OUE Commercial REIT Management Pte. Ltd. - …€¦ · Circular dated 1 July 2015 Singapore...
Transcript of OUE Commercial REIT Management Pte. Ltd. - …€¦ · Circular dated 1 July 2015 Singapore...
Circ
ular d
ated
1 July 2
015
www.ouect.com
Singapore Exchange Securities Trading Limited (the “SGX-ST”) assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this Circular. If you are in any doubt about its contents or as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.
Approval in-principle has been obtained from the SGX-ST for the listing and quotation of the Rights Units (as defined herein) in OUE Commercial Real Estate Investment Trust (“OUE C-REIT”), the Rights Issue (as defined herein) and the new Units to be issued upon conversion of the CPPUs (the “Conversion Units”) on the Main Board of the SGX-ST. The SGX-ST’s in-principle approval is not an indication of the merits of OUE C-REIT, the proposed Acquisition (as defined herein), the Rights Issue, the Rights Units, the CPPUs and the Conversion Units.
If you have sold or transferred all your units in OUE C-REIT (“Units”), please forward this Circular together with the Notice of Extraordinary General Meeting and the accompanying Proxy Form immediately to the purchaser or transferee to the stockbroker, bank or other agent through whom the sale was effected for onward transmission to the purchaser or transferee.
This Circular may not be sent to any person or any jurisdiction in which it would not be permissible to deliver the Rights Units and the “nil-paid” provisional allotment of Rights Units to Eligible Unitholders (as defined herein) under the Rights Issue (the “Rights Entitlements”) or make an offer of the Rights Units and the Rights Entitlements and the Rights Units and Rights Entitlements may not be offered, sold, resold, transferred or delivered, directly or indirectly, to any such person or in any such jurisdiction. The Rights Units and Rights Entitlements have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or under any securities laws of any state or other jurisdiction of the United States (“U.S.”) and may not be offered, sold, resold, allotted, taken up, exercised, renounced, pledged, transferred or delivered, directly or indirectly, within the U.S. except pursuant to an applicable exemption from, or a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the U.S.
Standard Chartered Securities (Singapore) Pte. Limited, CIMB Bank Berhad, Singapore Branch and Oversea-Chinese Banking Corporation Limited were the joint global coordinators and issue managers for the initial public offering of OUE C-REIT.
MANAGED BY
OUE Commercial REIT Management Pte. Ltd.Joint Lead Managers and
Underwriters for the Rights Issue
Joint Financial Advisers for the CPPU Issue and
the Rights Issue
Independent Financial Adviser to the Independent Directors of OUE Commercial REIT Management Pte. Ltd. and to
DBS Trustee Limited (as trustee of OUE C-REIT) for the Acquisition and the CPPU Issue
IMPORTANT DATES AND TIMES FOR UNITHOLDERS
EVENT DATE AND TIME
Last date and time for lodgement of Proxy Forms
Saturday, 25 July 2015 at 2.00 p.m.
Date and time of Extraordinary General Meeting
Monday, 27 July 2015 at 2.00 p.m.
Place of Extraordinary General Meeting
Marina Mandarin SingaporeMarina Mandarin Ballroom, Level 16 Raffles Boulevard, Marina SquareSingapore 039594
CIRCULAR TO UNITHOLDERS IN RELATION TO:
(1) THE PROPOSED ACQUISITION OF AN INDIRECT
INTEREST IN ONE RAFFLES PLACE AND THE PROPOSED
CPPU ISSUE; AND
(2) THE PROPOSED TRUST DEED SUPPLEMENT FOR THE
ISSUE OF PREFERRED UNITS.
CIRCULAR DATED 1 JULY 2015THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
(a real estate investment trust constituted on 10 October 2013 under the laws of the Republic of Singapore)
DELOITTE & TOUCHE CORPORATE FINANCE PTE LTD(Incorporated in the Republic of Singapore)(Company Registration No.: 200200144N)
The overview section 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 55 to 61 of this Circular.
THE PROPOSED ACQUISITION
OUE C-REIT proposes to acquire an indirect interest in One Raffles Place (“the Property”) through the acquisition of between 75.0% and 83.33% interest in OUB Centre Limited (“OUBC”) from OUE Limited (the “Sponsor”), via the acquisition of its wholly-owned subsidiary Beacon Property Holdings Pte. Ltd. (“BPHPL”) (the “Acquisition”).
OUBC is the registered owner of the Property and owns 81.54% of the beneficial interest in the Property (the “OUBC Interest”).
The agreed value of the OUBC Interest is S$1,715 million.
OVERVIEW OF THE TRANSACTION
OVERVIEW OF ONE RAFFLES PLACE
Description One Raffles Place is an integrated commercial development comprising two Grade-A office towers and a retail podium
Gross Floor Area (“GFA”) Approximately 119,725.8 sq m (1,288,717 sq ft)
Net Lettable Area (“NLA”) One Raffles Place Tower 1: Approximately 38,090.3 sq m (410,000 sq ft)
One Raffles Place Tower 2: Approximately 32,516.1 sq m (350,000 sq ft)
One Raffles Place Shopping Mall: Approximately 9,290.3 sq m (100,000 sq ft)
Total: Approximately 79,896.7 sq m (860,000 sq ft)
Car Park Lots 326 car park lots located in Basements 2 to 4
Title One Raffles Place Tower 1: 841-year leasehold title commencing 1 November 1985
One Raffles Place Tower 2: 99-year leasehold title commencing 26 May 1983
One Raffles Place Shopping Mall - the retail podium straddles two land plots:
– approximately 75% of the retail podium NLA is on a 99-year leasehold title commencing 1 November 1985
– the balance 25% is on the 841-year leasehold title commencing 1 November 1985
ABOUT ONE RAFFLES PLACE
One Raffles Place, comprising One Raffles Place Tower 1, One Raffles Place Tower 2 and One Raffles Place Shopping Mall, is a prominent, iconic integrated commercial development with Grade-A building specifications strategically located in the heart of Singapore’s main financial district Raffles Place.
One of the tallest buildings in the Singapore central business district (“CBD”), One Raffles Place Tower 1 comprises a 62-storey Grade-A office building, with a rooftop restaurant and observation deck offering panoramic views of the city skyline.
One Raffles Place Tower 2 is a 38-storey Grade-A office building completed in 2012, awarded the Platinum Green Mark Award by the Building and Construction Authority for its energy efficiency and environmentally sustainable design.
Offering a diverse range of shopping, dining and leisure options which cater to the needs of the working population in the CBD, One Raffles Place Shopping Mall is a six-storey retail podium that has undergone extensive refurbishment works which were completed in May 2014. It is currently the largest purpose-built shopping mall in Raffles Place.
Situated above and with a direct underground link to the Raffles Place Mass Rapid Transit (“MRT”) interchange station through the basement of its retail podium, One Raffles Place enjoys excellent connectivity along the North-South and East-West MRT lines, as well as easy accessibility to other developments within Raffles Place as well as Marina Bay.
ACQUISITION STRUCTURE
(After the Proposed Acquisition)
Other ThirdParties
100%
75.0% to 83.33%
81.54%
16.67% to 25.0%
OUBC
One Raffles Place
BPHPL
VALUATION OF THE OUBC INTEREST
As at 5 June 2015 S$ million
Savills 1,734.0
Cushman & Wakefield 1,733.0
Circ
ular d
ated
1 July 2
015
www.ouect.com
Singapore Exchange Securities Trading Limited (the “SGX-ST”) assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this Circular. If you are in any doubt about its contents or as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.
Approval in-principle has been obtained from the SGX-ST for the listing and quotation of the Rights Units (as defined herein) in OUE Commercial Real Estate Investment Trust (“OUE C-REIT”), the Rights Issue (as defined herein) and the new Units to be issued upon conversion of the CPPUs (the “Conversion Units”) on the Main Board of the SGX-ST. The SGX-ST’s in-principle approval is not an indication of the merits of OUE C-REIT, the proposed Acquisition (as defined herein), the Rights Issue, the Rights Units, the CPPUs and the Conversion Units.
If you have sold or transferred all your units in OUE C-REIT (“Units”), please forward this Circular together with the Notice of Extraordinary General Meeting and the accompanying Proxy Form immediately to the purchaser or transferee to the stockbroker, bank or other agent through whom the sale was effected for onward transmission to the purchaser or transferee.
This Circular may not be sent to any person or any jurisdiction in which it would not be permissible to deliver the Rights Units and the “nil-paid” provisional allotment of Rights Units to Eligible Unitholders (as defined herein) under the Rights Issue (the “Rights Entitlements”) or make an offer of the Rights Units and the Rights Entitlements and the Rights Units and Rights Entitlements may not be offered, sold, resold, transferred or delivered, directly or indirectly, to any such person or in any such jurisdiction. The Rights Units and Rights Entitlements have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or under any securities laws of any state or other jurisdiction of the United States (“U.S.”) and may not be offered, sold, resold, allotted, taken up, exercised, renounced, pledged, transferred or delivered, directly or indirectly, within the U.S. except pursuant to an applicable exemption from, or a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the U.S.
Standard Chartered Securities (Singapore) Pte. Limited, CIMB Bank Berhad, Singapore Branch and Oversea-Chinese Banking Corporation Limited were the joint global coordinators and issue managers for the initial public offering of OUE C-REIT.
MANAGED BY
OUE Commercial REIT Management Pte. Ltd.Joint Lead Managers and
Underwriters for the Rights Issue
Joint Financial Advisers for the CPPU Issue and
the Rights Issue
Independent Financial Adviser to the Independent Directors of OUE Commercial REIT Management Pte. Ltd. and to
DBS Trustee Limited (as trustee of OUE C-REIT) for the Acquisition and the CPPU Issue
IMPORTANT DATES AND TIMES FOR UNITHOLDERS
EVENT DATE AND TIME
Last date and time for lodgement of Proxy Forms
Saturday, 25 July 2015 at 2.00 p.m.
Date and time of Extraordinary General Meeting
Monday, 27 July 2015 at 2.00 p.m.
Place of Extraordinary General Meeting
Marina Mandarin SingaporeMarina Mandarin Ballroom, Level 16 Raffles Boulevard, Marina SquareSingapore 039594
CIRCULAR TO UNITHOLDERS IN RELATION TO:
(1) THE PROPOSED ACQUISITION OF AN INDIRECT
INTEREST IN ONE RAFFLES PLACE AND THE PROPOSED
CPPU ISSUE; AND
(2) THE PROPOSED TRUST DEED SUPPLEMENT FOR THE
ISSUE OF PREFERRED UNITS.
CIRCULAR DATED 1 JULY 2015THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
(a real estate investment trust constituted on 10 October 2013 under the laws of the Republic of Singapore)
DELOITTE & TOUCHE CORPORATE FINANCE PTE LTD(Incorporated in the Republic of Singapore)(Company Registration No.: 200200144N)
The overview section 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 55 to 61 of this Circular.
THE PROPOSED ACQUISITION
OUE C-REIT proposes to acquire an indirect interest in One Raffles Place (“the Property”) through the acquisition of between 75.0% and 83.33% interest in OUB Centre Limited (“OUBC”) from OUE Limited (the “Sponsor”), via the acquisition of its wholly-owned subsidiary Beacon Property Holdings Pte. Ltd. (“BPHPL”) (the “Acquisition”).
OUBC is the registered owner of the Property and owns 81.54% of the beneficial interest in the Property (the “OUBC Interest”).
The agreed value of the OUBC Interest is S$1,715 million.
OVERVIEW OF THE TRANSACTION
OVERVIEW OF ONE RAFFLES PLACE
Description One Raffles Place is an integrated commercial development comprising two Grade-A office towers and a retail podium
Gross Floor Area (“GFA”) Approximately 119,725.8 sq m (1,288,717 sq ft)
Net Lettable Area (“NLA”) One Raffles Place Tower 1: Approximately 38,090.3 sq m (410,000 sq ft)
One Raffles Place Tower 2: Approximately 32,516.1 sq m (350,000 sq ft)
One Raffles Place Shopping Mall: Approximately 9,290.3 sq m (100,000 sq ft)
Total: Approximately 79,896.7 sq m (860,000 sq ft)
Car Park Lots 326 car park lots located in Basements 2 to 4
Title One Raffles Place Tower 1: 841-year leasehold title commencing 1 November 1985
One Raffles Place Tower 2: 99-year leasehold title commencing 26 May 1983
One Raffles Place Shopping Mall - the retail podium straddles two land plots:
– approximately 75% of the retail podium NLA is on a 99-year leasehold title commencing 1 November 1985
– the balance 25% is on the 841-year leasehold title commencing 1 November 1985
ABOUT ONE RAFFLES PLACE
One Raffles Place, comprising One Raffles Place Tower 1, One Raffles Place Tower 2 and One Raffles Place Shopping Mall, is a prominent, iconic integrated commercial development with Grade-A building specifications strategically located in the heart of Singapore’s main financial district Raffles Place.
One of the tallest buildings in the Singapore central business district (“CBD”), One Raffles Place Tower 1 comprises a 62-storey Grade-A office building, with a rooftop restaurant and observation deck offering panoramic views of the city skyline.
One Raffles Place Tower 2 is a 38-storey Grade-A office building completed in 2012, awarded the Platinum Green Mark Award by the Building and Construction Authority for its energy efficiency and environmentally sustainable design.
Offering a diverse range of shopping, dining and leisure options which cater to the needs of the working population in the CBD, One Raffles Place Shopping Mall is a six-storey retail podium that has undergone extensive refurbishment works which were completed in May 2014. It is currently the largest purpose-built shopping mall in Raffles Place.
Situated above and with a direct underground link to the Raffles Place Mass Rapid Transit (“MRT”) interchange station through the basement of its retail podium, One Raffles Place enjoys excellent connectivity along the North-South and East-West MRT lines, as well as easy accessibility to other developments within Raffles Place as well as Marina Bay.
ACQUISITION STRUCTURE
(After the Proposed Acquisition)
Other ThirdParties
100%
75.0% to 83.33%
81.54%
16.67% to 25.0%
OUBC
One Raffles Place
BPHPL
VALUATION OF THE OUBC INTEREST
As at 5 June 2015 S$ million
Savills 1,734.0
Cushman & Wakefield 1,733.0
With a long remaining weighted average land lease expiry (by value) of 435 years, the proposed Acquisition is expected to increase the remaining land lease expiry of OUE C-REIT by approximately 3.6 times, from the current remaining weighted average land lease expiry of approximately 72 years to 258 years
KEY BENEFITS TO UNITHOLDERS
1. ACQUISITION OF A LANDMARK COMMERCIAL PROPERTY IN SINGAPORE
INCREASE IN REMAINING WEIGHTED AVERAGE LAND LEASE EXPIRY
72 Years
258 Years
3.6x
Existing Portfolio Enlarged Portfolio
DT
16C
E 1
BAYF
RON
T
NS
26
EW
14
RA
FFLE
S P
LAC
E
Singapore River
(U/C)
Bayf
ront
Ave
OUE Tower
OUE Bayfront
Mar
ina
Bay
Sand
sBattery Rd Fullerton
Fulle
rton
Rd
Shen
ton
Way
Cecil St
Cross St
Central Boulevard
Marina Boulevard
Mar
ina
Way
Robi
nson
Rd
Mar
ket
St
Chulia StSquare
Col
lyer
Qua
y
Ra�
es Q
uay
Church StOUE Link
To C
hang
i Airp
ort
Marina Bay
ONE RAFFLES PLACE
Raffles Place is perceived as the most accessible office location in the CBD and is expected to remain a focal point of the CBD, with its strategic location offering a strong pull-factor for existing and prospective tenants
The Property is situated above and seamlessly linked to the Raffles Place MRT interchange station, one of Singapore’s major interchange stations, which links to an extensive underground network of pedestrian walkways connecting other developments within Raffles Place as well as Marina Bay
Enjoys enhanced accessibility to other parts of Singapore via proximity to major expressways:- Marina Coastal Expressway- Central Expressway- East Coast Parkway- Ayer Rajah Expressway
2. ACQUISITION AT AN ATTRACTIVE PRICE
The agreed value for the OUBC Interest of S$1,715 million translates to an attractive price of S$2,382 per square foot (“psf”), compared to recently transacted prices of Grade-A properties in the Raffles Place area
Rents for Grade-A buildings in Raffles Place with direct access to the MRT station are expected to be relatively resilient:
- No known premium and Grade-A office developments to be completed in the area from 2015 to 2018
- Existing Grade-A offices in Raffles Place are uniquely positioned, offering mainly mid-sized floor plates of around 10,000 sq ft compared with recent and future office developments that offer floor plates of 20,000 sq ft and above
As at 1Q 2015, the Independent Market Research Consultant(1) estimates the average office rent in Marina Bay to be 20% higher than that in Raffles Place:
- Strong value proposition for businesses to be located in Raffles Place
Current office occupancy rate of the Property is estimated to be about 85.0% to 90.0%, as compared to the average occupancy rate for Grade-A offices in Raffles Place in 1Q 2015 of about 97.2%:
- Potential for occupancy rate to increase by about 7 to 12 percentage points (“ppt”)
Current office rent at the Property is estimated to be S$9.50 to S$10.00 psf per month, compared to the average rent for Grade-A offices in Raffles Place in 1Q 2015 of about S$11.50 psf per month:
- Potential for positive rental reversion of about 15% to 21%
Source: Unless otherwise indicated, the information in the chart is based on information provided in the valuation report of the OUBC interest by Cushman & Wakefield dated 9 June 2015 (1) This is specific information provided by the Manager for the purpose of comparison (2) Based on the sale of a 92.8% stake in Prudential Tower (3) Based on the sale of a 51% stake in Hitachi Tower which valued the property at around S$660.0 million
(1) DTZ Debenham Tie Leung (SEA) Pte Ltd (the “Independent Market Research Consultant”)
TRANSACTED PRICE (S$ psf)
85%
90%
97.2%
+12ppt
+7ppt
Current estimated office occupancy rate
of the Property
Average occupancy rate for Grade-A offices in
Raffles Place in 1Q 2015
Estimated range {
POTENTIAL UPSIDE IN OCCUPANCY: +7PPT TO 12PPT
3. GROWTH OPPORTUNITY FROM POTENTIAL IMPROVEMENT IN OCCUPANCY AND RENTAL RATES
9.50
10.00
11.50
+21%
+15%
Average rent for Grade-A offices in Raffles Place
in 1Q 2015
Estimated range {
S$ psf per month
POTENTIAL UPSIDE IN OFFICE RENTS: +15% TO 21%
Current estimated office rent of the
Property
2,830
Straits Trading Building(Sep 2014)
2,498
OUE Bayfront(Jan 2014)
2,382
OUBC Interest(1)
(in progress)
2,374
Hitachi Tower(3)
(Jan 2013)
2,316
Prudential Tower(2)
(May 2014)
847 years 92 yearsWeighted average of
435 yearsMore than 840 years
80 yearsRemaining Land Tenure:
Source: Independent Market Research Report by DTZ dated 24 April 2015
With a long remaining weighted average land lease expiry (by value) of 435 years, the proposed Acquisition is expected to increase the remaining land lease expiry of OUE C-REIT by approximately 3.6 times, from the current remaining weighted average land lease expiry of approximately 72 years to 258 years
KEY BENEFITS TO UNITHOLDERS
1. ACQUISITION OF A LANDMARK COMMERCIAL PROPERTY IN SINGAPORE
INCREASE IN REMAINING WEIGHTED AVERAGE LAND LEASE EXPIRY
72 Years
258 Years
3.6x
Existing Portfolio Enlarged Portfolio
DT
16C
E 1
BAYF
RON
T
NS
26
EW
14
RA
FFLE
S P
LAC
E
Singapore River
(U/C)
Bayf
ront
Ave
OUE Tower
OUE Bayfront
Mar
ina
Bay
Sand
s
Battery Rd Fullerton
Fulle
rton
Rd
Shen
ton
Way
Cecil St
Cross St
Central Boulevard
Marina Boulevard
Mar
ina
Way
Robi
nson
Rd
Mar
ket
St
Chulia StSquare
Col
lyer
Qua
y
Ra�
es Q
uay
Church StOUE Link
To C
hang
i Airp
ort
Marina Bay
ONE RAFFLES PLACE
Raffles Place is perceived as the most accessible office location in the CBD and is expected to remain a focal point of the CBD, with its strategic location offering a strong pull-factor for existing and prospective tenants
The Property is situated above and seamlessly linked to the Raffles Place MRT interchange station, one of Singapore’s major interchange stations, which links to an extensive underground network of pedestrian walkways connecting other developments within Raffles Place as well as Marina Bay
Enjoys enhanced accessibility to other parts of Singapore via proximity to major expressways:- Marina Coastal Expressway- Central Expressway- East Coast Parkway- Ayer Rajah Expressway
2. ACQUISITION AT AN ATTRACTIVE PRICE
The agreed value for the OUBC Interest of S$1,715 million translates to an attractive price of S$2,382 per square foot (“psf”), compared to recently transacted prices of Grade-A properties in the Raffles Place area
Rents for Grade-A buildings in Raffles Place with direct access to the MRT station are expected to be relatively resilient:
- No known premium and Grade-A office developments to be completed in the area from 2015 to 2018
- Existing Grade-A offices in Raffles Place are uniquely positioned, offering mainly mid-sized floor plates of around 10,000 sq ft compared with recent and future office developments that offer floor plates of 20,000 sq ft and above
As at 1Q 2015, the Independent Market Research Consultant(1) estimates the average office rent in Marina Bay to be 20% higher than that in Raffles Place:
- Strong value proposition for businesses to be located in Raffles Place
Current office occupancy rate of the Property is estimated to be about 85.0% to 90.0%, as compared to the average occupancy rate for Grade-A offices in Raffles Place in 1Q 2015 of about 97.2%:
- Potential for occupancy rate to increase by about 7 to 12 percentage points (“ppt”)
Current office rent at the Property is estimated to be S$9.50 to S$10.00 psf per month, compared to the average rent for Grade-A offices in Raffles Place in 1Q 2015 of about S$11.50 psf per month:
- Potential for positive rental reversion of about 15% to 21%
Source: Unless otherwise indicated, the information in the chart is based on information provided in the valuation report of the OUBC interest by Cushman & Wakefield dated 9 June 2015 (1) This is specific information provided by the Manager for the purpose of comparison (2) Based on the sale of a 92.8% stake in Prudential Tower (3) Based on the sale of a 51% stake in Hitachi Tower which valued the property at around S$660.0 million
(1) DTZ Debenham Tie Leung (SEA) Pte Ltd (the “Independent Market Research Consultant”)
TRANSACTED PRICE (S$ psf)
85%
90%
97.2%
+12ppt
+7ppt
Current estimated office occupancy rate
of the Property
Average occupancy rate for Grade-A offices in
Raffles Place in 1Q 2015
Estimated range {
POTENTIAL UPSIDE IN OCCUPANCY: +7PPT TO 12PPT
3. GROWTH OPPORTUNITY FROM POTENTIAL IMPROVEMENT IN OCCUPANCY AND RENTAL RATES
9.50
10.00
11.50
+21%
+15%
Average rent for Grade-A offices in Raffles Place
in 1Q 2015
Estimated range {
S$ psf per month
POTENTIAL UPSIDE IN OFFICE RENTS: +15% TO 21%
Current estimated office rent of the
Property
2,830
Straits Trading Building(Sep 2014)
2,498
OUE Bayfront(Jan 2014)
2,382
OUBC Interest(1)
(in progress)
2,374
Hitachi Tower(3)
(Jan 2013)
2,316
Prudential Tower(2)
(May 2014)
847 years 92 yearsWeighted average of
435 yearsMore than 840 years
80 yearsRemaining Land Tenure:
Source: Independent Market Research Report by DTZ dated 24 April 2015
4. ACHIEVEMENT OF TRANSFORMATIONAL SCALE AND STRENGTHENED COMPETITIVE POSITION
Achievement of transformational scale for OUE C-REIT through the proposed Acquisition which will significantly enlarge the size of its assets-under-management (“AUM”) and strengthen its competitive position in Singapore
5. STRONG SUPPORT FROM SPONSOR
The proposed issuance of the CPPUs to the Sponsor as part payment for the proposed Acquisition and its undertaking to take up its full pro rata stake in the Rights Issue demonstrates:
- Sponsor’s commitment to support OUE C-REIT’s acquisition growth strategy
- Long-term commitment to grow OUE C-REIT into an efficient platform for holding commercial properties
- Confidence in the growth prospects of One Raffles Place, underlining its importance as a key asset within OUE C-REIT’s portfolio
6. ENHANCED PORTFOLIO DIVERSIFICATION & RESILIENCE, REDUCED ASSET CONCENTRATION RISK
Increase gross revenue contribution denominated in Singapore dollars, which will reduce the impact of foreign exchange fluctuations
Enhance OUE C-REIT’s revenue diversification and reduce concentration risk of income stream from any single property
Enhanced quality of OUE C-REIT’s tenant base, with the addition of several established MNCs
INCREASE IN TOTAL AUM
3,365
1,631
106.3%
Existing Portfolio AUM(1) Enlarged Portfolio AUM
In S$ million
(1) As at 31 December 2014
Enlarged Portfolio(OUBC
Interest)
Existing Portfolio(1)
30.4%
69.6% 85.3%
14.7%
INCREASE IN PROPORTION OF SINGAPORE AUM
Singapore AUM Overseas AUM
INCREASE IN TOTAL NET LETTABLE AREA
1,545,000
825,000
87.3%
Existing Portfolio NLA(1) Enlarged Portfolio NLA
In sq ft
INCREASE IN MARKET CAPITALISATION
7. INCREASED MARKET CAPITALISATION AND POTENTIAL INCREASE IN LIQUIDITY
To part finance the proposed Acquisition, new Units will be raised via the Rights Issue. As at the Latest Practicable Date, the new Units will constitute 45.0% of the Units in issue
The issue of the new Units is expected to increase the market capitalisation of OUE C-REIT and this may therefore facilitate improvement in the trading liquidity of Units on the SGX-ST
The Manager believes the increased market capitalisation and liquidity would provide OUE C-REIT with increased visibility within the investment community
(1) For the Forecast Period from 1 October 2015 to 31 December 2015
(1) Based on Unit closing price of S$0.815 as at Latest Practicable Date of 26 June 2015
31.5% 43.8% 46.4%
17.7% 16.9%
68.5% 38.5% 36.7%
Enlarged Portfolio
(83.33% indirect interest
in OUBC)
Enlarged Portfolio
(75.0% indirect interest
in OUBC)
Existing Portfolio
PROPORTION OF PORTFOLIO GROSS REVENUE CONTRIBUTION DENOMINATED IN SINGAPORE DOLLARS(1)
Gross revenue denominated in foreign currencyGross revenue denominated in Singapore dollars
Existing Portfolio
PORTFOLIO GROSS REVENUE CONTRIBUTION BY PROPERTY(1)
72 Years
930.6
712.3
Market Capitalisation Pre Rights Issue(1)
Market Capitalisation Post Rights Issue
In S$ million
68.5%
Enlarged Portfolio
(83.33% indirectinterest
in OUBC)
Enlarged Portfolio
(75.0% indirect interest
in OUBC)
31.5%
82.3%
17.7% 16.9%
83.1%
OUE Bayfront Lippo Plaza One Raffles Place
30.6%
4. ACHIEVEMENT OF TRANSFORMATIONAL SCALE AND STRENGTHENED COMPETITIVE POSITION
Achievement of transformational scale for OUE C-REIT through the proposed Acquisition which will significantly enlarge the size of its assets-under-management (“AUM”) and strengthen its competitive position in Singapore
5. STRONG SUPPORT FROM SPONSOR
The proposed issuance of the CPPUs to the Sponsor as part payment for the proposed Acquisition and its undertaking to take up its full pro rata stake in the Rights Issue demonstrates:
- Sponsor’s commitment to support OUE C-REIT’s acquisition growth strategy
- Long-term commitment to grow OUE C-REIT into an efficient platform for holding commercial properties
- Confidence in the growth prospects of One Raffles Place, underlining its importance as a key asset within OUE C-REIT’s portfolio
6. ENHANCED PORTFOLIO DIVERSIFICATION & RESILIENCE, REDUCED ASSET CONCENTRATION RISK
Increase gross revenue contribution denominated in Singapore dollars, which will reduce the impact of foreign exchange fluctuations
Enhance OUE C-REIT’s revenue diversification and reduce concentration risk of income stream from any single property
Enhanced quality of OUE C-REIT’s tenant base, with the addition of several established MNCs
INCREASE IN TOTAL AUM
3,365
1,631
106.3%
Existing Portfolio AUM(1) Enlarged Portfolio AUM
In S$ million
(1) As at 31 December 2014
Enlarged Portfolio(OUBC
Interest)
Existing Portfolio(1)
30.4%
69.6% 85.3%
14.7%
INCREASE IN PROPORTION OF SINGAPORE AUM
Singapore AUM Overseas AUM
INCREASE IN TOTAL NET LETTABLE AREA
1,545,000
825,000
87.3%
Existing Portfolio NLA(1) Enlarged Portfolio NLA
In sq ft
INCREASE IN MARKET CAPITALISATION
7. INCREASED MARKET CAPITALISATION AND POTENTIAL INCREASE IN LIQUIDITY
To part finance the proposed Acquisition, new Units will be raised via the Rights Issue. As at the Latest Practicable Date, the new Units will constitute 45.0% of the Units in issue
The issue of the new Units is expected to increase the market capitalisation of OUE C-REIT and this may therefore facilitate improvement in the trading liquidity of Units on the SGX-ST
The Manager believes the increased market capitalisation and liquidity would provide OUE C-REIT with increased visibility within the investment community
(1) For the Forecast Period from 1 October 2015 to 31 December 2015
(1) Based on Unit closing price of S$0.815 as at Latest Practicable Date of 26 June 2015
31.5% 43.8% 46.4%
17.7% 16.9%
68.5% 38.5% 36.7%
Enlarged Portfolio
(83.33% indirect interest
in OUBC)
Enlarged Portfolio
(75.0% indirect interest
in OUBC)
Existing Portfolio
PROPORTION OF PORTFOLIO GROSS REVENUE CONTRIBUTION DENOMINATED IN SINGAPORE DOLLARS(1)
Gross revenue denominated in foreign currencyGross revenue denominated in Singapore dollars
Existing Portfolio
PORTFOLIO GROSS REVENUE CONTRIBUTION BY PROPERTY(1)
72 Years
930.6
712.3
Market Capitalisation Pre Rights Issue(1)
Market Capitalisation Post Rights Issue
In S$ million
68.5%
Enlarged Portfolio
(83.33% indirectinterest
in OUBC)
Enlarged Portfolio
(75.0% indirect interest
in OUBC)
31.5%
82.3%
17.7% 16.9%
83.1%
OUE Bayfront Lippo Plaza One Raffles Place
30.6%
OVERVIEW OF OUE C-REIT
(1) Represents 100% of One Raffles Place’s GFA and NLA(2) As at 31 December 2014(3) Valuation of the OUBC Interest by Savills as at 5 June 2015
ABOUT OUE C-REIT
OUE C-REIT is a real estate investment trust listed on the SGX-ST on 27 January 2014. OUE C-REIT’s principal investment strategy is to invest in income-producing real estate used primarily for commercial purpose in financial and business hubs in key gateway cities. Its portfolio comprises two strategically located properties in Singapore and China with a combined asset size of S$1.6 billion as at 31 December 2014.
Summary of selected information on OUE C-REIT’s enlarged portfolio:
OUE BAYFRONT LIPPO PLAZA ONE RAFFLES PLACE
Key tenants Bank of America Merrill Lynch
Hogan Lovells International LLP
Citrix Systems Singapore Pte Ltd
Ermenegildo Zegna
TMF Limited
British IFX Markets Ltd Shanghai Representative Office
Petrobras Singapore Pte Ltd
Alipay Singapore E-commerce Private Limited
Virgin Active Singapore Pte Ltd
GFA (sq ft) 503,482 629,925 c.1,288,717(1)
NLA (sq ft) 402,564 422,213 c.860,000(1)
Valuation (S$ million) 1,135.0(2) 495.6(2) 1,734.0(3)
METHOD OF FINANCING
PROPOSED ISSUE OF CPPUs
The Manager proposes to issue up to S$550.0 million of CPPUs to the Sponsor (or its nominees) as part payment for the Purchase Consideration.
The CPPUs will be classified as equity, and the proposed CPPU issue will not result in an increase in OUE C-REIT’s aggregate leverage under the Property Funds Appendix.
The CPPUs carry a coupon of 1.0% per annum, and are convertible at a premium of 15.0% above the theoretical ex-rights price (“TERP”) in relation to the Rights Issue into ordinary Units after the expiry of a four-year restriction period. During the restriction period the CPPUs are not allowed to be converted by the CPPU holder, but shall be redeemable on a pro rata basis at the option of the Manager, in whole or in part, at the issue price.
In order to ensure an orderly conversion of the CPPUs, not more than one-third of the CPPUs initially issued shall be converted in any one year after the restriction period.
RIGHTS ISSUE
The Manager has announced a fully underwritten renounceable Rights Issue of 393,305,817 new Units to Eligible Unitholders on the basis of 9 Rights Units for every 20 existing Units at a Rights Issue Price of S$0.555 to raise gross proceeds of approximately S$218.3 million.
Committed Sponsor has undertaken to fully subscribe for its pro rata entitlement of Rights Units representing 48.3% of voting rights.
The Manager intends to finance all acquisition costs relating to the proposed Acquisition (excluding the Acquisition Fee Units) through a combination of debt and equity financing, including the proposed issue of convertible perpetual preferred units (“CPPUs”) and the Rights Issue.
OUE C-REIT Post Transactions(4)
6.2%(3)
8.2%(2)
DPU YIELD(1)
(1) For the Forecast Period from 1 October 2015 to 31 December 2015
(2) DPU yield based on Rights Issue Price of S$0.555(3) DPU yield based on TERP of S$0.731 per Unit(4) Identical DPU yield at one decimal point for the proposed
Acquisition of 75.0% or 83.33% indirect interest in OUBC
ESTIMATED TOTAL ACQUISITION COST
S$ million 75.0% of the OUBC
Interest
83.33% of the OUBC
Interest
Purchase Consideration 1,034.0 1,148.8
Acquisition Fee 9.6 10.7
Transaction Costs 17.6 18.8
Estimated Total Acquisition Cost
1,061.2 1,178.3
TOTAL ACQUISITION COST
The total cost of the proposed Acquisition is estimated to range from S$1,061.2 million to S$1,178.3 million, comprising the expected Purchase Consideration(1) of S$1,034.0 million to S$1,148.8 million, and the estimated fees and expenses (including the acquisition fee payable to the Manager, stamp duty, professional fees and expenses) relating to the proposed Transactions.
333.3(31.4%)
9.6(0.9%)
500.0(47.1%)75.0%
indirect interest
in OUBC
218.3(20.6%)
In S$ million
399.3(33.9%)
10.7(0.9%)
550.0(46.7%)
218.3(18.5%)
83.33% indirect interest
in OUBC
SOURCES OF FUNDING
CPPUs Rights Issue Acquisition Fee UnitsDebt
ONE RAFFLES PLACE
Prominent, iconic integrated commercial development with Grade-A building specifications strategically located in the heart of Singapore's main financial district Raffles Place
LIPPO PLAZA
Grade-A commercial building located in the business district of Huangpu, one of Shanghai’s established core CBD locations
OUE BAYFRONT
Premium Grade-A office building located at Collyer Quay between the Marina Bay downtown and Raffles Place financial hub in Singapore’s CBD
(1) The Purchase Consideration is derived based on the expected Net Asset Value (“NAV”) of BPHPL Group, including the repayment of any outstanding shareholder’s loan. The difference between the agreed values of the OUBC interest to be acquired and the purchase consideration is the adjustment that shall reflect the actual NAV of BPHPL Group on the date of completion of the proposed Acquisition. BPHPL Group refers to BPHPL and its shareholding in OUBC
OVERVIEW OF OUE C-REIT
(1) Represents 100% of One Raffles Place’s GFA and NLA(2) As at 31 December 2014(3) Valuation of the OUBC Interest by Savills as at 5 June 2015
ABOUT OUE C-REIT
OUE C-REIT is a real estate investment trust listed on the SGX-ST on 27 January 2014. OUE C-REIT’s principal investment strategy is to invest in income-producing real estate used primarily for commercial purpose in financial and business hubs in key gateway cities. Its portfolio comprises two strategically located properties in Singapore and China with a combined asset size of S$1.6 billion as at 31 December 2014.
