CPN RETAIL GROWTH LEASEHOLD PROPERTY FUND Corporate presentation

Transcription

1 CPN RETAIL GROWTH LEASEHOLD PROPERTY FUND Corporate presentation

2 Important notice THIS PRESENTATION IS AVAILABLE ONLY TO PERSONS WHO ARE NON-U.S. PERSONS, PERSONS WITH ADDRESSES OUTSIDE THE U.S. AND CANADA. The information contained in this presentation is for information purposes only and does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for units in CPN Retail Growth Leasehold Property Fund ( CPNRF and units in CPNRF, Units ) in any jurisdiction nor should it or any part of it form the basis of, or be relied upon in any connection with, any contract or commitment whatsoever. This presentation is not an offer for sale of securities in the United States. The securities described in this presentation have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"). The securities described herein may not be offered or sold in the United States absent registration under the Securities Act or pursuant to exemption from registration. Any offer of securities of CPNRF will be made by means of an offering circular that will contain detailed information about CPNRF and its management, including financial statements. This presentation may include information which is forward-looking in nature. Forward-looking information involve known and unknown risks, uncertainties and other factors which may impact on the actual outcomes, including economic conditions in the markets in which CPNRF operates and general achievement of CPNRF business forecasts, which will cause the actual results, performance or achievements of CPNRF to differ, perhaps materially, from the results, performance or achievements expressed or implied in this presentation. This presentation has been prepared by the Management Company and the CPNRF Property Manager. The information in this presentation has not been independently verified. No representation, warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information and opinions in this presentation. None of the Management Company, the CPNRF Property Manager, or any of its agents or advisers, or any of their respective affiliates, advisers or representatives, shall have any liability (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. This presentation is made, furnished and distributed for information purposes only. No part of this presentation shall be relied upon directly or indirectly for any investment decision-making or for any other purposes. This presentation and all other information, materials or documents provided in connection therewith, shall not, either in whole or in part, be reproduced, redistributed or made available to any other person, save in strict compliance with all applicable laws. 1

3 Table of contents 1. Transaction summary 2. Overview of CPNRF 3. The new asset: CentralPlaza Pinklao 4. Benefits of the acquisition and capital increase 5. Transaction structure A. Appendix 2

4 01 TRANSACTION SUMMARY

5 Transaction summary In 2008, unitholders approved capital increase to invest in two assets: CentralPlaza Pinklao and CentralPlaza Chiang Mai Airport Transaction status update Transaction was postponed due to negative sentiment in global markets and Thailand s political instability towards end of 2008 With improvement in market condition and Thailand s political landscape, the investment committee of CPRNF has decided to re-activate the capital increase CPNRF currently meeting unitholders to seek support for the unitholder vote on 17 Aug 2009 Key differences between previous and current proposed transaction CPNRF will invest only in one asset (CentralPlaza Pinklao) this time Smaller capital increase to ensure success under volatile market conditions Expect to partially fund the investment with up to 10% gearing Take advantage of Thai banks liquidity and improve CPNRF cost of capital Change of fund manager to SCB Asset Management (current manager TMBAM) Property manager remains CPN 4

6 Transaction summary (cont d) Pricing must result in accretion to FY2010 DPU in order to proceed Terms of the capital increase Offering structure will comprise: No less than 50% rights offering The balance as a public offering and/or private placement CPN will take up pro-rata entitlements in a rights offer Expect an underwritten offering to ensure certainty of outcome Dispatch of circular and voting documents: 31 July 2009 Key dates Unitholder meeting: 17 August 2009 Submission to SEC: Mid August 2009 Completion of capital increase and investment: November

7 02 OVERVIEW OF CPNRF

8 Property fund for public offering ( PFPO ) Structure overview Properties located in Thailand Investment mandate Minimum 75% of fund to invest in properties; Maximum 20% of uncompleted properties Maximum 20% of fund to invest in money market instruments (1) Appraisals Properties to be appraised every two years and to be reviewed every year Gearing Gearing allowed to up to 10% of NAV (2) Dividend policy Taxation Pay out a minimum of 90% of net profit Foreign (non-thai), Thai listed, and Thai non-listed institutions are exempt from withholding taxation income and capital gains Foreign ownership No foreign ownership limit Notes: (1) According to the rules, this excludes government bonds, treasury bills and bonds issued by other qualified institutions (2) According to Notification of the SEC No. KorNor. 9/2551 re: Rules, Conditions and Procedures for Establishment and Management of the Fund (No.5) 7

9 Key investment highlights High quality shopping malls in Thailand s leading cities Highly recognized brand Proven track record of organic growth Strong acquisition pipeline Strong sponsorship by CPN Best-in-class among Thai PFPOs and comparable to other Asian REITs 8

