the Annual General Meeting of CMT to be held at 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 : 1 July 2010 or such other date as may be agreed in writing between the Trustee and the Vendor 5

14 CAPITAMALL TRUST (Constituted in the Republic of Singapore pursuant to a trust deed dated 29 October 2001 (as amended) (the Trust Deed )) Directors of 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 39 Robinson Road #18-01 Robinson Point Singapore 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 (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) (ii) (iii) 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; 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 the approval of Unitholders for the Acquisition. 6

15 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) (ii) (iii) the Purchase Consideration of S$268.0 million; the Acquisition Fee payable to the Manager which amounts to approximately S$2.7 million; and 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) (ii) Scenario A: where the Acquisition is fully funded through 100.0% debt financing; and 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

16 Scenario A Forecast Period 2010 Existing Portfolio Enlarged Portfolio DPU (cents) Increase over Existing Portfolio 1.0% Scenario B Issue Price per New Unit S$1.60 S$1.70 S$1.80 Forecast Period 2010 Existing Portfolio Enlarged Portfolio DPU (cents) Increase over Existing Portfolio 0.2% DPU (cents) Increase over Existing Portfolio 0.4% DPU (cents) Increase over Existing Portfolio 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 billion 1. 1 The asset size excludes CMT s distributable income for the quarter ended 31 December

17 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 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 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 Shopper Traffic at Clarke Quay (Number of persons in millions) (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) 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 arrivals 1. There were 9.7 million tourist arrivals to Singapore in ; and 1 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

18 (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. Percentage of Portfolio (1) by Gross Revenue Existing Properties (2) Enlarged Properties (3) 20.9% 25.1% 79.1% 74.9% Necessity Shopping (4) Discretionary Spending (5) Notes: (1) Excludes The 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 (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 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

19 Property Tampines Mall Junction 8 Funan DigitaLife Mall IMM Building Plaza Singapura Bugis Junction Sembawang Shopping Centre Jurong Entertainment Centre Hougang Plaza Description 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 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 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 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 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 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 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 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 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 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

20 Property Description 40.00% interest in Raffles City Singapore Lot One Shoppers Mall (1) Bukit Panjang Plaza (1) Rivervale Mall (1) 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 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 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 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 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 % 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 approximately 14.4% following the Acquisition. 12

21 Existing Properties (1) Enlarged Properties (1) Tampines Mall 12.1% 11.6% Junction 8 8.8% 8.4% Funan DigitaLife Mall 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) 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 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 Forecast Period 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 2010 by the Purchase Consideration of S$268.0 million. 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

22 statement of the Vendor for the financial year ended 31 December 2009, taking into account the Total Acquisition Cost, and assuming that: (i) (ii) 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 additional borrowings of S$274.1 million are taken to finance the Acquisition and the CMT Group s Aggregate Leverage will increase from approximately 30.5% (as at 31 December 2009) to approximately 33.1% Pro Forma DPU of the Acquisition The pro forma financial effects of the Acquisition on CMT s DPU for the financial year ended 31 December 2009, as if the CMT Group had purchased Clarke Quay on 1 January 2009, and held and operated Clarke Quay through to 31 December 2009, are as follows: Effects of the Acquisition Before the Acquisition After the Acquisition Net Income before Share of Profit of Associate (S$ 000) 236, ,691 Distributable Income (S$ 000) 281, ,632 (1) Issued Units ( 000) 3,179,268 (2) 3,180,844 (3) DPU (cents) 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 (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$1.70 per new Unit (purely for illustrative purpose only) Pro Forma NAV of the Acquisition The pro forma financial effects of the Acquisition on the NAV per Unit as at 31 December 2009, as if the Acquisition was completed on 31 December 2009, are as follows: Effects of the Acquisition Before the Acquisition After the Acquisition NAV (S$ 000) 4,893,113 (1) 4,894,983 (2) Issued Units ( 000) 3,180,193 (3) 3,181,769 (4) NAV per Unit (S$) Notes: (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 (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). 1 Based on the assumption that the Acquisition was completed on 31 December

23 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 Actual (S$ million) As Adjusted for the Acquisition (S$ million) Short-term debt: Secured debt Unsecured debt Total short-term debt Long-term debt: Secured debt 1,803.0 (1) 2,077.1 Unsecured debt Total long-term debt 1, ,077.1 Total debt: 2, ,517.1 Unitholders funds 4,893.1 (2) 4,895.8 Expenses relating to debt issuance (0.8) Total Unitholders funds 4, ,895.0 Total Capitalisation 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 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 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