Summary of selected information on OUE C-REIT’s enlarged portfolio:
OUE BAYFRONT LIPPO PLAZA ONE RAFFLES PLACE
Key tenants Bank of America Merrill Lynch
Hogan Lovells International LLP
Citrix Systems Singapore Pte Ltd
Ermenegildo Zegna
TMF Limited
British IFX Markets Ltd Shanghai Representative Office
Petrobras Singapore Pte Ltd
Alipay Singapore E-commerce Private Limited
Virgin Active Singapore Pte Ltd
GFA (sq ft) 503,482 629,925 c.1,288,717(1)
NLA (sq ft) 402,564 422,213 c.860,000(1)
Valuation (S$ million) 1,135.0(2) 495.6(2) 1,734.0(3)
METHOD OF FINANCING
PROPOSED ISSUE OF CPPUs
The Manager proposes to issue up to S$550.0 million of CPPUs to the Sponsor (or its nominees) as part payment for the Purchase Consideration.
The CPPUs will be classified as equity, and the proposed CPPU issue will not result in an increase in OUE C-REIT’s aggregate leverage under the Property Funds Appendix.
The CPPUs carry a coupon of 1.0% per annum, and are convertible at a premium of 15.0% above the theoretical ex-rights price (“TERP”) in relation to the Rights Issue into ordinary Units after the expiry of a four-year restriction period. During the restriction period the CPPUs are not allowed to be converted by the CPPU holder, but shall be redeemable on a pro rata basis at the option of the Manager, in whole or in part, at the issue price.
In order to ensure an orderly conversion of the CPPUs, not more than one-third of the CPPUs initially issued shall be converted in any one year after the restriction period.
RIGHTS ISSUE
The Manager has announced a fully underwritten renounceable Rights Issue of 393,305,817 new Units to Eligible Unitholders on the basis of 9 Rights Units for every 20 existing Units at a Rights Issue Price of S$0.555 to raise gross proceeds of approximately S$218.3 million.
Committed Sponsor has undertaken to fully subscribe for its pro rata entitlement of Rights Units representing 48.3% of voting rights.
The Manager intends to finance all acquisition costs relating to the proposed Acquisition (excluding the Acquisition Fee Units) through a combination of debt and equity financing, including the proposed issue of convertible perpetual preferred units (“CPPUs”) and the Rights Issue.
OUE C-REIT Post Transactions(4)
6.2%(3)
8.2%(2)
DPU YIELD(1)
(1) For the Forecast Period from 1 October 2015 to 31 December 2015
(2) DPU yield based on Rights Issue Price of S$0.555(3) DPU yield based on TERP of S$0.731 per Unit(4) Identical DPU yield at one decimal point for the proposed
Acquisition of 75.0% or 83.33% indirect interest in OUBC
ESTIMATED TOTAL ACQUISITION COST
S$ million 75.0% of the OUBC
Interest
83.33% of the OUBC
Interest
Purchase Consideration 1,034.0 1,148.8
Acquisition Fee 9.6 10.7
Transaction Costs 17.6 18.8
Estimated Total Acquisition Cost
1,061.2 1,178.3
TOTAL ACQUISITION COST
The total cost of the proposed Acquisition is estimated to range from S$1,061.2 million to S$1,178.3 million, comprising the expected Purchase Consideration(1) of S$1,034.0 million to S$1,148.8 million, and the estimated fees and expenses (including the acquisition fee payable to the Manager, stamp duty, professional fees and expenses) relating to the proposed Transactions.
333.3(31.4%)
9.6(0.9%)
500.0(47.1%)75.0%
indirect interest
in OUBC
218.3(20.6%)
In S$ million
399.3(33.9%)
10.7(0.9%)
550.0(46.7%)
218.3(18.5%)
83.33% indirect interest
in OUBC
SOURCES OF FUNDING
CPPUs Rights Issue Acquisition Fee UnitsDebt
ONE RAFFLES PLACE
Prominent, iconic integrated commercial development with Grade-A building specifications strategically located in the heart of Singapore's main financial district Raffles Place
LIPPO PLAZA
Grade-A commercial building located in the business district of Huangpu, one of Shanghai’s established core CBD locations
OUE BAYFRONT
Premium Grade-A office building located at Collyer Quay between the Marina Bay downtown and Raffles Place financial hub in Singapore’s CBD
(1) The Purchase Consideration is derived based on the expected Net Asset Value (“NAV”) of BPHPL Group, including the repayment of any outstanding shareholder’s loan. The difference between the agreed values of the OUBC interest to be acquired and the purchase consideration is the adjustment that shall reflect the actual NAV of BPHPL Group on the date of completion of the proposed Acquisition. BPHPL Group refers to BPHPL and its shareholding in OUBC
TABLE OF CONTENTS
Page
CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
INDICATIVE TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
LETTER TO UNITHOLDERS
1. Summary of Approvals Sought . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2. Resolution 1: The Proposed Acquisition and the Proposed CPPU Issue . . . . . . . . . 9
3. Resolution 2: The Proposed Trust Deed Supplement for the Issue of Preferred
Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4. Rationale for the Proposed Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5. Profit Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6. Details and Financial Information of the Proposed Transactions . . . . . . . . . . . . . . . 38
7. Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8. Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
9. Abstentions from Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
10. Actions to be Taken by Unitholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
11. Directors’ Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12. Joint Financial Advisers’ Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . 52
13. Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
14. Documents Available for Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
IMPORTANT NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
APPENDICES
Appendix A The Proposed Trust Deed Supplement . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Appendix B Terms of the Convertible Perpetual Preferred Units . . . . . . . . . . . . . . . . . . B-1
Appendix C Profit Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
Appendix D Independent Accountants’ Report on the Profit Forecast . . . . . . . . . . . . . . . D-1
Appendix E Independent Financial Adviser’s Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1
Appendix F Valuation Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
Appendix G Independent Market Research Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-1
Appendix H Existing Interested Person Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . H-1
NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
PROXY FORM
i
CORPORATE INFORMATION
Directors of OUE
Commercial REIT
Management Pte. Ltd.
(the “Manager”)
: Mr. Christopher James Williams (Chairman and
Non-Executive Director)
Mr. Ng Lak Chuan (Lead Independent Director)
Mr. Loh Lian Huat (Independent Director)
Mr. Carl Gabriel Florian Stubbe (Independent
Director)
Mr. Jonathan Miles Foxall (Non-Executive Non-
Independent Director)
Ms. Tan Shu Lin (Chief Executive Officer and
Executive Director)
Registered Office of the
Manager
: 50 Collyer Quay #04-08
OUE Bayfront
Singapore 049321
Trustee of OUE C-REIT
(the “Trustee”)
: DBS Trustee Limited
12 Marina Boulevard
Marina Bay Financial Centre Tower 3
Singapore 018982
Legal Adviser to the
Manager
: Allen & Gledhill LLP
One Marina Boulevard #28-00
Singapore 018989
Joint Financial Advisers
for the CPPU Issue and
the Rights Issue
: Citigroup Global Markets Singapore Pte. Ltd.
8 Marina View #21-00
Asia Square Tower 1
Singapore 018960
Standard Chartered Bank Singapore Branch
Marina Bay Financial Centre (Tower 1)
8 Marina Boulevard, Level 26
Singapore 018981
Joint Lead Managers and
Underwriters for the
Rights Issue
: Citigroup Global Markets Singapore Pte. Ltd.
8 Marina View #21-00
Asia Square Tower 1
Singapore 018960
DBS Bank Ltd.
12 Marina Boulevard Level 46
Marina Bay Financial Centre Tower 3
Singapore 018982
Legal Adviser to the Joint
Lead Managers and
Underwriters
: Clifford Chance Pte. Ltd.
Marina Bay Financial Centre
25th Floor, Tower 3
12 Marina Boulevard
Singapore 018982
ii
Legal Adviser to the
Trustee
: Rodyk & Davidson LLP
80 Raffles Place
#33-00 UOB Plaza 1
Singapore 048624
Unit Registrar and Unit
Transfer Office
: Boardroom Corporate & Advisory Services Pte. Ltd.
50 Raffles Place
#32-01 Singapore Land Tower
Singapore 048623
Independent Financial
Adviser to the
Independent Directors of
the Manager and to the
Trustee for the
Acquisition and the CPPU
Issue
: Deloitte & Touche Corporate Finance Pte Ltd
6 Shenton Way
#32-00 OUE Downtown 2
Singapore 068809
Independent Accountants : KPMG LLP
16 Raffles Quay #22-00
Hong Leong Building
Singapore 048581
Independent Valuers : Savills Valuation and Professional Services (S)
Pte Ltd
(appointed by the Trustee)
30 Cecil Street
#20-03 Prudential Tower
Singapore 049712
Cushman & Wakefield VHS Pte. Ltd.
(appointed by the Manager)
3 Church Street
#09-03 Samsung Hub
Singapore 049483
Independent Market
Research Consultant
: DTZ Debenham Tie Leung (SEA) Pte Ltd
100 Beach Road
#35-00 Shaw Tower
Singapore 189702
iii
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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 also be found in the Glossary on pages
55 to 61 of this Circular.
Any discrepancies in the tables included herein between the listed amounts and totals thereof are
due to rounding.
INTRODUCTION
OUE Commercial Real Estate Investment Trust (“OUE C-REIT”) is a real estate investment trust
listed on the Main Board of Singapore Exchange Securities Trading Limited (the “SGX-ST”). OUE
C-REIT is established with the principal investment strategy of investing, directly or indirectly, in
a portfolio of income-producing real estate used primarily for commercial purposes (including real
estate used primarily for office and/or retail purposes) in financial and business hubs within and
outside of Singapore, as well as real estate-related assets. OUE C-REIT is managed by OUE
Commercial REIT Management Pte. Ltd. (the “Manager”), a wholly-owned subsidiary of OUE
Limited (the “Sponsor”).
OUE C-REIT’s existing asset portfolio comprises:
• OUE Bayfront and its ancillary properties, which are located at Collyer Quay in Singapore’s
central business district (“CBD”), comprising (i) OUE Bayfront, an 18-storey premium office
building with rooftop restaurant premises located at 50 Collyer Quay, (ii) OUE Tower, a
conserved tower building located at 60 Collyer Quay with panoramic views of the Marina Bay
landscape which is currently occupied by a fine dining restaurant, and (iii) OUE Link, an
overhead pedestrian link bridge with retail units located at 62 Collyer Quay (collectively,
“OUE Bayfront”); and
• Lippo Plaza, which is located at 222 Huaihai Zhong Road in the commercial district of
Huangpu in central Shanghai, the People’s Republic of China (“PRC”). It is a 36-storey
Grade-A commercial building used for office and retail purposes and comprises a three-
storey retail podium and basement car park lots. OUE C-REIT has a 91.2% strata ownership
of Lippo Plaza (“Lippo Plaza”),
(collectively, the “Existing Portfolio”). The Existing Portfolio has a combined value of S$1,630.6
million as at 31 December 2014.
SUMMARY OF APPROVALS SOUGHT
The Manager seeks approval from the unitholders of OUE C-REIT (the “Unitholders”) for the
following resolutions:
(i) Resolution 1 (Ordinary Resolution): the proposed acquisition by OUE C-REIT of an
indirect interest in One Raffles Place (the “Property”) from the Sponsor through the
acquisition of the entire issued share capital of Beacon Property Holdings Pte. Ltd.
(“BPHPL”), which holds a percentage of the issued share capital in OUB Centre Limited
(“OUBC”) (the “Acquisition”), the proposed issue of new Units to the Manager for payment
of its acquisition fee for the proposed Acquisition (“Acquisition Fee”)1 and the proposed
1 As the proposed Acquisition is an “interested party transaction” under Appendix 6 of the Code on Collective
Investment Schemes issued by the Monetary Authority of Singapore (the “MAS”, and Appendix 6, the “Property
Funds Appendix”), the Acquisition Fee will be in the form of Units (the “Acquisition Fee Units”) which shall not be
sold within one year of the date of issuance in accordance with Paragraph 5.6 of the Property Funds Appendix.
1
issue of up to S$550.0 million convertible perpetual preferred units (“CPPUs”) to the Sponsor
(or its nominees) as part payment of the purchase consideration for the proposed Acquisition
(the “Purchase Consideration”) (the “CPPU Issue”); and
(ii) Resolution 2 (Extraordinary Resolution): the proposed entry into a supplement to the trust
deed dated 10 October 2013 constituting OUE C-REIT (as amended) (the “Trust Deed”, and
the proposed supplement to the Trust Deed, the “Trust Deed Supplement”) with the Trustee
for the purpose of allowing OUE C-REIT to issue preferred units in OUE C-REIT (“Preferred
Units”).
Unitholders should note that Resolution 1 is conditional upon Resolution 2 and in the event that
Resolution 2 is not passed, the Manager will not proceed with Resolution 1.
In connection with the proposed Acquisition, the Trustee has on 10 June 2015 entered into a
conditional sale and purchase agreement with the Sponsor to acquire the entire issued share
capital of BPHPL (the “SPA”).
RESOLUTION 1: THE PROPOSED ACQUISITION OF AN INDIRECT INTEREST IN ONE
RAFFLES PLACE AND THE PROPOSED CPPU ISSUE
Description of One Raffles Place
One Raffles Place is strategically located at the junction of Raffles Place and Chulia Street, in the
heart of Singapore’s main financial district, Raffles Place. It is situated above the Raffles Place
Mass Rapid Transit (“MRT”) interchange station, and has a direct and seamless link to the Raffles
Place MRT interchange station via an underground pedestrian walkway.
The Property is an integrated commercial development comprising One Raffles Place Tower 1,
One Raffles Place Tower 2 and One Raffles Place Shopping Mall, with approximately 860,000
square feet (“sq ft”) of aggregate net lettable area (“NLA”). One Raffles Place Tower 1 was
completed in 1986 and is one of the tallest buildings in the Singapore CBD. It comprises a
62-storey Grade-A office building with a rooftop restaurant and observation deck. One Raffles
Place Tower 2, which is the new tower completed in 2012, is a 38-storey Grade-A office building.
It has been awarded the Platinum Green Mark Award by the Building and Construction Authority
for its energy efficiency and environmentally sustainable design. One Raffles Place Shopping Mall
is a six-storey retail podium that has undergone extensive refurbishment works which were
completed in May 2014. It is the largest purpose-built shopping mall in Raffles Place, accounting
for about 10% of existing retail stock in the CBD1. Its basement level is seamlessly linked to the
Raffles Place MRT interchange station via an underground pedestrian walkway. The Property has
a total of 326 basement car park lots.
1 Source: The independent market research report dated 24 April 2015 by DTZ Debenham Tie Leung (SEA) Pte Ltd
(the “Independent Market Research Consultant”) (the “Independent Market Research Report”).
2
The table below sets out a summary of selected information on the Property (in respect of which
OUE C-REIT will be acquiring a partial indirect interest):
Gross Floor Area (“GFA”) Approximately 119,725.8 square metres (“sq m”)
(1,288,717 sq ft)
NLA One Raffles Place Tower 1: Approximately 38,090.3 sq m
(410,000 sq ft)
One Raffles Place Tower 2: Approximately 32,516.1 sq m
(350,000 sq ft)
One Raffles Place Shopping Mall: Approximately 9,290.3
sq m (100,000 sq ft)
Total: Approximately 79,896.7 sq m (860,000 sq ft)
Car park lots 326 car park lots located in Basements 2 to 4
Title One Raffles Place Tower 1: 841-year leasehold title
commencing 1 November 1985
One Raffles Place Tower 2: 99-year leasehold title
commencing 26 May 1983
One Raffles Place Shopping Mall – the retail podium
straddles two land plots:
− approximately 75% of the retail podium NLA is on a
99-year leasehold title commencing 1 November 1985
− the balance 25% is on the 841-year leasehold title
commencing 1 November 1985
The Proposed Acquisition Structure
OUBC is the registered owner of the Property and it owns 81.54% of the beneficial interest in the
Property for itself (the “OUBC Interest”), with the remaining 18.46% interest being held by OUBC
on trust for an unrelated third party. The Sponsor and its wholly-owned subsidiary BPHPL
collectively hold a 50.0% interest in OUBC. The remaining 50.0% interest is held by several third
parties, including the Kuwait Investment Office (“KIO”), which holds a 33.33% interest in OUBC.
Pursuant to an agreement entered into between the Sponsor, BPHPL and KIO on 10 June 2015
in relation to KIO’s divestment of its 33.33% interest in OUBC (the “Framework Agreement”),
BPHPL will acquire an additional interest in OUBC of a minimum of 25.0% and up to a maximum
of 33.33%. This is because pursuant to the articles of association of OUBC, if a shareholder
wishes to divest its shares (the “Divested Shares”), the remaining shareholders are entitled to
acquire the Divested Shares pro rata in accordance with their existing shareholding. Upon KIO
giving notice of its intention to dispose of its 33.33% interest, BPHPL would have a pro rata
entitlement to acquire a 25.0% interest in OUBC1, bringing its total interest in OUBC to 75.0%. If
the remaining shareholders do not exercise their entitlement to acquire the Divested Shares, then
BPHPL would be able to acquire up to a maximum of 33.33% interest in OUBC1 bringing its total
interest in OUBC to 83.33%. Therefore, the final Purchase Consideration shall be determined
based on the amount of the OUBC shares to be acquired by BPHPL, which is between 75.0% to
83.33% of the OUBC shares.
1 BPHPL currently holds a 45.0% interest in OUBC. The Sponsor holds the remaining 5.0% interest in OUBC and will
transfer such interest to BPHPL prior to completion of the proposed Acquisition. Upon the transfer of the Sponsor’s
5.0% interest in OUBC to BPHPL, BPHPL would have (i) a pro rata entitlement to acquire a 25.0% interest in OUBC
and (ii) the ability to acquire the maximum of 33.33% interest in OUBC.
3
Since OUBC owns 81.54% of the beneficial interest in the Property, a 75.0% interest in OUBC
translates into an effective interest of 61.16% in the Property and an 83.33% interest in OUBC
translates to an effective interest of 67.95% in the Property.
Purchase Consideration and Valuation
The Purchase Consideration payable to the Sponsor in connection with the proposed Acquisition
shall be the net asset value (“NAV”) of BPHPL Group1 after taking into account the agreed value
of S$1,715.0 million for the OUBC Interest (comprising 81.54% interest in the Property) and the
shareholder’s loan to be repaid by BPHPL upon completion of the proposed Acquisition. The
Purchase Consideration shall be paid to the Sponsor in a combination of cash and CPPUs.
The Purchase Consideration has been negotiated on a willing-buyer and willing-seller basis, after
taking into account the independent valuations of Savills Valuation and Professional Services (S)
Pte Ltd (“Savills”) and Cushman & Wakefield VHS Pte. Ltd. (“Cushman & Wakefield”)
(collectively, the “Independent Valuers”). The Independent Valuers had conducted their
valuations based on the income capitalisation approach and the market comparison method. (See
Appendix F for further details regarding the valuation of the OUBC Interest.)
The Trustee has commissioned Savills and the Manager has commissioned Cushman & Wakefield
to value the OUBC Interest and their valuations are as follows.
Valuation of the OUBC Interest by Savills
(as at 5 June 2015)S$1,734.0 million
Valuation of the OUBC Interest by Cushman & Wakefield
(as at 5 June 2015)S$1,733.0 million
Agreed Value for the OUBC Interest S$1,715.0 million
Agreed Value for 75.0% of the OUBC Interest S$1,286.3 million
Agreed Value for 83.33% of the OUBC Interest S$1,429.2 million
Assuming that:
(a) OUE C-REIT acquires BPHPL which owns a 75.0% interest in OUBC;
(b) the proposed Acquisition is completed on 1 October 2015;
(c) based on the agreed value of S$1,286.3 million for the 75.0% indirect interest in OUBC; and
(d) BPHPL Group’s assumed NAV and the repayment of a shareholder’s loan which shall be
extended by the Sponsor to BPHPL for the acquisition of the Divested Shares,
the expected Purchase Consideration shall be S$1,034.0 million.
Assuming that:
(a) OUE C-REIT acquires BPHPL which owns an 83.33% interest in OUBC;
(b) the proposed Acquisition is completed on 1 October 2015;
(c) based on the agreed value of S$1,429.2 million for the 83.33% indirect interest in OUBC; and
1 “BPHPL Group” refers to BPHPL and its shareholding in OUBC as at the date of completion of the proposed
Acquisition.
4
(d) BPHPL Group’s assumed NAV and the repayment of a shareholder’s loan which shall be
extended by the Sponsor to BPHPL for the acquisition of the Divested Shares,
the expected Purchase Consideration shall be S$1,148.8 million.
The expected Purchase Consideration shall be adjusted to reflect the actual NAV attributable to
the controlling shareholder of the BPHPL Group on the date of completion of the proposed
Acquisition.
Estimated Total Acquisition Cost
Depending on the shareholding interest in OUBC acquired by BPHPL, the estimated total cost of
the proposed Acquisition (the “Total Acquisition Cost”) will range from approximately S$1,061.2
million to S$1,178.3 million, comprising:
(i) the expected Purchase Consideration of S$1,034.0 million to S$1,148.8 million (see
“Purchase Consideration and Valuation” above);
(ii) the Acquisition Fee of approximately S$9.6 million to S$10.7 million to be paid in Units; and
(iii) the estimated debt and/or equity financing related costs, stamp duty, professional and other
fees and expenses incurred or to be incurred by OUE C-REIT in connection with the
proposed Acquisition of approximately S$17.6 million to S$18.8 million.
Method of Financing
The Manager intends to finance all acquisition costs relating to the proposed Acquisition
(excluding the Acquisition Fee Units) through a combination of debt and equity financing, including
the proposed CPPU Issue and the Rights Issue (as defined below).
(See paragraph 2.1.5 of the Letter to Unitholders for further details.)
Interested Person Transaction and Interested Party Transaction
As at 26 June 2015, being the latest practicable date prior to the printing of this Circular (the
“Latest Practicable Date”), the Sponsor, through its wholly-owned subsidiaries Clifford
Development Pte. Ltd. (“CDPL”) and the Manager, holds an aggregate interest in 422,018,928
Units, which is equivalent to 48.3% of the total number of Units in issue, and is therefore regarded
as a “controlling Unitholder” of OUE C-REIT under the Listing Manual of the SGX-ST (the “Listing
Manual”) and the Property Funds Appendix. In addition, as the Manager is a wholly-owned
subsidiary of the Sponsor, the Sponsor is therefore regarded as a “controlling shareholder” of the
Manager under both the Listing Manual and the Property Funds Appendix. As the Sponsor is the
vendor of BPHPL under the SPA, for the purposes of Chapter 9 of the Listing Manual and
Paragraph 5 of the Property Funds Appendix, the Sponsor (being 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 OUE
C-REIT.
Therefore, the proposed 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.
(See paragraph 6.2.3 of the Letter to Unitholders for further details.)
5
Payment of Acquisition Fee in Units
The Manager shall be paid an Acquisition Fee of approximately S$9.6 million to S$10.7 million for
the proposed Acquisition pursuant to the Trust Deed, depending on the percentage interest in
OUBC acquired by BPHPL. As the proposed Acquisition is an “interested party transaction” under
the Property Funds Appendix, the Acquisition Fee will be in the form of Units (“Acquisition Fee
Units”) which shall not be sold within one year of the date of issuance in accordance with
Paragraph 5.6 of the Property Funds Appendix.
Pursuant to Rule 805(1) of the Listing Manual, the Manager is seeking specific approval of the
Unitholders for the issue of the Acquisition Fee Units to the Manager. The issue price of the
Acquisition Fee Units shall be determined based on the theoretical ex-rights price (“TERP”) per
Unit in relation to the Rights Issue. While Clause 15.2.1 of the Trust Deed allows the Manager to
receive the Acquisition Fee Units at the Rights Issue Price, of S$0.555, the Manager has elected
to receive the Acquisition Fee Units at the TERP of S$0.731 per Unit instead.
(See paragraph 2.2 of the Letter to Unitholders for further details.)
The Proposed CPPU Issue
OUE C-REIT proposes to issue up to S$550.0 million CPPUs to the Sponsor (or its nominees) as
part payment for the Purchase Consideration.
(See paragraph 2.3 of the Letter to Unitholders for further details.)
The Rights Issue
The Manager has announced the issue of 393,305,817 new Units (the “Rights Units” and the
issue of the Rights Units, the “Rights Issue”), on a renounceable basis to Eligible Unitholders (as
defined herein) on the basis of 9 Rights Units for every 20 existing Units (the “Rights Ratio”) held
as at the time and date at and on which the transfer books and register of Unitholders will be
closed to determine the provisional allotments of Rights Units to Eligible Unitholders under the
Rights Issue (the “Books Closure Date”) at an issue price of S$0.555 per Rights Unit (the “Rights
Issue Price”), to raise gross proceeds of approximately S$218.3 million.
The Manager will be relying on the general mandate given by Unitholders at the annual general
meeting of Unitholders on 29 April 2015 to issue the Rights Units. In the event that OUE C-REIT
does not proceed with the proposed Acquisition, the proceeds from the Rights Issue shall be
re-deployed for potential future acquisitions or the repayment of its existing borrowings.
(See paragraph 2.4 of the Letter to Unitholders for further details.)
RESOLUTION 2: THE PROPOSED TRUST DEED SUPPLEMENT FOR THE ISSUE OF
PREFERRED UNITS
The Manager proposes to enter into the proposed Trust Deed Supplement with the Trustee for the
purposes of:
(i) authorising the Manager to issue Preferred Units from time to time, in one or more classes,
to any person(s) (including, without limitation, itself and/or its Related Parties (as defined
herein)), with the prior approval of Unitholders; and
6
(ii) setting out the general terms and conditions of an offer and issue of the Preferred Units.
(See paragraph 3 of the Letter to Unitholders for further details.)
RATIONALE FOR THE PROPOSED TRANSACTIONS
The Manager believes that the proposed Acquisition, the proposed CPPU Issue and the Rights
Issue (collectively, the “Transactions”) will bring the following key benefits to Unitholders:
(i) acquisition of a majority interest in a landmark commercial property in the Singapore CBD;
(ii) acquisition of a quality commercial property at an attractive price (albeit not immediately
yield-accretive);
(iii) favourable growth profile from potential increase in occupancy, potential positive rental
reversion and limited new office supply in Raffles Place;
(iv) achievement of transformational scale for OUE C-REIT through the proposed Acquisition
which will significantly enlarge the size of its portfolio and strengthen its competitive position
in Singapore;
(v) enhanced portfolio diversification and resilience, as well as reduced asset concentration risk;
(vi) strong support from the Sponsor through the proposed CPPU Issue and its take-up of the pro
rata stake in the Rights Issue;
(vii) increased market capitalisation and potential increased liquidity through the Rights Issue;
(viii) diversification of sources of funding; and
(ix) future ordinary equity injection into OUE C-REIT at a premium to the TERP through the
conversion of the CPPUs.
(See paragraph 4 of the Letter to Unitholders for further details.)
7
INDICATIVE TIMETABLE
The timetable for the events which are scheduled to take place after the extraordinary general
meeting of the Unitholders to be held on Monday, 27 July 2015 at Marina Mandarin Singapore,
Marina Mandarin Ballroom, Level 1, 6 Raffles Boulevard, Singapore 039594 (the “EGM”) is
indicative only and is subject to change at the Manager’s absolute discretion as well as applicable
regulatory requirements. Any changes (including any determination of the relevant dates) to the
timetable below will be announced.
Event Date and Time
Last date and time for lodgement of Proxy
Forms
: Saturday, 25 July 2015 at 2.00 p.m.
Date and time of the EGM : Monday, 27 July 2015 at 2.00 p.m.
If the approval for the proposed Acquisition is obtained at the EGM:
Target date for completion of the proposed
Acquisition and the proposed issuance of the
CPPUs
: Thursday, 1 October 2015
8
OUE COMMERCIAL REAL ESTATE INVESTMENT TRUST(Constituted in the Republic of Singapore pursuant to a trust deed dated
10 October 2013 (as amended))
Directors: Registered Office:
Mr. Christopher James Williams (Chairman and Non-Executive
Non-Independent Director)
Mr. Ng Lak Chuan (Audit and Risk Committee Chairman and
Lead Independent Director)
Mr. Loh Lian Huat (Independent Director)
Mr. Carl Gabriel Florian Stubbe (Independent Director)
Mr. Jonathan Miles Foxall (Non-Executive Non-Independent
Director)
Ms. Tan Shu Lin (Chief Executive Officer and Executive Director)
50 Collyer Quay
#04-08 OUE Bayfront
Singapore 049321
1 July 2015
To: The Unitholders of OUE Commercial Real Estate Investment Trust
Dear Sir/Madam
1. SUMMARY OF APPROVALS SOUGHT
The Manager is convening the EGM to seek Unitholders’ approval for:
(i) Resolution 1: the proposed Acquisition and the proposed CPPU Issue (Ordinary
Resolution); and
(ii) Resolution 2: the proposed Trust Deed Supplement for the issue of Preferred Units
(Extraordinary Resolution).
2. RESOLUTION 1: THE PROPOSED ACQUISITION AND THE PROPOSED CPPU ISSUE
2.1 THE PROPOSED ACQUISITION
2.1.1 Description of One Raffles Place
One Raffles Place is strategically located at the junction of Raffles Place and Chulia
Street, in the heart of Singapore’s main financial district, Raffles Place. It is situated
above the Raffles Place MRT station, and has a direct and seamless link to the Raffles
Place MRT interchange station via an underground pedestrian walkway.
The Property is an integrated commercial development comprising One Raffles Place
Tower 1, One Raffles Place Tower 2 and One Raffles Place Shopping Mall, with
approximately 860,000 sq ft of aggregate NLA. One Raffles Place Tower 1 was
completed in 1986 and is one of the tallest buildings in the Singapore CBD. It
comprises a 62-storey Grade-A office building with a rooftop restaurant and
observation deck. One Raffles Place Tower 2, which is the new tower completed in
2012, is a 38-storey Grade-A office building. It has been awarded the Platinum Green
Mark Award by the Building and Construction Authority for its energy efficiency and
environmentally sustainable design. One Raffles Place Shopping Mall is a six-storey
retail podium that has undergone extensive refurbishment works which were
completed in May 2014. It is the largest purpose-built shopping mall in Raffles Place,
9
accounting for about 10% of existing retail stock in the CBD1. Its basement level is
seamlessly linked to the Raffles Place MRT interchange station via an underground
pedestrian walkway. The Property has a total of 326 basement car park lots.
The table below sets out a summary of selected information on the Property (in respect
of which OUE C-REIT will be acquiring a partial indirect interest):
GFA Approximately 119,725.8 sq m (1,288,717 sq ft)
NLA One Raffles Place Tower 1: Approximately 38,090.3 sq m
(410,000 sq ft)
One Raffles Place Tower 2: Approximately 32,516.1 sq m
(350,000 sq ft)
One Raffles Place Shopping Mall: Approximately 9,290.3
sq m (100,000 sq ft)
Total: Approximately 79,896.7 sq m (860,000 sq ft)
Car park lots 326 car park lots located in Basements 2 to 4
Title One Raffles Place Tower 1: 841-year leasehold title
commencing 1 November 1985
One Raffles Place Tower 2: 99-year leasehold title
commencing 26 May 1983
One Raffles Place Shopping Mall – the retail podium
straddles two land plots:
− approximately 75% of the retail podium NLA is on a
99-year leasehold title commencing 1 November 1985
− the balance 25% is on the 841-year leasehold title
commencing 1 November 1985
2.1.2 The Proposed Acquisition Structure
OUBC is the registered owner of the Property and it owns 81.54% of the beneficial
interest in the Property for itself, with the remaining 18.46% interest being held by
OUBC on trust for an unrelated third party. The Sponsor and its wholly-owned
subsidiary BPHPL collectively hold a 50.0% interest in OUBC. The remaining 50.0%
interest is held by several third parties, including KIO, which holds a 33.33% interest
in OUBC.
Pursuant to the Framework Agreement, BPHPL will acquire an additional interest in
OUBC of a minimum of 25.0% and up to a maximum of 33.33%. This is because
pursuant to the articles of association of OUBC, if a shareholder wishes to divest its
shares (the “Divested Shares”), the remaining shareholders are entitled to acquire
the Divested Shares pro rata in accordance with their existing shareholding. Upon KIO
giving notice of its intention to dispose of its 33.33% interest, BPHPL would have a pro
rata entitlement to acquire a 25.0% interest in OUBC2, bringing its total interest in
OUBC to 75.0%. If the remaining shareholders do not exercise their entitlement to
acquire the Divested Shares, then BPHPL would be able to acquire up to a maximum
of 33.33% interest in OUBC2 bringing its total interest in OUBC to 83.33%. Therefore,
1 Source: Independent Market Research Report.
2 BPHPL currently holds a 45.0% interest in OUBC. The Sponsor holds the remaining 5.0% interest in OUBC and will
transfer such interest to BPHPL prior to completion of the proposed Acquisition. Upon the transfer of the Sponsor’s
5.0% interest in OUBC to BPHPL, BPHPL would have (i) a pro rata entitlement to acquire a 25.0% interest in OUBC
and (ii) the ability to acquire the maximum of 33.33% interest in OUBC.
10
the final Purchase Consideration shall be determined based on the amount of the
OUBC shares acquired by BPHPL, which is between 75.0% to 83.33% of the OUBC
shares.
Since OUBC owns 81.54% of the beneficial interest in the Property, a 75.0% interest
in OUBC translates into an effective interest of 61.16% in the Property and an 83.33%
interest in OUBC translates to an effective interest of 67.95% in the Property.
2.1.3 Purchase Consideration and Valuation
The Purchase Consideration payable to the Sponsor in connection with the proposed
Acquisition shall be the NAV of BPHPL Group after taking into account the agreed
value of S$1,715.0 million for the OUBC Interest (comprising 81.54% interest in the
Property) and the shareholder’s loan to be repaid by BPHPL upon completion of the
proposed Acquisition. The Purchase Consideration shall be paid to the Sponsor in a
combination of cash and CPPUs.
The Purchase Consideration has been negotiated on a willing-buyer and willing-seller
basis, after taking into account the independent valuations of the Independent Valuers.
The Independent Valuers had conducted their valuations based on the income
capitalisation approach and the market comparison method. (See Appendix F for
further details regarding the valuation of the OUBC Interest.)
The Trustee has commissioned Savills and the Manager has commissioned Cushman
& Wakefield to value the OUBC Interest. The following table sets out the selected
information on the valuations by the Independent Valuers.