10 High quality existing portfolio CentralPlaza Rama II & CentralPlaza Ratchada-Rama III CPNRF invests in the leasehold rights of two retail shopping malls in Bangkok: CentralPlaza Rama II (70% portfolio by leasable area) and CentralPlaza Ratchada-Rama III (30% portfolio by leasable area), with a total leasable area of 133,313 sqm Rama II is a prime complex in one of Bangkok s fast-growing neighbourhoods, while Rama III is an urban shopping mall in an expanding business district The two malls enjoy the benefits of a well-diversified tenant mix The popularity of the malls with shoppers in Bangkok ensured consistently high occupancy rates Well-diversified tenant mix by leasable area Consistently high occupancy rates Others, 16% Vacant, 2% Food and beverage 12% Entertainment and leisure 15% Department store 20% Electrical appliance and furnishing 16% Fashion beauty and health 19% Portfolio Occupancy 100% 98% 96% 94% 92% 90% 99.0% 98.0% 98.5% 98.1% 96.8% Q09 Source: CPN, as at 30 June 2009 Source: CPN, as at 30 June

11 Proven track record of strong organic growth Proven strong organic growth since the IPO in 2005 Daily traffic grew by CAGR of 11.7% from 2005 to 2Q09 Able to increase rental rates for renewals and new leases every year Increase in rental rates for renewals and new leases Year of renewal / new leases % of renewal / new leases to total area 14.1% 20.7% Increase in rental per annum (2) 8.0% 5.7% Strong operating performance results in DPU growth every year, with CAGR of 5.3% from 2005 to 1Q09 (annualized) Growth in average daily traffic 2Q % Distribution growth 4.8% Source: CPN (1) From 1 January 2009 to 30 June 2009 (2) Excludes rental agreement with revenue sharing clause Note: Excludes rental agreements < 1 year; % renewal as per total leasable area for each respective period 300, ,000 CAGR in daily traffic of 11.7% 243, , CAGR in DPU growth (annualized) of 5.3% Persons per day 200, , ,000 50, ,000 65,000 94, ,000 58, ,000 71, , ,000 83,000 85, , ,000 Distribution per unit (THB) Annualized Annualized Q09 Rama II Source: CPN, as at 30 June 2009 Note: Figures rounded to the nearest thousands Rama III (annualized) Actual Source: CPN, as at 31 March (annualized) Annualized 10

12 Strong acquisition pipeline Opened Rights of first refusal over 820,000 sqm of retail space (excluding office) from CPN s portfolio, including the leasable area to be acquired from Pinklao CPNRF has right of first refusal until 2012 Udon Thani Source: CPN pre-announcement estimate for 2Q09 Notes: Figures are pre-announced estimate, which may vary from the actual announcement (1) Excluding rental agreements < 1 year, such as kiosk, carts, ATMs and coin machine (2) Percentage based on leaseable area (3) Represent the areas that remain with CPN (which CPNRF did not invest during the initial investments (IPO) such as long-term lease areas, etc) (4) Represent leaseable retail areas of the projects (include both the areas that the Fund will invest and that it will not (such as long-term lease areas, etc) (5) Excluding areas which belong to other Central Group s members (such as Central Department Store and CRC Specialty Stores) Pattaya Festival 55,038 (5) sqm Chaengwattana 65,613 (5) sqm Rama II 5,937 (3) sqm Bangna 57,533 sqm Rama III 18,192 (3) sqm Chiangmai 76,108 sqm Pattaya Center 15,225 sqm Ladprao Leasable area (1) Khonkaen 48,700 (5) sqm 49,354 (5) sqm Chonburi 39,503 (5) sqm Rattanathibet 77,244 sqm CentralWorld 184,592 sqm Pinklao 54,220 (4) sqm Ramindra 17,159 sqm 55,583 sqm % 97% 97% 100% 98% 99% 99% 98% 99% 100% 97% Existing properties Proposed acquisition properties Occupancy Rate (2) N/A 100% 89% 83% Project under development by CPN Recently opened 11

13 combined with asset enhancement plans to sustain growth CentralPlaza Rama II Partial modification of air-conditioning system in Junction X zone Completed in December 2008 Directional signs improvement Completed in December 2008 CentralPlaza Rama III New design for take-home area Completed in April 2009 Reconfigure of E-Life and XY Arena Zone Completed in December 2008 Addition of new food park Completed in April

14 CPN sponsorship provides valuable synergies For over the past 29 years, CPN has successfully evolved into Thailand s largest and mostsophisticated property developer and retail management company Today, the company owns and manages 14 premium shopping complexes, 6 office buildings and 2 residential condominiums and 1 hotel with about 1.0 million square meters of total leasable area Market leader in retail development and property management One of the most successful property companies in the country having won many of the highly regarded awards and achievements including Asia s Best under a Billion by Forbes Magazine, ISO 9001:2000 certified for the Head Office and all shopping malls (excl. Chaengwattana, Chonburi, Pattaya Beach, and Udon Thani) CPN is included in the SET50 index and FTSE large cap index. The company was also ranked in the Top Quartile category for Good Corporate Governance of Thai listed companies. Leading position in Bangkok retail space CPN s awards and achievements CPN, 20% Others, 36% CPNRF, 4% The Mall Group, 11% MBK, 2% Siam Center, 2% Fashion Island, 4% Siam Future, 6% Future Park Rangsit, 5% Siam Paragon, 5% Seacon Square, 5% Source: CPN Note: Based on 4Q06 CB Richard Ellis s report and company s estimate as of March 2009 Source: CPN Top Corporate Governanace Report 2008 from SET Awards

