The Straits Trading Company Limited Corporate Profile August 2016
Disclaimer The information contained in this presentation (the "Presentation") is for information purposes only. The Presentation does not constitute or form part of any offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for, or any offer to underwrite or otherwise acquire any securities of The Straits Trading Company Limited (the Company ) or any other securities, nor shall any part of the Presentation or the fact of its presentation or communication form the basis of, or be relied on in connection with, any contract, commitment or investment decision in relation thereto. The information in this Presentation is based on the views of and certain assumptions held by the management of the Company. While the Company has made reasonable efforts to ensure the accuracy of the information, the Company has not independently verified such information. In addition, the Company does not make any representation or warranty as to the accuracy or completeness of the information contained in this Presentation or the reasonableness of any assumptions contained herein and any liability in respect therefore is expressly disclaimed. The information in this Presentation has been provided by the Company and speak as of 23 June 2016, and are subject to change without notice or update. The Company does not make any representation or warranty that there have been changes in the affairs of the Company after such date. This Presentation may contain forward-looking statements. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, expected performance, trends, anticipated developments in the Company s industries, market position, expenditures, and financial results, are forward-looking statements. Forwardlooking statements are based on certain assumptions and expectations of future events. The Company does not guarantee that these assumptions and expectations are accurate or will be realized. 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. Although the Company believes that such forward-looking statements are based on reasonable assumptions, it can give no assurance that such expectations will be met. These factors include, but are not limited to, (i) general global, regional and local political, social and economic conditions (including, but not limited to, factors such as the political landscape, environmental conditions and viral epidemics such as human avian flu and severe acute respiratory syndrome) that may result in reduced occupancy rates and room rates for the hospitality investments of the Company or affect the other investments of the Company, (ii) the cyclical nature of the property market and tourism industry in the countries in which the Company operates and fluctuations in tin prices, (iii) the Company not being successful in the implementation of its business strategies or in managing its growth, (iv) regulatory developments and changes in the industries in which the Company operates, the general economic condition of, and changes in, the economy in Asia-Pacific and Europe, (v) competition in the hospitality industry and the hospitality-related industry in the Asia-Pacific and Europe region, (vi) hostilities (including future terrorist attacks) or fear of hostilities that affect travel in general, within or to the Asia-Pacific region or any other countries in which the hospitality investments of the Company are located or have operations, (viii) changes in the supply and demand for tin metal, (vii) changes in the price of tin as a result of speculation,(viii) changes in interest rates or inflation rates,(ix) wars or acts of international or domestic terrorism,(x) occurrences of catastrophic events, natural disasters and acts of God that affect the business or properties of the Company, and (xi) other factors beyond the control of the Company. You are cautioned not to place undue reliance on these forwardlooking statements, which are based on current view of the Company's management on future events. This Presentation includes statistical data provided by us and various third parties and cites third party projections regarding growth and performances of the industry and markets in which we operate. Such data is taken or derived from information published by industry sources, various third parties and from our internal data. In each such case, the sources are identified in this Presentation. This Presentation is directed only atpersons which are not U.S. persons as defined under Regulation S of the U.S.Securities Act of 1933 and, in addition, which are lawfully able to receive this document under the laws of the jurisdictions in which they are located or other applicable laws. 2