Valuation of the OUBC Interest by Savills
(as at 5 June 2015)S$1,734.0 million
Valuation of the OUBC Interest by Cushman &
Wakefield (as at 5 June 2015)S$1,733.0 million
Agreed Value for the OUBC Interest S$1,715.0 million
Agreed Value for 75.0% of the OUBC Interest S$1,286.3 million
Agreed Value for 83.33% of the OUBC Interest S$1,429.2 million
Assuming that:
(a) OUE C-REIT acquires BPHPL which owns a 75.0% interest in OUBC;
(b) the proposed Acquisition is completed on 1 October 2015;
(c) based on the agreed value of S$1,286.3 million for the 75.0% indirect interest in
OUBC; and
(d) BPHPL Group’s assumed NAV and the repayment of a shareholder’s loan which
shall be extended by the Sponsor to BPHPL for the acquisition of the Divested
Shares,
the expected Purchase Consideration shall be S$1,034.0 million.
Assuming that:
(a) OUE C-REIT acquires BPHPL which owns an 83.33% interest in OUBC;
11
(b) the proposed Acquisition is completed on 1 October 2015;
(c) based on the agreed value of S$1,429.2 million for the 83.33% indirect interest
in OUBC; and
(d) BPHPL Group’s assumed NAV and the repayment of a shareholder’s loan which
shall be extended by the Sponsor to BPHPL for the acquisition of the Divested
Shares,
the expected Purchase Consideration shall be S$1,148.8 million.
The expected Purchase Consideration shall be adjusted to reflect the actual NAV
attributable to the controlling shareholder of the BPHPL Group on the date of
completion of the proposed Acquisition.
2.1.4 Estimated Total Acquisition Cost
Depending on the shareholding interest in OUBC acquired by BPHPL, the estimated
Total Acquisition Cost will range from approximately S$1,061.2 million to S$1,178.3
million, comprising:
(i) the expected Purchase Consideration of S$1,034.0 million to S$1,148.8 million
(see “Purchase Consideration and Valuation” above);
(ii) the Acquisition Fee of approximately S$9.6 million to S$10.7 million to be paid in
Units; and
(iii) the estimated debt and/or equity financing related costs, stamp duty, professional
and other fees and expenses incurred or to be incurred by OUE C-REIT in
connection with the proposed Acquisition of approximately S$17.6 million to
S$18.8 million.
The following table sets out the different components of the estimated Total Acquisition
Cost based on the different shareholding interest in OUBC acquired by BPHPL.
S$’ million
75.0% of the
OUBC Interest
83.33% of the
OUBC Interest
Expected Purchase Consideration S$1,034.0 S$1,148.8
Acquisition Fee S$9.6 S$10.7
Estimated debt and/or equity financing
related costs, stamp duty, professional
and other fees and expenses S$17.6 S$18.8
Estimated Total Acquisition Cost S$1,061.2 S$1,178.3
2.1.5 Method of Financing
The Manager intends to finance all acquisition costs relating to the proposed
Acquisition (excluding the Acquisition Fee Units) through a combination of debt and
equity financing, including the proposed CPPU Issue and the Rights Issue. The
following table sets out the intended source and application of estimated funds in
relation to the proposed Transactions.
12
S$’ million
75.0% of the
OUBC Interest
83.33% of the
OUBC Interest
Sources
CPPU Issue 500.0 550.0
Rights Issue 218.3 218.3
Debt/borrowings 333.3 399.3
Issue of Acquisition Fee Units 9.6 10.7
Total 1,061.2 1,178.3
Applications
Acquisition of BPHPL including any
repayment of shareholder’s loan 1,034.0 1,148.8
Acquisition Fee 9.6 10.7
Transaction Costs 17.6 18.8
Total 1,061.2 1,178.3
2.1.6 Principal Terms of the SPA
The principal terms of the SPA include, among others, the following conditions
precedent:
(i) BPHPL having acquired the additional 25.0% to 33.33% interest in OUBC and
being the legal and beneficial owner of the 75.0% to 83.33% shares in OUBC;
(ii) no statute, regulation or decision which would prohibit the sale and purchase of
the shares of BPHPL or the operation of any of OUBC and its subsidiaries having
been proposed, enacted or taken by any governmental or official authority;
(iii) the approval of the Sponsor’s shareholders for the disposal of BPHPL and
transactions in connection with such disposal;
(iv) the approval of the Unitholders for the proposed Acquisition and transactions in
connection with such Acquisition (including the proposed CPPU Issue and any
applicable whitewash resolution to be obtained from Unitholders in connection
with such issuance);
(v) the approval and confirmation being received by OUE C-REIT from Inland
Revenue Authority of Singapore that the CPPUs will be treated as equity;
(vi) the approval and confirmation being received by OUE C-REIT from the MAS that
the CPPUs will not count towards OUE C-REIT’s aggregate leverage limit under
the Property Funds Appendix; and
(vii) (a) no event or circumstance shall have occurred in respect of or in connection
with the affairs of OUBC and/or One Raffles Place, and (b) there being no breach
of any clause of the SPA (including any of the warranties), which adversely
affects the NAV of OUBC by 25% when compared to that reflected in the audited
consolidated financial statement of OUBC for the financial year ended 31
December 2014.
13
Completion of the proposed Acquisition is conditional upon the above condition
precedents being fulfilled or waived by the relevant party (other than paragraphs
2.1.6(iii) and (iv) above which cannot be waived) to the SPA on or prior to the Long
Stop Date. For the purpose of the SPA, “Long Stop Date” refers to the date falling
three months after the date of the EGM convened to seek Unitholders’ approval for,
among others, the acquisition of BPHPL or such other earlier date as may be mutually
agreed by OUE C-REIT and the Sponsor.
2.2 Payment of Acquisition Fee in Units
The Manager shall be paid an Acquisition Fee of approximately S$9.6 million to S$10.7
million for the proposed Acquisition pursuant to the Trust Deed, depending on the percentage
interest in OUBC acquired by BPHPL. As the proposed Acquisition is an “interested party
transaction” under the Property Funds Appendix, the Acquisition Fee will be in the form of
Units which shall not be sold within one year of the date of issuance in accordance with
Paragraph 5.6 of the Property Funds Appendix.
Pursuant to Rule 805(1) of the Listing Manual, the Manager is seeking specific approval of
the Unitholders for the issue of the Acquisition Fee Units to the Manager. The issue price of
the Acquisition Fee Units shall be determined based on the TERP per Unit in relation to the
Rights Issue. While Clause 15.2.1 of the Trust Deed allows the Manager to receive the
Acquisition Fee Units at the Rights Issue Price of S$0.555, the Manager has elected to
receive the Acquisition Fee Units at the TERP of S$0.731 per Unit instead.
Based on the TERP of S$0.731 per Unit, the number of Acquisition Fee Units issued shall be
approximately 13.2 million to 14.7 million.
2.3 The Proposed CPPU Issue
The Manager intends to issue up to S$550.0 million CPPUs to the Sponsor (or its nominees)
as part payment of the Purchase Consideration. The CPPUs will not be classified as
borrowings, and the proposed CPPU Issue will not result in an increase in OUE C-REIT’s
Aggregate Leverage under the Property Funds Appendix.
2.3.1 Key Characteristics of the CPPUs
Certain key characteristics and other salient terms of the CPPUs are set out below.
Key Characteristics Salient Terms
Term The CPPUs shall be perpetual instruments.
Issue Price The CPPUs shall be issued at S$1.00 per CPPU.
Issue Size Up to 500,000,000 to 550,000,000 CPPUs.
Listing It is not intended that the CPPUs be listed on a stock
exchange.
14
Key Characteristics Salient Terms
Distributions Each CPPU in issue shall entitle a holder of CPPUs (“CPPU
Holder”) to receive a distribution (the “CPPU
Distribution”) of an amount equivalent to 1.0% per annum
of the issue price of each CPPU. Based on such distribution
rate, the amount of CPPU Distribution to be paid to the
CPPU Holders per annum is between S$5.0 million to
S$5.5 million.
Any and all decisions regarding the declaration of any
CPPU Distribution shall be at the sole and absolute
discretion of the Manager.
Any CPPU Distribution or part thereof not due or payable
pursuant to the CPPU Terms1 shall not accumulate for the
benefit of the CPPU Holders or entitle the CPPU Holders to
any claim in respect thereof against OUE C-REIT, the
Trustee and/or the Manager.
The CPPUs shall, in respect of the entitlement to
participate in the distributions of OUE C-REIT, rank:
(i) junior to any securities or ownership interests and all
obligations of OUE C-REIT (excluding debt
obligations) that are expressed to rank senior to the
CPPUs;
(ii) pari passu with (a) each other and (b) any other
securities or ownership interests and all obligations of
OUE C-REIT (excluding debt obligations) that are
expressed to rank pari passu with the CPPUs; and
(iii) senior to the Units.
Distribution and
Capital Stopper
In the event any CPPU Distribution (taking into account the
Special CPPU Distribution (as defined herein)) is not
declared in full for any reason in respect of any CPPU
Distribution Period (as defined herein), OUE C-REIT shall
not, and shall procure that the subsidiaries of OUE C-REIT
shall not, in respect of the same period:
(i) declare or pay any distributions in respect of, or
repurchase or redeem, any Units or any other
securities or ownership interests of OUE C-REIT
ranking pari passu with or junior to the CPPUs; and
(ii) contribute any moneys to a sinking fund for the
payment of any distributions in respect of, or for the
redemption or repurchase of, any such Units or any
other securities or ownership interests,
except where required pursuant to under any relevant laws,
regulations and guidelines.
1 “CPPU Terms” shall have the meaning ascribed to it in Appendix B.
15
Key Characteristics Salient Terms
Ranking at
liquidation
In the event of the commencement of any dissolution or
winding up of OUE C-REIT (other than pursuant to a
permitted reorganisation), the CPPUs shall, in respect of
the Priority Amounts, rank:
(i) junior to (a) all debt of OUE C-REIT (including, without
limitation, all amounts due under Clause 26.5 of the
Trust Deed, all costs of the Trustee in its capacity as
trustee of OUE C-REIT (including, but not limited to,
liabilities owed to any CPPU Holder or Unitholder who
is a creditor of OUE C-REIT) and subordinated debt),
and (b) any securities or ownership interests and all
obligations of OUE C-REIT that are expressed to rank
senior to the CPPUs;
(ii) pari passu with (a) each other and (b) any other
securities or ownership interests and all obligations of
OUE C-REIT that are expressed to rank pari passu
with the CPPUs; and
(iii) senior to the Units.
Special CPPU
Distribution
Entitlements upon
Redemption
Where any CPPUs are to be redeemed, the Manager may,
at its sole discretion, elect to declare a special CPPU
Distribution (“Special CPPU Distribution”) of an amount
per CPPU equivalent to the Distribution Amount1 pro-rated
over the relevant Special Preferred Distribution Period2, on
all CPPUs for the relevant Special Preferred Distribution
Period, which shall be payable on the relevant Redemption
Date (as defined herein) in accordance with the terms of the
CPPUs, provided that the Special CPPU Distribution in
respect of each CPPU shall, together with all prior
distributions declared in respect of each CPPU in the
relevant year, not exceed the Distribution Amount.
Restriction Period The restriction period shall be a period of four years
commencing from the date of issue of the CPPUs (the
“Restriction Period”), within which the CPPU Holder may
not exercise its right of conversion of the CPPUs, save in
exceptional circumstances such as a takeover or when the
Manager announces an intention to carry out a permitted
reorganisation, where the CPPU Holders will be entitled to
exercise their right to convert the CPPUs into Units
(“Conversion Right”) even during the Restriction Period.
(Please see paragraphs 21.3 and 22.2 of Appendix B for
further details.)
Conversion of the
CPPUsThe CPPUs shall be convertible at the option of the CPPU
Holders, in whole or in part, into Units at the Conversion
Price on a Business Day to be determined at the CPPU
Holders’ discretion after the expiry of the Restriction Period
1 “Distribution Amount” means the Preferred Distribution of an amount equivalent to 1.0% per annum of the issue
price of the CPPU.
2 “Special Preferred Distribution Period” means, in relation to the calculation of Special CPPU Distributions, the
period commencing the day after the end of the last distribution period (whether in respect of CPPU Distribution or
Special CPPU Distribution) immediately preceding the relevant Redemption Date.
16
Key Characteristics Salient Terms
(each such day a “Conversion Date”) provided that not
more than one-third of the CPPUs initially issued can be
converted in any one year.
During the Restriction Period, the CPPU Holders shall not
be entitled to exercise their Conversion Right when the
Manager exercises its right to redeem any of the CPPUs
(the “Redemption Right”).
After the expiry of the Restriction Period and in the event
that the Manager exercises its Redemption Right in respect
of any of the CPPUs, the CPPU Holders shall be entitled
(but shall not be obliged) at any time to exercise their
Conversion Right to convert up to one-third of the CPPUs
initially issued into Units in accordance with the terms of the
CPPU on a date no later than five Business Days prior to
the date fixed for redemption thereof.
Any exercise of the Conversion Right by the CPPU Holders
in respect of their CPPUs which are the subject of the
Redemption Right shall prevail and the Redemption Notice
shall be disregarded in respect of such CPPUs, provided
that the CPPU Holders have exercised their Conversion
Right no later than five Business Days prior to the date
fixed for redemption of such CPPUs.
Conversion Price The Conversion Price1 shall be an amount equivalent to a
premium of 15.0% above the TERP per Unit in relation to
the Rights Issue.
Based on the TERP of S$0.731 per Unit, the Conversion
Price of the CPPUs is S$0.841.
Adjustments to
Conversion Price
Some of the events which will result in an adjustment to the
Conversion Price (as described above) include:
(i) consolidation or subdivision or buy-back of Units;
(ii) capitalisation of profits or reserves;
(iii) rights issue of Units or options over Units;
(iv) rights issue of other securities;
(v) issues of Units at less than the market price;
(vi) issues of other securities at less than the market price;
(vii) modification of rights of conversion; or
(viii) other offers to Unitholder.
Some of the events above are subject to certain thresholds
being met. (Please refer to paragraph 22.8 of Appendix B
for further details on the applicable formula for the
adjustments to the Conversion Price.)
1 “Conversion Price” means the price at which Units will be issued upon conversion of the CPPUs, as adjusted from
time to time.
17
Key Characteristics Salient Terms
Redemption of the
CPPUs
CPPUs shall be redeemable on a pro rata basis at the
option of the Manager, in whole or in part, at the issue price
on a Business Day to be determined at the Manager’s
discretion (each such day a “Redemption Date”), except
upon the occurrence of certain special events. The CPPUs
shall not be redeemable at the option of the CPPU Holders.
Voting Rights The CPPU Holders shall not be entitled to attend and vote
at meetings of Unitholders except in the following
circumstances:
(i) during such period as the CPPU Distribution or
Special CPPU Distribution so declared or any part
thereof remains in arrears and unpaid for at least 12
months after the date when the CPPU Distribution or
Special CPPU Distribution should otherwise have
been paid if declared by the Manager;
(ii) in respect of any resolution which varies or abrogates
any right, preference or privilege of the CPPUs
(including, without limitation, the authorisation,
creation or issue of any securities or ownership
interests and all obligations of OUE C-REIT ranking
senior to (but excluding, for purposes of this
paragraph only, those ranking pari passu with) the
CPPUs as to entitlement to participate in the
distributions and/or (in the event of any dissolution or
winding up of OUE C-REIT) the Deposited Property1);
or
(iii) in respect of any resolution for the dissolution or
winding up of OUE C-REIT,
and every CPPU Holder who is present in person at such
general Meetings shall have on a show of hands, one vote
and on a poll, one vote for every CPPU of which it is the
holder.
Transferability The CPPUs are generally freely transferable save for such
restrictions as may be necessary to facilitate the
conversion and redemption of the CPPUs after the
Restriction Period.
(Please refer to paragraphs 21.10 and 28 of Appendix B for
further details on the transferability of the CPPUs.)
Upon Unitholders’ approval of Resolution 1 and Resolution 2, the Manager will enter
into the proposed Trust Deed Supplement with the Trustee and the CPPUs will be
issued pursuant to the proposed Trust Deed Supplement. See Appendix B of this
Circular for details of the specific terms and conditions of the CPPUs.
Under Clause 5.1.4 of the Trust Deed, the Manager has the power to issue further
CPPUs of the same class with the CPPUs already issued.
1 “Deposited Property” as defined in the Trust Deed means all assets of OUE C-REIT, including all its Authorised
Investments (as defined in the Trust Deed) for the time being held or deemed to be held upon the trusts of the Trust
Deed.
18
2.3.2 Redemption Review Process
The Manager will put in place a redemption review process following the issuance of
the CPPUs. The Manager will monitor the commercial viability of redeeming the
CPPUs on an on-going basis and will at least on a semi-annual basis in every financial
year after the issuance of the CPPUs prepare an internal report as to whether to
redeem the CPPUs, taking into account relevant funding costs, market conditions,
benefits and risks of redemption. This report will be drawn up in the three months
preceding the commencement of the relevant six-month period. The internal report
shall set out the factors taken into consideration by the Manager as well as the
financial conditions of OUE C-REIT and such other information as the Manager may
consider necessary for the consideration of the audit and risk committee of the
Manager (the “Audit and Risk Committee”).
The Audit and Risk Committee will then review the internal report, deliberate and
decide if OUE C-REIT should redeem any CPPUs, taking into consideration the best
interest of OUE C-REIT and its minority Unitholders. Any member of the Audit and Risk
Committee who is a non-Independent Director shall abstain from voting on any
resolution relating to the redemption of the CPPUs at the meeting of the Audit and Risk
Committee.
2.4 The Rights Issue
The Manager will be relying on the general mandate given by Unitholders at the annual
general meeting of Unitholders on 29 April 2015 to issue the Rights Units. In the event that
OUE C-REIT does not proceed with the proposed Acquisition, the proceeds from the Rights
Issue shall be re-deployed for potential future acquisitions or the repayment of its existing
borrowings.
2.4.1 Principle Terms of the Rights Issue
The following is a summary of the principal terms and conditions of the Rights Issue:
Issue Size : 393,305,817 Rights Units to raise gross proceeds of
approximately S$218.3 million and net proceeds of
approximately S$214.9 million.
Basis of Provisional
Allotment
: Each Eligible Unitholder is entitled to subscribe for 9
Rights Units for every 20 existing Units standing to the
credit of his securities account with CDP (the “Securities
Account”) as at the Books Closure Date, fractional
entitlements to be disregarded.
Rights Issue Price : S$0.555 for each Rights Unit. The Rights Units are
payable in full upon acceptance and/or application.
The Rights Issue Price represents a discount of 31.5% to
the closing price of S$0.810 per Unit on the last trading
day of the Units prior to the announcement of the Rights
Issue (the “Closing Price”) and a discount of 24.1% to
the theoretical ex-rights price (“TERP”) of S$0.731 per
Unit.
19
Status of the Rights
Units
: The Rights Units will, upon allotment and issue, rank pari
passu in all respects with the existing Units in issue as at
the date of issue of the Rights Units.
Eligible Unitholders who validly accept, in full, their
Rights Entitlements, will receive such amount of the
accrued distributions from the period from 1 January
2015 to 30 June 2015 to which they would have been
entitled had the Rights Issue not occurred.
Eligible Unitholders : Eligible Unitholders are Unitholders with Units standing
to the credit of their Securities Accounts and whose
registered addresses with CDP are in Singapore as at
the Books Closure Date or who have, at least three
Market Days1 prior to the Books Closure Date, provided
CDP with addresses in Singapore for the service of
notices and documents and such Unitholders who the
Manager, on behalf of OUE C-REIT, may determine, may
be offered Rights Units without breaching applicable
securities laws.
Eligibility of
Unitholders to
participate in the
Rights Issue
: Eligible Unitholders are at liberty to accept in part or in
full, decline, renounce or trade on the SGX-ST (during
the “nil-paid” rights trading period prescribed by the
SGX-ST) their pro rata Rights Entitlements and are
eligible to apply for the Excess Rights Units.
The procedures for acceptance, excess applications and
payment by Eligible Unitholders will be set out in the
offer information statement in connection with the Rights
Issue to be lodged with the MAS and issued to Eligible
Unitholders (the “Offer Information Statement”).
Ineligible Unitholders : No provisional allotment of Rights Units will be made to
Ineligible Unitholders and no purported acceptance
thereof or application thereof by Ineligible Unitholders
will be valid. Ineligible Unitholders should refer to the
paragraphs under paragraph 2.4.3 below.
Trading of the Rights
Units
: Upon the listing of and quotation for the Rights Units on
the Main Board of the SGX-ST, the Rights Units will be
traded on the Main Board of the SGX-ST under the
book-entry (scripless) settlement system. For the
purposes of trading on the Main Board of the SGX-ST,
each board lot of Units will comprise 100 Units. All
dealings in and transactions (including transfers) of the
Rights Units effected through the SGX-ST and/or CDP
shall be made in accordance with the “Terms and
Conditions for Operation of Securities Account with
CDP”, as the same may be amended from time to time,
copies of which are available from CDP.
Eligible Unitholders can trade in odd lots of Units on the
SGX-ST’s Unit Share Market.
Governing Law : Laws of the Republic of Singapore
The actual terms and conditions of the Rights Issue will be set out in the Offer
Information Statement to be despatched by the Manager to Eligible Unitholders
in due course.
1 “Market Day” as defined in the Listing Manual refers to a day on which the SGX-ST is open for securities trading.
20
AS THE RIGHTS ISSUE IS MADE ON A RENOUNCEABLE BASIS, THE
PROVISIONAL ALLOTMENTS OF RIGHTS UNITS CAN BE RENOUNCED IN
FAVOUR OF A THIRD PARTY OR TRADED ON THE SGX-ST.
Unitholders should note that the Rights Issue is undertaken pursuant to the
general mandate given by Unitholders to the Manager at the annual general
meeting on 29 April 2015.
The Rights Issue is further conditional upon the lodgement of the Offer Information
Statement with the MAS.
2.4.2 Eligible Unitholders
Eligible Unitholders whose Securities Accounts are credited with Units as at 5.00 p.m.
on the Books Closure Date will be provisionally allotted the Rights Entitlements on the
basis of the number of Units standing to the credit of their Securities Accounts with
CDP as at the Books Closure Date.
“Eligible Unitholders” are Unitholders with Units standing to the credit of their
Securities Accounts and (a) whose registered addresses with CDP are in Singapore as
at the Books Closure Date or who have, at least three Market Days prior to the Books
Closure Date, provided CDP with addresses in Singapore for the service of notices
and documents or (b) who the Manager determines may be offered Rights Units
without breaching applicable securities laws.
Eligible Unitholders will be at liberty to accept in part or in full, decline or otherwise
renounce or trade (during the “nil-paid” rights trading period prescribed by the
SGX-ST) their provisional allotments of Rights Units and are eligible to apply for
Excess Rights Units in excess of their provisional allotments under the Rights Issue.
Eligible Unitholders who have subscribed for or purchased Units under the
Central Provident Fund (“CPF”) Investment Scheme (“CPFIS”) and/or the
Supplementary Retirement Scheme (“SRS”) can only accept their Rights
Entitlements by instructing the relevant banks in which they hold their CPFIS
accounts and/or SRS accounts to do so on their behalf. Any application made
directly to CDP or through automated teller machines will be rejected.
Unitholders holding Units through a finance company or depository agent may
only subscribe for the Rights Entitlements through their respective finance
company or depository agent.
Subscription for the Rights Entitlements arising from Units acquired under the
CPFIS Ordinary Account (“CPFIS-OA”), where the Rights Entitlements are of a
type included under the CPFIS-OA, can only be made using CPF funds. In the
event of insufficient CPF funds or stock limit, Unitholders should top-up their
CPF funds with the relevant bank in which they hold their CPFIS accounts to
ensure that they may subscribe for their Rights Entitlements.
2.4.3 Ineligible Unitholders
No provisional allotment of Rights Units will be made to Unitholders other than the
Eligible Unitholders (“Ineligible Unitholders”) and no purported acceptance thereof
or application therefor by Ineligible Unitholders will be valid.
21
The making of the Rights Issue may be prohibited or restricted in certain jurisdictions
under their relevant securities laws. Thus, for practical reasons and in order to avoid
any violation of the securities legislation or other relevant laws applicable in countries
(other than in Singapore) where Unitholders may have their addresses registered with
CDP, the Rights Issue will not be extended to Ineligible Unitholders. Save as provided
herein, Ineligible Unitholders who wish to participate in the Rights Issue will have to
provide CDP with addresses in Singapore for the service of notices and documents
and any other evidence of eligibility at least three Market Days prior to the Books
Closure Date. Save as provided herein and for the avoidance of doubt, the Ineligible
Unitholders are not eligible to participate in the Rights Issue.
The “nil-paid” Rights Entitlements and the Rights Units have not been and will not be
registered under the Securities Act, or under the securities laws of any state of the
U.S. and, accordingly, they may not be offered, sold, resold, granted, delivered,
allotted, taken up, transferred or renounced, directly or indirectly, in within the U.S.
except pursuant to an applicable exemption from, or a transaction not subject to, the
registration requirements of the Securities Act and in compliance with any applicable
securities laws of any state or other jurisdiction of the U.S. The Rights Units and the
Rights Entitlements will only be offered and sold in offshore transactions in reliance on
Regulation S.
If it is practicable to do so, the Manager may, in its absolute discretion, arrange for
“nil-paid” rights which would otherwise have been allotted to Ineligible Unitholders to
be sold “nil-paid” on the SGX-ST as soon as practicable after dealings in the “nil-paid”
rights commence.
Such sales may, however, only be effected if the Manager, in its absolute discretion,
determines that a premium can be obtained from such sales, after taking into account
expenses to be incurred in relation thereto.
The net proceeds from all such sales, after deduction of all expenses therefrom, will
be pooled and thereafter distributed to Ineligible Unitholders in proportion to their
respective Unitholdings determined as at the Books Closure Date and sent to them by
ordinary post, provided that where the amount to be distributed to any Ineligible
Unitholder is less than S$10.00, the Manager shall be entitled to retain or deal with
such net proceeds as the Manager may, its in absolute discretion, deem fit for the sole
benefit of OUE C-REIT and no Ineligible Unitholder shall have any claim whatsoever
against the Manager, the Joint Lead Managers and Underwriters, the Trustee or the
CDP in connection therewith.
2.4.4 Excess Rights Units
The Rights Units represented by the provisional allotments (A) of (i) Eligible
Unitholders who decline, do not accept, and elect not to renounce or trade their
provisional allotment of Rights Units under the Rights Issue (during the “nil-paid” rights
trading period prescribed by the SGX-ST) and/or (ii) Ineligible Unitholders which have
not been sold during the “nil-paid” rights trading period or (B) that have not been
validly taken up by the original allottees, renounces of the provisional allotments or the
purchasers of the “nil-paid” rights (collectively, the “Excess Rights Units”), subject to
the requirements of otherwise of the SGX-ST, will be issued to satisfy Excess Rights
Units applications as the Manager may, in its discretion, deem fit.
22
2.4.5 Rights Issue Price
The Rights Issue Price represents a discount of:
(i) 31.5% to the Closing Price;
(ii) 24.1% to the TERP per Unit. For the avoidance of doubt, the TERP is calculated
as follows:
TERP =
Market capitalisation of OUE C-REIT1
+ Gross proceeds from the Rights Issue
Units in issue after the Rights Issue2
; and
(iii) 39.7% to the pro forma NAV per Unit after completion of the proposed
Transactions of S$0.92 per Unit as at 31 December 2014 and before conversion
of the CPPUs. (Please also refer to paragraph 6.1.2 of the Letter to Unitholders
for the pro forma NAV per Unit.)
2.4.6 Use of Proceeds of the Rights Issue
The Manager expects to raise gross proceeds of approximately S$218.3 million and
net proceeds of approximately S$214.9 million under the Rights Issue. Based on the
Manager’s current estimates, the Manager expects to use the gross proceeds from the
Rights Issue as follows:
(i) approximately S$205.3 million (which is equivalent to 94.0% of the gross
proceeds of the Rights Issue) to part finance the expected Purchase
Consideration including the repayment of any outstanding shareholder’s loan at
BPHPL;
(ii) approximately S$3.4 million (which is equivalent to 1.6% of the gross proceeds
of the Rights Issue) to pay the total costs and expenses relating to the Rights
Issue; and
(iii) approximately S$9.6 million (which is equivalent to 4.4% of the gross proceeds
of the Rights Issue) to pay the stamp duty, professional and other fees and
expenses incurred or to be incurred in connection with the proposed
Transactions.
Pending deployment, the net proceeds from the Rights Issue may be deposited with
banks and/or financial institutions, or used for any other purpose on a short-term basis
as the Manager may, in its absolute discretion deem fit. If the proposed Acquisition is
not completed, the net proceeds may be re-deployed for future acquisitions or the
repayment of debt.
The Manager will make periodic announcements on the utilisation of the net proceeds
of the Rights Issue via SGXNET as and when such funds are materially utilised.
1 Based on the Closing Price.
2 Comprising existing Units as at the Latest Practicable Date and the Rights Units.
23
It should be noted that OUE C-REIT is currently not under pressure from its bankers
to repay any of its existing borrowings and has sufficient resources to meet its current
capital commitments. The Manager is of the opinion that, after taking into
consideration OUE C-REIT’s internal resources, its available loan facilities and the net
proceeds of the Rights Issue, the working capital available to OUE C-REIT is sufficient
to meet its present obligations as and when they fall due.
2.4.7 Costs of the Rights Issue
The estimated costs of the Rights Issue that OUE C-REIT will have to bear include the
management, underwriting and selling commissions and related expenses of S$3.4
million (excluding goods and service tax payable), together with any goods and
services tax payable thereon.
2.4.8 Underwriting of the Rights Issue and Commitment of the Sponsor
(i) Commitment of the Sponsor
To demonstrate its support for OUE C-REIT and the Rights Issue, the Sponsor
(which through its wholly-owned subsidiaries, CDPL and the Manager (in its own
capacity) (the “Subscribing Entities”), owns 422,018,928 Units representing
48.3% of the voting rights of OUE C-REIT as at the Latest Practicable Date) has
provided to the Manager and the Joint Lead Managers and Underwriters an
irrevocable undertaking (the “Irrevocable Undertaking”) pursuant to which the
Sponsor will procure that the Subscribing Entities take up their full pro rata
entitlement of up to 189,908,517 Rights Units representing 48.3% of the total
number of Rights Units.
(ii) Underwriting of the Rights Issue
Save for the Rights Units which are the subject of the Irrevocable Undertaking,
the Rights Issue is fully underwritten by the Joint Lead Managers and
Underwriters on the terms and subject to the conditions of the underwriting
agreement entered into between the Manager and the Joint Lead Managers and
Underwriters on 29 June 2015 (the “Underwriting Agreement”). Pursuant to the
Underwriting Agreement, the Joint Lead Managers and Underwriters have
agreed, subject to the terms and conditions of that agreement to subscribe for,
and/or procure the subscription for, at the Rights Issue Price, the Rights Units for
which valid applications have not been submitted. The Joint Lead Managers and
Underwriters will be entitled to a commission of 2.25% (the “Underwriting
Commission”).
The Underwriting Agreement may be terminated upon the occurrence of certain
events, including breaches by the Manager of certain terms of the Underwriting
Agreement, certain material adverse changes relating to OUE C-REIT and events
of a force majeure nature. However, the Joint Lead Managers and Underwriters
will not be entitled to rely on force majeure to terminate the Underwriting
Agreement on or after the date on which ex-rights trading commences, in
compliance with Rule 818 of the Listing Manual.
24
2.4.9 Status of the Rights Units
The Rights Units will, upon allotment and issue, rank pari passu in all respects with the
existing Units in issue as at the date of issue of the Rights Units.
3. RESOLUTION 2: THE PROPOSED TRUST DEED SUPPLEMENT FOR THE ISSUE OF
PREFERRED UNITS
3.1 The Proposed Trust Deed Supplement
The Manager proposes to enter into the proposed Trust Deed Supplement with the Trustee
for the purposes of:
(i) authorising the Manager to issue the Preferred Units from time to time, in one or more
classes, to any person(s) (including, without limitation, itself and/or its Related Parties),
with the prior approval of Unitholders; and
(ii) setting out the general terms and conditions of an offer and issue of the Preferred Units.
3.2 Requirement for Unitholders’ Approval
Pursuant to Clause 28.2 of the Trust Deed, the Trust Deed may be replaced or amended with
the prior consent of the Unitholders by way of an Extraordinary Resolution. Accordingly, the
Manager is seeking Unitholders’ approval for the proposed Trust Deed Supplement.
Key Characteristics of the Preferred Units
The Manager proposes to issue each class of Preferred Units on the general terms and
conditions set out in the proposed Trust Deed Supplement, as well as any specific terms and
conditions relating to the relevant class of Preferred Units which may be agreed between the
Manager and the relevant Preferred Unitholder1. A list of the key characteristics and salient
terms of the Preferred Units is set out below:
Key Characteristics Salient Terms
Term The term of the Preferred Units of each class shall be
separately determined in respect of such class of Preferred
Units.
Issue Price The issue price of a Preferred Unit of each class shall be
separately determined in respect of such class of Preferred
Units.
Listing The Preferred Units of each class may or may not be listed
on the SGX-ST and/or any other Recognised Stock
Exchange (as defined herein). Any listing of the Preferred
Units of each class (and the terms and conditions relating
to such listing, if any) shall be separately determined in
respect of such class of Preferred Units.
1 “Preferred Unitholder” means the registered holder for the time being of a Preferred Unit, including persons so
registered as joint holders, except where the registered holder is The Central Depository (Pte) Limited (“CDP”), the
term “Preferred Unitholder” shall, in relation to Preferred Units registered in the name of CDP mean, where the
context requires, the Depositor (as defined herein) whose securities account with CDP is credited with Preferred
Units.
25
Key Characteristics Salient Terms
Distributions The Preferred Units of each class shall, in respect of the
entitlement to participate in the distributions of OUE
C-REIT, rank:
(i) junior to all securities, ownership interests and
obligations of OUE C-REIT that are expressed to rank
senior to the Preferred Units of such class;
(ii) pari passu with (a) each other and (b) all securities,
ownership interests and obligations of OUE C-REIT
that are expressed to rank pari passu with the
Preferred Units of such class; and
(iii) senior to the Units.
The terms and conditions relating to the declaration and
payment of distributions in respect of the Preferred Units of
each class shall be separately determined in respect of
such class of Preferred Units, provided that any decision
regarding the declaration of distributions in respect of the
Preferred Units of each class shall be at the sole discretion
of the Manager.
Distribution and Capital
Stopper
The specific terms and conditions relating to each class of
Preferred Units may restrict the declaration of distributions
in respect of the Units and/or return of capital to Unitholders
in the event that any distributions payable in respect of the
Preferred Units of such class are not declared in full, or may
not contain such restrictions. Any such restrictions which
may be imposed pursuant to the terms of the Preferred
Units of each class (and the terms and conditions of such
restrictions, if any) shall be separately determined in
respect of such class of Preferred Units.
Ranking at Liquidation In the event of the commencement of any dissolution or
winding up of OUE C-REIT (other than pursuant to a
permitted reorganisation), the Preferred Units of each class
shall, in respect of the entitlement to participate in the
assets of OUE C-REIT upon liquidation, rank:
(i) junior to (a) all debts of OUE C-REIT (including,
without limitation, all amounts due under Clause 26.5
of the Trust Deed, all costs of the Trustee (including,
but not limited to, liabilities owed to any Preferred
Unitholder or Unitholder who is a creditor of OUE
C-REIT) and all subordinated debt) and (b) all
securities, ownership interests and obligations of OUE
C-REIT that are expressed to rank senior to the
Preferred Units of such class;
(ii) pari passu with (a) each other and (b) all securities,
ownership interests and obligations of OUE C-REIT
that are expressed to rank pari passu with the
Preferred Units of such class; and
(iii) senior to the Units.