24 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 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 Appendix 1. 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 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. 16

25 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 Unitholders 1 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 Units 2. 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) (ii) (iii) 2.0% gross revenue of Clarke Quay; 2.0% net property income of Clarke Quay; and 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 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. 17

26 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 Leverage 1 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 Scenario A: 100.0% Debt Financing Scenario B: 50.0% Debt Financing and 50.0% Equity Financing Before the Acquisition (1) 30.5% 30.5% After the Acquisition (2) 33.1% 31.3% Notes: (1) As at 31 December (2) Based on the assumption that the Acquisition was completed on 31 December 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) (ii) Scenario A: where the Acquisition is fully funded through 100.0% debt financing; and 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 The ratio of the value of borrowings and deferred payments (if any) to the value of the Deposited Property. 2 Based on Moody s affirmation on 10 February Moody s has also on 10 February 2009 affirmed that its outlook for CMT remains negative. 18

27 Scenario A: Forecast Consolidated Statements of Total Return and Distributable Income Existing Portfolio and Enlarged Portfolio (100.0% Debt Financing (1) ) Existing Portfolio Forecast Period 2010 (1 July December 2010) (S$ 000) Actual 2009 Forecast Year 2010 (2) Existing Portfolio Clarke Quay Total Gross Revenue 552, , ,700 14, ,250 Property Operating Expenses (175,932) (177,758) (86,353) (6,583) (92,936) Net property income 376, , ,347 7, ,314 Interest income 1, Asset management fees (34,178) (34,152) (17,084) (17,856) Trust expenses (5,704) (4,382) (2,191) (2,251) Foreign exchange gain realised 3,402 Finance costs (105,029) (94,346) (48,357) (54,288) Net income before share of profit of associate 236, , , ,967 Share of profit of associate 4,138 4,138 2,069 2,069 Net Income 240, , , ,036 Net change in fair value of financial derivatives (1,534) Net change in fair value of investment properties (302,187) Total return before income tax (63,286) 248, , ,036 Income tax expense (1,899) Total return (65,185) 248, , ,036 Distribution Statements Net income before share of profit of associate 236, , , ,967 Net effect of non-tax deductible/(chargeable) items 41,561 34,254 16,671 17,284 Distribution income from associate (3) 10,258 9,988 4,994 4,994 Net income from subsidiary (4) (6,150) Distributable Income to Unitholders 281, , , ,245 Units in issue ( 000) (5) 3,179,268 3,183,176 3,183,176 3,184,753 DPU (cents) Annualised DPU (cents) 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 (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 % 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

28 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) ) Existing Portfolio Forecast Period 2010 (1 July December 2010) (S$ 000) Actual 2009 Forecast Year 2010 (2) Existing Portfolio Clarke Quay Total Gross Revenue 552, , ,700 14, ,250 Property Operating Expenses (175,932) (177,758) (86,353) (6,583) (92,936) Net property income 376, , ,347 7, ,314 Interest income 1, Asset management fees (34,178) (34,152) (17,084) (17,853) Trust expenses (5,704) (4,382) (2,191) (2,251) Foreign exchange gain realised 3,402 Finance costs (105,029) (94,346) (48,357) (51,322) Net income before share of profit of associate 236, , , ,936 Share of profit of associate 4,138 4,138 2,069 2,069 Net Income 240, , , ,005 Net change in fair value of financial derivatives (1,534) Net change in fair value of investment properties (302,187) Total return before income tax (63,286) 248, , ,005 Income tax expense (1,899) Total return (65,185) 248, , ,005 Distribution Statements Net income before share of profit of associate 236, , , ,936 Net effect of non-tax deductible/(chargeable) items 41,561 34,254 16,671 17,081 Distribution income from associate (3) 10,258 9,988 4,994 4,994 Net income from subsidiary (4) (6,150) Distributable Income to Unitholders 281, , , ,011 Units in issue ( 000) (5) 3,179,268 3,183,176 3,183,176 3,266,151 DPU (cents) Annualised DPU (cents) 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). (2) Based on the Manager s forecast of the CMT Group s results from 1 January 2010 to 31 December (3) Relates to distribution income from 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 % 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

29 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 Directors 1 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 a.m. (or as soon thereafter as the Annual General Meeting of CMT to be held at 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 , 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 Units 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 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. 21

