MacarthurCook Property Securities Fund Investor Presentation June 2012 www.macarthurcook.com.au Email: mail@macarthurcook.com 1
Executive Summary MacarthurCook Fund Management Limited (MFML or Responsible Entity) as responsible entity of the MacarthurCook Property Securities Fund (Fund) is excited to welcome our unitholders to our first Investor Presentation which is being held in Singapore since AIMS Financial Group acquired the Responsible Entity in August 2009; The purpose of this Investor Presentation is to up date our unitholders on a number of key initiatives that we have undertaken recently and matters that we are continuing to pursue that may have a material affect on the Fund; Some of the key areas we wish to discuss in this presentation include: A summary of the outcome of the Entitlement Offer; An update on the Fund s OCBC Debt Facility; An update on the potential Unitholder s meeting; An update on MPS legal proceedings against RFML Limited and TFML Limited; Some key statistics in relation to MPS investment portfolio; An update on MPS strategy; and Some key highlights since AIMS acquired MacarthurCook Limited Following this presentation we welcome any questions from the floor. 2
Entitlement Offer Summary The Responsible Entity s objective was to structure an Entitlement Offer that would result in as wide a participation from all Eligible Unitholders as possible; We are delighted with the participation rate of 95.4% from all Eligible Unitholders; We are in particularly pleased with the take up from Central Depositary (Pte) Limited (CDP) Account Holders in Singapore, who over-subscribed for their pro rata entitlement by nearly 1.25 times; We greatly appreciate the support and confidence that all Eligible Unitholders have shown in our ability to manage the Fund during such a challenging period since taking over from our predecessor; AIMS Group Holding Pty Ltd (AIMS), subscribed for the shortfall of 7,659,251 New Units through the Sub- Underwriting arrangements, which resulted in an increase in their holding from 19.99% (pre Entitlement Offer) to 22.12% (post Entitlement Offer). Entitlement Offer Statistics New Units issued under the Entitlement Offer Total New Units applied for by Eligible Unitholders under the Entitlement Offer New Units issued to Eligible Unitholders in Australia and New Zealand New Units issued to CDP Account Holders Take Up Rate of all Eligible Unitholders Take Up Rate of Eligible Unitholders in Australia and New Zealand Take Up Rate of CDP Account Holders AIMS interest in the Fund post Entitlement Offer 167,706,282 160,047,031 (1) 120,644,775 39,302,609 95.4% 88.8% 123.7% 22.12% 1. The Total New Units applied for under the Entitlement Offer includes 99,647 Ineligible Units sold by BBY Limited in its capacity as nominee under section 615 of the Act on behalf of members of the Fund whose addresses, as shown on the register of the Fund, are places outside Australia, New Zealand and Singapore 3
Participation in the Entitlement Offer Participation by Eligible Unitholders Breakdown of Eligible Unitholders 95.4% ASX Entitlement (1) : 135.9m New Units Application: 120.6m New + Additional Units Participation Rate: 88.8% SGX Entitlement (2) : 31.8m New Units Application: 39.3m New + Additional Units Participation Rate: 123.7% Total New Units issued under the Entitlement Offer New & Additional Units subscribed for under the Entitlement Offer Total New & Additional Units subscribed for by Eligible Unitholders in Australia and New Zealand Total New & Additional Units subscribed for by CDP Account Holders Total New Units subscribed for by AIMS as subunderwriter for the Entitlement Offer 1. Entitlement of New Units under the Entitlement Offer for those Eligible Unitholders who invest via the ASX 2. Entitlement of New Units under the Entitlement Offer for those Eligible Unitholders who invest via the SGX 4