26
Key Characteristics Salient Terms
Redemption of the
Preferred Units
The Preferred Units of each class may be redeemable, in
full or in part, at the option of the Manager and/or the
relevant Preferred Unitholders, may be subject to
restrictions on redemption if any or may not be redeemable
at all. Any entitlement of the Manager and/or the relevant
Preferred Unitholder to redeem the Preferred Units of each
class (and the terms and conditions of such entitlement, if
any) shall be separately determined in respect of such
class of Preferred Units.
Conversion of the
Preferred Units
Each class of Preferred Units may be convertible, in full or
in part, into Units at the option of the Manager and/or the
relevant Preferred Unitholders, may be subject to
restrictions on conversion or may not be convertible into
Units at all. Any entitlement of the Manager and/or the
relevant Preferred Unitholder to convert each class of
Preferred Units into Units (and the terms and conditions of
such entitlement, if any) shall be separately determined in
respect of such class of Preferred Units.
Voting Rights The Preferred Units of each class shall have no voting
rights attached to them in respect of voting at meetings of
Unitholders, save in the following circumstances:
(i) during such period as the distributions so declared in
respect of the Preferred Units of such class or any part
thereof remain in arrears and unpaid for at least 12
months after the date when distributions in respect of
the Preferred Units of such class should otherwise
have been paid if declared by the Manager;
(ii) upon any resolution which varies or abrogates any
right, preference or privilege of the Preferred Units of
such class (including, without limitation, the
authorisation, creation or issue of any securities,
ownership interests or obligations of OUE C-REIT
ranking senior to (but excluding, for purposes of this
paragraph only, those ranking pari passu with) the
Preferred Units of such class in respect of the
entitlement to participate in the distributions and/or (in
the event of any dissolution or winding up of OUE
C-REIT) the Deposited Property); or
(iii) upon any resolution for the dissolution or winding up
of OUE C-REIT.
Transferability The Preferred Units of each class may be freely
transferable, may be subject to restrictions on transfer or
may not be transferable at all. Any entitlement to transfer
the Preferred Units of each class (and the terms and
conditions of such transfer, if any) shall be separately
determined in respect of such class of Preferred Units.
(See Appendix A of this Circular for further details of the proposed Trust Deed Supplement
and the general terms and conditions governing the Preferred Units.)
27
3.3 Rationale for the Proposed Trust Deed Supplement
The Manager believes that the ability to create and issue new classes of Preferred Units will
enhance OUE C-REIT’s financing flexibility and widen the pool of capital available to OUE
C-REIT by allowing the Manager to create and issue new classes of securities.
4. RATIONALE FOR THE PROPOSED TRANSACTIONS
The Manager believes that the proposed Transactions will bring the following key benefits to
Unitholders:
4.1 Acquisition of a majority interest in a landmark commercial property in the Singapore
CBD
The proposed Acquisition represents a unique opportunity for OUE C-REIT to acquire a
majority interest in One Raffles Place. It is expected to increase OUE C-REIT’s exposure to
its core Singapore office market and the Property possesses the following competitive
strengths arising from its positioning as a Grade-A commercial property;
(i) it is strategically located in the heart of Raffles Place, which is in the traditional financial
and business hub within Singapore’s CBD. Raffles Place is perceived as the most
accessible office location within the CBD, and is expected to remain as a focal point of
the CBD even with the expansion of the Marina Bay precinct, with One Raffles Place’s
strategic location being a strong pull-factor for existing and prospective tenants.
One Raffles Place is situated above and linked to the Raffles Place MRT interchange
station, one of Singapore’s major MRT interchange stations, via underground
pedestrian access through the basement of its retail podium which is also connected to
a comprehensive underground network of pedestrian walkways linking to other
developments within Raffles Place as well as Marina Bay. The Property also enjoys
enhanced accessibility to other parts of Singapore via its proximity to the Marina
Coastal Expressway, the Central Expressway and the East Coast Parkway;
(ii) it is a prominent iconic development with Grade-A building specifications. One Raffles
Place Tower 1 comprises a 62-storey office tower and is one of the tallest buildings in
the CBD, with its upper levels enjoying a 360-degree panoramic view of the city. One
Raffles Place Shopping Mall, a six-storey retail podium that has undergone extensive
refurbishment works recently, faces the entire length of the Raffles Place Park, within
the very heart of Raffles Place. As the largest purpose-built shopping mall in Raffles
Place, it offers a diverse range of shopping, dining and leisure options catering to the
needs of the working population in the CBD. The main anchor tenants of One Raffles
Place Shopping Mall include H&M, Uniqlo and other well-known local and international
brand names such as Paris Baguette Café, The Hour Glass, Pandora and Tumi;
(iii) The two office towers offer quality and efficient column-free office space with regular
floor plates. As a result, the Property enjoys an established blue-chip tenant base which
include reputable banking, insurance, financial, information and technology, media and
telecommunications companies and multi-national corporations (“MNCs”). Key tenants
include Petrobras Singapore Pte Ltd, Alipay Singapore E-commerce Private Limited,
Virgin Active Singapore Pte Ltd, Pramerica Investment Management (Singapore) Pte
Ltd and China Merchant Bank Co. Ltd;
28
(iv) One Raffles Place Tower 2 has been accredited with the prestigious BCA Green Mark
Platinum Certification for its environmentally sustainable features, and such
accreditation is increasingly sought after by blue-chip tenants and MNCs when sourcing
potential office space; and
(v) The Property is situated primarily on three land plots with three different tenures with
remaining long land leases of about 812 years, 69 years and 67 years respectively,
translating to a remaining weighted average land lease expiry (by value) of 435 years.
The long land leases provide an attractive investment opportunity and the proposed
Acquisition is expected to increase the remaining land lease expiry of OUE C-REIT,
from its current remaining weighted average land lease expiry of approximately 72
years to 258 years, which is approximately 3.6 times from its current remaining
weighted average land lease expiry.
Remaining Weighted Average Land Lease Expiry
Enlarged PortfolioExisting Portfolio
72 years
258 years
3.6x
4.2 Acquisition of a quality commercial property at an attractive price
While the proposed Acquisition is not immediately yield-accretive, it represents an
opportunity for OUE C-REIT to acquire an interest in a quality commercial property in the
prime Raffles Place area at an attractive price of S$2,382 per square foot (“psf”) compared
to the transacted prices of Grade-A properties in the area, as illustrated in the following
table1.
Property
Remaining
Lease
Date of
Transaction
Transacted
Price
Transacted
Price psf
OUBC Interest2 Weighted
average of
435 years
In progress S$1,715.0 million S$2,382 psf
Straits Trading
Building
847 years September
2014
S$450.0 million S$2,830 psf
1 Unless otherwise indicated, the information in the table is based on information provided in the valuation report of
the OUBC Interest by Cushman & Wakefield dated 9 June 2015.
2 This is specific information provided by the Manager for the purpose of comparison.
29
Property
Remaining
Lease
Date of
Transaction
Transacted
Price
Transacted
Price psf
Prudential
Tower1
80 years May 2014 S$512.0 million S$2,316 psf
OUE Bayfront 92 years January 2014 S$1,005.0 million S$2,498 psf
Hitachi Tower2 More than
840 years
January 2013 S$660.0 million S$2,374 psf
4.3 Favourable growth profile from potential increase in occupancy, positive rental
reversion and limited new office supply in Raffles Place
According to the Independent Market Research Report, rents for Grade-A office buildings in
Raffles Place, especially those which are well-located e.g. with direct access to the MRT
station, are expected to be relatively resilient, given that there are no known premium and
Grade-A office developments expected to be completed in the area from 2015 to 2018. In
addition, existing Grade-A offices in Raffles Place are uniquely positioned, offering mainly
mid-sized floor plates (typically at around 10,000 sq ft), compared with recent and future
office developments that offer floor plates of 20,000 sq ft and above.
Many companies in Singapore continue to favour the CBD as a choice location, with Raffles
Place widely regarded as the most established business location within the CBD. Offices with
mid-sized floor plates in Raffles Place offer a strong value proposition to these companies.
Coupled with the growing diversity of tenants in the CBD, the demand for mid-sized floor
plates in Raffles Place is expected to remain relatively firm. Despite the development of
Marina Bay, Raffles Place continues to be perceived as the most accessible location in the
CBD. As at 1Q 2015, the Independent Market Research Consultant estimates the average
office rent in Marina Bay to be 20% higher than that in Raffles Place, providing a strong value
proposition for businesses to be located in Raffles Place.
Based on the Independent Market Research Report, the current office occupancy rate of One
Raffles Place is estimated to be about 85.0% to 90.0%, as compared to the average
occupancy rate for Grade-A offices in Raffles Place in 1Q 2015 of about 97.2%. Based on the
above occupancy estimates, there is potential for One Raffles Place to increase its
occupancy rate by about 7 to 12 percentage points to reach an occupancy level in line with
the market.
1 Based on the sale of a 92.8% stake in Prudential Tower.
2 Based on the sale of a 51% stake in Hitachi Tower which valued the property at around S$660.0 million.
30
Potential Upside in Occupancy
Current EstimatedOffice Occupancy Rate
of the Property
Average Occupancy Ratefor Grade-A offices in
Raffles Place in 1Q 2015
85%
90%
97.2%
+12ppt
+7ppt(1)
Estimated
range {
Note:
(1) Ppt: percentage point.
Furthermore, the current office rent at One Raffles Place is estimated to be S$9.50 to
S$10.00 psf per month, compared to the average rent for Grade-A offices in Raffles Place in
1Q 2015 of about S$11.50 psf per month. Based on the above rent estimates, OUE C-REIT
can potentially achieve positive rental reversion to market rents of between 15% to 21%.
Potential Upside in Office Rents
Current EstimatedOffice Rent of the
Property
Average Rent for Grade-Aoffices in Raffles Place
in 1Q 2015
9.50
10.00
11.50
+21%
+15%
Estimated
range
S$ psf per month
{
31
4.4 Achievement of transformational scale for OUE C-REIT through the proposed
Acquisition which will significantly enlarge the size of its portfolio and strengthen its
competitive position in Singapore
Following the completion of the proposed Acquisition, OUE C-REIT’s assets-under-
management (“AUM”) is expected to increase from S$1,630.6 million (as at 31 December
2014) to S$3,364.6 million, representing an increase of 106.3%.
The larger asset base post-Acquisition is expected to enhance OUE C-REIT’s overall capital
management flexibility. With a larger asset base, OUE C-REIT will have greater debt
headroom before reaching the aggregate leverage limit under the Property Funds Appendix
(which is with reference to OUE C-REIT’s Deposited Property). A larger asset base will also
support more equity issuances by OUE C-REIT in future. These will, in turn, facilitate future
acquisitions and asset enhancement initiatives to be undertaken by OUE C-REIT.
Further, the proposed Acquisition is expected to increase OUE C-REIT’s proportion of
Singapore AUM from 69.6% to 85.3%, as well as increase the total NLA of OUE C-REIT’s
asset portfolio from approximately 825,000 sq ft to 1,545,000 sq ft, thereby enlarging OUE
C-REIT’s footprint within the Singapore CBD and strengthening its competitive position as a
landlord in the Singapore office market.
Proportion of Singapore Assets-under-Management
Enlarged Portfolio
(OUBC Interest)
Existing Portfolio
69.6%
30.4%
85.3%
14.7%
Singapore AUM Overseas AUM
4.5 Enhanced portfolio diversification and resilience, as well as reduced asset
concentration risk
The proposed Acquisition is expected to benefit Unitholders by enhancing the diversification
and resilience of the Existing Portfolio through the following ways:
(i) Increasing OUE C-REIT’s gross revenue contribution denominated in Singapore
dollars
The proposed Acquisition is expected to increase the gross revenue contribution
denominated in Singapore dollars, and in turn reduce the impact of foreign exchange
fluctuations on OUE C-REIT’s total distributable income. Post-Acquisition, the
proportion of gross revenue received by OUE C-REIT denominated in Singapore dollars
is expected to increase from 68.5%, to 82.3% and 83.1% in the Forecast Period, after
the completion of the proposed Acquisition of 75.0% and 83.33% indirect interest in
OUBC, respectively.
32
Proportion of Portfolio Gross Revenue Contribution denominated
in Singapore dollars(1)
Existing Portfolio
Enlarged Portfolio
(75.0% indirect interest in
OUBC)
Enlarged Portfolio
(83.33% indirect interest in
OUBC)
31.5%
68.5%
17.7%
82.3%
16.9%
83.1%
Gross revenue denominated inSingapore dollars
Gross revenue denominatedin foreign currency
Note:
(1) For the Forecast Period from 1 October 2015 to 31 December 2015.
(ii) Reducing the concentration risk of OUE C-REIT’s income stream from any single
property
The proposed Acquisition is expected to enhance OUE C-REIT’s income diversification
and reduce its asset concentration risk. No single property is expected to account for
more than 43.8% to 46.4% of OUE C-REIT’s gross revenue, after the completion of the
proposed Acquisition of 75.0% and 83.33% indirect interest in OUBC, respectively,
compared to 68.5% before the proposed Acquisition.
Portfolio Gross Revenue Contribution by Property(1)
Existing Portfolio
Enlarged Portfolio
(75.0% indirect interest in
OUBC)
Enlarged Portfolio
(83.33% indirect interest in
OUBC)
31.5%
68.5%
43.8%
17.7%
38.5%
46.4%
16.9%
36.7%
OUE Bayfront Lippo Plaza Proposed Acquisition
Note:
(1) For the Forecast Period from 1 October 2015 to 31 December 2015.
(iii) Enhancing the quality of OUE C-REIT’s tenant base
The proposed Acquisition is expected to enhance the quality of OUE C-REIT’s tenant
base, with the addition of several established MNCs which include Petrobras Singapore
Pte Ltd, Alipay Singapore E-commerce Private Limited, Virgin Active Singapore Pte Ltd,
Pramerica Investment Management (Singapore) Pte Ltd and China Merchant Bank Co.
Ltd, thereby adding to OUE C-REIT’s existing core of blue chip tenants. The stronger
and more diverse tenant base is also expected to improve the resilience of OUE
C-REIT’s cashflows.
33
4.6 Strong support from the Sponsor through the proposed CPPU Issue and its take-up of
the pro rata stake in the Rights Issue
The proposed Acquisition is in line with the Sponsor’s commitment to OUE C-REIT at the
time of its initial public offering, when the Sponsor granted a right of first refusal to OUE
C-REIT for its potential future acquisitions of income-producing real estate used primarily for
commercial purposes. The proposed issuance of the CPPUs to the Sponsor as part payment
for the proposed Acquisition and its undertaking to procure the Subscribing Entities to take
up their full pro rata stake in the Rights Issue will further align the interests of the Sponsor
with that of OUE C-REIT and its Unitholders. This also demonstrates the Sponsor’s
commitment to support OUE C-REIT’s acquisition growth strategy. Specifically, the
Sponsor’s commitment to take up the CPPUs and to procure the Subscribing Entities’
take-up of their pro rata stake in the Rights Issue, demonstrates its long-term commitment
to grow OUE C-REIT into an efficient platform for holding commercial properties, with both
the Sponsor and the Manager being incentivised to maximise distributions to Unitholders.
The strong support of the Sponsor for the proposed Transactions also reflects its confidence
in the growth prospects in One Raffles Place, underlining its importance as a key asset in
OUE C-REIT’s portfolio.
4.7 Increased market capitalisation and potential increased liquidity through the Rights
Issue
To part finance the proposed Acquisition, up to 393,305,817 new Units will be issued under
the Rights Issue. As at the Latest Practicable Date, the new Units will constitute 45.0% of the
Units in issue. The issue of the new Units is expected to increase the market capitalisation
of OUE C-REIT and may facilitate improvement in the trading liquidity of Units on the
SGX-ST. The Manager believes that the increased market capitalisation and liquidity would
provide OUE C-REIT with increased visibility within the investment community.
4.8 Diversification of sources of funding
The proposed CPPU issue enables the Manager to widen the pool of capital available to OUE
C-REIT and enhances its financial flexibility. The CPPUs will be treated as equity of OUE
C-REIT and not as borrowings or deferred payments under the Property Funds Appendix.
Therefore, the proposed CPPU Issue will not increase OUE C-REIT’s aggregate leverage
and refinancing risk. Assuming that OUE C-REIT acquires the maximum 83.33% indirect
interest in OUBC, its pro forma aggregate leverage is expected to be 41.9%1.
In addition, the Manager has the option but not the obligation to redeem the CPPUs. In this
regard, there is no refinancing risk arising from the proposed CPPU Issue as the CPPU
Holder does not have the right to procure the Manager to redeem the CPPUs.
4.9 Future ordinary equity injection into OUE C-REIT at a premium to the TERP through the
conversion of the CPPUs
The CPPUs are convertible at a premium of 15.0% above the TERP into ordinary Units after
the expiry of the four-year restriction period. In order to ensure an orderly conversion of the
CPPUs, not more than one-third of the CPPUs initially issued shall be converted in any one
year. If the CPPUs are converted, this will allow OUE C-REIT to issue ordinary equity at a
premium to the TERP at announcement of the Rights Issue.
1 OUE C-REIT’s pro forma aggregate leverage is expected to be 40.9% if it acquires the minimum 75.0% indirect
interest in OUBC.
34
5. 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 risk and uncertainties which could cause actual results to differ materially
from those projected. 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 table sets out OUE C-REIT Group’s Forecast Statement of Total Return for the
period from 1 October 2015 to 31 December 2015 (the “Forecast Period”) (the “Profit
Forecast”). The Profit Forecast has been examined by the Independent Accountants and
should be read together with their report set out in Appendix D of this Circular as well as the
assumptions and sensitivity analysis set out in Appendix C.
The Profit Forecast is presented based on the following:
(A) Scenario A – Based on the acquisition of a 75.0% indirect interest in OUBC
Scenario A has been prepared based on the following assumptions:
• OUE C-REIT acquires a minimum indirect interest of 75.0% in OUBC;
• the estimated Total Acquisition Cost is S$1,061.2 million comprising the expected
Purchase Consideration of S$1,034.0 million, Acquisition Fee payable in Units to
the Manager of S$9.6 million and estimated debt and/or equity financing related
costs, stamp duty, professional and other expenses related to the proposed
Acquisition is S$17.6 million;
• the Purchase Consideration for the proposed Acquisition, the financing-related
and Acquisition-related costs are funded through the following:
− issue of 393,305,817 Rights Units to Eligible Unitholders on the basis of 9
Rights Units for every 20 existing Units at the Rights Issue Price of S$0.555;
− debt/borrowings of approximately S$333.3 million;
− issuance of S$500.0 million of CPPUs with a preferred distribution of 1.0%
per annum; and
− issuance of 13.2 million new Units as satisfaction of the Acquisition Fee of
S$9.6 million to the Manager; and
• the proposed Acquisition is completed on 1 October 2015.
35
(B) Scenario B – Based on the acquisition of an 83.33% indirect interest in OUBC
Scenario B has been prepared based on the following assumptions:
• OUE C-REIT acquires a maximum indirect interest of 83.33% in OUBC;
• the estimated Total Acquisition Cost is S$1,178.3 million comprising the expected
Purchase Consideration of S$1,148.8 million and Acquisition Fee payable in Units
to the Manager of S$10.7 million and estimated debt and/or equity financing
related costs, stamp duty, professional and other expenses related to the
proposed Acquisition is S$18.8 million;
• the Purchase Consideration for the proposed Acquisition, the financing-related
and Acquisition-related costs are funded through the following:
− issue of 393,305,817 Rights Units to Eligible Unitholders on the basis of 9
Rights Units for every 20 existing Units at the Rights Issue Price of S$0.555;
− debt/borrowings of approximately S$399.3 million;
− issuance of S$550.0 million of CPPUs with a preferred distribution of 1.0%
per annum; and
− issuance of 14.7 million new Units as satisfaction of the Acquisition Fee of
S$10.7 million to the Manager; and
• the proposed Acquisition is completed on 1 October 2015.
Forecast Statement of Total Return
S$’000
Forecast Period
(1 October 2015 – 31 December 2015)
Existing
Portfolio
Enlarged Portfolio(1)
Scenario A Scenario B
Gross revenue 19,740 40,263 40,263
Property operating expenses (5,259) (11,334) (11,334)
Net property income 14,481 28,929 28,929
Other income 2,174 2,174 2,174
Amortisation of intangible asset (1,047) (1,047) (1,047)
Manager’s management fees (1,290) (2,293) (2,404)
Trustee’s fee (75) (135) (140)
Other expenses (408) (685) (685)
Finance income 19 19 19
Finance cost (5,143) (11,850) (12,516)
Net finance costs (5,124) (11,831) (12,497)
Total return for the period
before tax
8,711 15,112 14,330
36
S$’000
Forecast Period
(1 October 2015 – 31 December 2015)
Existing
Portfolio
Enlarged Portfolio(1)
Scenario A Scenario B
Tax expense (1,084) (2,983) (2,983)
Total return for the period 7,627 12,129 11,347
Attributable to:
Unitholders 7,627 9,889 9,853
Non-controlling interest – 2,240 1,494
Total return for the period 7,627 12,129 11,347
Reconciliation from total
return for the period to
amount available for
distribution to Unitholders
Total return attributable to
Unitholders
7,627 9,889 9,853
Distribution adjustments(2) 4,306 6,077 6,306
11,933 15,966 16,159
Distribution attributable to
CPPU Holders(3)
– (1,250) (1,375)
Amount available for
distribution 11,933 14,716 14,784
Number of Units entitled to
Distribution (’000)
878,774(4) 1,286,996(5) 1,288,615(6)
Assuming CPPUs are not
converted:
DPU (cents) 1.36 1.14 1.15
DPU Yield
(annualised)
6.6%(7) 6.2%(8) 6.2%(8)
DPU Yield based on Rights
Issue Price (annualised)
N/A 8.2% 8.2%
Notes:
(1) Enlarged Portfolio comprises Existing Portfolio and 75.0% indirect interest in OUBC and 83.33%
indirect interest in OUBC under Scenario A and Scenario B respectively.
(2) Distribution adjustments comprise non-tax deductible and other adjustments, mainly 100% of the
Manager’s management base fee payable in Units, amortisation of intangible assets,
amortisation of debt-related transaction costs, trustee’s fee, depreciation expense and deferred
tax expense.
(3) Assumes the issuance of S$500.0 million and S$550.0 million of CPPUs with a preferred
distribution of 1.0% per annum for Scenario A and Scenario B respectively.
(4) Comprises 874.0 million Units issued as at the Latest Practicable Date and estimated 4.8 million
Units to be issued in satisfaction of the Manager’s management base fee from the Latest
Practicable Date to 31 December 2015.
(5) Comprises 874.0 million Units issued as at the Latest Practicable Date and estimated 6.5 million
Units to be issued in satisfaction of the Manager’s management base fee from the Latest
Practicable Date to 31 December 2015, 13.2 million new Units to be issued in satisfaction of the
Acquisition Fee payable to the Manager for the proposed Acquisition and 393.3 million new Units
to be issued for the Rights Issue at the Rights Issue Price of S$0.555.
37
(6) Comprises 874.0 million Units issued as at the Latest Practicable Date and estimated 6.6 million
Units to be issued in satisfaction of the Manager’s management base fee from the Latest
Practicable Date to 31 December 2015, 14.7 million new Units to be issued in satisfaction of the
Acquisition Fee payable to the Manager for the proposed Acquisition and 393.3 million new Units
to be issued for the Rights Issue at the Rights Issue Price of S$0.555.
(7) Based on closing market price of S$0.815 per Unit as at the Latest Practicable Date.
(8) Based on TERP of S$0.731 per Unit.
The Profit Forecast is set out in Appendix C of this Circular. The above forecast consolidated
statements of total return and distributable income must be read together with the detailed
Profit Forecast in Appendix C of this Circular, and the Independent Accountants’ Report on
the Profit Forecast in Appendix D of this Circular.
6. DETAILS AND FINANCIAL INFORMATION OF THE PROPOSED TRANSACTIONS
6.1 Pro Forma Financial Effects of the Proposed Transactions
FOR ILLUSTRATIVE PURPOSES ONLY: The pro forma financial effects of the proposed
Transactions on the DPU, NAV per Unit and capitalisation presented below are strictly for
illustrative purposes and are prepared based on the audited consolidated financial
statements of OUE C-REIT for the financial period from 27 January 2014 (Listing Date of
OUE C-REIT) to 31 December 2014 (“FY 2014”) (the “FY 2014 Audited Financial
Statements”) and the audited consolidated financial statements of OUBC for the year ended
31 December 2014 as well as the following assumptions:
(i) Scenario A – Based on the acquisition of a 75.0% indirect interest in OUBC
(a) gross proceeds of approximately S$218.3 million are raised from the issue of
393,305,817 Rights Units to Eligible Unitholders, on the basis of 9 Rights Units for
every 20 existing Units at the Rights Issue Price of S$0.555;
(b) issuance of S$500.0 million of CPPUs to the Sponsor;
(c) debt/borrowings of approximately S$333.3 million are drawn down; and
(d) the Acquisition Fee of approximately S$9.6 million is payable to the Manager
wholly in Units.
(ii) Scenario B – Based on the acquisition of an 83.33% indirect interest in OUBC
(a) gross proceeds of approximately S$218.3 million are raised from the issue of
393,305,817 Rights Units to Eligible Unitholders, on the basis of 9 Rights Units for
every 20 existing Units at the Rights Issue Price of S$0.555;
(b) issuance of S$550.0 million of CPPUs to the Sponsor;
(c) debt/borrowings of approximately S$399.3 million are drawn down; and
(c) the Acquisition Fee of approximately S$10.7 million is payable to the Manager
wholly in Units.
38
6.1.1 Pro Forma DPU
FOR ILLUSTRATIVE PURPOSES ONLY: The pro forma financial effects of the
proposed Transactions on OUE C-REIT’s DPU for FY 2014, as if the proposed
Transactions were completed on 27 January 2014, and OUE C-REIT held the indirect
interest in OUBC through to 31 December 2014 are as follows. For illustrative
purposes, the pro forma DPU is shown as if one-third of the CPPUs were
converted on 27 January 2014 and if the CPPUs were all converted on 27 January
2014, although (i) the CPPUs cannot be converted during the four-year
Restriction Period save in certain limited circumstances and (ii) not more than
one-third of the CPPUs initially issued can be converted in any one year.
Scenario A – Based on the acquisition of a 75.0% indirect interest in OUBC
FY 2014
Before the
Proposed
Transactions
Pro Forma Adjusted for
the Proposed Transactions
CPPUs
are not
converted
One-third
of CPPUs
are
converted
CPPUs
are all
converted
Amount available
for distribution
(S$’000) 45,909 56,034(1) 57,582(1),(2) 60,678(1),(3)
Units in issue and
to be issued (’000) 872,430(4) 1,283,528(5) 1,481,705(6) 1,878,059(7)
DPU (cents) 5.27(8) 4.37 3.89 3.23
DPU Yield
(annualised) 6.9%(9) 6.4%(10) 5.7%(10) 4.8%(10)
DPU Yield based
on Rights Issue
Price (annualised) N/A 8.5% 7.5% 6.3%
Notes:
(1) Amount available for distribution excludes the over provision of income taxes relating to prior years,recognised in the audited consolidated financial statements of OUBC for the year ended 31 December2014.
(2) Assuming one-third of the original amount of CPPUs are converted on 27 January 2014. The CPPUHolder is entitled to ordinary distribution upon conversion of one-third of the CPPUs. The remainingtwo-thirds of the CPPUs are entitled to the preferred distribution.
(3) Assuming CPPUs are all converted on 27 January 2014. The CPPU Holder is entitled to ordinarydistribution upon conversion with no preferred distribution.
(4) Represents the number of Units issued and to be issued as at 31 December 2014.
(5) Comprises the Units set out in Note 4, 393.3 million new Units issued under the Rights Issue at theRights Issue Price of S$0.555, 4.6 million Units assumed to be issued in satisfaction of themanagement base fees payable to the Manager arising from the proposed Acquisition and 13.2million new Units assumed to be issued in satisfaction of the Acquisition Fee payable to the Managerfor the proposed Acquisition.
(6) Comprises the Units set out in Note 5 and 198.2 million Units assumed to be issued as a result ofone-third conversion of CPPUs based on a conversion price of S$0.841 per Unit on 27 January 2014.
(7) Comprises the Units set out in Note 5 and 594.5 million Units assumed to be issued as a result of fullconversion of CPPUs based on a conversion price of S$0.841 per Unit on 27 January 2014.
(8) The DPU after adjusting for the bonus element in the Rights Units is 4.75 cents.
(9) Based on closing market price of S$0.815 per Unit as at the Latest Practicable Date.
(10) Based on TERP of S$0.731 per Unit.
39
Scenario B – Based on the acquisition of an 83.33% indirect interest in OUBC
FY 2014
Before the
Proposed
Transactions
Pro Forma Adjusted for
the Proposed Transactions
CPPUs
are not
converted
One-third of
CPPUs are
converted
CPPUs
are all
converted
Amount available
for distribution
(S$’000) 45,909 56,268(1) 57,971(1),(2) 61,376(1),(3)
Units in issue and
to be issued
(’000) 872,430(4) 1,285,505(5) 1,503,500(6) 1,939,489(7)
DPU (cents) 5.27(8) 4.38 3.86 3.16
DPU Yield
(annualised) 6.9%(9) 6.4%(10) 5.7%(10) 4.7%(10)
DPU Yield
based on Rights
Issue Price
(annualised) N/A 8.5% 7.5% 6.1%
Notes:
(1) Amount available for distribution excludes the over provision of income taxes relating to prior years,
recognised in the audited consolidated financial statements of OUBC for the year ended 31 December
2014.
(2) Assuming one-third of the original amount of CPPUs are converted on 27 January 2014. The CPPU
Holder is entitled to ordinary distribution upon conversion of one-third of the CPPUs. The remaining
two-thirds of the CPPUs are entitled to the preferred distribution.
(3) Assuming CPPUs are all converted on 27 January 2014. The CPPU Holder is entitled to ordinary
distribution upon conversion with no preferred distribution.
(4) Represents the number of Units issued and to be issued as at 31 December 2014.
(5) Comprises the Units set out in Note 4, 393.3 million new Units issued under the Rights Issue at the
Rights Issue Price of S$0.555, 5.1 million Units assumed to be issued in satisfaction of the
management base fees payable to the Manager arising from the proposed Acquisition and 14.7
million new Units assumed to be issued in satisfaction of the Acquisition Fee payable to the Manager
for the proposed Acquisition.
(6) Comprises the Units set out in Note 5 and 218.0 million Units assumed to be issued as a result of
one-third conversion of CPPUs based on a conversion price of S$0.841 per Unit on 27 January 2014.
(7) Comprises the Units set out in Note 5 and 654.0 million Units assumed to be issued as a result of full
conversion of CPPUs based on a conversion price of S$0.841 per Unit on 27 January 2014.
(8) The DPU after adjusting for the bonus element in the Rights Units is 4.75 cents.
(9) Based on closing market price of S$0.815 per Unit as at the Latest Practicable Date.
(10) Based on TERP of S$0.731 per Unit.
6.1.2 Pro Forma NAV per Unit
FOR ILLUSTRATIVE PURPOSES ONLY: The pro forma financial effects of the
proposed Transactions on the NAV per Unit as at 31 December 2014, as if OUE
C-REIT had completed the proposed Transactions on that date, are as follows. For
illustrative purposes, the pro forma NAV per Unit is shown as if one-third of the
CPPUs were converted on 31 December 2014 and if the CPPUs were all
converted on 31 December 2014 and, although (i) the CPPUs cannot be
40
converted during the four-year Restriction Period save in certain limited
circumstances and (ii) not more than one-third of the CPPUs initially issued can
be converted in any one year.
Scenario A – Based on the acquisition of a 75.0% indirect interest in OUBC
As at 31 December 2014
Before the
Proposed
Transactions
Pro Forma Adjusted for
the Proposed Transactions
CPPUs
are not
converted
One-third of
CPPUs are
converted
CPPUs
are all
converted
NAV (S$’000) 957,785 1,175,976 1,342,643 1,675,976
Units in issue and
to be issued (’000) 872,430(1) 1,278,933(2) 1,477,110(3) 1,873,463(4)
NAV per Unit (S$) 1.10 0.92 0.91 0.89
Notes:
(1) Represents the number of Units issued and to be issued as at 31 December 2014.
(2) Comprises the Units set out in Note 1, 393.3 million new Units issued under the Rights Issue at the
Rights Issue Price of S$0.555 and 13.2 million new Units assumed to be issued in satisfaction of the
Acquisition Fee payable to the Manager for the proposed Acquisition.
(3) Comprises the Units set out in Note 2 and 198.2 million Units assumed to be issued as a result of
one-third conversion of CPPUs based on a conversion price of S$0.841 per Unit on 31 December
2014.
(4) Comprises the Units set out in Note 2 and 594.5 million Units assumed to be issued as a result of full
conversion of CPPUs based on a conversion price of S$0.841 per Unit on 31 December 2014.
Scenario B – Based on the acquisition of an 83.33% indirect interest in OUBC
As at 31 December 2014
Before the
Proposed
Transactions
Pro Forma Adjusted for
the Proposed Transactions
CPPUs are
not converted
One-third of
CPPUs are
converted
CPPUs are
all converted
NAV (S$’000) 957,785 1,177,048 1,360,381 1,727,048
Units in issue and to
be issued (’000)
872,430(1) 1,280,399(2) 1,498,393(3) 1,934,382(4)
NAV per Unit (S$) 1.10 0.92 0.91 0.89
Notes:
(1) Represents the number of Units issued and to be issued as at 31 December 2014.
(2) Comprises the Units set out in Note 1, 393.3 million new Units issued under the Rights Issue at the
Rights Issue Price of S$0.555 and 14.7 million new Units assumed to be issued in satisfaction of the
Acquisition Fee payable to the Manager for the proposed Acquisition.
(3) Comprises the Units set out in Note 2 and 218.0 million Units assumed to be issued as a result of
one-third conversion of CPPUs based on a conversion price of S$0.841 per Unit on 31 December
2014.
(4) Comprises the Units set out in Note 2 and 654.0 million Units assumed to be issued as a result of full
conversion of CPPUs based on a conversion price of S$0.841 per Unit on 31 December 2014.
41
6.1.3 Pro Forma Capitalisation
FOR ILLUSTRATIVE PURPOSES ONLY: The pro forma capitalisation of OUE C-REIT
as at 31 December 2014, as if OUE C-REIT had completed the proposed Transactions
on 31 December 2014, is as follows. For illustrative purposes, the pro forma
capitalisation is shown as if one-third of the CPPUs were converted on 31
December 2014 and if the CPPUs were all converted on 31 December 2014,
although (i) the CPPUs cannot be converted during the four-year Restriction
Period save in certain limited circumstances and (ii) not more than one-third of
the CPPUs initially issued can be converted in any one year.
Scenario A – Based on the acquisition of a 75.0% indirect interest in OUBC
S$’000
As at 31 December 2014
Before the
Proposed
Transactions
Pro Forma Adjusted for
the Proposed Transactions
CPPUs are
not converted
One-third of
CPPUs are
converted
CPPUs are
all converted
Short-term debt:
Secured 168 240,047(1) 240,047(1) 240,047(1)
Total short-term debt 168 240,047 240,047 240,047
Long-term debt:
Secured 632,730(2) 960,549(3) 960,549(3) 960,549(3)
Total long-term debt 632,730 960,549 960,549 960,549
Total Debt 632,898 1,200,596 1,200,596 1,200,596
Convertible perpetual
preferred units – 500,000 333,333 –
Unitholders’ funds 957,785 1,185,717 1,352,384 1,685,717
Expenses relating to
the proposed
Transactions – (9,741) (9,741) (9,741)
Total Unitholders’
funds (including the
CPPUs) 957,785 1,675,976 1,675,976 1,675,976
Total Capitalisation 1,590,683 2,876,572 2,876,572 2,876,572
Notes:
(1) Relates to 75.0% of the secured debt in OUBC and is stated net of upfront fee and transaction costs
of S$0.7 million.