STC Group A Diversified Investment Company Since Tecity Group s takeover of The Straits Trading Company Limited ( STC ) in 2008, STC has been transformed into a major player in real estate, hospitality and resources, with investments that span the Asia-Pacific region. STC s real estate ecosystem Real Estate 89.5% 20.1% *11.2% 30.0% Asset / Fund Management Real Estate Investment Trust Hospitality 54.8% Resources 89.5% owned coinvestment vehicle with 10.5% owned by John Lim family office (up to S$950m total commitment) One of the largest real estate fund managers in the region One of the largest REITs in Singapore with ownership interests in prime commercial and retail properties One of the largest hospitality operators in the region with around 90 properties and over 13,000 rooms under management The second largest producer of refined tin metal in the world New investments that complement these platforms STC will leverage on these platforms and make appropriate future investments to develop engines of growth *Aggregate interest at Tecity Group of companies 3
Board of Directors are Industry Veterans Chew Gek Khim (Executive Chairman) Ms.Chewwasearmarkedandgroomedbyhergrandfather, the late Tan Sri (Dr) Tan Chin TuantoheadtheTecity Group Deputy Chairman of ARA Asset Management Ltd, Chairman of ARA Trust Management (Suntec) Ltd, and Malaysia Smelting Corporation Berhad, Board Member of SGXand serves on the board of SIC of Singapore Chew Gek Hiang(NI & NE Director) Executive Director and Head of Finance at Tecity Group Serves on advisory panel of GST Review Board Accountantbytraining;memberofInstitute of Chartered Accountants in England and Wales since 1990 Yap Chee Keong (NI & NE Director) Over25yearsofexperience ingeneral management, M&Aandfinance Former advisor and CFO at SingPower Group Fellow of ISCA and CPA Australia & SID David Goh (NI & NE Director) CIO and Chief Strategist at Tecity Group Formeradjunctassociateprofessorof FinanceatNTU and investment analyst with Great Eastern Life HoldsM.Sc.fromMITand is a CFACharter holder Timothy Chia (Lead ID) Dr Gary Weiss (ID) Chairman of Hup Soon Global Corporation Limited ID of Banyan Tree Holdings Ltd and F&N Ltd Advisory Council Member of ASEAN Business Club Former Senior Adviser to EQT Funds Management Ltd Executive Director of Ariadne Australia Ltd Former Executive Director of Guinness Peat Group plc and served on the Boards of several ASX-listed companies, including Westfield Holdings Limited Extensive experience in international business and cross-border M&A ThamKuiSeng(ID) Tan Tiong Cheng(ID) Highly experienced in the real estate sector NE Director of Global Logistics Properties Ltd, SembcorpIndustries Ltd and Banyan Tree Holdings Ltd Board member of Singapore Land Authority Former Chief Corporate Officer of CapitaLandand Director of Raffles Medical Group Ltd 40 years of experience in the real estate sector Executive Chairman of Knight Frank Pte Ltd Independent Director of Heeton Holdings Ltd and UOL Limited Fellow Member of the Singapore Institute of Valuersand Surveyors and a member of the Valuation Review Board Note: NI stands for non-independent; NE stands for Non-Executive; ID stands for independent director 44
Recent History Demonstrates STC s Ability to Create and Unlock Value 2010 2011 2012 2013 2014 2015 REAL ESTATE High-quality but low-yielding real estate portfolio Continuous divestment of lowyielding residential properties Acquisition of 20.1% stake in ARA Formation of Straits Real Estate Pte. Ltd. MonetisedStraits Trading Building for S$450m; crystallised cumulative gain of S$373m Transformed into a dynamic growth platform HOSPITALITY Small-scale niche operator Joint venture with a member of Far East Organization 30% stake in sizable hospitality operator Operational turnaround RESOURCES Variety of resources investments INVESTMENTS Passive 17% stake in WBL Divestment of non-tin assets and refocused on core tin business Improved profile & liquidity with SGX secondary listing STC emerged as the largest shareholder in WBL with a c.41% stake after a share swap with two institutional investors Triggered an MGO and finally accepted a competing general offer World s 2 nd largest supplier of refined tin Well positioned to benefit from potential tin price recovery S$508m of shareholder value unlocked and reinvested into new businesses 5
Strong Foundations Laid for STC Group STC s foundation of growth rests upon: Strong business network to originate deals for our portfolio companies Strong and patient capital with a highly disciplined investment framework Highly experienced management team with strong execution track record Commitment to high standards of corporate governance and strong business ethics Real Estate STC Group Asset / Fund Management Hospitality 30% JV with Far East Orchard Investment in Far East Hospitality Trust Business Network & Connectivity Management Expertise Corporate Finance and M&A Capabilities Good Governance & Business Ethics Resources 6