15 Best-in-class and most liquid Thai PFPO After the proposed acquisition, CPNRF s market cap is expected to be more than twice the size of the next largest property fund traded in the Stock Exchange of Thailand Given our market capitalization, we are also the most liquid commercial PFPO in Thailand CPNRF provides one of the best returns among the Thai commercial PFPO universe Market cap of the Thai PFPOs (above THB 4b) Thai commercial PFPO liquidity and returns (1) 16,000 15,710 Mkt cap Trading vol 12-month returns on Market cap (THB m) 14,000 12,000 10,000 8,000 6,000 4,000 2, ,613 10,096 Valuation of new property (1) 6,698 6,386 5,659 4,165 CPNRF SPF TFUND QHPF FUTUREPF BKKCP CPNRF MIPF FUTUREPF QHPF MJLF (THB m) ,096 2,128 4,165 5,695 1,794 (THB 000) (2) 57 7,855 N/A (3) 1,439 2, Unit price 4.9% (1.6%) (4.3%) (9.0%) (11.1%) (17.9%) Distribution 8.9% 9.4% 8.3% 9.9% 10.4% 9.3% Total 13.8% 7.8% 4.0% 1.0% (0.7%) (8.6%) Source: Bloomberg as at 28 July 2009 Notes: (1) Assume THB 5,613m for new property valuation which is an average appraised values by Thai Property Appraisal Lynn Phillips Co Ltd ( TPALP ) as of 9 July 2009 and 15 Business Advisory Ltd ( 15BIZ ) as of 25 June 2009 Source: Bloomberg as at 28 July 2009 Notes: (1) Total returns = 12 month return on unit price + 12 month return on distribution; 12 month return on unit price is = (current unit price/unit price 12-month before) 1; 12 month return on distribution = (distribution received within the last 12 month period/unit price 12-month before) (2) Average daily trading volume YTD (3) Stock is illiquid with only 6 trading days YTD. Latest traded value is THB 3,360 as at 28 July

16 Resilient compared to Asia Pacific peers On a total returns basis, the investment performance of CPNRF has been superior vs the average performance of comparable retail REITs in Asia CPNRF s distribution yield is comparable to regional retail REITs despite a balance sheet with no gearing Total 12-month returns of selected Asian retail REITs (1) Asian retail REITs yields and spreads (2) 40.0% 30.0% 20.0% 10.0% 0.0% (10.0%) (20.0%) (30.0%) (40.0%) 35.5% Strong unit price appreciation of 28% for the past twelve month period 8.4% 7.8% Average returns (excl. CPNRF): -10.4% (6.2%) (22.6%) (25.2%) (31.0%) (31.6%) 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 11.8% 11.1% 11.1% Average distribution 9.6% yield (excl. CPNRF): 8.6% 8.6% 8.3% 7.2% 6.2% 5.8% 6.1% 4.7% 4.7% 3.7% 3.5% 2.4% 1.6% (50.0%) CRCT Link CPNRF FCT LMRT SUN STARH CMT 0.0% LMRT SUN STARH CPNRF FCT CMT CRCT Link Source: Bloomberg as at 28 July 2009 Note: (1) Total returns = (12-month unit price change + 12-month distributions) / (Unit price as 12 months ago) 12-month distribution yield based on unit price as at 28 July 2009 Spread over risk free rate (10 year government bond issued in local currency) 3.720%: CPNRF 2.510%: SUN, STARH, FCT, CMT, CRCT Hong 2.362%: Link %: LMRT 15

17 03 THE NEW ASSET CentralPlaza Pinklao

18 CPN s portfolio of top quality assets Traffic by property (ranked by 2Q09 traffic) 200, ,000 Injected to CPNRF Prime complex in one of Bangkok s fast-growing neighbourhoods Proposed injection to CPNRF The second best property in CPN s portfolio by financial performance Persons / day 160, , , ,000 80,000 60,000 40,000 20,000 Injected to CPNRF Urban shopping mall in an expanding business district 0 Ladprao RamaII II Pinklao Bangna CentralWorld Rama III Chonburi Chiangmai Airport Chaengwattana Q09 Rattanathibet Pattaya Festival Ramindra Pattaya Center Udon Thani Gross area (1) (sqm) 127K 156K 143K 178K 295K 131K 101K 108K 160K 105K 200K 47K 40K 85K Source: CPN estimates as at 30 June 2009 Note: (1) Gross areas of the whole shopping malls (excluding parking) and include areas of department stores which do not belong to CPN (including those in Ladprao, Pinklao, Bangna, Rama III, Pattaya and Ram Indra). 17

19 CentralPlaza Pinklao Asset highlights The second best performing center in CPN s portfolio by financial performance Dominant player in its location, no other comparable quality malls in the same catchment area Integrated complex with retail and office components Located on a main road with high level of connectivity and conveniently accessible by large surrounding residential communities Anchored by many strong tenants, which draw traffic into the mall, including Central Department Store, Tops Supermarket, EGV Cinema, Fitness First Gym & Health Club, etc. (1) High level of occupancy for entire shopping complex at 98.6% (2) and 98.1% (2) for the retail areas to be invested by the Fund during this capital increase Note: (1) Central Department Store, Tops Supermarket, EGV Cinema are not located in the area to be invested by the Fund during this capital increase (2) As at 30 June 2009 Catchment area of Pinklao 18