(2) Stated net of upfront fee and transaction costs of S$11.5 million.
(3) Comprises the loan in Note 2 and the secured loan to be drawn down by OUE C-REIT which is stated
net of upfront fee and transaction costs of S$5.4 million.
42
Scenario B – Based on the acquisition of an 83.33% indirect interest in OUBC
S$’000
As at 31 December 2014
Pro Forma Adjusted for
the Proposed Transactions
Before the
Proposed
Transactions
CPPUs are
not converted
One-third of
CPPUs are
converted
CPPUs are
all converted
Short-term debt:
Secured 168 266,718(1) 266,718(1) 266,718(1)
Total short-term debt 168 266,718 266,718 266,718
Long-term debt:
Secured 632,730(2) 1,025,583(3) 1,025,583(3) 1,025,583(3)
Total long-term debt 632,730 1,025,583 1,025,583 1,025,583
Total Debt 632,898 1,292,301 1,292,301 1,292,301
Convertible perpetual
preferred units – 550,000 366,667 –
Unitholders’ funds 957,785 1,186,789 1,370,122 1,736,789
Expenses relating to
the proposed
Transactions – (9,741) (9,741) (9,741)
Total Unitholders’
funds (including the
CPPUs) 957,785 1,727,048 1,727,048 1,727,048
Total Capitalisation 1,590,683 3,019,349 3,019,349 3,019,349
Notes:
(1) Relates to 83.33% of the secured debt in OUBC and is stated net of upfront fee and transaction costs
of S$0.8 million.
(2) Stated net of upfront fee and transaction costs of S$11.5 million.
(3) Comprises the loan in Note 2 and the secured loan to be drawn down by OUE C-REIT which is stated
net of upfront fee and transaction costs of S$6.4 million.
6.2 Requirement of Unitholders’ Approval for the Proposed Acquisition and the Proposed
CPPU Issue
6.2.1 Major Transaction
Chapter 10 of the Listing Manual governs the acquisition or divestment of assets,
including options to acquire or dispose of assets, by OUE C-REIT. Such transactions
are classified into the following categories:
(a) non-discloseable transactions;
(b) discloseable transactions;
(c) major transactions; and
(d) very substantial acquisitions or reverse takeovers.
43
A transaction by OUE C-REIT may fall into any of the categories set out above
depending on the size of the relative figures computed on the following bases of
comparison:
(i) the NAV of the assets to be disposed of, compared with OUE C-REIT’s NAV;
(ii) the net profits attributable to the assets acquired, compared with OUE C-REIT’s
net profits;
(iii) the aggregate value of the consideration given, compared with OUE C-REIT’s
market capitalisation;
(iv) the number of Units issued by OUE C-REIT as consideration for an acquisition,
compared with the number of Units previously in issue.
Where any of the relative figures computed on the bases set out above exceeds
20.0%, the transaction is classified as a major transaction. The Listing Manual
requires that a major transaction involving OUE C-REIT be made conditional upon
approval by Unitholders in a general meeting. However, the approval of Unitholders is
not required in the case of an acquisition of profitable assets if only sub-paragraph
6.2.1(ii) exceeds the relevant 20.0% threshold.
6.2.2 Relative Figures for the Proposed Acquisition computed on the bases set out in
Rule 1006
The relative figures for the proposed Acquisition using the applicable bases of
comparison described in sub-paragraph 6.2.1 above are set out in the table below.
Scenario A – Based on the acquisition of a 75.0% indirect interest in OUBC
Comparison of
Proposed
Acquisition(1) OUE C-REIT
Relative
figure (%)
Profits (S$’000) 7,371(2) 10,639(3) 69.3
Consideration against market
capitalisation (S$ million) 1,034.0(4) 712.3(5) 145.2
Units issued as consideration
against Units previously in issue
(’000)
This is not applicable as no ordinary Units are
expected to be issued as consideration for the
proposed Acquisition.
Notes:
(1) Assuming that BPHPL was incorporated on 1 January 2015 and has held and consolidated OUBCfrom 1 January 2015 to 31 March 2015.
(2) This figure is derived from OUBC’s audited consolidated financial statement for the year ended 31December 2014 and represents its net profit before tax (before accounting for fair value gain onrevaluation of property), pro-rated for the period from 1 January 2014 to 31 March 2014.
(3) This figure represents total return and is based on OUE C-REIT’s unaudited consolidated financialstatement for the first quarter of 2015.
(4) This figure represents the expected Purchase Consideration for the 75.0% indirect interest in OUBC.
(5) This figure is based on OUE C-REIT’s volume weighted average price of S$0.8150 per Unit as at theLatest Practicable Date.
44
Scenario B – Based on the acquisition of an 83.33% indirect interest in OUBC
Comparison of
Proposed
Acquisition(1) OUE C-REIT
Relative
figure (%)
Profits (S$’000) 8,190(2) 10,639(3) 77.0
Consideration against market
capitalisation (S$ million) 1,148.8(4) 712.3(5) 161.3
Units issued as consideration
against Units previously in issue
(’000)
This is not applicable as no ordinary Units are
expected to be issued as consideration for the
proposed Acquisition.
Notes:
(1) Assuming that BPHPL was incorporated on 1 January 2015 and has held and consolidated OUBCfrom 1 January 2015 to 31 March 2015.
(2) This figure is derived from OUBC’s audited consolidated financial statement for the year ended 31December 2014 and represents its net profit before tax (before accounting for fair value gain onrevaluation of property), pro-rated for the period from 1 January 2014 to 31 March 2014.
(3) This figure represents total return and is based on OUE C-REIT’s unaudited consolidated financialstatement for the first quarter of 2015.
(4) This figure represents the expected Purchase Consideration for the 83.33% indirect interest in OUBC.
(5) This figure is based on OUE C-REIT’s volume weighted average price of S$0.8150 per Unit as at theLatest Practicable Date.
As the relative figure for the basis of comparison set out in sub-paragraph 6.2.1(iii)
exceeds 100.0%, the Manager had submitted an application to the SGX-ST regarding
the waiver of Rule 1015 relating to very substantial acquisitions. The reasons for the
waiver application were, among others, as follows:
(i) the proposed Acquisition has been foreshadowed prior to OUE C-REIT’s listing
on the SGX-ST;
(ii) Unitholders’ approval will be sought for the proposed Acquisition;
(iii) the proposed Acquisition will not result in a change of control in OUE C-REIT;
(iv) the proposed Acquisition is in OUE C-REIT’s ordinary course of business; and
(v) OUE C-REIT is not able to produce three years of historical pro forma financial
information for the proposed Acquisition as it was only listed on the SGX-ST on
27 January 2014.
In light of the reasons stated above, the SGX-ST has on 20 March 2015 advised that
it has no objection to the waiver from Rule 1015 with respect to the proposed
Acquisition, subject to OUE C-REIT announcing the waiver granted, the reasons for
seeking the waiver and the conditions, if any, of the waiver.
6.2.3 Interested Person Transaction and Interested Party Transaction
Under Chapter 9 of the Listing Manual, where OUE C-REIT 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 OUE C-REIT’s latest audited NTA, Unitholders’
approval is required in respect of the transaction. Based on the FY 2014 Audited
Financial Statements, the audited NTA of OUE C-REIT was S$945.2 million as at 31
45
December 2014. Accordingly, if the value of a transaction which is proposed to be
entered into in the current financial year by OUE C-REIT 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$47.3 million, such a
transaction would be subject to Unitholders’ approval. Given the expected Purchase
Consideration of approximately S$1,034.0 million for a 75.0% indirect interest in
OUBC (which is 109.4% of the audited NTA of OUE C-REIT as at 31 December 2014),
the value of the proposed Acquisition exceeds the said threshold and hence the
proposed Acquisition is subject to the approval of the Unitholders pursuant to Rule
906(1)(a) of the Listing Manual.
Paragraph 5 of the Property Funds Appendix also imposes a requirement for
Unitholders’ approval for an interested party transaction by OUE C-REIT whose value
exceeds 5.0% of OUE C-REIT’s latest audited NAV. Based on the FY 2014 Audited
Financial Statements, the audited NAV of OUE C-REIT was S$957.8 million as at 31
December 2014. Accordingly, if the value of a transaction which is proposed to be
entered into by OUE C-REIT with an interested party is equal to or greater than S$47.9
million, such a transaction would be subject to Unitholders’ approval. Given the
expected Purchase Consideration of approximately S$1,034.0 million for a 75.0%
indirect interest in OUBC (which is 108.0% of the audited NAV of OUE C-REIT as at
31 December 2014), the value of the proposed Acquisition exceeds the said threshold.
As at the Latest Practicable Date, the Sponsor holds, through its wholly-owned
subsidiaries CDPL and the Manager, an aggregate interest in 422,018,928 Units,
which is equivalent to approximately 48.3% of the total number of Units in issue, and
is therefore regarded as a “controlling Unitholder” of OUE C-REIT under both the
Listing Manual and the Property Funds Appendix. In addition, as the Manager is a
wholly-owned subsidiary of the Sponsor, the Sponsor is therefore regarded as a
“controlling shareholder” of the Manager under both the Listing Manual and the
Property Funds Appendix.
As the Sponsor is the vendor of BPHPL under the SPA, for the purposes of Chapter
9 of the Listing Manual and Paragraph 5 of the Property Funds Appendix, the Sponsor
(being 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 OUE C-REIT.
Therefore, the proposed 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.
Details of the interested person transactions entered into between (1) OUE C-REIT
and (2) the Sponsor and its subsidiaries and associates, during the course of the
current financial year up to the Latest Practicable Date (“Existing Interested Person
Transactions”), which are the subject of aggregation pursuant to Rule 906 of the
Listing Manual, may be found in Appendix H of this Circular.
46
6.2.4 Advice of the IFA
The Manager has appointed the IFA to advise the Independent Directors, the Audit and
Risk Committee and the Trustee in relation to the proposed Acquisition and the
proposed CPPU Issue. A copy of 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 each of the
proposed Acquisition and the proposed CPPU Issue is based on normal commercial
terms and is not prejudicial to the interests of OUE C-REIT 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 proposed Acquisition
and the proposed CPPU Issue to be proposed at the EGM.
6.2.5 Interests of Directors and Substantial Unitholders
As at the Latest Practicable Date, Mr Christopher James Williams is the Chairman and
Non-Executive Director of the Manager as well as Deputy Chairman of the Sponsor.
Based on the Register of Directors’ Unitholdings maintained by the Manager and save
as disclosed in the table below, none of the Directors currently holds a direct or
deemed interest in the Units as at the Latest Practicable Date:
Name of Director
Direct Interest Deemed Interest
Total no. of
Units held %
No. of
Units held %
No. of
Units held %
Mr. Christopher
James Williams – – 125,000 0.01 125,000 0.01
Mr. Ng Lak Chuan 250,000 0.03 – – 250,000 0.03
Mr. Loh Lian Huat 100,000 0.01 150,000 0.02 250,000 0.03
Mr. Carl Gabriel
Florian Stubbe – – – – – –
Mr. Jonathan Miles
Foxall – – – – – –
Ms. Tan Shu Lin 250,000 0.03 – – 250,000 0.03
Based on the Register of Substantial Unitholders’ Unitholdings maintained by the
Manager, the Substantial Unitholders and their interests in the Unitholdings as at the
Latest Practicable Date are as follows:
Name of
Substantial
Unitholder
Direct Interest Deemed Interest
Total No. of
Units held %
No. of
Units held %
No. of
Units held %
Clifford
Development
Pte. Ltd.
(“CDPL”) 414,006,000 47.37(22) – – 414,006,000 47.37(22)
OUE Limited – – 422,018,928(1) 48.29(22) 422,018,928 48.29(22)
47
Name of
Substantial
Unitholder
Direct Interest Deemed Interest
Total No. of
Units held %
No. of
Units held %
No. of
Units held %
OUE Realty Pte.
Ltd. (“OUER”) – – 422,018,928(2) 48.29(22) 422,018,928 48.29(22)
Golden Concord
Asia Limited
(“GCAL”) – – 422,018,928(3) 48.29(22) 422,018,928 48.29(22)
Fortune Code
Limited (“FCL”) – – 422,018,928(4) 48.29(22) 422,018,928 48.29(22)
Lippo ASM Asia
Property Limited
(“LAAPL”) – – 422,018,928(5) 48.29(22) 422,018,928 48.29(22)
Pacific Landmark
Holdings Limited
(“Pacific
Landmark”) – – 422,018,928(6) 48.29(22) 422,018,928 48.29(22)
HKC Property
Investment
Holdings Limited
(“HKC Property”) – – 422,018,928(7) 48.29(22) 422,018,928 48.29(22)
Hongkong
Chinese Limited
(“HCL”) – – 428,488,928(8) 49.03(22) 428,488,928 49.03(22)
Hennessy
Holdings Limited
(“HHL”) – – 428,488,928(9) 49.03(22) 428,488,928 49.03(22)
Prime Success
Limited (“PSL”) – – 428,488,928(10) 49.03(22) 428,488,928 49.03(22)
Lippo Limited
(“LL”) – – 428,488,928(11) 49.03(22) 428,488,928 49.03(22)
Lippo Capital
Limited (“LCL”) – – 428,488,928(12) 49.03(22) 428,488,928 49.03(22)
Lanius Limited
(“Lanius”) – – 428,488,928(13) 49.03(22) 428,488,928 49.03(22)
Admiralty Station
Management
Limited
(“Admiralty”) – – 422,018,928(14) 48.29(22) 422,018,928 48.29(22)
ASM Asia
Recovery
(Master) Fund
(“AARMF”) – – 422,018,928(15) 48.29(22) 422,018,928 48.29(22)
ASM Asia
Recovery Fund
(“AARF”) – – 422,018,928(16) 48.29(22) 422,018,928 48.29(22)
Argyle Street
Management
Limited (“ASML”) – – 422,018,928(17) 48.29(22) 422,018,928 48.29(22)
Argyle Street
Management
Holdings Limited
(“ASMHL”) – – 422,018,928(18) 48.29(22) 422,018,928 48.29(22)
Kin Chan (“KC”) – – 422,018,928(19) 48.29(22) 422,018,928 48.29(22)
48
Name of
Substantial
Unitholder
Direct Interest Deemed Interest
Total No. of
Units held %
No. of
Units held %
No. of
Units held %
V-Nee Yeh (“VY”) – – 422,018,928(20) 48.29(22) 422,018,928 48.29(22)
Tang Yigang @
Tang Gordon 169,980,000 19.45(22) – – 169,980,000 19.45(22)
Chen Huaidan @
Celine Tang 69,200,000(21) 7.92(22) – – 69,200,000 7.92(22)
Notes:
(1) OUE Limited is the holding company of the Manager and CDPL, and has a deemed interest in the
Units held by the Manager and CDPL.
(2) OUER is the immediate holding company of OUE Limited and has a deemed interest in the Units in
which OUE Limited has a deemed interest.
(3) GCAL has a deemed interest in the Units through the deemed interests of its wholly-owned subsidiary,
OUER.
(4) FCL has a deemed interest in the Units through the deemed interests of its wholly-owned subsidiary,
GCAL.
(5) LAAPL is deemed to have an interest in the Units in which its subsidiary, FCL, has a deemed interest.
(6) LAAPL is jointly held by Pacific Landmark and Admiralty. Accordingly, Pacific Landmark is deemed to
have an interest in the Units in which LAAPL has a deemed interest.
(7) HKC Property is the immediate holding company of Pacific Landmark. Accordingly, HKC Property is
deemed to have an interest in the Units in which Pacific Landmark has a deemed interest.
(8) HCL is an intermediate holding company of Pacific Landmark. Accordingly, HCL is deemed to have
an interest in the Units in which Pacific Landmark has a deemed interest, as well as a deemed interest
in 6,470,000 Units held by Wonder Plan Holdings Limited, a wholly-owned subsidiary of HCL.
(9) HHL is an intermediate holding company of Pacific Landmark. Accordingly, HHL is deemed to have
an interest in the Units in which Pacific Landmark has a deemed interest, as well as a deemed interest
in 6,470,000 Units in which HCL has a deemed interest.
(10) PSL is an intermediate holding company of Pacific Landmark. Accordingly, PSL is deemed to have an
interest in the Units in which Pacific Landmark has a deemed interest, as well as a deemed interest
in 6,470,000 Units in which HCL has a deemed interest.
(11) LL is an intermediate holding company of Pacific Landmark. Accordingly, LL is deemed to have an
interest in the Units in which Pacific Landmark has a deemed interest, as well as a deemed interest
in 6,470,000 Units in which HCL has a deemed interest.
(12) LCL is a holding company of Pacific Landmark. Accordingly, LCL is deemed to have an interest in the
Units in which Pacific Landmark has a deemed interest, as well as a deemed interest in 6,470,000
Units in which HCL has a deemed interest.
(13) Lanius is the holder of the entire issued shares capital of LCL, which in turn is a holding company of
Pacific Landmark. Accordingly, Lanius is deemed to have an interest in the Units in which Pacific
Landmark has a deemed interest, as well as a deemed interest in 6,470,000 Units in which HCL has
a deemed interest. Lanius is the trustee of a discretionary trust the beneficiaries of which include
Stephen Riady and other members of his family.
(14) LAAPL is jointly held by Pacific Landmark and Admiralty. Accordingly, Admiralty is deemed to have an
interest in the Units in which LAAPL has a deemed interest.
(15) AARMF is a majority shareholder of Admiralty. Accordingly, AARMF is deemed to have an interest in
the Units in which Admiralty has a deemed interest.
(16) AARF is a majority shareholder of AARMF. Accordingly, AARF is deemed to have an interest in the
Units in which AARMF has a deemed interest.
(17) ASML manages AARF. Accordingly, ASML is deemed to have an interest in the Units in which AARF
has a deemed interest.
(18) ASMHL is the immediate holding company of ASML. Accordingly, ASMHL is deemed to have an
interest in the Units in which ASML has a deemed interest.
(19) KC is the beneficial holder of more than 20% of the issued share capital of ASMHL. Accordingly, KC
is deemed to have an interest in the Units in which ASMHL has a deemed interest.
49
(20) VY is the beneficial holder of more than 20% of the issued share capital of ASMHL. Accordingly, VY
is deemed to have an interest in the Units in which ASMHL has a deemed interest.
(21) Chen Huaidan @ Celine Tang holds 69,200,000 Units in a joint account with Tang Yigang @ Tang
Gordon.
(22) The Unitholding percentage is calculated based on 874,012,928 issued Units as at the Latest
Practicable Date.
Save as disclosed above and based on information available to the Manager as at the
Latest Practicable Date, none of the Directors or the Substantial Unitholders has an
interest, direct or indirect, in the proposed Acquisition and the proposed CPPU Issue.
6.2.6 Directors’ Service Contracts
No person is proposed to be appointed as a director of the Manager in connection with
the proposed Acquisition and the proposed CPPU Issue or any other transactions
contemplated in relation to the proposed Acquisition and the proposed CPPU Issue.
7. RECOMMENDATIONS
7.1 On Resolution 1: The Proposed Acquisition and the Proposed CPPU Issue
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 proposed Transactions as set out in paragraph 4 above, the
Independent Directors and the Audit and Risk Committee believe that the proposed
Acquisition and the proposed CPPU Issue are based on normal commercial terms and would
not be prejudicial to the interests of OUE C-REIT or its Unitholders.
Accordingly, the Independent Directors recommend that the Unitholders vote at the EGM in
favour of Resolution 1 relating to the proposed Acquisition and the proposed CPPU Issue.
7.2 On Resolution 2: The Proposed Trust Deed Supplement for the Issue of Preferred Units
Having considered the rationale for the proposed Trust Deed Supplement as set out in
paragraph 3 above, the Directors believe that the proposed Trust Deed Supplement would be
beneficial to, and is in the interests of, OUE C-REIT and its Unitholders.
Accordingly, the Directors recommend that the Unitholders vote at the EGM in favour of
Resolution 2 relating to the proposed Trust Deed Supplement.
8. EXTRAORDINARY GENERAL MEETING
The EGM will be held on Monday, 27 July 2015 at Marina Mandarin Singapore, Marina
Mandarin Ballroom, Level 1, 6 Raffles Boulevard, Singapore 039594 for the purpose of
considering and, if thought fit, passing (with or without modification), the resolutions set out
in the Notice of EGM which is set out on I-1 of this Circular. The purpose of this Circular is
to provide Unitholders with relevant information about the resolutions.
A Depositor shall not be regarded as a Unitholder entitled to attend the EGM and to speak
and vote unless he is shown to have Units entered against his name in the Depository
Register, as certified by CDP as at 48 hours before the time fixed for the EGM.
50
9. ABSTENTIONS FROM VOTING
Rule 919 of the Listing Manual prohibits interested persons and their associates from voting
on a resolution in relation to a matter in respect of which such persons are interested in at
the EGM.
Given that (i) the SPA will be entered into with the Sponsor and (ii) the CPPUs will be issued
to the Sponsor as partial consideration of the Purchase Consideration, the Sponsor will
abstain, and will ensure that its subsidiaries and associates (as defined in the Listing
Manual) (including the Manager), will abstain from voting on Resolution 1 at the EGM. For
the purposes of good corporate governance, Mr Christopher James Williams (being a
director of the Sponsor) will abstain from voting at the EGM on Resolution 1.
10. ACTIONS TO BE TAKEN BY UNITHOLDERS
Unitholders will find enclosed in this Circular the Notice of Extraordinary General Meeting
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 Unit Registrar and Unit Transfer Office, Boardroom Corporate & Advisory Services Pte.
Ltd., 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623, not later than
Saturday, 25 July 2015 at 2.00 p.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 if he so wishes.
Persons who have an interest in the approval of the resolutions (such as the Sponsor and its
subsidiaries and associates (including the Manager)) 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 the resolutions.
11. DIRECTORS’ RESPONSIBILITY STATEMENT
The Directors collectively and individually accept full responsibility for the accuracy of the
information given in this Circular and confirm after making all reasonable enquiries that, to
the best of their knowledge and belief, this Circular constitutes full and true disclosure of all
material facts about the proposed Acquisition, the proposed CPPU Issue, the Rights Issue,
the proposed Trust Deed Supplement, OUE C-REIT and its subsidiaries, and the Directors
are not aware of any facts the omission of which would make any statement in this Circular
misleading. The Directors are satisfied that the Profit Forecast has been stated after due and
careful enquiry. Where information in this Circular has been extracted from published or
otherwise publicly available sources or obtained from a named source, the sole responsibility
of the Directors has been to ensure that such information has been accurately and correctly
extracted from those sources and/or reproduced in this Circular in its proper form and
context.
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12. JOINT FINANCIAL ADVISERS’ RESPONSIBILITY STATEMENT
To the best of the Joint Financial Advisers’ knowledge and belief, the information in relation
to the Rights Issue and proposed CPPU Issue contained in this Circular constitutes full and
true disclosure of all material facts about the Rights Issue and the proposed CPPU Issue,
OUE C-REIT and its subsidiaries in relation to the Rights Issue and the proposed CPPU
Issue, and the Joint Financial Advisers are not aware of any facts the omission of which
would make any statement about the Rights Issue and the proposed CPPU Issue in this
Circular misleading. The Joint Financial Advisers are satisfied that the Profit Forecast has
been stated by the Directors after due and careful enquiry.
13. CONSENTS
Each of the Joint Financial Advisers, the IFA, the Independent Accountants, the Independent
Valuers and the Independent Market Research Consultant has given and not withdrawn its
written consent to the issue of this Circular with the inclusion of its name and, respectively,
the IFA Letter, the Independent Accountants’ Report on the Profit Forecast, the Valuation
Certificates and the Independent Market Research Report, and all references thereto, in the
form and context in which they appear in this Circular.
14. DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents are available for inspection1 during normal business
hours at the registered office of the Manager located at 50 Collyer Quay #04-08, OUE
Bayfront, Singapore 049321 from the date of this Circular up to and including the date falling
three months after the date of this Circular:
(a) the SPA;
(b) the IFA Letter;
(c) the full valuation report issued by Savills in respect of the OUBC Interest;
(d) the full valuation report issued by Cushman & Wakefield in respect of the OUBC
Interest;
(e) the Independent Market Research Report;
(f) the Independent Accountants’ Report on the Profit Forecast;
(g) the FY 2014 Audited Financial Statements; and
(h) the letters of consent from each of the Joint Financial Advisers, the IFA, the
Independent Accountants, the Independent Valuers and the Independent Market
Research Consultant.
The Trust Deed will be available for inspection at the registered office of the Manager for so
long as OUE C-REIT is in existence.
1 Prior appointment will be appreciated.
52
The specific terms and conditions of the CPPUs will be available for inspection at the
registered office of the Manager for so long as the CPPUs are in issue.
In addition to the specific terms and conditions of the CPPUs, the general terms and
conditions of the Preferred Units that may be issued by the Manager from time to time will
also be available for inspection at the registered office of the Manager for so long as such
Preferred Units are in issue.
Yours faithfully
for and on behalf of the Board of Directors of
OUE Commercial REIT Management Pte. Ltd.
(as manager of OUE Commercial Real Estate Investment Trust)
Tan Shu Lin
Chief Executive Officer and Executive Director
1 July 2015
53
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 OUE C-REIT is not necessarily indicative of the future performance
of OUE C-REIT.
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.
If you have sold or transferred all your Units, you should immediately forward this Circular,
together with the Notice of Extraordinary General Meeting 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.
54
GLOSSARY
In the Circular, the following definitions apply throughout unless the context otherwise requires:
“Acquisition” : The proposed acquisition by OUE C-REIT of an indirect
interest in the Property from the Sponsor though the
acquisition of the entire issued share capital of BPHPL
“Acquisition Fee” : The acquisition fee of approximately S$9.6 million to S$10.7
million payable to the Manager pursuant to the Trust Deed for
the Proposed Acquisition
“Acquisition Fee Units” : The Units to be issued to the Manager as payment for the
Acquisition Fee
“Audit and Risk
Committee”
: The audit and risk committee of the Manager
“AUM” : Assets-under-management
“Board” : The board of directors of the Manager as at the date of this
Circular
“Books Closure Date” : The time and date at and on which the transfer books and
register of Unitholders will be closed to determine the
provisional allotments of Rights Units to Eligible Unitholders
under the Rights Issue
“BPHPL” : Beacon Property Holdings Pte. Ltd.
“BPHPL Group” : BPHPL and its shareholding in OUBC as at the date of
completion of the proposed Acquisition
“CBD” : Central business district
“CDP” : The Central Depository (Pte) Limited
“CDPL” : Clifford Development Pte. Ltd.
“Circular” : This circular to Unitholders dated 1 July 2015
“Closing Price” : The closing price of S$0.810 per Unit on the last trading day
of the Units prior to the announcement of the Rights Issue
“Companies Act” : The Companies Act, Chapter 50 of Singapore, as amended or
modified from time to time
“Conversion Price” : The price at which Units will be issued upon conversion of the
CPPUs, as adjusted from time to time
“Conversion Right” : The right of a CPPU Holder to convert any CPPU into Unit(s)
55
“Conversion Units” : The new Units issued pursuant to the conversion of the
CPPUs
“CPF” : Central Provident Fund
“CPFIS” : CPF Investment Scheme
“CPFIS-OA” : CPFIS Ordinary Account
“CPPUs” : Convertible perpetual preferred units
“CPPU Distribution” : The preferential distribution which may be declared by the
Manager in respect of the CPPUs
“CPPU Distribution
Calculation Date”
: Such date or dates, identical to the Distribution Calculation
Dates in respect of the Units, on which the CPPU Distribution
(excluding Special CPPU Distribution) in respect of any CPPU
Distribution Period shall be calculated, if the Manager elects
at its sole discretion to declare such CPPU Distribution
“CPPU Distribution Date” : A Business Day, which is no later than 90 calendar days (or
such other period as may be determined by the Manager)
after the CPPU Distribution Calculation Date in respect of the
relevant Preferred Distribution Period
“CPPU Distribution
Period”
: (i) For the first CPPU Distribution Period, the period from, and
including, the date of issue of the CPPUs to, and including, 31
December 2015; and (ii) in all other cases, such periods,
identical to the Distribution Periods (as defined in the Trust
Deed) in respect of the Units, for which the CPPU Distribution
shall accrue
“CPPU Holder” : The holder of CPPUs
“CPPU Issue” : The issue of up to S$550.0 million CPPUs to the Sponsor (or
its nominees) as part satisfaction of the Purchase
Consideration
“CPPU Terms” : Has the meaning ascribed to it in Appendix B
“Cushman & Wakefield” : Cushman & Wakefield VHS Pte. Ltd.
“Deposited Property” : All assets of OUE C-REIT, including all its Authorised
Investments (as defined in the Trust Deed) for the time being
held or deemed to be held upon the trusts of the Trust Deed
“Directors” : The directors of the Manager as at the date of this Circular
“Distribution Amount” : The Preferred Distribution of an amount equivalent to 1.0%
per annum of the issue price of the CPPU
“Divested Shares” : Shares in OUBC to be divested
56
“DPU” : Distributions per Unit
“EGM” : The extraordinary general meeting of OUE C-REIT, notice of
which is given on pages I-1 and I-2 of this Circular
“Excess Rights Units” : The excess Rights Units available during the offer period of
the Rights Issue
“Existing Portfolio” : OUE Bayfront and Lippo Plaza
“Extraordinary
Resolution”
: A resolution proposed and passed as such by a majority being
greater than 75.0% 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
“Forecast Period” : The period from 1 October 2015 to 31 December 2015
“FY 2014” : The financial period from 27 January 2014 to 31 December
2014
“FY 2014 Audited
Financial Statements”
: OUE C-REIT’s latest audited financial statements for FY 2014
“Framework Agreement” : The agreement entered into between the Sponsor, BPHPL
and KIO in relation to KIO’s divestment of its 33.33% interest
in OUBC
“GFA” : Gross floor area
“IFA” or “Independent
Financial Adviser”
: Deloitte & Touche Corporate Finance Pte Ltd
“IFA Letter” : The letter from the IFA to the Independent Directors, the Audit
and Risk Committee and the Trustee
“Independent Valuers” : Savills and Cushman & Wakefield
“Independent Market
Research Consultant”
: DTZ Debenham Tie Leung (SEA) Pte Ltd
“Independent Market
Research Report”
: The independent market research report dated 24 April 2015
by DTZ Debenham Tie Leung (SEA) Pte Ltd
“Independent Directors” : Mr. Ng Lak Chuan, Mr. Loh Lian Huat and Mr. Carl Gabriel
Florian Stubbe
“Ineligible Unitholders” : Unitholders other than the Eligible Unitholders to whom no
provisional allotment of Rights Units will be made
“Irrevocable Undertaking” : The undertaking provided by the Sponsor to the Manager and
the Joint Lead Managers and Underwriters in relation to the
Rights Issue
57
“Joint Financial Advisers” : Citigroup Global Markets Singapore Pte. Ltd. and Standard
Chartered Bank Singapore Branch
“Joint Lead Managers and
Underwriters”
: Citigroup Global Markets Singapore Pte. Ltd. and DBS Bank
Ltd.
“KIO” : The Kuwait Investment Office
“Latest Practicable Date” : The latest practicable date prior to the printing of this Circular,
being 26 June 2015
“Lippo Plaza” : A 36-storey Grade-A commercial building located at 222
Huaihai Zhong Road in the commercial district of Huangpu in
central Shanghai, the PRC, which used for office and retail
purposes and comprises a three-storey retail podium and
basement car park lots, where OUE C-REIT has a 91.2%
strata ownership
“Listing Date” : The date of listing of OUE C-REIT on the Main Board of the
SGX-ST
“Listing Manual” : The Listing Manual of the SGX-ST, as may be amended or
modified from time to time
“Manager” : OUE Commercial REIT Management Pte. Ltd., in its capacity
as manager of OUE C-REIT
“MAS” : Monetary Authority of Singapore
“Market Day” : A day on which the SGX-ST is open for securities trading
“MNCs” : Multi-national corporations
“MRT” : Mass Rapid Transit
“NAV” : Net asset value
“NLA” : Net lettable area
“NTA” : Net tangible assets
“Offer Information
Statement”
: The offer information statement in connection with the Rights
Issue to be lodged with the MAS and issued to Eligible
Unitholders
“Ordinary Resolution” : A resolution proposed and passed as such by a majority being
greater than 50.0% 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
“OUBC” : OUB Centre Limited
58
“OUBC Interest” : OUBC’s 81.54% beneficial interest in the Property
“OUE Bayfront” : OUE Bayfront and its ancillary properties, comprising (i) OUE
Bayfront, an 18-storey premium office building with rooftop
restaurant premises located at 50 Collyer Quay, (ii) OUE
Tower, a conserved tower building located at 60 Collyer Quay
with panoramic views of the Marina Bay landscape which is
currently occupied by a fine dining restaurant, and (iii) OUE
Link, an overhead pedestrian link bridge with retail units
located at 62 Collyer Quay
“OUE C-REIT” : OUE Commercial Real Estate Investment Trust
“OUE C-REIT Group” : OUE C-REIT and its subsidiaries
“psf” : Per square foot
“PRC” : The People’s Republic of China
“Preferred Units” : Preferred units in OUE C-REIT
“Preferred Unitholder” : The registered holder for the time being of a Preferred Unit,
including persons so registered as joint holders, except where
the registered holder is CDP, the term “Preferred Unitholder”
shall, in relation to Preferred Units registered in the name of
CDP mean, where the context requires, the Depositor (as
defined herein) whose securities account with CDP is credited
with Preferred Units
“Profit Forecast” : OUE C-REIT Group’s Forecast Statement of Total Return and
Distribution Statements for the Forecast Period (1 October
2015 to 31 December 2015)
“Property” : One Raffles Place
“Property Funds
Appendix”
: Appendix 6 to the Code on Collective Investment Schemes
“Purchase Consideration” : The consideration payable by the Trustee for the proposed
Acquisition
“Redemption Notice” : The notice issued by the Manager to a CPPU Holder to
redeem all (or part) of the CPPUs held by the CPPU Holder
“Redemption Right” : The right of the Manager to redeem any CPPU
“REIT” : Real estate investment trust
“Related Parties” : An “interested person” as defined in the Listing Manual and/or
(as the case may be) an “interested party” as defined in the
Property Funds Appendix
59
“Restriction Period” : The period of four years commencing from the date of issue of
the CPPUs
“Rights Entitlement” : The “nil-paid” provisional allotment of Rights Units to Eligible
Unitholders under the Rights Issue
“Rights Issue” : The renounceable rights issue where the Rights Units would
be offered to Eligible Unitholders to raise gross proceeds of
approximately S$218.3 million
“Rights Issue Price” : The issue price of S$0.555 per Rights Unit
“Rights Ratio” : The issue of 9 Rights Units for every 20 existing Units
“Rights Units” : 393,305,817 new Units to be issued pursuant to the Rights
Issue
“Savills” : Savills Valuation and Professional Services (S) Pte Ltd
“Securities Account” : Securities account maintained by a Depositor with the CDP
but not including a securities sub-account
“Securities Act” : The United States Securities Act of 1933, as amended
“SGX-ST” : Singapore Exchange Securities Trading Limited
“SPA” : The sale and purchase agreement entered into between the
Sponsor and the Trustee on 10 June 2015 for the acquisition
of the entire issued share capital of BPHPL
“Sponsor” : OUE Limited
“Subscribing Entities” : CDPL and the Manager
“Substantial Unitholder” : A person with an interest in Units constituting not less than
5.0% of all Units in issue
“sq ft” : Square feet
“sq m” : Square metres
“SRS” : Supplementary Retirement Scheme
“TERP” : Theoretical ex-rights price
“Total Acquisition Cost” : The estimated total costs in connection with the proposed
Acquisition which ranges from approximately S$1,061.2
million to S$1,178.3 million (depending on the shareholding
interest in OUBC acquired by BPHPL)
“Transactions” : The proposed Acquisition, the proposed CPPU Issue and the
Rights Issue
60
“Trust Deed” : The trust deed constituting OUE C-REIT dated 10 October
2013, as amended and restated by a first amending and
restating deed dated 9 January 2014 and supplemented by a
first supplemental deed dated 26 January 2015
“Trust Deed Supplement” : The second supplemental deed to be entered into by the
Trustee and Manager to amend and vary the Trust Deed
“Trustee” : DBS Trustee Limited, in its capacity as trustee of OUE C-REIT
“Underwriting Agreement” : The underwriting agreement entered into between the
Manager and the Joint Lead Managers and Underwriters on
29 June 2015
“Underwriting
Commission”
: The 2.25% commission which the Joint Lead Managers and
Underwriters will be entitled to under the Underwriting
Agreement
“Unit” : A unit representing an undivided interest in OUE C-REIT
“Unitholders” : Unitholders of OUE C-REIT
“U.S.” : United States
“per cent.” or “%” : Per centum or percentage
“S$” or “SGD” : Singapore dollars, being the lawful currency of the Republic of
Singapore
“VWAP” : Volume weighted average price
The terms “Depositor”, “Depository Register” and “Depository Agent” shall have the meanings
ascribed to them respectively in Section 130A of the Companies Act.