30 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 not later than Monday, 12 April 2010 at 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 Manager 1 at 39 Robinson Road, #18-01 Robinson Point, Singapore from the date of this Circular up to and including the date falling three months after the date of this Circular: (i) (ii) (iii) the Sale and Purchase Agreement; the IFA Letter; the Independent Accountants Report on the Profit Forecast; 1 Prior appointment with the Manager (telephone: ) will be appreciated. 22

31 (iv) (v) (vi) (vii) the valuation report on Clarke Quay issued by CBRE; the valuation report on Clarke Quay issued by Knight Frank; the CMT Group Audited Financial Statements; and 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 CAPITAMALL TRUST MANAGEMENT LIMITED (as manager of CapitaMall Trust) Company Registration No R Mr James Koh Cher Siang Chairman & Independent Non-Executive Director 23

32 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

33 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 : CB Richard Ellis (Pte) Ltd 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 , , , and , 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, % 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

34 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 a.m. (or as soon thereafter as the Annual General Meeting of CMT to be held at 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 , 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 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 Forecast Period 2010 : 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 : ANZ Singapore Limited 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

35 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

36 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

37 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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39 DETAILS OF CLARKE QUAY AND THE EXISTING PROPERTIES APPENDIX A 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 Gross Floor Area NLA Committed Occupancy 94.9% Number of Leases 55 Car Park Lots ,756 sq ft 361,595 sq ft 294,610 sq ft Title Leasehold tenure of 99 years with effect from 13 January 1990 Valuation (as at 3 February 2010) Gross Revenue Net Property Income 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) S$14,550 S$7, 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). (%) % 21.4% 31.6% 11.5% 13.3% and Beyond A-1

40 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% 6.0% Leisure & Entertainment Food & Beverage Office Beauty & Health Gifts & Specialty Services 39.3% 50.3% 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. Leisure & Entertainment 14.3% 2 Shanghai Dolly Pte. Ltd. Leisure & Entertainment 5.8% 3 The Pump Room Pte. Ltd. Leisure & Entertainment 4.0% 4 MMS Communications Singapore Pte. Ltd. Office 3.8% 5 The Arena Entertainment Pte. Ltd. Leisure & Entertainment 3.8% 6 Attica Private Ltd. Leisure & Entertainment 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. Leisure & Entertainment 2.2% Top Ten Tenants 46.4% Other Tenants 53.6% Total 100.0% A-2

41 2. EXISTING PROPERTIES The table below sets out selected information about the Existing Properties (as at 31 December 2009). Tampines Mall Junction 8 Funan DigitaLife Mall IMM Building Plaza Singapura Bugis Junction Sembawang Shopping Centre Jurong Entertainment Centre Hougang Plaza Raffles City Singapore (4) Lot One Shoppers Mall (5) Bukit Panjang Rivervale The Atrium Plaza (5) Mall NLA (sq ft) 327, , ,698 Retail: 408,128 Non-retail: 534, , , ,320 N.A. (2) 75,353 Retail: 403,209 Office: 380, , ,469 81,130 Retail: 16,318 Office: 357,354 Number of Leases Retail: 240 Non-retail: N.A. (2) 10 Retail: 200 Office: 46 Hotels & Convention Centre: Retail: 8 Office:12 Number of Car Park Lots ,313 (cars) 90 (heavy vehicles) (1) 161 N.A. (2) 154 1, (1) 106 Title/Leasehold Estate Expiry Leasehold tenure of 99 years with effect from 1 September 1992 Leasehold tenure of 99 years with effect from 1 September 1991 Leasehold tenure of 99 years with effect from 12 December 1979 Leasehold tenure of years with effect from 23 January 1989 Freehold Leasehold tenure of 99 years with effect from 10 September 1990 Leasehold tenure of 999 years with effect from 26 March 1885 Leasehold tenure of 99 years with effect from 1 March 1991 Leasehold tenure of 99 years with effect from 1 March 1991 Leasehold tenure of 99 years with effect from 16 July 1979 Leasehold tenure of 99 years with effect from 1 December 1993 Leasehold tenure of 99 years with effect from 1 December 1994 Leasehold tenure of 99 years with effect from 6 December 1997 Leasehold tenure of 99 years with effect from 15 August 2008 Valuation (S$ million) , , Committed Occupancy (%) 100.0% 100.0% 99.3% Retail: 99.7% Non-retail: 97.6% 100.0% 100.0% 99.5% N.A. (2) 100.0% Retail: 100.0% Office: 98.6% 99.9% 99.8% 100.0% 99.1% Shopper Traffic in 2009 (million) N.A. (2) N.A. (3) N.A. (3) Notes: (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 % of the beneficial interest in the property portfolio of CapitaRetail Singapore Limited which comprised the CRS Properties. A-3