20 CentralPlaza Pinklao Overview Integrated commercial complex situated on western Bangkok Consists of CentralPlaza Shopping Complex and 2 office buildings: Central Tower A Pinklao and Central Tower B Pinklao The Fund will invest in certain parts of the shopping complex (excluding Central Department Store and long-term lease tenants), the 2 office buildings (whole) and parking spaces (in proportion to the utilised areas in which the fund will invest) Lease term of approximately 15 years Asset details (1) Tenant mix of shopping complex (by leasable area) (1) Electronic and furnishing 12.3% Others 15.0% Food and beverage 22.7% Vacant 1.9% Fashion, health, and beauty 33.4% Entertainment 14.7% Major tenants of shopping complex (1) Tenants (2) Area (sqm) % of total leasable area As at 30 June 2009 Shopping Tower A Tower B Fitness First 2, Storey 7+1 basement Prae Pittaya Leasable area (m 2 ) 23,210 22,427 11,335 AIS Service Center Number of tenants Fuji Restaurant Occupancy rate 98.1% 84.7% 87.5% KFC Restaurant Average rental (THB/sqm/month) 1, Total 4, Source: CPN, as at 30 June 2009 Notes: (1) Based on the area which CPNRF will invest in (2) Top-five tenants do not include a food court area of approximately 1,660 sqm Source: CPN, as at 30 June

21 CentralPlaza Pinklao Strong rental growth Historical performance (1) Average rental rates Occupancy rates 2,000 1,600 1, Q09 CAGR of 7.2% 1,491 1,598 1, % 80% 97.8% 81.4% 90.9% 98.1% 98.6% 85.7% 87.5% 85.7% THB / sqm / month 1, Q09 CAGR of 6.0% % 40% 20% Q09 0% Q09 Source: CPN Shopping Complex Offices Source: CPN Shopping Complex Offices Average rental rates of the shopping complex increases by CAGR of 7.2% from Q09 Average rental rates of the office buildings increases by CAGR of 6.0% from Q09 High occupancy rates from Q09 Rezoning in the shopping complex caused occupancy rate to drop temporarily in 2007 Consistent growth in office occupancy rate after one large tenant moved out in 2006 with slight drop in office occupancy in 2Q09 Note: (1) Historical performance based on the whole project; not reflective of portion which will be invested by the Fund 20

22 CentralPlaza Pinklao Asset enhancement Relocation of food court to new area 1,600-sqm new FOODPARK, 5th floor Completed for service in March 2008 Major renovation plans Complex visibility and access enhancement 5th Floor enhancement Reconfigure retail area on 5th Floor Expected to complete by end of 2009 Interior design refurbishment Note: Plan drafts are under development 21

23 Independently appraised values of assets Buildings Floors Gross area to be invested by the Fund (sqm) Appraised value (THB m) TPALP 15BIZ 2010 Net property income (1) (THB m) Property yield at max. appraised value (2) Property yield at min. appraised value (2) CentralPlaza Pinklao Shopping Complex (certain part) 7-storey with 1 basement 67,082 4, , % 13.4% Central Tower A Pinklao Office Building (in whole) 26-storey 32, % 12.4% Central Tower B Pinklao Office Building (in whole) 18-storey 18, % 12.6% Parking Areas in those Buildings (with 1,800 parking spaces) 10-storey with 1 basement 67,936 Total 185,671 5, , % 13.2% Note: (1) Based on Unitholders Circular (2) Please note that this is based on the higher value ( Max. ) and lower value ( Min. ) of the two appraised valuations and is used for illustrative purposes only. The actual acquisition price of the new assets will be determined by CPNRF investment committee Central Plaza Pinklao complex represents approximately 27% of post transaction CPNRF NAV (1) Retail focus - office component represents only approximately 6% of post transaction CPNRF NAV (1) Note: (1) Based on the average appraised value of the two appraised valuations and reported NAV of approximately THB 11,354m as at 30 June

24 Ownership structure Pinklao Land Total areas (Rai-Ngan-Square Wah) (square meters) Right of the original lessee or owner Land to be leased/subleased by the Fund (Rai-Ngan-Square Wah) (square meters) Possession right of the Fund ,536 Long-term lease contract, expiry on 31 December ,536 (subleased) Long-term sublease contract, expiry on 31 December 2024 Salable area (1) (square meters) 142,701 Building Salable area (1) to be invested in by the Fund (square meters) % of salable area (1) to be invested in by the Fund to total salable area of the whole project Possession right of the Fund 100, Long-term lease contract, expiry on 31 December 2024 Note: (1) Salable area means leasable area and common area (including promotion area) which can be leased out and / or used for rendering the services. 23

25 04 BENEFITS OF ACQUISITION AND CAPITAL INCREASE

26 Improved critical mass and growth profile Before transaction After transaction Portfolio size THB 10,972m (1) 2 Properties THB 16,585m (2) 3 Properties (3) Financial growth THB 1,185m FY2010E Net Property Income THB 1,901m FY2010E Net Property Income DPU accretion Transaction is conditional on accretion to expected FY2010 DPU Notes: (1) Appraised by 15BIZ as at 31 December 2008 (2) Assume THB 5,613.35m for new property valuation which is an average appraised values by TPALP as of 9 July 2009 and 15BIZ as of 25 June 2009; final investment value to be determined at the time of the offering (3) Plaza Pinklao, Pinklao Tower A and Pinklao Tower B are considered to be 1 property 25