The terms “subsidiary” and “substantial shareholder” shall have the meanings ascribed to them
in Sections 5 and 81 of the Companies Act respectively.
Words importing the singular shall, where applicable, include the plural and vice versa. Words
importing the masculine gender shall, where applicable, include the feminine and neuter genders
and vice versa. References to persons, where applicable, shall include corporations.
The headings in this Circular are inserted for convenience only and shall be ignored in construing
this Circular.
Any reference in this Circular to any enactment is a reference to that enactment as for the time
being amended or re-enacted. Any word defined under the Companies Act or any statutory
modification thereof and not otherwise defined in the Circular shall have the same meaning
assigned to it under the Companies Act or any statutory modification thereof, as the case may be.
Any reference to a time of day in this Circular is made by reference to Singapore time unless
otherwise stated. Any discrepancies in the tables in this Circular between the listed amounts and
the totals thereof are due to rounding.
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its
Th
isa
me
nd
me
nt
isin
ten
de
dto
cla
rify
wh
at
“Lis
ted
”m
ea
ns
inth
eco
nte
xt
of
Se
cu
riti
es
oth
er
tha
nU
nit
s,
su
ch
as
Pre
ferr
ed
Un
its.
“Se
cu
riti
es
”is
de
fin
ed
inC
lau
se
1.1
of
the
Tru
st
De
ed
tom
ea
n“a
ny
sh
are
,sto
ck,
bo
nd
,
de
be
ntu
re,
wa
rra
nt,
tra
nsfe
rab
lesu
bscri
pti
on
rig
ht,
op
tio
n,
loa
nco
nve
rtib
lein
toe
qu
ity
se
cu
riti
es,
an
yco
nve
rtib
lese
cu
riti
es
(in
clu
din
g,
wit
ho
ut
lim
ita
tio
n,
co
nve
rtib
le
bo
nd
s),
un
its
inb
usin
ess
tru
sts
,u
nit
sin
co
lle
cti
ve
inve
stm
en
tsch
em
es,
un
its
inu
nit
tru
sts
or
an
yo
the
rin
tere
sts
inm
utu
alfu
nd
so
r
an
yo
the
rse
cu
rity
”.
A-1
No
.E
xis
tin
gC
lau
se
sP
rop
os
ed
Ne
wC
lau
se
sR
ati
on
ale
3C
lau
se
1.1
–D
efi
nit
ion
s
“Pre
fere
nc
eH
old
ers
”m
ea
ns
the
ho
lde
rso
f
pre
fere
nce
Un
its;
Cla
us
e1
.1–
De
fin
itio
ns
“Pre
fere
nc
eH
old
ers
”m
ea
ns
the
ho
lde
rso
f
pre
fere
nce
Un
its;
Sta
nd
ard
ise
the
Us
eo
fT
erm
sfo
rth
eIs
su
e
of
Pre
ferr
ed
Un
its
Th
isa
me
nd
me
nt
isto
sta
nd
ard
ise
the
term
sto
be
use
dfo
rth
eis
su
eo
fth
eP
refe
rre
dU
nit
s.
4N
ot
ap
plica
ble
.C
lau
se
1.1
–D
efi
nit
ion
s
“Pre
ferr
ed
Dis
trib
uti
on
”m
ea
ns
the
pre
fere
nti
al
dis
trib
uti
on
wh
ich
ma
yb
e
de
cla
red
by
the
Ma
na
ge
rin
its
so
led
iscre
tio
n
an
dp
aid
inre
sp
ect
of
the
rele
va
nt
cla
ss
of
Pre
ferr
ed
Un
its;
Po
we
rto
ma
ke
Dis
trib
uti
on
sto
Ho
lde
rso
f
Pre
ferr
ed
Un
its
Th
isa
me
nd
me
nt
isin
ten
de
dto
pro
vid
efo
r
dis
trib
uti
on
sto
ho
lde
rso
fP
refe
rre
dU
nit
s.
5N
ot
ap
plica
ble
.C
lau
se
1.1
−D
efi
nit
ion
s
“Pre
ferr
ed
Un
it”
me
an
so
ne
pre
ferr
ed
un
itin
the
Tru
sto
fa
ny
cla
ss
ofP
refe
rre
dU
nit
sis
su
ed
fro
mti
me
toti
me
ina
cco
rda
nce
wit
hth
e
Pre
ferr
ed
Un
itTe
rms
att
ach
ed
toth
ere
leva
nt
cla
ss
of
Pre
ferr
ed
Un
its;
Po
we
rto
Iss
ue
Pre
ferr
ed
Un
its
Th
isa
me
nd
me
nt
isin
ten
de
dto
pro
vid
efo
rth
e
issu
eo
fP
refe
rre
dU
nit
s.
6N
ot
ap
plica
ble
.C
lau
se
1.1
−D
efi
nit
ion
s
“Pre
ferr
ed
Un
itD
ep
os
ito
r”m
ea
ns:
(a)
ad
ire
ct
acco
un
th
old
er
wit
hth
e
De
po
sit
ory
;o
r
(b)
aD
ep
osit
ory
Ag
en
t,b
ut
for
the
avo
ida
nce
of
do
ub
t,d
oe
sn
ot
inclu
de
aS
ub
-Acco
un
t
Ho
lde
r,
Po
we
rto
Lis
tP
refe
rre
dU
nit
s
Th
isa
me
nd
me
nt
isin
ten
de
dto
pro
vid
efo
rth
e
issu
eo
fP
refe
rre
dU
nit
sin
the
eve
nt
tha
tth
ey
are
tob
ed
ep
osit
ed
.
A-2
No
.E
xis
tin
gC
lau
se
sP
rop
os
ed
Ne
wC
lau
se
sR
ati
on
ale
wh
ose
na
me
ise
nte
red
inth
eP
refe
rre
dU
nit
De
po
sit
ory
Re
gis
ter
inre
sp
ecto
fth
eP
refe
rre
d
Un
its
he
ldb
yh
im;
7N
ot
ap
plica
ble
.C
lau
se
1.1
−D
efi
nit
ion
s
“Pre
ferr
ed
Un
ith
old
er”
me
an
s,
inre
lati
on
to
an
ycla
ss
of
Pre
ferr
ed
Un
its
wh
ich
are
Un
liste
d,
are
gis
tere
dh
old
er
for
the
tim
eb
ein
g
of
tha
tcla
ss
of
Pre
ferr
ed
Un
its
inclu
din
g
pe
rso
ns
so
reg
iste
red
as
Pre
ferr
ed
Un
itJo
int
Ho
lde
rs,
an
din
rela
tio
nto
Pre
ferr
ed
Un
its
wh
ich
are
Lis
ted
on
the
SG
X-S
T,
me
an
sth
e
De
po
sit
ory
,a
nd
the
term
“Pre
ferr
ed
Un
ith
old
er”
sh
all,
inre
lati
on
toa
ny
cla
ss
of
Pre
ferr
ed
Un
its
wh
ich
are
Lis
ted
an
d
reg
iste
red
inth
en
am
eo
fth
eD
ep
osit
ory
,
me
an
,w
he
reth
eco
nte
xt
req
uir
es
(in
clu
din
g
wit
ho
ut
lim
ita
tio
n,
the
red
em
pti
on
or
co
nve
rsio
no
fth
at
cla
ss
of
Pre
ferr
ed
Un
its,
wh
ere
ap
plica
ble
),a
Pre
ferr
ed
Un
itD
ep
osit
or
pro
vid
ed
tha
tfo
rth
ep
urp
ose
so
fm
ee
tin
gs
of
Pre
ferr
ed
Un
ith
old
ers
,su
ch
Pre
ferr
ed
Un
ith
old
er
sh
all
me
an
aP
refe
rre
dU
nit
De
po
sit
or
as
sh
ow
nin
the
reco
rds
of
the
De
po
sit
ory
48
ho
urs
pri
or
toth
eti
me
of
a
me
eti
ng
of
Pre
ferr
ed
Un
ith
old
ers
,su
pp
lie
db
y
the
De
po
sit
ory
toth
eM
an
ag
er;
Po
we
rto
Iss
ue
Pre
ferr
ed
Un
its
Th
isa
me
nd
me
nt
isin
ten
de
dto
pro
vid
efo
rth
e
issu
eo
fP
refe
rre
dU
nit
s.
A-3
No
.E
xis
tin
gC
lau
se
sP
rop
os
ed
Ne
wC
lau
se
sR
ati
on
ale
8N
ot
ap
plica
ble
.C
lau
se
1.1
−D
efi
nit
ion
s
“Pre
ferr
ed
Un
itT
erm
s”
co
mp
rise
the
Ge
ne
ral
Pre
ferr
ed
Un
itTe
rms
an
dS
pe
cif
icP
refe
rre
d
Un
itTe
rms;
Po
we
rto
Iss
ue
Pre
ferr
ed
Un
its
Th
isa
me
nd
me
nt
isin
ten
de
dto
pro
vid
efo
rth
e
issu
eo
fP
refe
rre
dU
nit
s.
9N
ot
ap
plica
ble
.C
lau
se
1.1
−D
efi
nit
ion
s
“Sp
ec
ific
Pre
ferr
ed
Un
itT
erm
s”,
inre
lati
on
toa
cla
ss
of
Pre
ferr
ed
Un
its,
me
an
sa
ny
sp
ecif
icte
rms
an
dco
nd
itio
ns
go
ve
rnin
gth
e
off
er
an
dis
su
eo
fsu
ch
cla
ss
of
Pre
ferr
ed
Un
its,
as
ma
yb
ed
ete
rmin
ed
by
the
Ma
na
ge
r
at
its
so
led
iscre
tio
np
urs
ua
nt
toth
eG
en
era
l
Pre
ferr
ed
Un
itTe
rms;
Po
we
rto
iss
ue
Pre
ferr
ed
Un
its
Th
isa
me
nd
me
nt
isin
ten
de
dto
pro
vid
efo
rth
e
issu
eo
fd
iffe
ren
tcla
sse
so
fP
refe
rre
dU
nit
s.
10
Cla
us
e1
.1−
De
fin
itio
ns
“Ta
xR
uli
ng
”m
ea
ns
an
yta
xru
lin
gis
su
ed
or
to
be
issu
ed
by
the
IRA
Sa
nd
/or
Min
istr
yo
f
Fin
an
ce
of
Sin
ga
po
reo
nth
eta
xa
tio
no
fth
e
Tru
st
an
dth
eH
old
ers
,a
sth
esa
me
ma
yb
e
mo
dif
ied
,a
me
nd
ed
,su
pp
lem
en
ted
,re
vis
ed
or
rep
lace
dfr
om
tim
eto
tim
e;
Cla
us
e1
.1−
De
fin
itio
ns
“Ta
xR
uli
ng
”m
ea
ns
an
yta
xru
lin
gis
su
ed
or
to
be
issu
ed
by
the
IRA
Sa
nd
/or
Min
istr
yo
f
Fin
an
ce
of
Sin
ga
po
reo
nth
eta
xa
tio
no
fth
e
Tru
st
an
dth
eH
old
ers
an
d/o
rth
eh
old
ers
of
oth
er
Se
cu
riti
es
(if
ap
plica
ble
),a
sth
esa
me
ma
yb
em
od
ifie
d,
am
en
de
d,
su
pp
lem
en
ted
,
revis
ed
or
rep
lace
dfr
om
tim
eto
tim
e;
Po
we
rto
Iss
ue
Pre
ferr
ed
Un
its
Th
isa
me
nd
me
nt
isin
ten
de
dto
pro
vid
efo
rth
e
issu
eo
fP
refe
rre
dU
nit
s.
11
Cla
us
e1
.1−
De
fin
itio
ns
“Un
it”
me
an
so
ne
un
div
ide
dsh
are
inth
eT
rust.
Wh
ere
the
co
nte
xt
so
req
uir
es,
the
de
fin
itio
n
inclu
de
sa
Un
ito
fa
Cla
ss
or
ap
refe
ren
ce
Un
it;
Cla
us
e1
.1−
De
fin
itio
ns
“Un
it”
me
an
so
ne
un
div
ide
dsh
are
inth
eT
rust.
Wh
ere
the
co
nte
xt
so
req
uir
es,
the
de
fin
itio
n
inclu
de
sa
Un
ito
fa
Cla
ss
or
a
Pre
ferr
ed
pre
fere
nce
Un
it;
Iss
ue
of
Pre
ferr
ed
Un
its
Th
isa
me
nd
me
nt
isto
sta
nd
ard
ise
the
use
of
the
term
sfo
rth
eis
su
eo
fth
eP
refe
rre
dU
nit
s.
A-4
No
.E
xis
tin
gC
lau
se
sP
rop
os
ed
Ne
wC
lau
se
sR
ati
on
ale
12
Cla
us
e1
.1−
De
fin
itio
ns
“Un
lis
ted
”in
rela
tio
nto
the
Tru
st,
me
an
s,
as
ap
plica
ble
inth
ere
leva
nt
co
nte
xt,
no
tb
ein
g
inclu
de
do
n,
or
ha
vin
gb
ee
nd
eliste
dfr
om
,th
e
Off
icia
lL
ist
of
the
SG
X-S
To
r(a
sth
eca
se
ma
y
be
)a
ny
oth
er
Re
co
gn
ise
dS
tock
Exch
an
ge
,
an
din
rela
tio
nto
the
Un
its,
me
an
sh
avin
g
be
en
su
sp
en
de
dfo
r6
0co
nse
cu
tive
ca
len
da
r
da
ys
or
mo
refr
om
be
ing
liste
d,
qu
ote
do
r
tra
de
do
nth
eO
ffic
ialL
ist
of
the
SG
X-S
To
r(a
s
the
ca
se
ma
yb
e)
an
yo
the
rR
eco
gn
ise
dS
tock
Exch
an
ge
;
Cla
us
e1
.1−
De
fin
itio
ns
“Un
lis
ted
”in
rela
tio
nto
the
Tru
st,
me
an
s,
as
ap
plica
ble
inth
ere
leva
nt
co
nte
xt,
no
tb
ein
g
inclu
de
do
n,
or
ha
vin
gb
ee
nd
eliste
dfr
om
,th
e
Off
icia
lL
ist
of
the
SG
X-S
To
r(a
sth
eca
se
ma
y
be
)a
ny
oth
er
Re
co
gn
ise
dS
tock
Exch
an
ge
,
an
din
rela
tio
nto
the
Un
its
or
oth
er
Se
cu
riti
es
(if
ap
plica
ble
),m
ea
ns
ha
vin
gb
ee
nsu
sp
en
de
d
for
60
co
nse
cu
tive
ca
len
da
rd
ays
or
mo
refr
om
be
ing
liste
d,
qu
ote
do
rtr
ad
ed
on
the
Off
icia
l
Lis
to
fth
eS
GX
-ST
or
(as
the
ca
se
ma
yb
e)
an
yo
the
rR
eco
gn
ise
dS
tock
Exch
an
ge
;
Po
we
rto
Iss
ue
Pre
ferr
ed
Un
its
Th
isa
me
nd
me
nt
isin
ten
de
dto
pro
vid
ew
ha
t
“Un
liste
d”
me
an
sin
the
co
nte
xt
of
Se
cu
riti
es
oth
er
tha
nU
nit
s,
su
ch
as
Pre
ferr
ed
Un
its.
13
Cla
us
e2
.7.1
–V
ari
ati
on
of
Rig
hts
Wh
en
eve
rth
eU
nit
so
fth
eT
rust
are
div
ide
d
into
diffe
ren
tC
lasse
s,
su
bje
ct
toth
e
pro
vis
ion
so
fth
eR
ele
va
nt
La
ws,
Re
gu
lati
on
s
an
dG
uid
elin
es,
pre
fere
nce
Un
its,
oth
er
tha
n
red
ee
ma
ble
pre
fere
nce
Un
its,
ma
yb
ere
pa
id
an
dth
esp
ecia
lri
gh
tsa
tta
ch
ed
toa
ny
Cla
ss
ma
yb
eva
rie
do
ra
bro
ga
ted
eit
he
rw
ith
the
co
nse
nt
inw
riti
ng
of
the
ho
lde
rso
fth
ree
qu
art
ers
of
the
issu
ed
Un
its
of
the
Cla
ss
or
wit
hth
esa
ncti
on
of
an
Extr
ao
rdin
ary
Re
so
luti
on
at
ase
pa
rate
me
eti
ng
of
ho
lde
rso
f
the
Un
its
of
the
Cla
ss
(bu
tn
ot
oth
erw
ise
)a
nd
ma
yb
eso
rep
aid
,va
rie
do
ra
bro
ga
ted
eit
he
r
wh
ilst
the
Tru
st
isa
go
ing
co
nce
rno
rd
uri
ng
or
inco
nte
mp
lati
on
of
aw
ind
ing
up
.To
eve
ry
su
ch
me
eti
ng
of
Ho
lde
rs,
all
the
pro
vis
ion
so
f
Cla
us
e2
.7.1
Wh
en
eve
rth
eU
nit
so
fth
eT
rust
are
div
ide
d
into
diffe
ren
tC
lasse
s,
su
bje
ct
toth
e
pro
vis
ion
so
fth
eR
ele
va
nt
La
ws,
Re
gu
lati
on
s
an
dG
uid
elin
es,
Pre
ferr
ed
pre
fere
nce
Un
its,
oth
er
tha
nre
de
em
ab
leP
refe
rre
dp
refe
ren
ce
Un
its,
ma
yb
ere
pa
ida
nd
the
sp
ecia
lri
gh
ts
att
ach
ed
toa
ny
Cla
ss
ma
yb
eva
rie
do
r
ab
rog
ate
de
ith
er
wit
hth
eco
nse
nt
inw
riti
ng
of
the
ho
lde
rso
fth
ree
qu
art
ers
of
the
issu
ed
Un
its
of
the
Cla
ss
or
wit
hth
esa
ncti
on
of
an
Extr
ao
rdin
ary
Re
so
luti
on
at
ase
pa
rate
me
eti
ng
of
ho
lde
rso
fth
eU
nit
so
fth
eC
lass
(bu
tn
ot
oth
erw
ise
)a
nd
ma
yb
eso
rep
aid
,
va
rie
do
ra
bro
ga
ted
eit
he
rw
hilst
the
Tru
st
isa
go
ing
co
nce
rno
rd
uri
ng
or
inco
nte
mp
lati
on
of
aw
ind
ing
up
.To
eve
rysu
ch
me
eti
ng
of
Sta
nd
ard
ise
the
Us
eo
fT
erm
sfo
rth
eIs
su
e
of
Pre
ferr
ed
Un
its
Th
isa
me
nd
me
nt
isto
sta
nd
ard
ise
the
term
sto
be
use
dfo
rth
eis
su
eo
fth
eP
refe
rre
dU
nit
s.
A-5
No
.E
xis
tin
gC
lau
se
sP
rop
os
ed
Ne
wC
lau
se
sR
ati
on
ale
this
De
ed
rela
tin
gto
me
eti
ng
so
fH
old
ers
(in
clu
din
g,
bu
tn
ot
lim
ite
dto
the
pro
vis
ion
so
f
Sch
ed
ule
1)
sh
all
mu
tati
sm
uta
nd
isa
pp
ly,
exce
pt
tha
tth
en
ece
ssa
ryq
uo
rum
sh
all
be
two
pe
rso
ns
at
lea
st
ho
ldin
go
rre
pre
se
nti
ng
by
pro
xy
at
lea
st
on
eth
ird
of
the
issu
ed
Un
its
of
the
Cla
ss
an
dth
at
an
yh
old
er
of
Un
its
of
the
Cla
ss
pre
se
nt
inp
ers
on
or
by
pro
xy
ma
y
de
ma
nd
ap
oll
an
dth
at
eve
rysu
ch
ho
lde
rsh
all
on
ap
oll
ha
ve
on
evo
tefo
re
ve
ryU
nit
of
the
Cla
ss
he
ldb
yh
im,
PR
OV
IDE
DA
LW
AY
Sth
at
wh
ere
the
ne
ce
ssa
rym
ajo
rity
for
su
ch
an
Extr
ao
rdin
ary
Re
so
luti
on
isn
ot
ob
tain
ed
at
su
ch
me
eti
ng
of
Ho
lde
rs,
co
nse
nt
inw
riti
ng
if
ob
tain
ed
fro
mth
eh
old
ers
of
thre
eq
ua
rte
rso
f
the
issu
ed
Un
its
of
the
Cla
ss
co
nce
rne
dw
ith
in
two
mo
nth
so
fsu
ch
me
eti
ng
of
Ho
lde
rssh
all
be
as
va
lid
an
de
ffe
ctu
al
as
an
Extr
ao
rdin
ary
Re
so
luti
on
at
su
ch
me
eti
ng
of
Ho
lde
rs.
Th
is
Cla
use
2.7
sh
all
ap
ply
toth
eva
ria
tio
no
r
ab
rog
ati
on
of
the
sp
ecia
lri
gh
tsa
tta
ch
ed
to
so
me
on
lyo
fth
eU
nit
so
fa
ny
Cla
ss
as
ife
ach
gro
up
of
Un
its
of
the
Cla
ss
diffe
ren
tly
tre
ate
d
form
ed
ase
pa
rate
Cla
ss
the
sp
ecia
lri
gh
ts
wh
ere
of
are
tob
eva
rie
d.
Ho
lde
rs,a
llth
ep
rovis
ion
so
fth
isD
ee
dre
lati
ng
tom
ee
tin
gs
of
Ho
lde
rs(i
nclu
din
g,
bu
tn
ot
lim
ite
dto
the
pro
vis
ion
so
fS
ch
ed
ule
1)
sh
all
mu
tati
sm
uta
nd
isa
pp
ly,
exce
pt
tha
tth
e
ne
ce
ssa
ryq
uo
rum
sh
all
be
two
pe
rso
ns
at
lea
st
ho
ldin
go
rre
pre
se
nti
ng
by
pro
xy
at
lea
st
on
eth
ird
of
the
issu
ed
Un
its
of
the
Cla
ss
an
d
tha
ta
ny
ho
lde
ro
fU
nit
so
fth
eC
lass
pre
se
nt
in
pe
rso
no
rb
yp
roxy
ma
yd
em
an
da
po
lla
nd
tha
t
eve
rysu
ch
ho
lde
rsh
all
on
ap
oll
ha
ve
on
e
vo
tefo
re
ve
ryU
nit
of
the
Cla
ss
he
ldb
yh
im,
PR
OV
IDE
DA
LW
AY
Sth
at
wh
ere
the
ne
ce
ssa
rym
ajo
rity
for
su
ch
an
Extr
ao
rdin
ary
Re
so
luti
on
isn
ot
ob
tain
ed
at
su
ch
me
eti
ng
of
Ho
lde
rs,
co
nse
nt
inw
riti
ng
ifo
bta
ine
dfr
om
the
ho
lde
rso
fth
ree
qu
art
ers
of
the
issu
ed
Un
its
of
the
Cla
ss
co
nce
rne
dw
ith
intw
om
on
ths
of
su
ch
me
eti
ng
of
Ho
lde
rssh
all
be
as
va
lid
an
d
eff
ectu
al
as
an
Extr
ao
rdin
ary
Re
so
luti
on
at
su
ch
me
eti
ng
of
Ho
lde
rs.T
his
Cla
use
2.7
sh
all
ap
ply
toth
eva
ria
tio
no
ra
bro
ga
tio
no
fth
e
sp
ecia
lri
gh
tsa
tta
ch
ed
toso
me
on
lyo
fth
e
Un
its
of
an
yC
lass
as
ife
ach
gro
up
of
Un
its
of
the
Cla
ss
diffe
ren
tly
tre
ate
dfo
rme
da
se
pa
rate
Cla
ss
the
sp
ecia
lri
gh
tsw
he
reo
fa
reto
be
va
rie
d.
14
He
ad
ing
of
Cla
us
e5
of
the
De
ed
Issu
eo
fU
nit
s
He
ad
ing
of
Cla
us
e5
of
the
De
ed
Issu
eo
fU
nit
sa
nd
Pre
ferr
ed
Un
its
Po
we
rto
iss
ue
Pre
ferr
ed
Un
its
Th
isa
me
nd
me
nt
isin
ten
de
dfo
rth
eh
ea
din
gto
be
tte
rre
fle
ct
the
ma
inte
xt
tha
tfo
llo
ws.
A-6
No
.E
xis
tin
gC
lau
se
sP
rop
os
ed
Ne
wC
lau
se
sR
ati
on
ale
15
Cla
us
e5
.1.1
–R
igh
tto
Iss
ue
Un
its
Su
bje
ct
toth
ep
rovis
ion
so
fth
isD
ee
da
nd
an
y
Re
leva
nt
La
ws,
Re
gu
lati
on
sa
nd
Gu
ide
lin
es,
the
Ma
na
ge
rsh
all
ha
ve
the
exclu
siv
eri
gh
tto
eff
ect
for
the
acco
un
to
fth
eT
rust
the
issu
eo
f
Un
its
(wh
eth
er
on
an
init
ial
issu
eo
fU
nit
s,
a
rig
hts
issu
e,
an
issu
eo
fn
ew
Un
its
oth
erw
ise
tha
nb
yw
ay
of
ari
gh
tsis
su
eo
ra
ny
issu
e
pu
rsu
an
tto
are
inve
stm
en
to
fd
istr
ibu
tio
n
arr
an
ge
me
nt
or
an
yis
su
eo
fU
nit
sp
urs
ua
nt
to
aco
nve
rsio
no
fa
ny
Se
cu
riti
es)
an
da
ny
Un
its
ma
yb
eis
su
ed
wit
hsu
ch
pre
fere
nti
al,
de
ferr
ed
,q
ua
lifi
ed
or
sp
ecia
lri
gh
ts,
pri
vile
ge
s
or
co
nd
itio
ns
as
the
Ma
na
ge
rm
ay
thin
kfi
t
PR
OV
IDE
DT
HA
T,
inco
nn
ecti
on
wit
hth
ein
itia
l
Lis
tin
go
fth
eT
rust
on
the
SG
X-S
T,
the
Ma
na
ge
rsh
all
no
tb
eb
ou
nd
toa
cce
pt
an
ap
plica
tio
nfo
rU
nit
sso
as
tog
ive
rise
toa
ho
ldin
go
ffe
we
rth
an
1,0
00
Un
its
(or
su
ch
oth
er
nu
mb
er
of
Un
its
as
ma
yb
ed
ete
rmin
ed
by
the
Ma
na
ge
r)a
nd
for
so
lon
ga
sth
eT
rust
is
Lis
ted
,th
eM
an
ag
er
sh
all
co
mp
lyw
ith
the
Lis
tin
gR
ule
so
r,if
ap
plica
ble
,th
elisti
ng
rule
s
of
the
rele
va
nt
Re
co
gn
ise
dS
tock
Exch
an
ge
or
an
yo
the
rR
ele
va
nt
La
ws,
Re
gu
lati
on
sa
nd
Gu
ide
lin
es
wh
en
issu
ing
Un
its.
No
fra
cti
on
so
f
aU
nit
sh
all
be
issu
ed
(wh
eth
er
on
an
init
ial
issu
eo
fU
nit
s,
ari
gh
tsis
su
e,
an
issu
eo
fn
ew
Un
its
oth
erw
ise
tha
nb
yw
ay
of
ari
gh
tsis
su
e,
an
yis
su
ep
urs
ua
nt
toa
rein
ve
stm
en
to
f
dis
trib
uti
on
arr
an
ge
me
nt
or
an
yis
su
eo
fU
nit
s
Cla
us
e5
.1.1
–R
igh
tto
Iss
ue
Un
its
an
d
Pre
ferr
ed
Un
its
Su
bje
ct
toth
ep
rovis
ion
so
fth
isD
ee
da
nd
an
y
Re
leva
nt
La
ws,
Re
gu
lati
on
sa
nd
Gu
ide
lin
es,
the
Ma
na
ge
rsh
all
ha
ve
the
exclu
siv
eri
gh
tto
eff
ect
for
the
acco
un
to
fth
eT
rust
the
issu
eo
f
Un
its
(wh
eth
er
on
an
init
ial
issu
eo
fU
nit
s,
a
rig
hts
issu
e,
an
issu
eo
fn
ew
Un
its
oth
erw
ise
tha
nb
yw
ay
of
ari
gh
tsis
su
eo
ra
ny
issu
e
pu
rsu
an
tto
are
inve
stm
en
to
fd
istr
ibu
tio
n
arr
an
ge
me
nt
or
an
yis
su
eo
fU
nit
sp
urs
ua
nt
to
aco
nve
rsio
no
fa
ny
Se
cu
riti
es)
an
da
ny
Un
its
ma
yb
eis
su
ed
wit
hsu
ch
pre
fere
nti
al,
de
ferr
ed
,q
ua
lifi
ed
or
sp
ecia
lri
gh
ts,
pri
vile
ge
s
or
co
nd
itio
ns
as
the
Ma
na
ge
rm
ay
thin
kfi
t
(in
clu
din
gP
refe
rre
dU
nit
s)
PR
OV
IDE
DT
HA
T,
inco
nn
ecti
on
wit
hth
ein
itia
lL
isti
ng
ofth
eT
rust
on
the
SG
X-S
T,
the
Ma
na
ge
rsh
all
no
tb
e
bo
un
dto
acce
pt
an
ap
plica
tio
nfo
rU
nit
sa
nd
oth
er
Se
cu
riti
es
so
as
tog
ive
rise
toa
ho
ldin
g
of
few
er
tha
n1
,00
0U
nit
so
rP
refe
rre
dU
nit
s
(or
su
ch
oth
er
nu
mb
er
of
Un
its
or
Pre
ferr
ed
Un
its
as
ma
yb
ed
ete
rmin
ed
by
the
Ma
na
ge
r)
an
dfo
rso
lon
ga
sth
eT
rust
isL
iste
d,
the
Ma
na
ge
rsh
all
co
mp
lyw
ith
the
Lis
tin
gR
ule
s
or,
ifa
pp
lica
ble
,th
elisti
ng
rule
so
fth
ere
leva
nt
Re
co
gn
ise
dS
tock
Exch
an
ge
or
an
yo
the
r
Re
leva
nt
La
ws,
Re
gu
lati
on
sa
nd
Gu
ide
lin
es
wh
en
issu
ing
Un
its
or
Pre
ferr
ed
Un
its.
No
fra
cti
on
so
fa
Un
ito
rP
refe
rre
dU
nit
sh
all
be
issu
ed
(wh
eth
er
on
an
init
ial
issu
eo
fU
nit
s,
a
Po
we
rto
iss
ue
Pre
ferr
ed
Un
its
Th
isa
me
nd
me
nt
isin
ten
de
dto
de
al
wit
h
ad
min
istr
ati
ve
ma
tte
rsco
nce
rnin
gth
eis
su
eo
f
Pre
ferr
ed
Un
its.
A-7
No
.E
xis
tin
gC
lau
se
sP
rop
os
ed
Ne
wC
lau
se
sR
ati
on
ale
pu
rsu
an
tto
aco
nve
rsio
no
fa
ny
Se
cu
riti
es)
an
din
issu
ing
su
ch
nu
mb
er
of
Un
its
as
co
rre
sp
on
din
gto
the
rele
va
nt
su
bscri
pti
on
pro
ce
ed
s(i
fa
ny),
the
Ma
na
ge
rsh
all,
in
resp
ect
of
ea
ch
Ho
lde
r’s
en
titl
em
en
tto
Un
its,
tru
nca
teb
ut
no
tro
un
do
ffto
the
ne
are
st
wh
ole
Un
ita
nd
an
yb
ala
nce
ari
sin
gfr
om
su
ch
tru
nca
tio
nsh
all
be
reta
ine
da
sp
art
of
the
De
po
sit
ed
Pro
pe
rty.
Issu
es
of
Un
its
sh
all
on
ly
be
ma
de
on
aB
usin
ess
Da
yu
nle
ss
an
dto
the
exte
nt
tha
tth
eM
an
ag
er,
wit
hth
ep
revio
us
co
nse
nt
of
the
Tru
ste
e,
oth
erw
ise
pre
scri
be
s.
Issu
es
of
Un
its
for
ca
sh
sh
all
be
ma
de
at
a
pri
ce
he
rein
aft
er
pre
scri
be
d.
rig
hts
issu
e,
an
issu
eo
fn
ew
Un
its
oth
erw
ise
tha
nb
yw
ay
of
ari
gh
tsis
su
e,
an
yis
su
e
pu
rsu
an
tto
are
inve
stm
en
to
fd
istr
ibu
tio
n
arr
an
ge
me
nt
or
an
yis
su
eo
fU
nit
sp
urs
ua
nt
to
aco
nve
rsio
no
fa
ny
Se
cu
riti
es)
an
din
issu
ing
su
ch
nu
mb
er
of
Un
its
or
Pre
ferr
ed
Un
its
as
co
rre
sp
on
din
gto
the
rele
va
nt
su
bscri
pti
on
pro
ce
ed
s(i
fa
ny),
the
Ma
na
ge
rsh
all,
in
resp
ect
of
ea
ch
Ho
lde
r’s
en
titl
em
en
tto
Un
its
or
Pre
ferr
ed
Un
its,
tru
nca
teb
ut
no
tro
un
do
ff
toth
en
ea
rest
wh
ole
Un
ito
rP
refe
rre
dU
nit
an
d
an
yb
ala
nce
ari
sin
gfr
om
su
ch
tru
nca
tio
nsh
all
be
reta
ine
da
sp
art
of
the
De
po
sit
ed
Pro
pe
rty.
Issu
es
of
Un
its
or
Pre
ferr
ed
Un
its
sh
all
on
lyb
e
ma
de
on
aB
usin
ess
Da
yu
nle
ss
an
dto
the
exte
nt
tha
tth
eM
an
ag
er,
wit
hth
ep
revio
us
co
nse
nt
of
the
Tru
ste
e,
oth
erw
ise
pre
scri
be
s.