STC s Major Shareholder Major Shareholder Overview of The Tecity Group The Cairns Pte Ltd (Tecity Group) Note: 1. Based on disclosures in STC s FY2015 Annual Report The Tecity Group was founded by the late banker and 70.0% 1 philanthropist Tan Sri (Dr) Tan Chin Tuan The Tecity Group comprises a 70% stake in The Straits Trading Company Limited; a privately held investment arm, Tecity Management; and a philanthropic arm, The Tan Chin Tuan Foundation The Tecity Group manages an active global investment portfolio with a philosophy centered on the principles of its founder. It prides itself in being a responsible partner and desirable employer The Tecity Group is headed by Ms Chew Gek Khim, granddaughter of the founder 7
STC s Real Estate Ecosystem *11.2% 20.1% 89.5% 100% SUNTEC REIT ARA STRAITS REAL ESTATE EXISTING PROPERTY PORTFOLIO Ownership of incomeproducing real estate assets Prime commercial and retail portfolio in Singapore central business district Private fund management REIT management Real estate management services Total capital commitment of $950 million Direct real estate investments Other real estate opportunities SRE Capital Investing in real estate and infrastructure related securities Maximise yield Look to attractively divest remaining assets Redeploy capital into SRE CAPITAL DEPLOYED Managed by ARA Assets managed externally by ARA Property Management (where applicable) *Aggregate interest at Tecity Group of companies 8
Exposure to Wide Spectrum of Assets Across the Real Estate Space An investment vehicle that seeks out higher returning real estate investment opportunities globally Can invest directly in physical assets, in structured real estate backed securities, seed real estate funds, or fund real estate operating platforms Recurring income from REIT securities and trading through SRE Capital, that invests in a diversified portfolio of real estate equities in Asia Pacific A leading integrated real estate fund manager with revenues from managing REITs, private real estate funds, and providing real estate management services and corporate finance advisory services Rental income provides recurring income Platform for value-accretive acquisitive growth A platform to pursue growth opportunities for the hospitality management and ownership businesses Hotel management contracts provide recurring fee income Ownership of hotel assets provides capital appreciation 9
Straits Real Estate Pte. Ltd. Straits Real Estate Pte. Ltd. ( SRE ) is a real estate investment company that seeks out real estate related investments and opportunities globally. SRE was incorporated in November 2013 with a capital commitment of up to S$950 million. Seek to deploy capital into medium-to-high returning real estate investment opportunities across global markets High degree of flexibility to invest in direct real estate and real estate backed instruments and securities Strong commitment and support from shareholders and strategic partners to carry out investment strategy 10
SRE Capital Pte. Ltd. SRE Capital Pte. Ltd. ( SRE Capital ), a wholly-owned subsidiary of SRE, is a Singaporebased asset management company that specialisesin investing in publicly listed real estate and infrastructure related securities within the Asia Pacific region. Vision Mission To be a leading investment manager of real estate related securities in Asia Pacific Aim to maximisereturns for investors through creating and executing value-added strategies Deliver returns commensurate with core and core-plus commercial real estate markets in Asia Pacific through listed securities space while managing market volatility inherent in listed public securities. 11
Management Team at Straits Real Estate Straits Real Estate Desmond Tang (Chief Executive Officer) Over 23 years of experience in real estate investment and management Formerly Co-Head and Managing Director of Alpha Investment Partners Strong track record executing various strategies across markets and property sectors Andy Lim (Director, Business Development) Works with CEO to develop and implement growth opportunities and investments Executive Director of John Lim Family Office (JLFO), responsible for sourcing, structuring, negotiating and executing the group s investments Lai Jing Dong(Director, Investments) Focused on sourcing and executing real estate transactions Former Vice President at The Carlyle Group where he established its real estate presence in South East Asia and Australia Former Executive Director in Real Estate Principal Investment at Goldman Sachs Japan Adeline Fong (Director, Asset Management) Over 18 years of experience in regional real estate development, asset and fund management Formerly Assistant Director for Asset Management with Alpha Investment Partners Adept in optimising asset