Top Unitholders Snapshot Following the Entitlement Offer, all except 1 of the top 6 Unitholders increased their interest in MPS ( 000) (%) 80,000 70,000 Pre Entitlement Offer Post Entitlement Offer Pre Entitlement Offer 22.0 19.25 Number of Units 60,000 50,000 40,000 30,000 Post Entitlement Offer Relative increase in interest post Entitlement Offer Relative Decrease in interest post Entitlement Offer 16.5 13.75 11.0 8.25 % of Units 20,000 5.5 10,000 2.75 1 2 3 4 5 6 Rank Name Rank Name 1. AIMS Group Holding Pty Ltd 4. JP Morgan Nominees (Australia) Limited 2. The Central Depository (PTE) Limited 5. HSBC Custody Nominees (Australia) Limited 3. Pelorus Property Investments Limited 6. Perpetual Trustee Co. Limited (MCK Office Property Trust) 5
Fund Balance Sheet Gearing The Responsible Entity s primary focus remains repaying the OCBC Debt Facility ($ 000) 45,000 40,000 OCBC Debt Post Offer OCBC Debt 30/6/09 31/12/11 Gearing post Entitlement Offer Gearing 30/6/09-3/12/11 (%) 40.0 35.0 Interest Bearing Liabilities 35,000 30,000 25,000 20,000 15,000 18.5% (1)(2) 30.0 25.0 20.0 15.0 10.0 % Balance Sheet Gearing 10,000 5.0 30 June 09 30 June 10 30 June 11 30 Sept 11 31 Dec 11 20 June 12 1. Based on the Fund s Total Assets as at 29 February 2012, the balance sheet gearing post Entitlement Offer is calculated as approximately 18.5%. Total Assets excludes the recovery of any funds in relation to the litigation against RFML and TFML. 2. The actual gearing ratio as at 30 June 2012 will be announced in the Full Year 2012 results presentation in due course 6
OCBC Debt Facility Amortisation ($000) (%) Interest Bearing Liabilities 15,000 13,000 11,000 9,000 7,000 5,000 3,000 1,000 Estimated Balance Sheet Gearing 7.75% (1) 20.0 17.5 15.0 12.5 10.0 7.5 5.0 2.5 % Estimated Balance Sheet Gearing 0 1 2 3 4 5 (2) Event Event 0. OCBC Debt as at 20 June 2012 (post Entitlement Offer) 3. Minimum withdrawal from Australian Unity Office Property Fund (Jul 12) 1. Cash available on hand (June 12) 4. Estimated net income distribution from investments (Jul Dec 12) 2. Capital distribution from sale of 607 St Kilda Rd (July 12) 5. RE has already commenced discussions to refinance with a new lender 1. The Estimated Balance Sheet Gearing is calculated as the interest bearing debt divided by the Total Assets as at 29 February 2012. Total Assets excludes the recovery of any funds in relation to the litigation involving RFML and TFML 2. If the Fund cannot refinance the balance of the OCBC Debt Facility with a new lender, it will seek to dispose of select assets 7
Update on Unitholder Meeting On 4 April 2012, BlackWall Property Funds Limited (BlackWall), a subsidiary of Pelorus Private Equity Limited (Pelorus), announced that it intended to convene a meeting of unitholders in MPS; The purpose of this meeting was to consider replacing MacarthurCook Fund Management Limited (MFML) as the responsible entity of the Fund with TFML Limited (TFML), a subsidiary of BlackWall; In a letter dated, 18 April 2012, OCBC advised the Responsible Entity that it will be an event of default under the OCBC Debt Facility if MacarthurCook Funds Management Limited ceases to be the responsible entity of the Fund; On 20 April 2012, the Responsible Entity indicated that it did not support the proposal and provided a summary of the reasons for this including: TFML, the replacement responsible entity of P-REIT, would be in a position of irreconcilable conflict in relation to the proceedings against RFML Limited (RFML) and TFML; and Inability to liquidate MPS investments without crystallising a significant loss On 18 June 2012, the Responsible Entity advised unitholders that it has been informed by Pelorus that the notice of meeting has NOT been dispatched to unitholders and as a result the meeting CANNOT be held on 29 June 2012; The Responsible Entity also advised that at this stage it is NOT in a position to inform unitholders if and when the meeting will be held; The Responsible Entity wishes to advise unitholders that following the allotment of New Units after the Entitlement Offer, Pelorus has an interest of 4.97% in the Fund, which is LESS THAN the 5% minimum required to convene a meeting of unitholders. 8