42 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. (%) % 26.0% 32.3% 5.1% 3.9% and Beyond 2.2 Trade Sector Analysis for Existing Properties The chart below provides a breakdown by monthly Gross Rental Income of the different trade 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 % 3.4% 3.6% 5.2% 3.2% 3.3% 5.8% 3.1% 2.8%2.9% Food & Beverage 23.5% 6.9% 8.6% 9.1% 14.0% 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 A-4

43 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 Percentage of Monthly Gross Rental Income 1 RC Hotels (Pte) Ltd Hotel 3.6% 2 BHG (Singapore) Pte. Ltd. Department Store 2.9% 3 Cold Storage Singapore (1983) Pte Ltd Supermarket/Beauty & Health/Services/Warehouse 2.9% 4 Temasek Holdings (Private) Limited Office 2.6% 5 NTUC Fairprice Co-operative Ltd Supermarket/Beauty & Health/Food Court/Services 6 Barclays Capital Services Limited Singapore Branch 7 Kopitiam Investment Pte Ltd Food Court/Food & Beverage 2.5% Office 2.4% 1.9% 8 Wing Tai Holdings Limited Fashion/Food & Beverage 1.9% 9 Golden Village Multiplex Pte Ltd Leisure & Entertainment 1.7% 10 Best Denki (Singapore) Pte Ltd Electronics & Warehouse 1.4% Top Ten Tenants 23.8% Other Tenants 76.2% Total 100.0% 3. ENLARGED PROPERTIES The table below sets out selected information on the Enlarged Properties as at 31 December 2009 (unless otherwise indicated). Clarke Quay Existing Properties Enlarged Properties NLA (sq ft) 294,610 4,542,598 (2) 4,837,208 (2) Number of Leases 55 2,304 (2) 2,359 (2) Shopper Traffic in 2009 (million) (3) (3) Valuation (S$ million) (CBRE) (1) (Knight Frank) (1) 6,920.5 (4) 7,188.5 (4),(5) Notes: (1) As at 3 February (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

44 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). (%) % 25.7% 32.4% 5.4% 4.3% and Beyond 3.2 Trade Sector Analysis for Enlarged Properties The chart below provides a breakdown by monthly Gross Rental Income of the different trade sectors of tenants represented in the Enlarged Properties (based on committed Gross Rental Income for the month of December 2009 and excludes turnover rent). 4.5% 3.2% 5.8% 4.9% 5.6% 6.6% 2.8% 2.9% 2.7% 3.1% 3.1% 8.3% 9.0% 24.2% 13.3% 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 A-6

45 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 Trade Sector Percentage of Monthly Gross Rental Income 1 RC Hotels (Pte) Ltd Hotel 3.4% 2 BHG (Singapore) Pte. Ltd. Department Store 2.8% 3 Cold Storage Singapore (1983) Pte Ltd Supermarket/Beauty & Health/Services/Warehouse 2.8% 4 Temasek Holdings (Private) Limited Office 2.5% 5 NTUC Fairprice Co-operative Ltd Supermarket/Beauty & 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 Leisure & Entertainment 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

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47 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

48 Scenario A: Forecast Consolidated Statements of Total Return and Distributable Income Existing Portfolio and Enlarged Portfolio (100.0% Debt Financing (1) ) Existing Portfolio Forecast Period 2010 (1 July December 2010) (S$ 000) Actual 2009 Forecast Year 2010 (2) Existing Portfolio Clarke Quay Total Gross Revenue Gross rental income 513, , ,941 12, ,821 Car park income 14,317 14,149 7, ,717 Other income 24,673 21,249 10,647 1,065 11,712 Total Gross Revenue 552, , ,700 14, ,250 Property Operating Expenses Property management fees (20,839) (20,848) (10,491) (495) (10,986) Property tax (49,283) (50,103) (25,453) (1,163) (26,616) Other property operating expenses (105,810) (106,807) (50,409) (4,925) (55,334) Total Property Operating Expenses (175,932) (177,758) (86,353) (6,583) (92,936) Net property income 376, , ,347 7, ,314 Interest income 1, Asset management fees (34,178) (34,152) (17,084) (17,856) Trust expenses (5,704) (4,382) (2,191) (2,251) Foreign exchange gain realised 3,402 Finance costs (105,029) (94,346) (48,357) (54,288) Net income before share of profit of associate 236, , , ,967 Share of profit of associate 4,138 4,138 2,069 2,069 Net Income 240, , , ,036 Net change in fair value of financial derivatives (1,534) Net change in fair value of investment properties (302,187) Total return before income tax (63,286) 248, , ,036 Income tax expense (1,899) Total return (65,185) 248, , ,036 Distribution Statements Net income before share of profit of associate 236, , , ,967 Net effect of non-tax deductible/(chargeable) items 41,561 34,254 16,671 17,284 Distribution income from associate (3) 10,258 9,988 4,994 4,994 Net income from subsidiary (4) (6,150) Distributable Income to Unitholders 281, , , ,245 Units in issue ( 000) (5) 3,179,268 3,183,176 3,183,176 3,184,753 DPU (cents) Annualised DPU (cents) 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 (3) Relates to distribution income from 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 % 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 B-2