returns across various fund strategies Goh Yah Huay (Director, Finance) 20 years experience in Accounting, Controllership, Financial Planning & Analysis Formerly Vice President of Finance at Straits Trading responsible for finance function at Hospitality Division Strong track record of identifying and evaluating business and financial challenges SRE Capital Stephen Ray Finch (CEO/CIO) Over 34 years of experience in securities trading and fund management Formerly CEO and Director at ARA Strategic Capital/APN Funds Management (Asia), fund manager of ARA Asian Asset Income Fund Financial Adviser to 9 out of 13 REITs listed in Singapore as well as landmark REIT listings in Malaysia, Thailand and China Manish Bhargava (Director, Research and Trading) Formerly Head of Research and Trading at APN s Asian Real Estate Securities business, including ARA Asian Asset Income Fund 13 years experience in real estate investment Experienced Fund Manager responsible for conducting research and investing in Asian real estate securities 12
STC s Partners Are Leading Players Straits Real Estate ARA Asset Management Far East Hospitality Holdings STC: 89.5% stake (up to S$850m commitment) MrJohn Lim: 10.5% stake (up to S$100m commitment) STC: 20.1% stake Mr John Lim: 19.25% stake Cheung Kong: 7.83% stake STC: 30% stake Far East Orchard: 70% stake Profile of John Lim: Mr Lim has been the Group Chief Executive Officer and Executive Director of ARA since its establishment in 2002 Under Mr Lim s leadership, ARA s assets under management ( AUM ) has grown to S$28.9 billion (as at 1Q 2016) Profile of Cheung Kong Group: Cheung Kong Group is a property development and strategic investment company It is one of the largest developers in Hong Kong of residential, commercial and industrial properties About one in seven private residences in Hong Kong were developed by the company Profile of Far East Orchard: Far East Orchard is a member of Far East Organization, Singapore s largest private property developer Far East Orchard has a diversified portfolio focusing on property development, hospitality real estate development and management and the healthcare real estate space 13
Straits Real Estate - Investment Portfolio Tokyo ARA Harmony Fund III SGD 72.8 mm* Chongqing Osaka Greater Tokyo Office Fund SGD 80.0 mm* Malaysia Singapore Chongqing Retail Mall SGD 103.0 mm* Suntec REIT SGD 120.0 mm* Japan Residential Portfolio SGD 77.2 mm* Australia 114 William Street Office SGD 58.7 mm* *Committed or invested equity in SGD equivalent Melbourne Summit Development Fund SGD 100.0 mm* 14
SRE Investment Maiden Investment in Chongqing Artist impression External facade Artist impression Garden Concept in Atrium ChongqingRetail Mall Retail development in Chongqing, China Property is a 82,000 sqm development that is directly linked to the subway station Part of a large mixed-use development with residential buildings, offices and a hotel 15
ARA Award Winning Premier Real Estate Fund Manager 20.1% owned associate of STC, ARA is one of the largest real estate fund managers in the region, with S$29.7 billion of AUM (as at 2Q2016) ARA manages REITs and private funds in key markets of Asia with a diversified portfolio spanning the office, retail and industrial sectors; and provides real estate management services Suntec City, Singapore Managed by Suntec REIT Manager Beijing Oriental Plaza, Beijing China Managed by Hui Xian REIT Manager 16
FEHH STC s JV Hospitality Operating Arm FEHH, STC s hospitality joint venture with Far East Orchard, manages a combined hospitality portfolio of over 90 hotels and serviced apartments with more than 13,000 rooms under management across 25 locations FEHH owns a stable of nine unique and complementary hospitality brands Rendezvous Hotel Singapore Adina Apartment Hotel Berlin, Germany 17
Malaysia Smelting Corporation -A Leading Supplier of Refined Tin Metal Leading supplier of tin metal globally One of the world s leading suppliers of refined tin metal Listed on the Main Market of Bursa Malaysia since 1994, with a secondary listing on SGX-ST Custom tin smelting facility in Butterworth Penang, Malaysia and open pit mining of tin in Perak, Malaysia Producer of premium high-purity refined tin ( MSC Straits ) 18
The STC Strategy 1 Develop engines of growth by leveraging on STC s real estate ecosystem and resources platforms 2 Nurture the real estate and resources platforms to grow the businesses and the recurring revenue streams 3 Optimisecapital productivity through deploying capital from the divestments of low-yielding assets to higher returning real estate opportunities 4 Continuously developing and enhancing the synergies within the STC real estate ecosystem 5 Identify investments that are able to leverage on the platforms to generate complementary revenue streams and profit for STC 19