Issu
es
of
Un
its
or
Pre
ferr
ed
Un
its
for
ca
sh
sh
all
be
ma
de
at
ap
rice
he
rein
aft
er
pre
scri
be
d.
16
Cla
us
e5
.1.2
–Is
su
eo
fC
las
se
so
fU
nit
s
Th
eM
an
ag
er
ma
yb
yd
ee
dsu
pp
lem
en
tal
he
reto
wit
hth
eT
ruste
eis
su
eC
lasse
so
fU
nit
s
un
de
rsu
ch
term
sa
nd
co
nd
itio
ns
as
ma
yb
e
co
nta
ine
dth
ere
in.
Cla
us
e5
.1.2
–Is
su
eo
fC
las
se
so
fU
nit
sa
nd
Oth
er
Se
cu
riti
es
Th
eM
an
ag
er
ma
yb
yd
ee
dsu
pp
lem
en
tal
he
reto
wit
hth
eT
ruste
eis
su
eC
lasse
so
fU
nit
s
an
do
the
rS
ecu
riti
es
un
de
rsu
ch
term
sa
nd
co
nd
itio
ns
as
ma
yb
eco
nta
ine
dth
ere
in.
Iss
ue
of
Cla
ss
es
of
Pre
ferr
ed
Un
its
Th
isa
me
nd
me
nt
isto
cla
rify
tha
tth
eM
an
ag
er
ma
yis
su
ed
iffe
ren
tC
lasse
so
fP
refe
rre
dU
nit
s.
A-8
No
.E
xis
tin
gC
lau
se
sP
rop
os
ed
Ne
wC
lau
se
sR
ati
on
ale
17
Cla
us
e5
.1.3
–Is
su
eo
fP
refe
ren
ce
Un
its
Pre
fere
nce
Un
its
ma
yb
eis
su
ed
su
bje
ct
to
su
ch
lim
ita
tio
nth
ere
of
as
ma
yb
ep
rescri
be
d
by
the
SG
X-S
To
ra
ny
Re
co
gn
ise
dS
tock
Exch
an
ge
up
on
wh
ich
Un
its
ma
yb
eliste
d.T
he
tota
ln
um
be
ro
fis
su
ed
pre
fere
nce
Un
its
sh
all
no
te
xce
ed
the
tota
ln
um
be
ro
fo
rdin
ary
Un
its
issu
ed
at
an
yti
me
.P
refe
ren
ce
Ho
lde
rssh
all
ha
ve
the
sa
me
rig
hts
as
ord
ina
ryH
old
ers
as
reg
ard
sre
ce
ivin
go
fn
oti
ce
s,
rep
ort
sa
nd
ba
lan
ce
sh
ee
tsa
nd
att
en
din
gm
ee
tin
gs
of
Ho
lde
rs,
an
dP
refe
ren
ce
Ho
lde
rssh
all
als
o
ha
ve
the
rig
htto
vo
tea
ta
ny
me
eti
ng
co
nve
ne
d
for
the
pu
rpo
se
of
red
ucin
gth
eca
pit
al
or
win
din
gu
po
rsa
ncti
on
ing
asa
leo
fth
e
un
de
rta
kin
go
fth
eT
rust
or
wh
ere
the
pro
po
sa
l
tob
esu
bm
itte
dto
the
me
eti
ng
dir
ectl
ya
ffe
cts
the
irri
gh
tsa
nd
pri
vile
ge
so
rw
he
nth
e
dis
trib
uti
on
on
the
pre
fere
nce
Un
its
isin
arr
ea
r
for
mo
reth
an
six
mo
nth
s.
Cla
us
e5
.1.3
–Is
su
eo
fP
refe
rre
dU
nit
s
Pre
ferr
ed
Pre
fere
nce
Un
its
ma
yb
eis
su
ed
su
bje
ct
tosu
ch
lim
ita
tio
nth
ere
of
as
ma
yb
e
pre
scri
be
db
yth
eS
GX
-ST
or
an
yR
eco
gn
ise
d
Sto
ck
Exch
an
ge
up
on
wh
ich
Un
its
ma
yb
e
liste
d.
Th
eto
tal
nu
mb
er
of
issu
ed
Pre
ferr
ed
pre
fere
nce
Un
its
sh
all
no
te
xce
ed
the
tota
ln
um
be
ro
fo
rdin
ary
Un
its
issu
ed
at
an
yti
me
.S
ub
ject
toth
ere
leva
nt
Pre
ferr
ed
Un
itTe
rms
att
ach
ed
tosu
ch
cla
sse
so
f
Pre
ferr
ed
Un
its
as
ma
yb
ein
issu
efr
om
tim
e
toti
me
,P
refe
rre
dU
nit
ho
lde
rsP
refe
ren
ce
Ho
lde
rssh
all
ha
ve
the
sa
me
rig
hts
as
ord
ina
ry
Ho
lde
rsa
sre
ga
rds
rece
ivin
go
fn
oti
ce
s,
rep
ort
sa
nd
ba
lan
ce
sh
ee
tsa
nd
att
en
din
g
me
eti
ng
so
fH
old
ers
,a
nd
Pre
ferr
ed
Un
ith
old
ers
Pre
fere
nce
Ho
lde
rssh
all
als
o
ha
ve
the
rig
htto
vo
tea
ta
ny
me
eti
ng
co
nve
ne
d
for
the
pu
rpo
se
of
red
ucin
gth
eca
pit
al
or
win
din
gu
po
rsa
ncti
on
ing
asa
leo
fth
e
un
de
rta
kin
go
fth
eT
rust
or
wh
ere
the
pro
po
sa
l
tob
esu
bm
itte
dto
the
me
eti
ng
dir
ectl
ya
ffe
cts
the
irri
gh
tsa
nd
pri
vile
ge
so
rw
he
nth
e
dis
trib
uti
on
on
the
Pre
ferr
ed
pre
fere
nce
Un
its
isin
arr
ea
rfo
ra
tle
ast
12
mo
nth
sm
ore
tha
nsix
mo
nth
s.
Iss
ue
of
Pre
ferr
ed
Un
its
Th
isa
me
nd
me
nt
isto
sta
nd
ard
ise
the
use
of
the
term
sfo
rth
eis
su
eo
fth
eP
refe
rre
dU
nit
s
an
dto
su
bje
ct
the
ge
ne
ral
pro
vis
ion
wh
ich
pro
vid
es
for
the
issu
eo
fP
refe
rre
dU
nit
sto
the
Pre
ferr
ed
Un
itTe
rms.
A-9
No
.E
xis
tin
gC
lau
se
sP
rop
os
ed
Ne
wC
lau
se
sR
ati
on
ale
18
Cla
us
e5
.1.4
–Is
su
eo
fF
urt
he
rP
refe
ren
ce
Ca
pit
al
Th
eM
an
ag
er
ha
sp
ow
er
tois
su
efu
rth
er
pre
fere
nce
ca
pit
al
ran
kin
ge
qu
ally
wit
h,
or
in
pri
ori
tyto
,p
refe
ren
ce
Un
its
alr
ea
dy
issu
ed
.
Cla
us
e5
.1.4
–Is
su
eo
fF
urt
he
rP
refe
ren
ce
Ca
pit
al
Th
eM
an
ag
er
ha
sp
ow
er
tois
su
efu
rth
er
pre
fere
nce
ca
pit
al
ran
kin
ge
qu
ally
wit
h,
or
in
pri
ori
tyto
,p
refe
ren
ce
Pre
ferr
ed
Un
its
alr
ea
dy
issu
ed
.
Iss
ue
of
Fu
rth
er
Pre
fere
nc
eC
ap
ita
l
Th
isa
me
nd
me
nt
isto
sta
nd
ard
ise
the
use
of
the
term
sfo
rth
eis
su
eo
fp
refe
ren
ce
ca
pit
al.
19
Cla
us
e11
.1–
Dis
trib
uti
on
of
Inc
om
e
Fo
rso
lon
ga
sth
eT
rust
isU
nliste
d,
su
bje
ct
to
the
Re
leva
nt
Ru
les,
La
ws,
Re
gu
lati
on
sa
nd
Gu
ide
lin
es
an
dth
isC
lau
se
11
,th
eM
an
ag
er
ma
ya
tit
sd
iscre
tio
nd
ecla
red
istr
ibu
tio
ns
of
Inco
me
.
Fo
rso
lon
ga
sth
eT
rust
isL
iste
d,
su
bje
ct
to
this
Cla
use
11
an
dth
eR
ele
va
nt
La
ws,
Re
gu
lati
on
sa
nd
Gu
ide
lin
es,
the
Ma
na
ge
r
sh
all
ma
ke
reg
ula
rd
istr
ibu
tio
ns
of
all
(or
su
ch
low
er
pe
rce
nta
ge
as
de
term
ine
db
yth
e
Ma
na
ge
rin
its
ab
so
lute
dis
cre
tio
n)
of
its
Dis
trib
uta
ble
Inco
me
toH
old
ers
at
qu
art
erl
y,
ha
lf-y
ea
rly
or
ye
arl
yin
terv
als
or
at
su
ch
oth
er
inte
rva
lsa
sth
eM
an
ag
er
sh
all
de
cid
ein
its
ab
so
lute
dis
cre
tio
n.
Cla
us
e11
.1–
Dis
trib
uti
on
of
Inc
om
e
Fo
rso
lon
ga
sth
eT
rust
isU
nliste
d,
su
bje
ct
to
the
Re
leva
nt
Ru
les,
La
ws,
Re
gu
lati
on
sa
nd
Gu
ide
lin
es
an
dth
isC
lau
se
11
,th
eM
an
ag
er
ma
ya
tit
sd
iscre
tio
nd
ecla
red
istr
ibu
tio
ns
of
Inco
me
.
Fo
rso
lon
ga
sth
eT
rust
isL
iste
d,
su
bje
ct
to
this
Cla
use
11
,th
ere
leva
nt
Pre
ferr
ed
Un
it
Te
rms
att
ach
ed
tosu
ch
cla
sse
so
fP
refe
rre
d
Un
its
as
ma
yb
ein
issu
efr
om
tim
eto
tim
ea
nd
the
Re
leva
nt
La
ws,
Re
gu
lati
on
sa
nd
Gu
ide
lin
es,
the
Ma
na
ge
rsh
all
ma
ke
reg
ula
r
dis
trib
uti
on
so
fa
ll(o
rsu
ch
low
er
pe
rce
nta
ge
as
de
term
ine
db
yth
eM
an
ag
er
init
sa
bso
lute
dis
cre
tio
n)
of
its
Dis
trib
uta
ble
Inco
me
to
Ho
lde
rsa
tq
ua
rte
rly,
ha
lf-y
ea
rly
or
ye
arl
y
inte
rva
lso
ra
tsu
ch
oth
er
inte
rva
lsa
sth
e
Ma
na
ge
rsh
all
de
cid
ein
its
ab
so
lute
dis
cre
tio
n.
Dis
trib
uti
on
of
Inc
om
e
Th
isa
me
nd
me
nt
isto
su
bje
ct
inco
me
dis
trib
uti
on
sin
rela
tio
nto
Un
its
toth
ete
rms
of
Pre
ferr
ed
Un
its
tha
ta
rein
issu
e.
A-10
No
.E
xis
tin
gC
lau
se
sP
rop
os
ed
Ne
wC
lau
se
sR
ati
on
ale
20
Cla
us
e11
.4–
Fre
qu
en
cy
of
Dis
trib
uti
on
of
Inc
om
e
Fo
rso
lon
ga
sth
eT
rust
isU
nliste
d,
the
Ma
na
ge
rsh
all
ha
ve
the
dis
cre
tio
nto
de
term
ine
the
fre
qu
en
cy
of
ea
ch
dis
trib
uti
on
of
Inco
me
.
Fo
rso
lon
ga
sth
eT
rust
isL
iste
d,
the
Ma
na
ge
r
will
en
de
avo
ur
toe
nsu
reth
at
for
ea
ch
Fin
an
cia
lY
ea
rth
ere
isa
tle
ast
on
ed
istr
ibu
tio
n
an
dth
ela
st
dis
trib
uti
on
co
ve
rsth
ep
eri
od
up
toth
ela
st
da
yo
fth
eF
ina
ncia
lY
ea
r.F
or
ea
ch
Dis
trib
uti
on
Pe
rio
dth
eM
an
ag
er
will
ca
lcu
late
,
an
dth
eT
ruste
ew
ill
dis
trib
ute
,e
ach
Ho
lde
r’s
Dis
trib
uti
on
En
titl
em
en
t,in
acco
rda
nce
wit
h
the
pro
vis
ion
so
fth
isC
lau
se
11
.
Cla
us
e11
.4–
Fre
qu
en
cy
of
Dis
trib
uti
on
of
Inc
om
e
Fo
rso
lon
ga
sth
eT
rust
isU
nliste
d,
the
Ma
na
ge
rsh
all
ha
ve
the
dis
cre
tio
nto
de
term
ine
the
fre
qu
en
cy
of
ea
ch
dis
trib
uti
on
of
Inco
me
.
Fo
rso
lon
ga
sth
eT
rust
isL
iste
d,
su
bje
ct
to
the
rele
va
nt
Pre
ferr
ed
Un
itTe
rms
att
ach
ed
to
su
ch
cla
sse
so
fP
refe
rre
dU
nit
sa
sm
ay
be
in
issu
efr
om
tim
eto
tim
e,
the
Ma
na
ge
rw
ill
en
de
avo
ur
toe
nsu
reth
at
for
ea
ch
Fin
an
cia
l
Ye
ar
the
reis
at
lea
st
on
ed
istr
ibu
tio
na
nd
the
lastd
istr
ibu
tio
nco
ve
rsth
ep
eri
od
up
toth
ela
st
da
yo
fth
eF
ina
ncia
lY
ea
r.F
or
ea
ch
Dis
trib
uti
on
Pe
rio
dth
eM
an
ag
er
will
ca
lcu
late
,
an
dth
eT
ruste
ew
ill
dis
trib
ute
,e
ach
Ho
lde
r’s
Dis
trib
uti
on
En
titl
em
en
t,in
acco
rda
nce
wit
h
the
pro
vis
ion
so
fth
isC
lau
se
11
.
Fre
qu
en
cy
of
Dis
trib
uti
on
Inc
om
e
Th
isa
me
nd
me
nt
isto
su
bje
ct
the
fre
qu
en
cy
of
inco
me
dis
trib
uti
on
sin
rela
tio
nto
Un
its
toth
e
term
so
fP
refe
rre
dU
nit
sth
at
are
inis
su
e.
21
Cla
us
e11
.5.3
–D
istr
ibu
tio
nE
nti
tle
me
nt
Ea
ch
Ho
lde
r’s
Dis
trib
uti
on
En
titl
em
en
tis
tob
e
de
term
ine
din
acco
rda
nce
wit
hth
efo
llo
win
g
form
ula
:
DE
=D
AX
UH
UI
Wh
ere
:
“DE
”is
the
Dis
trib
uti
on
En
titl
em
en
t;
Cla
us
e11
.5.3
–D
istr
ibu
tio
nE
nti
tle
me
nt
Ea
ch
Ho
lde
r’s
Dis
trib
uti
on
En
titl
em
en
tis
tob
e
de
term
ine
din
acco
rda
nce
wit
hth
efo
llo
win
g
form
ula
:
DE
=(D
A–
PD
)X
UH
UI
Wh
ere
:
“DE
”is
the
Dis
trib
uti
on
En
titl
em
en
t;
Dis
trib
uti
on
En
titl
em
en
t
Th
isa
me
nd
me
nt
isto
su
bje
ct
the
dis
trib
uti
on
en
titl
em
en
to
fU
nit
ho
lde
rsto
the
term
so
f
Pre
ferr
ed
Un
its
tha
ta
rein
issu
e.
A-11
No
.E
xis
tin
gC
lau
se
sP
rop
os
ed
Ne
wC
lau
se
sR
ati
on
ale
“DA
”is
the
Dis
trib
uti
on
Am
ou
nt;
“UH
”is
the
nu
mb
er
of
Un
its
he
ldb
yth
e
Ho
lde
r,a
tth
eclo
se
of
bu
sin
ess
on
the
Re
co
rdD
ate
for
the
rele
va
nt
Dis
trib
uti
on
Pe
rio
da
dju
ste
dto
the
exte
nt
he
ise
nti
tle
dto
pa
rtic
ipa
tein
the
Dis
trib
uti
on
Am
ou
nt;
an
d
“UI”
isth
en
um
be
ro
fU
nit
sin
issu
ein
the
Tru
st
at
the
clo
se
of
bu
sin
ess
on
the
Re
co
rdD
ate
for
the
rele
va
nt
Dis
trib
uti
on
Pe
rio
da
dju
ste
dto
the
exte
nt
the
Ho
lde
ris
en
titl
ed
to
pa
rtic
ipa
tein
the
Dis
trib
uti
on
Am
ou
nt.
“DA
”is
the
Dis
trib
uti
on
Am
ou
nt;
“UH
”is
the
nu
mb
er
of
Un
its
he
ldb
yth
e
Ho
lde
r,a
tth
eclo
se
of
bu
sin
ess
on
the
Re
co
rdD
ate
for
the
rele
va
nt
Dis
trib
uti
on
Pe
rio
da
dju
ste
dto
the
exte
nt
he
ise
nti
tle
dto
pa
rtic
ipa
tein
the
Dis
trib
uti
on
Am
ou
nt;
an
d
“UI”
isth
en
um
be
ro
fU
nit
sin
issu
ein
the
Tru
st
at
the
clo
se
of
bu
sin
ess
on
the
Re
co
rdD
ate
for
the
rele
va
nt
Dis
trib
uti
on
Pe
rio
da
dju
ste
dto
the
exte
nt
the
Ho
lde
ris
en
titl
ed
to
pa
rtic
ipa
tein
the
Dis
trib
uti
on
Am
ou
nt.
;
an
d
“PD
”is
the
ag
gre
ga
tea
mo
un
to
fa
llP
refe
rre
d
Dis
trib
uti
on
sp
aya
ble
or
pa
ido
na
ll
Pre
ferr
ed
Un
its
inis
su
efo
rth
ere
leva
nt
Dis
trib
uti
on
Pe
rio
d.
22
Cla
us
e11
.10
.1–
Ca
teg
ori
es
an
dS
ou
rce
so
f
Inc
om
e
Fo
ra
ny
ca
teg
ory
or
so
urc
eo
fin
co
me
the
Ma
na
ge
rm
ay
ke
ep
se
pa
rate
acco
un
tsa
nd
allo
ca
teth
ein
co
me
fro
ma
ny
ca
teg
ory
or
so
urc
eto
an
yH
old
er.
Cla
us
e11
.10
.1–
Ca
teg
ori
es
an
dS
ou
rce
so
f
Inc
om
e
Fo
ra
ny
ca
teg
ory
or
so
urc
eo
fin
co
me
the
Ma
na
ge
rm
ay
ke
ep
se
pa
rate
acco
un
tsa
nd
allo
ca
teth
ein
co
me
fro
ma
ny
ca
teg
ory
or
so
urc
eto
an
yH
old
er,
Pre
ferr
ed
Un
ith
old
er
or
ho
lde
ro
fo
the
rS
ecu
riti
es
(wh
ere
ap
plica
ble
).
Po
we
rto
All
oc
ate
Inc
om
eto
Pre
ferr
ed
Un
ith
old
ers
Th
isa
me
nd
me
nt
isto
pro
vid
efo
rth
e
allo
ca
tio
no
fin
co
me
toP
refe
rre
dU
nit
ho
lde
rs.
A-12
No
.E
xis
tin
gC
lau
se
sP
rop
os
ed
Ne
wC
lau
se
sR
ati
on
ale
23
Cla
us
e2
6.5
–M
an
ne
ro
fL
iqu
ida
tio
n
Up
on
the
Tru
st
be
ing
term
ina
ted
the
Tru
ste
e
sh
all,
su
bje
ct
toa
uth
ori
sa
tio
ns
or
dir
ecti
on
s(i
f
an
y)
giv
en
toit
by
the
Ma
na
ge
ra
nd
/or
the
Ho
lde
rsa
nd
pu
rsu
an
tto
the
irp
ow
ers
co
nta
ine
din
Sch
ed
ule
1,
pro
ce
ed
as
follo
ws:
26
.5.1
the
Tru
ste
esh
all
se
lla
llIn
ve
stm
en
ts
the
nre
ma
inin
gin
its
ha
nd
sa
sp
art
of
the
De
po
sit
ed
Pro
pe
rty
an
dsh
all
rep
ay
an
yb
orr
ow
ing
eff
ecte
db
yth
e
Tru
st
un
de
rC
lau
se
10
.12
(to
ge
the
r
wit
ha
ny
inte
rest
accru
ed
bu
t
rem
ain
ing
un
pa
id)
for
the
tim
eb
ein
g
ou
tsta
nd
ing
an
da
llo
the
rd
eb
tsa
nd
Lia
bilit
ies
inre
sp
ect
of
the
Tru
st
be
fore
ap
ply
ing
the
ba
lan
ce
toth
e
Ho
lde
rs.
All
se
cu
red
cre
dit
ors
will
be
rep
aid
be
fore
un
se
cu
red
cre
dit
ors
.
Se
cu
red
cre
dit
ors
willb
ere
pa
idin
the
ord
er
of
pri
ori
tyo
fth
eir
resp
ecti
ve
rig
hts
of
se
cu
rity
.O
na
win
din
gu
p,
the
Tru
ste
em
ay,
wh
ere
ap
plica
ble
,re
tain
fro
ma
ny
dis
trib
uti
on
tob
em
ad
eto
Ho
lde
rsa
na
mo
un
te
qu
al
toa
ny
co
nti
ng
en
tlia
bilit
yto
the
IRA
Su
nd
er
an
yin
de
mn
ity
giv
en
toth
eIR
AS
.
Su
ch
sa
leb
yth
eT
ruste
esh
all
be
Cla
us
e2
6.5
–M
an
ne
ro
fL
iqu
ida
tio
n
Su
bje
ct
toth
ere
leva
nt
Pre
ferr
ed
Un
itTe
rms
att
ach
ed
tosu
ch
cla
sse
so
fP
refe
rre
dU
nit
sa
s
ma
yb
ein
issu
efr
om
tim
eto
tim
e,
Uu
po
nth
e
Tru
st
be
ing
term
ina
ted
the
Tru
ste
esh
all,
su
bje
ct
toa
uth
ori
sa
tio
ns
or
dir
ecti
on
s(i
fa
ny)
giv
en
toit
by
the
Ma
na
ge
ra
nd
/or
the
Ho
lde
rs
an
dp
urs
ua
nt
toth
eir
po
we
rsco
nta
ine
din
Sch
ed
ule
1,
pro
ce
ed
as
follo
ws:
26
.5.1
the
Tru
ste
esh
all
se
lla
llIn
ve
stm
en
ts
the
nre
ma
inin
gin
its
ha
nd
sa
sp
art
of
the
De
po
sit
ed
Pro
pe
rty
an
dsh
all
rep
ay
an
yb
orr
ow
ing
eff
ecte
db
yth
e
Tru
st
un
de
rC
lau
se
10
.12
(to
ge
the
r
wit
ha
ny
inte
rest
accru
ed
bu
t
rem
ain
ing
un
pa
id)
for
the
tim
eb
ein
g
ou
tsta
nd
ing
an
da
llo
the
rd
eb
tsa
nd
Lia
bilit
ies
inre
sp
ect
of
the
Tru
st
be
fore
ap
ply
ing
the
ba
lan
ce
toth
e
Ho
lde
rs.
All
se
cu
red
cre
dit
ors
will
be
rep
aid
be
fore
un
se
cu
red
cre
dit
ors
.
Se
cu
red
cre
dit
ors
willb
ere
pa
idin
the
ord
er
of
pri
ori
tyo
fth
eir
resp
ecti
ve
rig
hts
of
se
cu
rity
.O
na
win
din
gu
p,
the
Tru
ste
em
ay,
wh
ere
ap
plica
ble
,re
tain
fro
ma
ny
dis
trib
uti
on
tob
em
ad
eto
Ho
lde
rsa
na
mo
un
te
qu
al
toa
ny
co
nti
ng
en
tlia
bilit
yto
the
IRA
Su
nd
er
an
yin
de
mn
ity
giv
en
toth
eIR
AS
.
Su
ch
sa
leb
yth
eT
ruste
esh
all
be
Ma
nn
er
of
Liq
uid
ati
on
Th
isa
me
nd
me
nt
isto
su
bje
ct
the
ma
nn
er
of
liq
uid
ati
on
of
OU
EC
-RE
ITto
the
term
so
fth
e
Pre
ferr
ed
Un
its
tha
ta
rein
issu
e.
A-13
No
.E
xis
tin
gC
lau
se
sP
rop
os
ed
Ne
wC
lau
se
sR
ati
on
ale
ca
rrie
do
ut
an
dco
mp
lete
din
su
ch
ma
nn
er
an
dw
ith
insu
ch
pe
rio
da
fte
r
the
term
ina
tio
no
fth
eT
rusta
sso
on
as
pra
cti
ca
ble
.A
ny
am
ou
nt
pa
ya
ble
in
resp
ect
of
fee
s,
co
sts
an
de
xp
en
se
s
ch
arg
ed
by
the
De
po
sit
ory
un
de
rth
e
De
po
sit
ory
Se
rvic
es
Te
rms
an
d
Co
nd
itio
ns
or
un
de
ra
ny
ind
em
nit
y
giv
en
toth
eD
ep
osit
ory
sh
all
be
ran
ke
dto
ge
the
rw
ith
un
se
cu
red
cre
dit
ors
an
dth
eD
ep
osit
ory
will
ran
k
eq
ua
lly
wit
ha
llo
the
ru
nse
cu
red
cre
dit
ors
inre
sp
ect
of
an
ycla
im
ag
ain
st
the
Tru
st
un
de
rth
ein
de
mn
ity
giv
en
toth
eD
ep
osit
ory
.O
na
win
din
g
up
,th
eT
ruste
em
ay
reta
infr
om
an
y
dis
trib
uti
on
tob
em
ad
eto
Ho
lde
rsa
n
am
ou
nt
eq
ua
lto
an
yco
nti
ng
en
t
lia
bilit
yto
the
De
po
sit
ory
un
de
rsu
ch
ind
em
nit
yo
rin
resp
ect
of
su
ch
fee
s,
co
sts
an
de
xp
en
se
sd
ue
toth
e
De
po
sit
ory
.S
uch
sa
leb
yth
eT
ruste
e
sh
all
be
ca
rrie
do
ut
an
dco
mp
lete
da
s
so
on
as
pra
cti
ca
ble
;
26
.5.2
the
Tru
ste
esh
all
fro
mti
me
toti
me
dis
trib
ute
toth
eH
old
ers
an
dth
e
De
po
sit
ory
inre
sp
ect
of
the
De
po
sit
ors
inp
rop
ort
ion
toth
eir
resp
ecti
ve
inte
rests
inth
eD
ep
osit
ed
Pro
pe
rty
all
ne
tC
ash
pro
ce
ed
s
de
rive
dfr
om
the
rea
lisa
tio
no
fth
e
ca
rrie
do
ut
an
dco
mp
lete
din
su
ch
ma
nn
er
an
dw
ith
insu
ch
pe
rio
da
fte
r
the
term
ina
tio
no
fth
eT
rusta
sso
on
as
pra
cti
ca
ble
.A
ny
am
ou
nt
pa
ya
ble
in
resp
ect
of
fee
s,
co
sts
an
de
xp
en
se
s
ch
arg
ed
by
the
De
po
sit
ory
un
de
rth
e
De
po
sit
ory
Se
rvic
es
Te
rms
an
d
Co
nd
itio
ns
or
un
de
ra
ny
ind
em
nit
y
giv
en
toth
eD
ep
osit
ory
sh
all
be
ran
ke
dto
ge
the
rw
ith
un
se
cu
red
cre
dit
ors
an
dth
eD
ep
osit
ory
will
ran
k
eq
ua
lly
wit
ha
llo
the
ru
nse
cu
red
cre
dit
ors
inre
sp
ect
of
an
ycla
im
ag
ain
st
the
Tru
st
un
de
rth
ein
de
mn
ity
giv
en
toth
eD
ep
osit
ory
.O
na
win
din
g
up
,th
eT
ruste
em
ay
reta
infr
om
an
y
dis
trib
uti
on
tob
em
ad
eto
Ho
lde
rsa
n
am
ou
nt
eq
ua
lto
an
yco
nti
ng
en
t
lia
bilit
yto
the
De
po
sit
ory
un
de
rsu
ch
ind
em
nit
yo
rin
resp
ect
of
su
ch
fee
s,
co
sts
an
de
xp
en
se
sd
ue
toth
e
De
po
sit
ory
.S
uch
sa
leb
yth
eT
ruste
e
sh
all
be
ca
rrie
do
ut
an
dco
mp
lete
da
s
so
on
as
pra
cti
ca
ble
;
26
.5.2
the
Tru
ste
esh
all
fro
mti
me
toti
me
dis
trib
ute
toth
eH
old
ers
an
dth
e
De
po
sit
ory
inre
sp
ect
of
the
De
po
sit
ors
inp
rop
ort
ion
toth
eir
resp
ecti
ve
inte
rests
inth
eD
ep
osit
ed
Pro
pe
rty
all
ne
tC
ash
pro
ce
ed
s
de
rive
dfr
om
the
rea
lisa
tio
no
fth
e
A-14
No
.E
xis
tin
gC
lau
se
sP
rop
os
ed
Ne
wC
lau
se
sR
ati
on
ale
De
po
sit
ed
Pro
pe
rty
an
da
va
ila
ble
for
the
pu
rpo
se
so
fsu
ch
dis
trib
uti
on
PR
OV
IDE
DT
HA
Tth
eT
ruste
esh
all
no
tb
eb
ou
nd
(exce
pt
inth
eca
se
of
the
fin
al
dis
trib
uti
on
)to
dis
trib
ute
an
y
of
the
mo
ne
ys
for
the
tim
eb
ein
gin
its
ha
nd
sth
ea
mo
un
to
fw
hic
his
insu
ffic
ien
tto
pa
yS
$1
inre
sp
ect
of
ea
ch
un
div
ide
dsh
are
inth
e
De
po
sit
ed
Pro
pe
rty
PR
OV
IDE
DA
LS
O
TH
AT
the
Tru
ste
esh
all
be
en
titl
ed
to
reta
ino
ut
of
an
ym
on
eys
init
sh
an
ds
as
pa
rto
fth
eD
ep
osit
ed
Pro
pe
rty
un
de
rth
ep
rovis
ion
so
fth
isC
lau
se
26
full
pro
vis
ion
for
all
fee
s,
co
sts
,
ch
arg
es,
exp
en
se
s,
cla
ims
an
d
de
ma
nd
sin
cu
rre
d,
ma
de
or
ap
pre
he
nd
ed
by
the
Tru
ste
ein
co
nn
ecti
on
wit
ho
ra
risin
go
ut
of
the
liq
uid
ati
on
of
this
Tru
st
an
do
ut
of
the
mo
ne
ys
so
reta
ine
dto
be
ind
em
nif
ied
an
dsa
ve
dh
arm
less
ag
ain
st
an
ysu
ch
co
sts
,ch
arg
es,
exp
en
se
s,
cla
ims
an
d
de
ma
nd
s.
Eve
rysu
ch
dis
trib
uti
on
sh
all
be
ma
de
toth
eH
old
ers
an
dth
e
De
po
sit
ory
(in
resp
ect
of
the
De
po
sit
ors
)in
acco
rda
nce
wit
hth
e
pro
vis
ion
so
fC
lau
se
12
.1.
An
y
un
cla
ime
dp
roce
ed
so
ro
the
rC
ash
he
ldb
yth
eT
ruste
eu
nd
er
the
pro
vis
ion
so
fth
isC
lau
se
26
ma
ya
t
the
exp
ira
tio
no
f1
2m
on
ths
fro
mth
e
De
po
sit
ed
Pro
pe
rty
an
da
va
ila
ble
for
the
pu
rpo
se
so
fsu
ch
dis
trib
uti
on
PR
OV
IDE
DT
HA
Tth
eT
ruste
esh
all
no
tb
eb
ou
nd
(exce
pt
inth
eca
se
of
the
fin
al
dis
trib
uti
on
)to
dis
trib
ute
an
y
of
the
mo
ne
ys
for
the
tim
eb
ein
gin
its
ha
nd
sth
ea
mo
un
to
fw
hic
his
insu
ffic
ien
tto
pa
yS
$1
inre
sp
ect
of
ea
ch
un
div
ide
dsh
are
inth
e
De
po
sit
ed
Pro
pe
rty
PR
OV
IDE
DA
LS
O
TH
AT
the
Tru
ste
esh
all
be
en
titl
ed
to
reta
ino
ut
of
an
ym
on
eys
init
sh
an
ds
as
pa
rto
fth
eD
ep
osit
ed
Pro
pe
rty
un
de
rth
ep
rovis
ion
so
fth
isC
lau
se
26
full
pro
vis
ion
for
all
fee
s,
co
sts
,
ch
arg
es,
exp
en
se
s,
cla
ims
an
d
de
ma
nd
sin
cu
rre
d,
ma
de
or
ap
pre
he
nd
ed
by
the
Tru
ste
ein
co
nn
ecti
on
wit
ho
ra
risin
go
ut
of
the
liq
uid
ati
on
of
this
Tru
st
an
do
ut
of
the
mo
ne
ys
so
reta
ine
dto
be
ind
em
nif
ied
an
dsa
ve
dh
arm
less
ag
ain
st
an
ysu
ch
co
sts
,ch
arg
es,
exp
en
se
s,
cla
ims
an
d
de
ma
nd
s.
Eve
rysu
ch
dis
trib
uti
on
sh
all
be
ma
de
toth
eH
old
ers
an
dth
e
De
po
sit
ory
(in
resp
ect
of
the
De
po
sit
ors
)in
acco
rda
nce
wit
hth
e
pro
vis
ion
so
fC
lau
se
12
.1.
An
y
un
cla
ime
dp
roce
ed
so
ro
the
rC
ash
he
ldb
yth
eT
ruste
eu
nd
er
the
pro
vis
ion
so
fth
isC
lau
se
26
ma
ya
t
the
exp
ira
tio
no
f1
2m
on
ths
fro
mth
e
A-15
No
.E
xis
tin
gC
lau
se
sP
rop
os
ed
Ne
wC
lau
se
sR
ati
on
ale
da
teu
po
nw
hic
hth
esa
me
we
re
pa
ya
ble
be
pa
idin
toco
urt
su
bje
ct
to
the
rig
ht
of
the
Tru
ste
eto
de
du
ct
the
refr
om
an
ye
xp
en
se
sit
ma
yin
cu
r
inm
akin
gsu
ch
pa
ym
en
t;
26
.5.3
the
Tru
ste
em
ay
no
td
istr
ibu
tea
ny
Inve
stm
en
tto
an
yH
old
er
insp
ecie
;
an
d
26
.5.4
the
Tru
ste
em
ay
at
the
dir
ecti
on
of
the
Ma
na
ge
rp
ostp
on
eth
ere
alisa
tio
no
f
an
yIn
ve
stm
en
tfo
rso
lon
ga
sth
e
Ma
na
ge
rth
inks
fit
an
dn
eit
he
rth
e
Tru
ste
en
or
the
Ma
na
ge
rsh
all
be
lia
ble
for
an
ylo
ss
or
da
ma
ge
att
rib
uta
ble
tosu
ch
po
stp
on
em
en
t.
da
teu
po
nw
hic
hth
esa
me
we
re
pa
ya
ble
be
pa
idin
toco
urt
su
bje
ct
to
the
rig
ht
of
the
Tru
ste
eto
de
du
ct
the
refr
om
an
ye
xp
en
se
sit
ma
yin
cu
r
inm
akin
gsu
ch
pa
ym
en
t;
26
.5.3
the
Tru
ste
em
ay
no
td
istr
ibu
tea
ny
Inve
stm
en
tto
an
yH
old
er
insp
ecie
;
an
d
26
.5.4
the
Tru
ste
em
ay
at
the
dir
ecti
on
of
the
Ma
na
ge
rp
ostp
on
eth
ere
alisa
tio
no
f
an
yIn
ve
stm
en
tfo
rso
lon
ga
sth
e
Ma
na
ge
rth
inks
fit
an
dn
eit
he
rth
e
Tru
ste
en
or
the
Ma
na
ge
rsh
all
be
lia
ble
for
an
ylo
ss
or
da
ma
ge
att
rib
uta
ble
tosu
ch
po
stp
on
em
en
t.