27 Benefits of the acquisitions and the capital increase 1 DPU accretion Accretive transaction on expected DPU for FY2010E 2 Robust balance sheet 3 Portfolio diversification CPNRF to take on conservative leverage of up to 10% of NAV Take advantage of strong liquidity in Thailand banks and optimise capital structure Increase from 2 properties to 3 properties (1) Diversified tenant and customer base 4 Expand trading liquidity Increase liquidity by increasing fund size by over 50% Notes: (1) Plaza Pinklao, Pinklao Tower A and Pinklao Tower B are considered to be 1 property 26

28 1. 1 DPU accretive transaction No gearing (i.e. 0% gearing of enlarged NAV (1) ) Net investment price Net of proceeds the real to properties CPN (THB (THB m) and m) premium/discount and premium/discount to average appraised to average value appraised (%)² value (%) (2) Proceeds paid Investment to CPN by CPNRF price 5,052 5,192 5,333 5,473 5,613 5,754 5,894 6,034 6,175 Net proceeds Net investment received by price CPN³ 4,953 5,091 5,229 5,368 5,506 5,644 5,782 5,921 6,059 Net proceeds Discount as % of avg or appraised premium value (%) (11.8%) (9.3%) (6.8%) (4.4%) (1.9%) 0.5% 3.0% 5.5% 7.9% Offering price Unit of price the offered new investment (THB) units (THB) % na na na na na na na na % 0.10% na na na na na na na % 0.56% na na na na na na na % 1.02% na na na na na na na % 1.47% 0.43% na na na na na na % 1.91% 0.87% na na na na na na % 2.34% 1.31% 0.29% na na na na na % 2.77% 1.74% 0.73% na na na na na % 3.20% 2.17% 1.15% 0.16% na na na na % 3.61% 2.58% 1.58% 0.59% na na na na % 4.02% 3.00% 1.99% 1.00% 0.04% na na na % 4.43% 3.41% 2.40% 1.42% 0.45% na na na % 4.83% 3.81% 2.81% 1.82% 0.86% na na na % 5.22% 4.20% 3.21% 2.23% 1.26% 0.32% na na % 5.61% 4.59% 3.60% 2.62% 1.66% 0.72% na na % 5.99% 4.98% 3.99% 3.01% 2.06% 1.12% 0.19% na % 6.37% 5.36% 4.37% 3.40% 2.44% 1.51% 0.59% na % 6.74% 5.73% 4.75% 3.78% 2.83% 1.89% 0.97% 0.07% % 7.10% 6.10% 5.12% 4.15% 3.21% 2.27% 1.36% 0.45% % 7.47% 6.47% 5.49% 4.52% 3.58% 2.65% 1.73% 0.83% % 7.82% 6.83% 5.85% 4.89% 3.95% 3.02% 2.11% 1.21% Notes: The referenced offering price and the referenced net investment price of the real properties to be invested by the Fund are for illustrative purposes only. The final offering price and the net investment price for the real properties may be higher, lower or equal to the range set out in the above table (1) Enlarged NAV refers to post transaction NAV. The figure is dependent on final investment price. For the purposes of the above sensitivity table, we assume no borrowing (2) The average appraised price from the appraisal reports of TPALP and 15BIZ is THB 5,613.35m (3) The net investment price of the real properties to be invested by the Fund is the investment price of the real properties to be invested by the Fund deducted by expenses related to the capital increase absorbed by Central Pattana Public Company Limited. The amount of such expenses is dependent on the size of capital increase, borrowing amount and the structure of the offering result 27