Litigation with RFML & TFML MPS holds 10.9% in P-REIT (formerly known as the Reed Property Trust); The majority of this investment is held in 15 million preferred equity units redeemable for A$1.00 per unit valued at A$15.0 million; The redemption dates for these units were in November 2008 and December 2008; Legal proceedings were initial brought against RFML, as responsible entity of P-REIT and P-REIT itself seeking redemptions of the Fund s investment and returns for the period since the redemption was to occur or damages; On 9 May 2012, P-REIT unitholders removed RFML as responsible entity of P-REIT and replaced it with TFML (a subsidiary of BlackWall); On 20 June 2012, MPS won a motion to join TFML as a second defendant to the proceedings; The proceedings are still listed for hearing on 9 July 2012; In October 2011, P-REIT was listed on the ASX at an issue price of $0.25 per unit, which compares to the last traded price of $0.08 per unit on 20 June 2012; This represents a decline in the value of the Fund's investment since the time of P-REIT listing on the ASX from A$5.645 million to A$1.807 million or a 68.0% decline in value or 1.1 cents per unit. Date Unit Price Number of Units Value (A$) Change in Value from previous period 30 June 2010 $0.38 22,581,875 $8,581,122 N/A 30 June 2011 $0.30 22,581,875 $6,774,563-21.1% 27 October 2011 $0.25 22,581,875 $5,645,469-16.7% 20 June 2012 $0.08 22,581,875 $1,806,550-68.0% 9
Term to Unlisted Fund Expiry 37.5% (by value) of MPS unlisted investments are expected to terminate by 30/06/2014 (1) ( $000) 40,000 35,000 $30.9m $ Value of Investment (2) 30,000 25,000 20,000 15,000 10,000 $6.9m $20.8m $8.2m 5,000 $4.4m $1.3m $3.8m 31 Dec 12 30 June 13 31 Dec 13 1. The responsible entity of the underlying funds cannot guarantee that the assets will be sold and the fund is wound up by the fund s termination date 2. Based on Unit Price as at 29 February 2012 3. Unitholders have voted in favour of disposing of the underlying assets and winding up the respective fund within the next 12 to 24 months 30 June 14 Winding Up (3) Open Ended 10
Income Distribution Profile The Estimated Annualised Weighted Average Distribution Yield from MPS investments in 7.1% (1) Summary Number of different investments paying a regular income distribution % of investments paying a regular income distribution (by value) Estimated Annualised Income Distribution Yield 10 72.4% 5.2% 10 10 72.4% Estimated Annualised Weighted Average Distribution Yield 7.1% No. of different investments paying a regular income distribution No. of different investments NOT paying a regular income distributions MPS underlying investments MPS underlying investments (by value) paying regular distribution income From 2013 we intend to recommence regular income distributions 1. The Estimated Annualised Weighted Average Distribution Yield is calculated on the 10 different investments that are currently paying a regular income distribution 11
Fund s Strategy Since AIMS took over MacarthurCook Limited in August 2009, the Responsible Entity's strategy has been to reduce the OCBC Debt Facility to stabilise the Fund's balance sheet; Since August 2009, the OCBC Debt Facility has been reduced from $44.5 million to $11.8 million (post Entitlement Offer); The Responsible Entity will continue with the strategy of reducing the OCBC Debt Facility as shown on slide 8; In addition to the events that are known to be occurring, such as the estimated $0.50 per unit return of capital from Centuria Direct Property Fund following the sale of 607 St Kilda Rd, Melbourne, there are other events that are expected to occur however the timing is uncertain at this stage. For example: Unitholders voted to wind up Stockland Direct Office Trust No. 3, which MPS has a 6.7% interest; Unitholders voted to wind up APGF Real Estate Investment Trust, which MPS has a 2.6% interest; and Toga Accommodation Fund are expected to announce a liquidity event by 31 Dec 2012 We are working closely with all of these groups to ensure the best outcome is achieved for our investors; Next year (in 2013), if the OCBC Debt Facility has been repaid or refinanced on acceptable terms, the Responsible Entity intends to recommence regular income distributions; Our primary objective is to provide investors with regular income and potential for capital growth and continue to fulfil our obligation to protect investors interest in the Fund. 12
