CAPITARETAIL CHINA TRUST (CRCT) First and Only China Shopping Mall S-REIT Tapping into China s Consumption Growth 30 and 31 March 2012
Important Notice and Disclaimer This presentation may contain forward-looking statements that involve assumptions, 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 other developments or companies, shifts in expected levels of occupancy rate, property rental income, charge out collections, changes in operating expenses (including employee wages, benefits and training costs), 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 current view of management on future events. The information contained in this presentation has not been independently verified. No representation or warranty expressed or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Neither CapitaRetail China Trust Management Limited (the Manager ) or any of its affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising, whether directly or indirectly, from any use, reliance or distribution of this presentation or its contents or otherwise arising in connection with this presentation. The past performance of CapitaRetail China Trust ( CRCT ) is not indicative of the future performance of CRCT. Similarly, the past performance of the Manager is not indicative of the future performance of the Manager. The value of units in CRCT ( 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 that the Manager redeem or purchase their Units while the Units are listed. It is intended that holders of Units (Unitholders) may only deal in their Units through trading on Singapore Exchange Securities Trading Limited (the SGX-ST ). Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. This presentation is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for Units. 1
Contents Overview FY 2011 Highlights Market Outlook 2
CapitaMall Qibao, Shanghai Financial Results for XQ 2011 * DD Month 2011* Overview
First and Only China Shopping Mall S-REIT Geographically Diversified Portfolio of 9 Income-Producing Shopping Malls 6 Growth Cities 535,279 sq m Total GRA RMB7.1 billion Valuation 60.8 million Shopper Traffic Valuation and total gross rentable area as at 31 Dec 2011. Shopper traffic for FY 2011. 4
Access to China s Rapidly Growing Retail Market 1 Increasing Urbanisation Projected to reach 61.9% in 2030 2 Retailers Continue to Enjoy Strong Sales 30.9 35.8 42.5 47.0 51.1 55.0 58.6 61.9 RMB Mil 5,950 6,718 7,641 8,921 10,849 13,268 15,700 18,123 3 1995 2000 2005 2010 2015 2020 2025 2030 Source: United Nations Rising Disposable Income per Capita Creating Stimulus for Consumption 2004 2005 2006 2007 2008 2009 2010 2011 Source: National Bureau of Statistics of China RMB 9,422 10,493 11,759 13,786 15,781 17,175 19,109 21,810 2004 2005 2006 2007 2008 2009 2010 2011 Source: National Bureau of Statistics of China 5
Unique Exposure into China s Tier 1, 2, and 3 Cities CRCT offers unique opportunity to tap into the growth of both Tier 1 and non-tier 1 Chinese cities Robust retail sales growth of about 18% in Huhhot, Wuhan, Zhengzhou and Wuhu in 2011 CRCT s Portfolio Gross Rentable Area Retail Sales Growth in 2011 Wuhan Huhhot Wuhu Total GRA 535,279 sq m Beijing 17.1% 10.8% 12.3% 18.4% 18.0% 17.6% 18.8% Shanghai Zhengzhou 6 Source: National Bureau of Statistics of China, Beijing Staitsical Information Net, Shanghai Statistics, Statistical Information of Zhengzhou, Statistical Information of Wuhan, The Government Website of Huhhot, Wuhu Statistics Information
International Retails Keen to Expand into China Expansion plans across 1 st, 2 nd and 3 rd tier cities 1,000 stores by 2020 1,500 stores by 2015 2,500 stores by 2015 New Brands Entering China: We think second tier is a great opportunity because the middle class is growing faster It may be starting from a lower base, but growing more rapidly as urbanisation occurs. David Zoba Senior Vice President, Global Real Estate, GAP 7 Source: China Daily, Financial Times, Reuters, Bloomberg
Quality Tenants in Our Malls 8
CRCT offers Resilience and Growth Increasing distribution per unit through economic cycles Distribution Per Unit (Singapore cents) 6.72 7.53 8.14 8.36 8.70 2007 2008 2009 2010 2011 Global Financial Crisis European Debt Crisis 9
Investing in Quality, Income-Producing Malls CapitaMall Xizhimen - China s Most Progressive Mall Landmark development in Beijing Won China s Most Progressive Mall award conferred by China Commercial Real Estate Association in Mar 2012 Other awards won by CapitaMall Xizhimen: Most Youthful and Vibrant Mall of the Year award by Beijing News in 2010 2010 Most Valuable Brand Marketing Initiative by Lifestyle Magazine 10
Investing in Quality, Income-Producing Malls (cont d) CapitaMall Wangjing Most Influential Mall in Wangjing Area Won Most Influential Mall in Wangjing Area by Beijing News in 2010 One of China s top commercial projects promoting regional development, DFOM Commercial Real Estate Forum, 2011 Prestigious 2008 2009 Operation Award at the Mall China Golden Mall Awards 11