29 1. 1 Impact of gearing on DPU accretion Gearing of 5% of enlarged NAV (1) Net investment price Net proceeds of the real to CPN properties (THB m) (THB and premium/discount m) and premium/discount to average appraised to average value appraised (%)² value (%) (2) Proceeds paid Investment to CPN by CPNRF price 5,052 5,192 5,333 5,473 5,613 5,754 5,894 6,034 6,175 Net proceeds Net investment received price by CPN³ 4,963 5,101 5,240 5,378 5,516 5,655 5,793 5,931 6,070 Net proceeds Discount as % of avg or premium appraised value (%) (11.6%) (9.1%) (6.7%) (4.2%) (1.7%) 0.7% 3.2% 5.7% 8.1% Offering price Unit of the price new offered investment (THB) units (THB) % 3.75% 2.62% 1.52% 0.44% na na na na % 4.19% 3.07% 1.97% 0.90% na na na na % 4.62% 3.51% 2.41% 1.34% 0.29% na na na % 5.05% 3.94% 2.85% 1.78% 0.73% na na na % 5.47% 4.36% 3.28% 2.21% 1.17% 0.14% na na % 5.88% 4.78% 3.70% 2.64% 1.59% 0.57% na na % 6.29% 5.19% 4.11% 3.05% 2.01% 1.00% na na % 6.69% 5.60% 4.52% 3.46% 2.43% 1.41% 0.42% na % 7.09% 5.99% 4.92% 3.87% 2.84% 1.82% 0.83% na % 7.48% 6.39% 5.32% 4.27% 3.24% 2.23% 1.24% 0.26% % 7.86% 6.77% 5.71% 4.66% 3.64% 2.63% 1.64% 0.67% % 8.24% 7.15% 6.09% 5.05% 4.03% 3.02% 2.04% 1.07% % 8.61% 7.53% 6.47% 5.43% 4.41% 3.41% 2.43% 1.46% % 8.97% 7.90% 6.85% 5.81% 4.79% 3.80% 2.82% 1.85% % 9.33% 8.26% 7.21% 6.18% 5.17% 4.17% 3.20% 2.24% % 9.69% 8.62% 7.58% 6.55% 5.54% 4.55% 3.57% 2.61% % 10.04% 8.98% 7.93% 6.91% 5.90% 4.91% 3.94% 2.99% % 10.38% 9.33% 8.29% 7.26% 6.26% 5.28% 4.31% 3.35% % 10.72% 9.67% 8.63% 7.62% 6.62% 5.63% 4.67% 3.72% % 11.06% 10.01% 8.98% 7.96% 6.96% 5.98% 5.02% 4.07% % 11.39% 10.34% 9.31% 8.30% 7.31% 6.33% 5.37% 4.43% Notes: The referenced offering price and the referenced net investment price of the real properties to be invested by the Fund are for illustrative purposes only. The final offering price and the net investment price for the real properties may be higher, lower or equal to the range set out in the above table (1) Enlarged NAV refers to post transaction NAV. The figure is dependent on final investment price. For the purposes of the above sensitivity table, a borrowing amount of approximately 5% of the Enlarged NAV has been assumed (2) The average appraised price from the appraisal reports of TPALP and 15BIZ is THB 5,613.35m (3) The net investment price of the real properties to be invested by the Fund is the investment price of the real properties to be invested by the Fund deducted by expenses related to the capital increase absorbed by Central Pattana Public Company Limited. The amount of such expenses is dependent on the size of capital increase, borrowing amount and the structure of the offering result 28

30 1. 1 Impact of gearing on DPU accretion Gearing of 10% of enlarged NAV (1) Offering price Unit of price the new offered investment (THB) units (THB) Net investment price Net of proceeds the real to properties CPN (THB (THB m) and m) premium/discount and premium/discount to average to appraised average value appraised (%)² value (%) (2) Proceeds paid Investment to CPN by CPNRF price 5,052 5,192 5,333 5,473 5,613 5,754 5,894 6,034 6,175 Net proceeds Net investment received by price CPN³ 4,972 5,110 5,249 5,387 5,526 5,664 5,803 5,941 6,080 Net proceeds Discount as % of avg or appraised premium value (%) (11.4%) (9.0%) (6.5%) (4.0%) (1.6%) 0.9% 3.4% 5.8% 8.3% % 7.94% 6.74% 5.57% 4.42% 3.30% 2.20% 1.12% 0.06% % 8.35% 7.16% 5.99% 4.85% 3.73% 2.63% 1.55% 0.49% % 8.75% 7.56% 6.40% 5.26% 4.15% 3.05% 1.98% 0.92% % 9.14% 7.96% 6.81% 5.67% 4.56% 3.47% 2.40% 1.35% % 9.53% 8.36% 7.20% 6.07% 4.96% 3.88% 2.81% 1.77% % 9.91% 8.74% 7.59% 6.47% 5.36% 4.28% 3.22% 2.18% % 10.29% 9.12% 7.98% 6.86% 5.76% 4.68% 3.62% 2.58% % 10.66% 9.50% 8.36% 7.24% 6.15% 5.07% 4.02% 2.98% % 11.02% 9.87% 8.73% 7.62% 6.53% 5.46% 4.40% 3.37% % 11.38% 10.23% 9.10% 7.99% 6.90% 5.83% 4.79% 3.76% % 11.73% 10.58% 9.46% 8.36% 7.27% 6.21% 5.16% 4.14% % 12.08% 10.94% 9.82% 8.72% 7.64% 6.58% 5.54% 4.51% % 12.42% 11.28% 10.17% 9.07% 7.99% 6.94% 5.90% 4.88% % 12.75% 11.62% 10.51% 9.42% 8.35% 7.30% 6.26% 5.25% % 13.08% 11.96% 10.85% 9.76% 8.70% 7.65% 6.62% 5.61% % 13.41% 12.29% 11.18% 10.10% 9.04% 7.99% 6.97% 5.96% % 13.73% 12.61% 11.51% 10.43% 9.38% 8.33% 7.31% 6.31% % 14.04% 12.93% 11.84% 10.76% 9.71% 8.67% 7.65% 6.65% % 14.36% 13.25% 12.16% 11.09% 10.04% 9.00% 7.99% 6.99% % 14.66% 13.56% 12.47% 11.41% 10.36% 9.33% 8.32% 7.32% % 14.96% 13.86% 12.78% 11.72% 10.68% 9.65% 8.64% 7.65% Notes: The referenced offering price and the referenced net investment price of the real properties to be invested by the Fund are for illustrative purposes only. The final offering price and the net investment price for the real properties may be higher, lower or equal to the range set out in the above table (1) Enlarged NAV refers to post transaction NAV. The figure is dependent on final investment price. For the purposes of the above sensitivity table, a borrowing amount of approximately 10% of the Enlarged NAV has been assumed (2) The average appraised price from the appraisal reports of TPALP and 15BIZ is THB 5,613.35m (3) The net investment price of the real properties to be invested by the Fund is the investment price of the real properties to be invested by the Fund deducted by expenses related to the capital increase absorbed by Central Pattana Public Company Limited. The amount of such expenses is dependent on the size of capital increase, borrowing amount and the structure of the offering result 29