49 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) ) Existing Portfolio Forecast Period 2010 (1 July December 2010) (S$ 000) Actual 2009 Forecast Year 2010 (2) Existing Portfolio Clarke Quay Total Gross Revenue Gross rental income 513, , ,941 12, ,821 Car park income 14,317 14,149 7, ,717 Other income 24,673 21,249 10,647 1,065 11,712 Total Gross Revenue 552, , ,700 14, ,250 Property Operating Expenses Property management fees (20,839) (20,848) (10,491) (495) (10,986) Property tax (49,283) (50,103) (25,453) (1,163) (26,616) Other property operating expenses (105,810) (106,807) (50,409) (4,925) (55,334) Total Property Operating Expenses (175,932) (177,758) (86,353) (6,583) (92,936) Net property income 376, , ,347 7, ,314 Interest income 1, Asset management fees (34,178) (34,152) (17,084) (17,853) Trust expenses (5,704) (4,382) (2,191) (2,251) Foreign exchange gain realised 3,402 Finance costs (105,029) (94,346) (48,357) (51,322) Net income before share of profit of associate 236, , , ,936 Share of profit of associate 4,138 4,138 2,069 2,069 Net Income 240, , , ,005 Net change in fair value of financial derivatives (1,534) Net change in fair value of investment properties (302,187) Total return before income tax (63,286) 248, , ,005 Income tax expense (1,899) Total return (65,185) 248, , ,005 Distribution Statements Net income before share of profit of associate 236, , , ,936 Net effect of non-tax deductible/(chargeable) items 41,561 34,254 16,671 17,081 Distribution income from associate (3) 10,258 9,988 4,994 4,994 Net income from subsidiary (4) (6,150) Distributable Income to Unitholders 281, , , ,011 Units in issue ( 000) (5) 3,179,268 3,183,176 3,183,176 3,266,151 DPU (cents) Annualised DPU (cents) 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. (2) Based on the Manager s forecast of the CMT Group s results from 1 January 2010 to 31 December (3) Relates to distribution income from 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 % 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 B-3

50 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 Singapore 1, 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 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: 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

51 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. 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. (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 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

52 (d) 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 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 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 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 Jurong Entertainment Centre has ceased operations in preparation for asset enhancement works which are targeted to be completed in the first quarter of It is assumed that there would be no rental income arising from Jurong Entertainment Centre between 1 January 2010 and 31 December (e) 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 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 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

53 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 Property Operating Expenses 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 As no rental income is expected for Jurong Entertainment Centre, property tax is assumed to be paid on 10.0% of the annual value 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) 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 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

54 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 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 The base component of the management fee will be paid in the form of cash for the Forecast Year 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 It is further assumed that the 10-day volume weighted average traded price to be S$1.70 per Unit for the Forecast Year 2010 for the purpose of computing the number of Units for the performance component of the management fee payable in Units. 1.4 Other Expenses Other expenses of the Existing Properties include recurring operating expenses such as the Trustee s fee, annual listing fees, valuation fees, legal fees, registry and depository charges, accounting, audit and tax adviser s fees, postage, printing and stationery costs, costs associated with the preparation of annual reports, investor communication costs and other miscellaneous expenses. 1.5 Capital Expenditure A provision of cashflow payments for the forecasted capital expenditure for the Existing Properties has been included in Forecast Year It has been assumed that capital expenditure will be funded by bank borrowings and/or revolving loan arrangement. Capital expenditure incurred is capitalised as part of the Deposited Property and has no impact on the statements of total return and distributable income other than affecting the base component of the management fee, the Trustee s fee and the financing costs. Forecast Period 2010 (1 July 2010 to 31 December 2010) S$ million Expansion and renovation (1) 85.7 Regular capital expenditure 17.6 Total capital expenditure Note: (1) For asset enhancement works and major building capital expenditure forecasted for the Existing Properties. 1.6 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 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