Investing in China through a Singapore-listed Vehicle with Strong Corporate Governance List of Awards won by CRCT Best Investor Relations for an IPO Award 2007 by IR Magazine South East Asia Runner up for Most Transparent Company New Issue at the Securities Investors Association (Singapore) Investors Choice Awards 2007 Gold, Silver and Bronze awards in the Best Annual Report REITs and Business Trusts category at the Singapore Corporate Awards 2011, 2010 and 2009 Bronze award for Best Investor Relations (companies with S$300 million to less than S$1 billion in market capitalisation) category at Singapore Corporate Awards 2011 12
Strong Sponsor CRCT is managed by an external manager, CapitaRetail China Trust Management Limited, which is an indirect wholly-owned subsidiary of CapitaMalls Asia Limited (CMA), one of Asia s largest listed shopping mall developers, owners and managers. Long-term growth potential from rights of first refusal to purchase CMA s extensive portfolio of malls in China Access to CMA s integrated shopping mall business model 13
CapitaMall Wangjing, Beijing Financial Results for XQ 2011 * DD Month FY 2011* Highlights
FY 2011 Highlights Stellar financial results in 4Q 2011 4 th consecutive quarter of double-digit growth in tenant sales and NPI DPU growth of 10.1% to 2.28 cents Rental reversion of 9.5% Strong growth in FY 2011 NPI growth of 15.9% (11.7% excl CapitaMall Minzhongleyuan) Positive rental reversion of 11.5% Distribution per unit growth of 4.1% to 8.70 cents Net asset value up 13.7% to S$1.33 Prudent capital management No major refinancing in 2012 15 Gearing at low of 28.0%
Delivering Results in 2011 CapitaMall Xizhimen and CapitaMall Wangjing Double-digit y-o-y NPI growth from portfolio s two largest malls Close to 100% occupancy Double-digit rental reversions Enlarged portfolio with acquisition of CapitaMall Minzhongleyuan CapitaMall Minzhongleyuan 16
Delivering Results in 2011 (cont d) CapitaMall Wuhu, CapitaMall Qibao and CapitaMall Saihan Robust NPI growth momentum - CapitaMall Wuhu: 37.6% y-o-y - CapitaMall Qibao: 60.8% y-o-y - CapitaMall Saihan: 91.7% y-o-y Strong rental reversion CapitaMall Saihan CapitaMall Qibao CapitaMall Wuhu 17
Robust Tenant Sales Growth Trend CRCT Portfolio Tenant Sales 1 Growth Ave. Monthly Sales (RMB psm) Exceeded China s retail sales growth of 18.4% in 2010 and 17.1% in 2011 +26.1% +25.8% 1. Includes only tenants at CapitaMall Xizhimen, CapitaMall Wangjing, CapitaMall Saihan, CapitaMall Qibao and CapitaMall Wuhu. 18
Strong Financial Position 4Q 2011 Unencumbered Assets as % of Total Assets Gearing 100.0% 28.0% Fixed vs Floating Rate Debt as at 31 Dec 2011 Net Debt / EBITDA (x) 5.2 Interest Coverage 8.0 Average Term to Maturity (Years) 1.34 1 Average Cost of Debt 2.60% 1. The average term to maturity has been extended to 2.37 years upon the refinancing of S$138 million debt in February 2012. 19
CapitaMall Wuhu, Wuhu Financial Results for XQ 2011 * DD Month Market 2011* Outlook
China s Fundamentals Remain Strong Healthy GDP growth of 9.2% 1 and retail sales growth of 17.1% 1 in 2011 despite dismal global economic conditions 2012 GDP growth target of 7.5% to achieve higher quality, sustainable development. 7.5% growth rate is still much higher than developed countries 2012 GDP Growth Forecast by IMF (Jan 12) China sgrowth Target:7.5% IMF Forecast: 8.2% 21 1. National Bureau of Statistics of China
Growing Income and Increasing Urbanisation to Support Consumption Growth Urban disposable income per capita expected to grow about 15% per annum from 2011 to 2015 Urbanisation rate expected to reach 61.9% by 2030, from 47.0% in 2010 Close to one billion people will live in cities, bringing about more retail spending Real consumption estimated to reach US$4.8 trillion by 2020, making China the world s second largest consumer market after United States Growth in urban disposable income per capita in 2011 Beijing 13.2% Zhengzhou 14.4% Shanghai 13.8% Wuhan 14.1% 22 Source; China Institute for Reform and Development, United Nations, McKinsey & Company, Beijing Statistical Information Net, Shanghai Statistics, Statistical Information of Wuhan, Statistical Information of Zhengzhou.
Government is Committed to Boost Consumption We will work hard to expand consumer demand. We will move faster to set up a permanent mechanism for boosting consumption We will improve policies that encourage consumption. Premier Wen Jiabao 5 th Session of the 11 th National People s Congress 5 March 2012 To speed up China s transformation, China should expand its domestic demand by unleashing potentials in the urbanisation process. Vice Premier Li Keqiang Opening Ceremony of China Development Forum 18 March 2012 23
Potential Appreciation of the Renminbi CRCT derives 100% revenue in Renminbi (RMB) terms Proxy for exposure to RMB RMB as an International Reserve Currency I see no reason for the renminbi not to reach the status of an international reserve currency and occupy a position on par with China s economic size. Christine Lagard, IMF Managing Director Luncheon Address in Beijing, 18 March 2012 24
Key Investment Highlights Unique vehicle offering unparalleled growth potential Proven track record underpinned by strong cash flow Mid to long term appreciation of RMB Most resilient sector during through economic cycles Strong sponsor with secured acquisition pipeline 25
First and Only China Shopping Mall S-REIT For enquiries, please contact: Mark Wai Ling (Ms) Investor Relations Tel: +65 6826 5521 Fax: +65 6536 3884 Email: mark.wailing@capitaland.com http://www.capitaretailchina.com 26