31 1. 2 Robust balance sheet CPNRF will explore taking on leverage of up to 10% of NAV to partially fund the investment in Central Plaza Pinklao Maximum gearing of 10% imposed by Thailand SEC is conservative as compared with Asia REIT peers who have an average gearing of 31% CPNRF currently has no leverage as compared to its Asia REIT peers Details of borrowing Gearing (%) 70% 60% 58% CPNRF is currently in discussion with loan providers 50% 40% 30% 20% 10% 46% 44% 42% 41% 39% 38% 35% 34% 33% 33% 32% 32% 28% 26% 23% 20% Average (excl. CPNRF): 31% 15% 12% 10% 8% As per fund scheme, the Investment Committee will have an authority to make decision regarding the loan Further details on the borrowing will be disclosed once decision has been made 0% 0% FCOT Saizen CIT CCT MIREIT ART MLT AREIT SUN FCT CMT CRCT SGREIT KREIT Fortune PREIT CDL-HT First LMRT Indiabulls AIT CPNRF Source: Bloomberg as at 24 July

32 3. 3 Portfolio diversification Increased diversity in tenant base (1) Tenant contribution by leasable area 25% 20% 15% 10% 5% 0% 20.3% 14.2% Central Department Store 9.0% 6.3% 5.8% 4.1% 3.7% 2.8% 2.6% 1.7% Major Cineplex Home Work Fitness First Tops Supermarket 1.5% 2.0% 1.4% 0.0% Revenue Office of Area 16 Major Bowl Balanced lease expiry profile scenario (2) 0.7% 0.8% 0.8% 0.0% 0.5% 0.5% Krung Thai Bank Office Depot Existing portfolio Enlarged portfolio IT City % of leases expiry by leasable area 30% 25% 20% 15% 10% 5% 10.1% 13.9% 12.5% 15.9% 20.4% 19.5% 21.1% 17.4% 25.2% 20.1% 9.7% 8.2% Existing portfolio Enlarged portfolio 4.1% 1.9% 0% (3) 2009 (Jul-Dec) After 2012 Other leasable area Vacant Notes: (1) Top ten tenants of the existing properties and the properties to be invested in this capital increase as at 30 June 2009 (2) Lease expiry profile by total leasable area as at 30 June 2009 (3) Other leasable area includes the area leased out for shorter than 1-year period and the area leased out to other tenants which are not permanent units whereby the lease agreements are mostly on a short-term basis 31

33 3. 3 Portfolio diversification (cont d) Leasable area (2Q09) Traffic flow - retail (2Q09) Pinklao Tower B, 6% Rama III, 30% Rama II, 70% +42.7% Pinklao Tower A, 12% Pinklao Plaza, 12% Rama II, 49% Pinklao Plaza, 37% Rama II, 40% Rama III, 21% Rama III, 23% 133,313 sqm 190,286 sqm 369,000 Net property income (FY10E) Pinklao Tower A, 4% Pinklao Tower B, 2% +56.8% Rama III, 37% Rama II, 63% +60.4% Pinklao Plaza, 32% Rama II, 39% Rama III, 36% Rama II, 64% Rama III, 23% THB 1,185m THB 1,901m 234,000 32

34 4. 4 Increased liquidity Increased free float (1) Fund size to increase by 57.5% (2) Free float increased to ~US$ 310m, up from ~US$ 200m currently CPNRF market cap (US$ m) Liquidity comparison of Asian REITs Post-transaction liquidity comparable with other regional REITs Amount of free float (US$ m) +57.3% ,000 1,800 1, % 78.3% Float as % of market cap Current Free float Non free float Post transaction 1,400 1,200 1, ,865 2, % 86.7% 1, % 79.1% 66.7% Link CMT SUN STARH CRCT FRT CPNRF (post trx) Free float Non free float 36.5% 166 FCT 42.5% 128 LMRT Source: Bloomberg as at 28 July 2009 Source: Bloomberg as at 28 July 2009 Notes: Exchange rate per US$ 1.00 as following: SG$ 1.44, HK$ 7.75, THB (1) Assume constant free float ratio (i.e % held by CPN) (2) Post transaction market cap assumes current market cap plus estimated capital increase which is a total of estimated transaction cost and average appraisal price for Central Pinklao of THB 5.6billion (average between TPAPL s THB 5.8billion and 15BIZ s THB 5.4billion 33