55 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 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 As the accretion and amortisation are non-cash items, they are added back to the distributable income through net tax adjustments. B-9

56 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 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 B-10

57 SECTION C: ASSUMPTIONS CLARKE QUAY It is assumed that the Acquisition will be completed on 1 July 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 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

58 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 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 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 Property Operating Expenses 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 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 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 Marketing Expenses It is assumed that a total of approximately S$0.8 million will be incurred as marketing expenses for the Forecast Period 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 B-12

59 2.4 Capital Expenditure A provision of cashflow payments for the forecasted capital expenditure for Clarke Quay has been included in the Forecast Period 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. Forecast Period 2010 (1 July 2010 to 31 December 2010) S$ million Regular capital expenditure 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

60 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 Note: (1) DPU as shown in the Profit Forecast. 3.2 Property Operating Expenses 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 Forecast Period 2010 (Annualised) (cents) Scenario A Scenario B 2.5% above base case s operating expenses Base case (1) % below base case s operating expenses Note: (1) DPU as shown in the Profit Forecast. B-14

61 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 Forecast Period 2010 (Annualised) (cents) Scenario A Scenario B Interest rates are 25 basis points above base case Base case (1) Interest rates are 25 basis points below base case Note: (1) DPU as shown in the Profit Forecast. 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 Forecast Period 2010 (Annualised) (cents) Scenario A Scenario B Base case (1) Conversion of 50.0% of the Convertible Bonds Conversion of 100.0% of the Convertible Bonds Note: (1) DPU as shown in the Profit Forecast. 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 Forecast Period 2010 (Annualised) (cents) S$1.60 per new Unit 9.07 Base case (S$1.70 per new Unit) (1) 9.09 S$1.80 per new Unit 9.11 Note: (1) DPU as shown in the Profit Forecast. B-15

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63 APPENDIX C INDEPENDENT ACCOUNTANTS REPORT ON THE PROFIT FORECAST The Board of Directors CapitaMall Trust Management Limited (in its capacity as manager of CapitaMall Trust) 39 Robinson Road #18-01 Robinson Point Singapore HSBC Institutional Trust Services (Singapore) Limited (in its capacity as trustee of CapitaMall Trust) 21 Collyer Quay #10-01 HSBC Building Singapore 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

64 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

65 APPENDIX D VALUATION CERTIFICATES V aluation & Advisory Services CB Richard Ellis (Pte) Ltd 6 Battery Road #32-01 Singapore T (65) F (65) VALUATION CERTIFICATE Property: Client: Trust: Purpose: Interest Valued: Basis of Valuation: Registered Owner: Land Area: Town Planning: Clarke Quay 3A/B/C/D/E River Valley Road Singapore /1/2/3/4 CapitaMall Trust Management Limited (as Manager of CapitaMall Trust) CapitaMall Trust Acquisition Leasehold for a term of 99 years commencing from Balance term years. Market Value subject to existing tenancies and occupational arrangements. Clarke Quay Pte Ltd 27,104.8 sqm Commercial and within Conservation Area Co. Reg. No.: R Brief Description: Tenancy Profile: 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. Royal Selangor (S) Pte Ltd, Cocoon Bar & Supperclub Pte Ltd, Shanghai Dolly Pte Ltd, Luminox Pte Ltd, MMs S Communications Singapore Pte Ltd and other specialty tenancies. NLA (sqft): 294,610 GFA (sqft): 361,595 Car Space Ratio: 1.39 lots per 1,000 square feet of lettable area. Valuation Approaches: Date of Valuation: Assessed Value: Capitalisation Approach & Discounted Cash Flow Analysis 3 February 2010 S$270,000,000 (Two Hundred Seventy Million Dollars) This valuation is exclusive of GST. Assumptions, Disclaimers, Limitations & Qualifications: Prepared By: 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. CB Richard Ellis (Pte) Ltd Per: Li Hiaw Ho DipUrbVal (Auck) SNZPI FSISV Per: Sim Hwee Yan BSc (Est. Mgt) Hons FSISV Appraiser's Licence, No. AD Appraiser's Licence, No. AD J Executive Director - Valuation & Advisory Services Executive Director - Valuation & Advisory Services D-1