AIMS Track Record Since AIMS acquired MacarthurCook Ltd in August 2009, we has focused on maximising the value of each fund in the group while protecting unitholder interests MacarthurCook Industrial Property Fund (MIF) After taking control of MIF, AIMS successfully reduced gearing and reinstated distributions; Resulting in an increase in the NTA per unit and the trading price on the ASX almost double from $0.17 to $0.31; These improvements attracted offers from a number of global real estate investors for the c.a$124m portfolio; In May 2010, REIT Management & Research LLC, which manages over $US21 billion of real estate across 5 publicly traded vehicles, made a A$0.41 per unit cash offer, which subsequently rose to A$0.44 per unit; In June 2010, MIF unitholders voted overwhelmingly in favour to accept the final cash offer and MIF was delisted from the ASX (and renamed CWH (Australia) Trust) and MFML remains the responsible entity; The portfolio has grown to over A$300m and the JV partners are seeking to acquire further larger scale commercial office buildings in major Australian CBD locations. 1 2 3 4 5 Select properties from CWH (Australia) Trust 1. 320 Pitt St, Sydney, NSW, 2. 44 Mandan St, Villawood, NSW, 3. 9-13 Titanium Court, Crestmead, QLD, 4. 16 Rodborough Rd, Frenches Forest, NSW, 5. 22 Rodborough Rd, Frenches Forest, NSW 13
AIMS Track Record Overview AIMS AMP Capital Industrial REIT AIMS AMP Capital Industrial REIT 2QFY10 4QFY12 No. of properties 21 25 Total Assets S$505.2 S$939.0m Market capitalisation S$60.0m S$507.9m Gearing 44.7% 28.8% DPU N/A 9.2% (1) Rating (S&P) N/A BBB- 1. Based on closing price of S$1.14 per unit on 31 May 2012 Investor total returns 160 150 140 130 120 110 100 90 Price Performance (1)(2) Rebased to 100 as of 1 Jan 10 80 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Source: Bloomberg as of 31 May 2012 Performance since 01/01/10 31/5/12 AACIREIT: +45.3% STI: -4.9% FST REI: +3.6% AACREIT STI Index FTSE REI 1. Assumes dividends reinvested 2. Price is adjusted for Equity Transactions Substantial unitholders as at 30 April 2012 Investor Total Returns % Name % Interest Investors since IPO (19/4/07 31/3/12) -4.0% Institutional investors (23/10/09 31/3/12) (1) 20.5% Retail investors (1/01/10 31/3/12) (2) 16.0% 1. Assuming participation in Placement in Nov 09, Rights Issue in Dec 09, Rights Issue in Oct 10, Placement in Feb 11 & reinvestment of distribution 2. Assuming participation in Rights Issue in Oct 10& reinvestment of distributions AMP Capital Investors Limited 14.34% Dragon Pacific Assets Limited 11.92% APG Algemene Pensioen 9.37% Universities Superannuation Scheme 7.23% George Wang 6.99% 14
Important Notice Disclaimer The information contained in this presentation is for information purposes only and does not constitute an offer to sell or any solicitation of an offer or invitation to purchase or subscribe for units in MacarthurCook Property Securities Fund ( MPS ) in Australia, Singapore or any other 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. The past performance of the Units and MPS is not indicative of the future performance of MPS. Predictions, projections or forecasts of the economy or economic trends of the markets are not necessarily indicative of the future or likely performance of MPS. The value of the Units and the income derived from them may fall as well as rise. Units are not obligations of, deposits in, or guaranteed by, the MacarthurCook Funds Management Limited (the Manager ). An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Investors have no right to request that the Manager redeem their Units while the Units are listed. It is intended that holders of Units ( Unitholders ) may only deal in their Units through trading on the Australian Stock Exchange ( ASX ) or the Singapore Exchange Securities Trading Limited (the SGX-ST ). Listing of the Units on the ASX and SGX-ST does not guarantee a liquid market for the Units. This presentation may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments, shifts in expected levels of property rental income, changes in operating expenses, including employee wages, benefits and training, property expenses and governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the Manager's current view of future events. 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 Manager, or any of its 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. 15