35 05 TRANSACTION STRUCTURE

36 Key events of the transaction Key events Unitholder meeting Regulatory review Offering period Expected dates (1) 17 August 2009 Expected approval by mid September 2009 Mid October 2009 Trading of new units Early November 2009 Note: (1) All dates are tentative and may subject to change and/or delay 35

37 Key terms of unitholder approval Items Agenda Approval required Approval threshold Acquisition of new property and adjustment of property management fee 1 Acquisition of Pinklao assets Change in property management fee to reflect additional investment Three-fourths of total units, present and voting (excluding CPN) (1) Capital raising for the acquisition 2 3 Approve increase of fund capital through an issuance and offer for sale of additional Investment Units (including loan, if any) Approve pricing mechanism To deem that resolution be valid for one year after the date of resolution has been passed Approve offering structure and allotment method To approve listing of the new Investment Units To deem that resolution be valid for one year after the date of resolution has been passed 50% of total votes 50% of total votes Change of fund management company and fund management scheme 4 5 To approve change of fund management company and related fund management scheme To approve change on fund management scheme 50% of total votes 50% of total votes Note: (1) As at 8 June 2009, CPN s investment in CPNRF is 33.33% of total investment units 36

38 Proposed structure of the capital increase Issue of new units up to THB 6.7b/US$ 195m (1) 50 % of new units 50 % of new units Rights offering to existing unitholders Private placement and/or public offering Allocation based on rights entitlement Public offering will be done on a small-lot first basis Unitholders may apply for excess units Investors participating in private placement are institutional investors and/or specific investors who are not existing unitholders CPN will commit to take up pro-rata share of the transaction Note: (1) Approximation, using exchange rate of THB per US$ 37

39 Pricing mechanism Offering price to be determined nearer to the offering by CPNRF Investment Committee in consultation with lead managers Offering price of the new units will be subject to: Maximum funds raised of THB 6,706million (maximum asset investment price + estimated expenses) Maximum asset investment price (120% of the lowest valuation between the two independent valuations): THB 6,496million for assets at CentralPlaza Pinklao Prevailing market conditions and CPNRF market price at the time of the fund raising Asset investment price which will be DPU accretive for FY2010 Rights Offering and Private Placement and/or Public Offering to be issued at the same Offering price 38

40 Closing summary Benefits to unitholders from the capital increase Acquiring prime asset of CPN DPU accretive to the Fund Potential to optimise CPNRF capital structure through gearing Improves size and liquidity for the Fund Enhances diversification benefits Acquisition meets CPNRF s objectives Organic growth potential and acquisition pipeline 39

41 Investor Relations Office: Choenporn Subhadhira Kalvalee Thongsomaung Tel: ext.1614 Tel: ext Website:

42 Appendix A

43 Thailand macro economic environment CPI and Core CPI CPI and CPI core y-o-y growth has turned negative due to the impact on global financial crisis which has a significant impact on Thailand s export sector 10% 8% 6% CPI % CPI Core % Although private consumption and retail sale indices have declined from their peaks in 2008, the indices are still maintained at 2007 level 4% 2% 0% -2% -4% -6% Import/Export Index Source: Ministry of Commerce Private Consumption Index and Retail Sale Index (US$ m) 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Export value Import value Private consumption index Retail sale index Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Source: Bank of Thailand Source: Bank of Thailand 42

44 Retail property market in Bangkok The supply of Bangkok s retail space rose 0.8% q-o-q and 9.0% y-o-y As of 1Q09, overall occupancy rose slightly to 92.9% largely due to new tenants opening their businesses and existing retailers having completed their renovation While average rents remained relatively stable in 1Q09, premium operators such as CPN has seen rental increase from its tenant renewal On longer term basis, CBRE expects occupancy rate to fall but believes the level of drop will be limited Approximately 152k m 2 of retail space will be completed by 2Q09, bringing total retail space to 5.23m m 2 6, , , , , , Source: CBRE Retail market trend Q 2009 Total supply Total take-up Vacancy rate 50% 40% 30% 20% 10% 0% Occupancy level by area, 2003-Q Retail rents by area, 2003-Q % 96% 92% 88% 84% THB/m 2 4,000 3,000 2,000 1,000 80% Q 2009 Downtown Midtown Suburban Downtown Midtown Suburban 1Q 2009 Source: CBRE Source: CBRE 43

45 Office property market in Bangkok As of 1Q09, total Bangkok office grew 67,300m 2 or 0.9% q-o-q and 4.0% y-o-y. 70.3% of the newly completed space is from new two projects located in CBD. Outside CBD, the newly complete space is from Central Chaengwattana who accounts for 29.7% of total new supply in 1Q09 Net take-up during 1Q09 declined 62.3% q-o-q and 82.4% y-o-y. Despite of certain expanding companies, multinationals are reducing the size of their offices Overall, rent fell by an average of 4.0% CBRE expects demand for offices in 2009 to slow down but does not foresee any significant downward change in take-up rate sqm 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Source: CBRE Office market trend Total supply Total take-up Vacancy rate Q % 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Net take up, 2000-Q Office rents by area, 2003-Q Take-up (sqm) 400, , , , , , ,000 THB / sqm CBD Grade A CBD Grade B Non-CBD Grade A Non-CBD Grade B , Q Q Source: CBRE Source: CBRE 44