24
Cla
us
e3
4–
Th
ird
Pa
rty
Rig
hts
Ap
ers
on
wh
ois
no
ta
pa
rty
toth
isD
ee
dm
ay
no
te
nfo
rce
its
term
su
nd
er
the
Co
ntr
acts
(Rig
hts
of
Th
ird
Pa
rtie
s)
Act,
Ch
ap
ter
53
Bo
f
Sin
ga
po
re,
exce
pt
tha
te
ach
Ho
lde
rm
ay
en
joy
the
be
ne
fit
of
or
en
forc
eth
ete
rms
of
this
De
ed
ina
cco
rda
nce
wit
hth
ep
rovis
ion
so
fth
e
Co
ntr
acts
(Rig
hts
of
Th
ird
Pa
rtie
s)
Act,
Ch
ap
ter
53
Bo
fS
ing
ap
ore
an
dsu
bje
ct
toth
e
pro
vis
ion
so
fth
isD
ee
d.
Cla
us
e3
4–
Th
ird
Pa
rty
Rig
hts
Ap
ers
on
wh
ois
no
ta
pa
rty
toth
isD
ee
dm
ay
no
te
nfo
rce
its
term
su
nd
er
the
Co
ntr
acts
(Rig
hts
of
Th
ird
Pa
rtie
s)
Act,
Ch
ap
ter
53
Bo
f
Sin
ga
po
re,
exce
pt
tha
t(a
)e
ach
Ho
lde
ra
nd
/or
(b)
ea
ch
Pre
ferr
ed
Un
ith
old
er
(or
as
the
ca
se
ma
yb
e)
ea
ch
Pre
ferr
ed
Un
itD
ep
osit
or
ma
y
en
joy
the
be
ne
fit
of
or
en
forc
eth
ete
rms
of
this
De
ed
ina
cco
rda
nce
wit
hth
ep
rovis
ion
so
fth
e
Co
ntr
acts
(Rig
hts
of
Th
ird
Pa
rtie
s)
Act,
Ch
ap
ter
53
Bo
fS
ing
ap
ore
an
dsu
bje
ct
toth
e
pro
vis
ion
so
fth
isD
ee
d.
Rig
hts
of
Ho
lde
rso
fP
refe
rre
dU
nit
s
Th
isa
me
nd
me
nt
isto
allo
wh
old
ers
of
Pre
ferr
ed
Un
its
toe
njo
yth
eb
en
efi
to
fo
r
en
forc
eth
ete
rms
of
the
Tru
st
De
ed
.
A-16
The form of the new schedule to be inserted into the Trust Deed upon Unitholders’ approval of the
resolution relating to the proposed Trust Deed Supplement (Resolution 2) is as set out below.
Schedule 2
General Provisions relating to the Preferred Units
The Preferred Units shall have the following rights and be subject to the following restrictions:
1. Interpretation
1.1 Definitions
Unless the context otherwise requires, the following words or expressions shall have the
meaning respectively assigned to them, namely:
“Agent” means any one or more agents as may from time to time be appointed by the
Manager or the Trustee to administer the procedures relating to the Preferred Units;
“Conversion Notice” means, where applicable, the notice issued by the Manager and/or a
Preferred Unitholder of the relevant class of Preferred Units for the purposes of converting
all (or part) of the Preferred Units of such class held by such Preferred Unitholder into Units;
“Conversion Right” means, where applicable, the right of a Preferred Unitholder of the
relevant class of Preferred Units to convert any Preferred Unit of such class into Units;
“General Preferred Unit Terms” means the general terms and conditions governing the
offer and issue of the Preferred Units from time to time, as contained in this Schedule 2;
“Permitted Reorganisation” means a solvent reconstruction, amalgamation,
reorganisation, merger or consolidation whereby all or substantially all the business,
undertaking and assets of the Trust which are held by the Trustee are transferred to a
successor entity which assumes all the obligations of the Trustee and/or the Manager (as
the case may be) in relation to the Preferred Units;
“Preferred Distribution” means the preferential distribution which may be declared by the
Manager in its sole discretion and paid in respect of the relevant class of Preferred Units;
“Preferred Distribution Date” means such date on which the Preferred Distribution for the
relevant Preferred Distribution Period shall be paid;
“Preferred Distribution Period” means each period for which the Preferred Distribution
shall accrue in respect of a Preferred Unitholder of the relevant class of Preferred Units;
“Preferred Unit” means one preferred unit in the Trust of any class issued from time to time
in accordance with the Preferred Unit Terms attached to the relevant class of Preferred
Units;
“Preferred Unit Conversion Taxes” means, where applicable, the Taxes and capital,
stamp, issue and registration duties (i) arising on conversion of the Preferred Units of the
relevant class (other than any Taxes or capital or stamp duties payable in Singapore and,
if relevant, in the place of the Recognised Stock Exchange, by the Manager and/or the Trust
(as the case may be) in respect of the allotment and issue of Units and listing of the Units
A-17
on the SGX-ST or a Recognised Stock Exchange on conversion) or (ii) arising by reference
to any disposal or deemed disposal of a Preferred Unit of such class in connection with such
conversion;
“Preferred Unit Depositor” means:
(a) a direct account holder with the Depository; or
(b) a Depository Agent, but for the avoidance of doubt, does not include a Sub-Account
Holder,
whose name is entered in the Preferred Unit Depository Register in respect of the Preferred
Units held by him;
“Preferred Unit Depository Register” means the electronic register of the relevant class
of Preferred Units deposited with the Depository maintained by the Depository;
“Preferred Unit Joint Holders” means such persons for the time being entered in the
Register of Preferred Unitholders as joint Preferred Unitholders in respect of a Preferred
Unit, either as Preferred Unit Joint-All Holders or Preferred Unit Joint-Alternate Holders;
“Preferred Unit Joint-All Holders” means Preferred Unit Joint Holders whose mandate the
Manager and the Trustee shall act upon only if given by all of the Preferred Unit Joint
Holders or, where any Preferred Unit Joint-All Holder is a Minor, where the mandate is given
by all of the adult Joint-All Holder(s);
“Preferred Unit Joint-Alternate Holders” means Preferred Unit Joint Holders whose
mandate the Manager and the Trustee shall act upon if given by any of the Preferred Unit
Joint Holders (other than a Minor);
“Preferred Unit Terms” means the General Preferred Unit Terms and Specific Preferred
Unit Terms;
“Preferred Unitholder” means, in relation to any class of Preferred Units which are
Unlisted, a registered holder for the time being of that class of Preferred Units including
persons so registered as Preferred Unit Joint Holders, and in relation to Preferred Units
which are Listed on the SGX-ST, means the Depository, and the term “Preferred
Unitholder” shall, in relation to any class of Preferred Units which are Listed and registered
in the name of the Depository, mean, where the context requires (including without
limitation, the redemption or conversion of that class of Preferred Units, where applicable),
a Preferred Unit Depositor provided that for the purposes of meetings of Preferred
Unitholders, such Preferred Unitholder shall mean a Preferred Unit Depositor as shown in
the records of the Depository 48 hours prior to the time of a meeting of Preferred
Unitholders, supplied by the Depository to the Manager;
“Priority Amount” means such amount which the Preferred Unitholder of the relevant class
of Preferred Units shall be entitled to receive upon the dissolution or winding up of the Trust;
“Register of Preferred Unitholders” means the register of Preferred Unitholders holding
such class of Preferred Units from time to time in issue maintained by or on behalf of the
Trustee;
“Registrar” means such person as may from time to time be appointed by the Trustee to
keep and maintain the Register of Preferred Unitholders;
A-18
“Registration Date” means the date on which the person or persons designated in the
Conversion Notice shall become the holder of record of the number of Units issuable upon
conversion, such date being (i) the date the relevant Units are credited to his or their
respective accounts with the Depository (for so long as the Units are Listed on the SGX-ST)
or (ii) the date of registration of such person or persons as holders in the Register (if the
Units are not Listed on the SGX-ST);
“Securities Account” means a securities account maintained by a Preferred Unit Depositor
with the Depository;
“Specific Preferred Unit Terms”, in relation to a class of Preferred Units, means any
specific terms and conditions governing the offer and issue of such class of Preferred Units,
as may be determined by the Manager at its sole discretion pursuant to the General
Preferred Unit Terms;
“Statement of Holdings” shall have the meaning ascribed to it in paragraph 6.4 of this
Schedule 2; and
“Transfer Instrument” means the instrument of transfer, in such form as the Manager and
the Trustee may from time to time approve, to be signed by the transferor and transferee
and delivered to the Manager at its registered office for the purposes of effecting a transfer
of Preferred Units of the relevant class.
For the purposes of this Schedule 2, capitalised terms not specifically defined in this
paragraph 1.1 shall have the meanings ascribed to them in Clause 1.1 of this Deed.
1.2 Miscellaneous Construction
Words importing the singular number only shall include the plural and vice versa; words
importing the masculine gender only shall include the feminine and neuter genders and
vice versa; words importing persons include corporations; the words “written” or “in
writing” include printing, engraving, lithography, or other means of visible reproduction or
partly one and partly the other. References to “Clauses” and the “Schedule” are to be
construed as references to the clauses of and the schedule to this Deed. The word
“including” or “includes” means, depending on the context, “including but not limited to” or
“including without limitation”.
1.3 Headings
The headings in this Schedule 2 are for convenience only and shall not affect the
construction hereof.
2. Issue of Preferred Units
2.1 General
2.1.1 Subject to the provisions of this Deed and any Relevant Laws, Regulations and
Guidelines, the Manager shall have the exclusive right to effect for the account of
the Trust the issue of Preferred Units (whether on an initial issue of Units, a rights
issue, an issue of new Units otherwise than by way of a rights issue or otherwise)
from time to time, in one or more classes, to any person(s) (including, without
limitation, itself and/or its Related Parties) with the prior approval of Holders by way
of an Ordinary Resolution at a meeting of Holders.
A-19
2.1.2 The Preferred Units of each class shall be issued in accordance with the Preferred
Unit Terms relating to such class of Preferred Units, provided that the Preferred
Units of each class shall have the key characteristics set out in paragraph 2.1.3
below.
2.1.3 The Preferred Units of each class:
(i) shall, in respect of the entitlement to participate in the distributions of the Trust,
rank:
(a) junior to all securities, ownership interests and obligations of the Trust
that are expressed to rank senior to the Preferred Units of such class;
(b) pari passu with (1) each other and (2) all securities, ownership interests
and obligations of the Trust that are expressed to rank pari passu with the
Preferred Units of such class; and
(c) senior to the Units;
(ii) shall, in respect of the entitlement to participate in the Deposited Property in
the event of any dissolution or winding up of the Trust (other than pursuant to
a Permitted Reorganisation), rank:
(a) junior to (1) all debt (including subordinated debt) of the Trust, and (2) all
securities, ownership interests and obligations of the Trust that are
expressed to rank senior to the Preferred Units of such class;
(b) pari passu with (1) each other and (2) all securities, ownership interests
and obligations of the Trust that are expressed to rank pari passu with the
Preferred Units of such class; and
(c) senior to the Units;
(iii) shall have no voting rights attached to them in respect of voting at meetings of
Holders save in the following circumstances:
(a) during such period as the distributions so declared in respect of the
Preferred Units of such class or any part thereof remains in arrears and
unpaid for at least 12 months after the date when distributions in respect
of the Preferred Units of that class should otherwise have been paid if
declared by the Manager;
(b) in respect of any resolution which varies or abrogates any right,
preference or privilege of the Preferred Units of such class (including,
without limitation, the authorisation, creation or issue of any securities,
ownership interests or obligations of the Trust ranking senior to or pari
passu the Preferred Units of such class as to the entitlement to
participate in the distributions of the Trust and/or (in the event of any
dissolution or winding up of the Trust) the Deposited Property); or
(c) in respect of any resolution for the dissolution or winding up of the Trust;
A-20
(iv) shall entitle the Preferred Unitholders of such class to receive Preferred
Distributions which may be cumulative or non-cumulative, if the Manager
elects at its sole discretion to declare such Preferred Distributions;
(v) may restrict the declaration of distributions in respect of the Units or return of
capital to Unitholders in the event that the Preferred Distributions in respect of
any Preferred Distribution Period are not declared in full, or may not have any
such restrictions;
(vi) may be perpetual or have a fixed term;
(vii) may be Listed or Unlisted;
(viii) may be freely redeemable, in full or in part, at the option of the Manager and/or
the relevant Preferred Unitholders, may be subject to restrictions on
redemption, or may not be redeemable at all;
(ix) may be freely convertible, in full or in part, into Units at the option of the
Manager and/or the relevant Preferred Unitholders, may be subject to
restrictions on conversion, or may not be convertible at all; and
(x) may be freely transferable, may be subject to restrictions on transfer, or may
not be redeemable at all,
and where relevant, the specific terms relating to such key characteristics shall be
separately determined in respect of each class of Preferred Units.
2.1.4 Without prejudice to the foregoing, subject to any Relevant Laws, Regulations and
Guidelines, in relation to any class of Preferred Units which are convertible into
Units, the Manager has the full power and authority to issue Units pursuant to a
conversion of one or more of the relevant Preferred Unit(s) in accordance with the
Preferred Unit Terms relating to such class of Preferred Units.
2.2 Issue Price
The issue price of a Preferred Unit in each class of Preferred Units shall be separately
determined in respect of the relevant class of Preferred Units.
2.3 No Fractions
No fractions of a Preferred Unit shall be issued (whether on an initial issue of Preferred
Units, a rights issue, an issue of new Preferred Units otherwise than by way of a rights issue
or otherwise) or, where applicable, redeemed or converted. In issuing the number of
Preferred Units as corresponding to the relevant subscription proceeds (if any), the
Manager shall, in respect of each Preferred Unitholder’s entitlement to the Preferred Units,
round down to the nearest whole Preferred Unit and any balance arising from rounding
down shall be retained as part of the Deposited Property. In redeeming or converting any
Preferred Units, the Manager shall, at its sole discretion, be entitled to round up or down
any fractional Preferred Units to the nearest whole number or to disregard such fractions.
A-21
3. Binding Effect of this Deed and the Preferred Unit Terms
3.1 The General Preferred Unit Terms, which shall comprise the provisions of this Schedule 2
(read with the other provisions of this Deed, to the extent applicable and not inconsistent,
in which case the express provisions contained in this Schedule 2 shall prevail) shall,
together with the Specific Preferred Unit Terms relating to the relevant class of Preferred
Units, set out all the terms governing the relevant class of Preferred Units and shall be
binding on each Preferred Unitholder of such class. In the event and to the extent of any
conflict or inconsistency between the provisions expressly contained in this Schedule 2
(read with the other provisions of this deed as aforementioned) and the Specific Preferred
Unit Terms, the latter shall prevail.
3.2 A copy of the Preferred Unit Terms (including any modifications and/or supplements
thereto) will be made available for inspection, together with a copy of this Deed, at the
respective registered offices of the Trustee and the Manager at all times during usual
Business Hours.
4. Length of Term
The term of the Preferred Units of each class shall be separately determined in respect of
the relevant class of Preferred Units.
5. Listing
The Preferred Units of each class may be Listed or Unlisted. Any listing of the Preferred
Units of the relevant class (and the terms and conditions relating to such listing, if any) shall
be separately determined in respect of each class of Preferred Units.
6. No Certificates
6.1 No certificate shall be issued to the Preferred Unitholders by either the Manager or the
Trustee in respect of any class of Preferred Units (whether Listed or Unlisted) issued to the
Preferred Unitholders. Where the Preferred Units of the relevant class are Listed on the
SGX-ST, the Manager and the Trustee shall, pursuant to the Depository Services Terms and
Conditions, appoint the Depository as the Preferred Units depository for the Trust, and all
Preferred Units issued will be deposited with the Depository and represented by entries in
the Register of Preferred Unitholders in the name of the Depository as the registered
Preferred Unitholder thereof.
6.2 Where the Preferred Units of the relevant class are Listed on the SGX-ST, the Manager, or
the Agent appointed by the Manager, shall issue to the Depository, not more than 10
Business Days after the issue of the Preferred Units, a confirmation note confirming their
holdings of such Preferred Units (it being understood that such confirmation note shall
prima facie be deemed to be a certificate evidencing title to the Units issued to or held by
the Depository).
6.3 Where the Preferred Units of the relevant class are Listed on the SGX-ST and registered
in the Register of Preferred Unitholders in the name of, and deposited with, the Depository
as the registered Preferred Unitholder, the Manager will endeavour to ensure that the
Depository will, within the relevant periods, issue to each Preferred Unit Depositor of the
relevant class of Preferred Units the relevant confirmation notes, monthly statements and
statements of account on account of transactions in Preferred Units of such class
completed in respect of the relevant Preferred Unit Depositor’s Securities Account.
A-22
6.4 Where the Preferred Units of the relevant class are Unlisted, the Manager or the Agent
appointed by the Manager shall (i) issue to each Preferred Unitholder of that class not more
than one month after the allotment of any such class of Preferred Units a confirmation note
confirming the allotment, such confirmation note shall prima facie be deemed to be a
certificate evidencing title to the Preferred Units issued; and (ii) issue to each Preferred
Unitholder, on a calendar quarterly basis (or such other period as may be agreed between
the Manager and the Trustee), a statement of holdings relating to the Preferred Units
(“Statement of Holdings”). A Statement of Holdings in respect of the Preferred Units of the
relevant class shall:
(i) be dated and specify the number of Preferred Units of that class held by each
Preferred Unitholder of that relevant class in respect of the preceding quarter (or such
other relevant period) and the transactions in respect of the Preferred Units of the
relevant class, and
(ii) be in such form as may from time to time be agreed between the Manager and the
Trustee.
7. Record of Preferred Unitholders
7.1 Registrar
The Trustee may, with the approval of the Manager, at any time and from time to time
appoint the Registrar on its behalf to keep and maintain the Register of Preferred
Unitholders. The fees and expenses of the Registrar (as may be agreed from time to time
between the Manager, the Trustee and the Registrar) shall be payable out of the Deposited
Property.
7.2 Register of Preferred Unitholders
All Preferred Units issued or held from time to time by any person as a Preferred Unitholder
will be represented by entries in an up-to-date Register of Preferred Unitholders kept in
Singapore by the Trustee or the Registrar in accordance with the Relevant Laws,
Regulations and Guidelines. The Register of Preferred Unitholders must be maintained at
all times whether the Preferred Units are Listed or Unlisted. The Trustee or the Registrar
shall record each Preferred Unitholder as the registered holder of Preferred Units held by
such Preferred Unitholder.
7.3 Information in the Register of Preferred UnithoIders
There shall be entered in the Register of Preferred Unitholders, in respect of each person
who becomes a Preferred Unitholder or who has ceased to be a Preferred Unitholder, the
following information as soon as practicable after the Trustee or the Registrar receives the
following relevant information:
(i) the names and addresses of the Preferred Unitholders;
(ii) the number of Preferred Units of each class held by each Preferred Unitholder;
(iii) the date on which every such person entered in respect of the Preferred Units standing
in his name became a Preferred Unitholder and where he became a Preferred
Unitholder by virtue of an instrument of transfer a sufficient reference to enable the
name and address of the transferor to be identified;
A-23
(iv) the date on which any transfer is registered and the name and address of the
transferee; and
(v) (where applicable) the date on which any Preferred Units have been redeemed or
converted into Units.
7.4 Discrepancies
The entries in the Register of Preferred Unitholders shall (save in the case of manifest
error) be conclusive evidence of the number of Preferred Units held by each Preferred
Unitholder and, in the event of any discrepancy between the entries in the Register of
Preferred Unitholders and the details appearing on any confirmation note issued to the
Preferred Unitholder, the entries in the Register of Preferred Unitholders shall prevail
unless the Preferred Unitholder proves, to the satisfaction of the Manager and the Trustee,
that the Register of Preferred Unitholders is incorrect.
7.5 Change of Name or Address
Any change of name or address on the part of any Preferred Unitholder shall forthwith be
notified to the Manager in writing or in such other manner as the Manager may approve. If
the Manager is satisfied with the change in name or address and that all formalities as may
be required by the Manager have been complied with, the Manager shall notify the Trustee
or the Registrar of the same and the Trustee or the Registrar shall alter or cause to be
altered the Register of Preferred Unitholders accordingly.
7.6 Inspection of the Register of Preferred Unitholders
7.6.1 Except when the Register of Preferred UnithoIders is closed in accordance with
paragraph 7.7 of this Schedule 2, the Register of Preferred Unitholders shall during
Business Hours (subject to such reasonable restrictions as the Trustee may impose
but so that not less than two hours in each Business Day shall be allowed for
inspection) be open to the inspection of any Preferred Unitholder without charge.
7.6.2 If the Register of Preferred Unitholders is kept on magnetic tape or in accordance
with some mechanical or electrical system, the provisions of paragraph 7.6.1 above
may be satisfied by the production of legible evidence of the contents of the
Register of Preferred Unitholders.
7.7 Closure of the Register of Preferred Unitholders
Subject to the Relevant Laws, Regulations and Guidelines, the Register of Preferred
Unitholders may be closed at such times and for such periods as the Trustee may from time
to time determine, provided that the Register of Preferred Unitholders must not be closed
for more than 30 days in any one Year.
8. Preferred Units to be Held Free from Equities
A Preferred Unitholder entered in the Register of Preferred Unitholders as the registered
holder of Preferred Units shall be the only person recognised by the Trustee or by the
Manager as having any right, title or interest in or to the Preferred Units registered in his
name. The Manager may recognise the relevant Preferred Unitholder as absolute owner of
the Preferred Units and shall not be bound by any notice to the contrary or to take notice
of or to see to the execution of any trust, express, implied or constructive, save as herein
A-24
expressly provided or save as required by some court of competent jurisdiction to recognise
any trust or equity or other interest affecting the title to any Preferred Units. No notice of any
trust shall be entered on the Register of Preferred Unitholders.
9. Preferred Unit Joint Holders
Where Preferred Unit Joint Holders are registered as Preferred Unitholders, they are, for
the purposes of the administration of the Trust and not otherwise, deemed to hold the
relevant Preferred Units as joint holders, on the following conditions:
(i) except when otherwise required by the Listing Rules or any other Relevant Laws,
Regulations and Guidelines, the Manager is not bound to register more than three
persons as the Preferred Unit Joint Holders of the Preferred Units;
(ii) the Preferred Unit Joint Holders are jointly and severally liable in respect of all
payments, including payment of Tax, which ought to be made in respect of the
Preferred Units;
(iii) on the death of any one of the Preferred Unit Joint Holder and subject to any Relevant
Laws, Regulations and Guidelines, the survivor or survivors, upon producing such
evidence of death as the Manager or the Trustee may require, shall be the only person
or persons whom the Trustee and the Manager will recognise as having any title to the
Preferred Units, PROVIDED THAT where the sole survivor is a Minor, the Manager or
the Trustee shall act only on the requests, applications or instructions of the surviving
Minor after he attains the age of 18 years and shall not be obligated to act on the
requests, applications or instructions of the heirs, executors or administrators of the
deceased Preferred Unit Joint Holder, and shall not be liable for any claims or
demands whatsoever by the heirs, executors or administrators of the deceased
Preferred Unit Joint Holder, the Minor Preferred Unit Joint Holder or the Minor
Preferred Unit Joint Holder’s legal guardian in omitting to act on any request,
application or instruction given by any of them (in the case of the Minor, before he
attains the age of 18 years);
(iv) any one of the Preferred Unit Joint Holders may give an effective receipt which will
discharge the Trustee or the Manager in respect of any payment or distribution in
respect of the Preferred Units;
(v) the Preferred Unit Joint Holders of a Preferred Unit are counted as a single Preferred
Unitholder of the relevant Preferred Unit for the purposes of calculating the number of
Preferred Unitholders or requisitionists who have requisitioned for a meeting of
Unitholders; and
(vi) only the person whose name appears first in the Register of Preferred Unitholders as
one of the Preferred Unit Joint Holders is entitled to delivery of any notices, cheques
or communications from the Trustee or the Manager, and any notice, cheque or
communication given to that person is deemed to be given to all the Preferred Unit
Joint Holders.
10. Minors
10.1 A Minor shall not be registered as:
(i) a sole Preferred Unitholder; or
(ii) a Preferred Unit Joint-Alternate Holder.
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10.2 A Minor may be registered as a Preferred Unit Joint-All Holder if each of the other Preferred
Unit Joint-All Holders is a person who has attained the age of 18 years.
10.3 If one of the Preferred Unit Joint-All Holders is a Minor, the Manager and the Trustee need
only act on the instructions given by the other Preferred Unit Joint-All Holder or Preferred
Unit Joint-All Holders who has or have attained the age of 18 years.
11. Obligations of the Manager and the Trustee
Save as otherwise expressly provided in the Preferred Unit Terms relating to the relevant
class of Preferred Units, neither the Trustee nor the Manager owes any obligation to the
Preferred Unitholder other than the obligation to comply with the Preferred Unit Terms
relating to the relevant class of Preferred Units.
12. Rights, Benefits and Obligations of Preferred Unitholders
12.1 All rights, benefits and obligations contained in the Preferred Unit Terms relating to the
relevant class of Preferred Units shall apply for the benefit of and bind each relevant
Preferred Unitholder.
12.2 A Preferred Unitholder has no equitable or proprietary interest in the Deposited Property
and is not entitled to the transfer to it of the Deposited Property or any part of the Deposited
Property or of any estate or interest in the Deposited Property or any part of the Deposited
Property.
12.3 Save as otherwise expressly provided in the Preferred Unit Terms relating to the relevant
class of Preferred Units, a Preferred Unitholder has no other rights against the Trust, the
Trustee and/or the Manager other than the right to enforce the Preferred Unit Terms relating
to the relevant class of Preferred Units against the Trustee and/or the Manager and to enjoy
the benefits conferred on the Preferred Unitholder under the relevant Preferred Unit Terms
relating to such class of Preferred Units.
12.4 The rights and benefits of the Holders are subject to the Preferred Unit Terms relating to any
class of Preferred Units in issue from time to time. Where the interests of Preferred
Unitholders and Holders conflict, the Manager and the Trustee must prefer the interests of
the Preferred Unitholders.
13. No Further Liability
13.1 Save as otherwise expressly provided in the Preferred Unit Terms relating to the relevant
class of Preferred Units, the liability of each Preferred Unitholder in his capacity as such is
limited to the Preferred Unitholder’s investment in the Trust.
13.2 A Preferred Unitholder is not required to indemnify the Manager or the Trustee (or a creditor
of either or both of them) against any liability of the Trustee or the Manager in respect of
the Trust.
13.3 Nothing in or under this Deed makes either the Trustee or the Manager an agent of a
Preferred Unitholder.
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14. Preferred Distributions
14.1 Entitlement to Preferred Distributions
14.1.1 The Preferred Units of each class shall entitle the relevant Preferred Unitholders to
receive a Preferred Distribution in respect of each Preferred Distribution Period if
and only if the Manager elects to declare such Preferred Distribution pursuant to the
exercise of its discretion under paragraph 14.1.3 below. The terms and conditions
relating to the declaration and payment of Preferred Distributions in respect of the
Preferred Units of each class, including but not limited to:
(i) the nature of the Preferred Distribution (including, without limitation, whether
the Preferred Distributions are to be non-cumulative or cumulative);
(ii) the source of income from which the Preferred Distributions may be declared
(including, without limitation, whether the Preferred Distributions are to be
declared out of income derived from the Deposited Property);
(iii) the amount of Preferred Distributions which the relevant Preferred Unitholders
are entitled to receive; and
(iv) the frequencies of, and intervals between, payments of the Preferred
Distributions to the relevant Preferred Unitholders;
shall be separately determined in respect of each class of Preferred Units.
14.1.2 The Preferred Units of each class shall, in respect of the entitlement to participate
in the distributions of the Trust, rank:
(i) junior to all securities, ownership interests and obligations of the Trust that are
expressed to rank senior to the Preferred Units of the relevant class;
(ii) pari passu with (a) each other and (b) all securities, ownership interests and
obligations of the Trust that are expressed to rank pari passu with the
Preferred Units of the relevant class; and
(iii) senior to the Units.
14.1.3 Any decision regarding the declaration of any Preferred Distribution in respect of
any Preferred Distribution Period shall be at the sole and absolute discretion of the
Manager.
14.2 Distribution and Capital Stopper
The Preferred Unit Terms relating to each class of Preferred Units may restrict the
declaration of distributions in respect of the Units and/or return of capital to UnithoIders in
the event that any Preferred Distribution is not declared in full, or may not contain any such
restrictions. Any such restrictions which may be imposed (and the terms and conditions of
such restrictions, if any) shall be separately determined in respect of each class of
Preferred Units.
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14.3 Payment of Preferred Distribution
14.3.1 No Preferred Distribution or any part thereof shall become due or payable on any
such Preferred Distribution Date unless the Manager has declared or resolved to
pay the Preferred Distribution on that Preferred Distribution Date.
14.3.2 For the purpose of identifying the persons who are entitled to the Preferred
Distribution payable in respect of any Preferred Distribution Period, the persons
who are Preferred Unitholders on the record date for that Preferred Distribution
Period have an absolute, vested and indefeasible interest in the relevant Preferred
Distribution.
14.3.3 The Manager and the Trustee may retain from each Preferred Unitholder’s
Preferred Distribution all amounts which:
(i) equal any amount of Tax which has been paid or which the Manager
determines is or may be payable by the Trustee or the Manager in respect of
the portion of the income of the Trust attributable to such Preferred Unitholder
or the amount of the distribution otherwise distributable to such Preferred
Unitholder;
(ii) are required to be deducted by law, the Tax Ruling, this Deed and/or any other
Preferred Unit Terms relating to the relevant class of Preferred Units; or
(iii) are payable by the Preferred Unitholder to the Trustee or the Manager,
and the Manager must notify each Preferred Unitholder, following the end of each
Financial Year, of any amounts deducted under paragraphs 14.3.3(i) and 14.3.3(ii)
above.
14.4 Preferred Unitholder Notification
14.4.1 Each Preferred Unitholder must, as and when required by the Manager, provide
such information as to his place of residence for taxation purposes as the Manager
may from time to time determine.
14.4.2 The Trustee and the Manager shall be entitled to rely absolutely on any declaration
of tax residence which may be received from a Preferred Unitholder or applicant for
Preferred Units.
14.5 Tax Declaration Forms and Tax Distribution Vouchers
14.5.1 The Manager shall, where necessary before a Preferred Distribution is paid, issue
to a Preferred Unitholder a tax declaration form in a form approved by the Trustee
and/or the IRAS for the purpose of that Preferred Unitholder declaring his tax status.
14.5.2 The Manager and the Trustee may rely on any representation made by a Preferred
Unitholder as to his tax status made on each relevant tax declaration form returned
to the Manager (or its Agent) or the Trustee to determine whether or not to deduct
Tax from the Preferred Distribution which that Preferred Unitholder is entitled to
receive.
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14.5.3 If a Preferred Unitholder fails to make a declaration in time for a Preferred
Distribution, the Manager and the Trustee shall deduct the appropriate amount of
tax with respect to the Preferred Distribution which that Preferred Unitholder is
entitled to receive.
14.5.4 After a Preferred Distribution has been paid, the Trustee shall where necessary
issue to each Preferred Unitholder a tax distribution voucher prepared by the
Manager in a form approved by the Trustee and/or the IRAS.
14.5.5 In the case of any Preferred Distribution made or on termination of the Trust, each
tax distribution voucher shall show what proportion of the Preferred Distribution
represents capital, what proportion represents income exempt from Singapore
income tax or income subject to Singapore income tax and what proportion
represents the portion of any Tax payable by the Trustee on income and gains
attributable to the Preferred Unitholders.
14.6 No Further Rights to Participate in Distributions
Save as expressly set out in the Preferred Unit Terms relating to the relevant class of
Preferred Units, the Preferred Units shall not confer any right or claim as regards
participation in any distribution of the Trust.
15. Liquidation of the Trust
15.1 Ranking
15.1.1 In the event of the commencement of any dissolution or winding up of the Trust
(other than pursuant to a Permitted Reorganisation), the Preferred Units of each
class shall, in respect of participation in the Deposited Property, rank:
(i) junior to (a) all debt of the Trust (including, without limitation all amounts due
under Clause 26.5 of this Deed, all costs of the Trustee (including, but not
limited to, liabilities owed to any Preferred Unitholder or Unitholder who is a
creditor of the Trust) and all subordinated debt), and (b) all securities,
ownership interests and obligations of the Trust that are expressed to rank
senior to the Preferred Units;
(ii) pari passu with (a) each other and (b) all securities, ownership interests and
obligations of the Trust that are expressed to rank pari passu with the
Preferred Units; and
(iii) senior to the Units.
15.1.2 The Priority Amount which Preferred Unitholders are entitled to receive upon a
dissolution or winding up of the Trust shall be separately determined in respect of
each class of Preferred Units, provided that the Preferred Unitholders shall only be
entitled to receive such Priority Amounts only after the repayment and discharge of
the following:
(i) all debt of the Trust (including, without limitation all amounts due under Clause
26.5 of this Deed, all costs of the Trustee (including, but not limited to,
liabilities owed to any Preferred Unitholder or Unitholder who is a creditor of
the Trust) and all subordinated debt); and
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(ii) all other payments due to securities, ownership interests and obligations of the
Trust that are expressed to rank senior to the Preferred Units of the relevant
class.
15.2 Payment of Priority Amount
15.2.1 The Trustee may make a payment of the Priority Amount to any Preferred Unitholder
only if the relevant Preferred Unitholder delivers to the Manager any evidence of
title required by the Manager together with any form of receipt and discharge
required by the Trustee.
15.2.2 The Priority Amount may not be satisfied by a distribution in specie of the Deposited
Property to a Preferred Unitholder.
15.3 Deductions for Contingent Liabilities
The Trustee, at the direction of the Manager, may retain for as long as the Manager thinks
fit any part of the Priority Amounts which, in the Manager’s opinion, may be required to meet
any actual or contingent liability of the Trustee or the Manager or any amounts payable
actually or contingently to the Trustee or the Manager under this Deed, including but not
limited to under Clause 26.5 of this Deed.
15.4 Pro Rata Entitlement
If, upon any such dissolution or winding up of the Trust, the amount available for payment
of the Priority Amounts of the Preferred Unitholders of the relevant class of Preferred Units
is insufficient to fully satisfy the entire sum of Priority Amounts of all the Preferred
Unitholders of such class of Preferred Units, each Preferred Unitholder of such class shall
be entitled to recover such proportion of his Priority Amount calculated based on the
proportion of the amount of the Preferred Unitholder’s entitlement relative to the total
amount of all entitlements of the holders of all securities, ownership interests and
obligations of the Trust which rank pari passu with the Preferred Units of the relevant class.
15.5 No Further Rights to Participate in the Deposited Property
Save as expressly set out in the Preferred Unit Terms relating to the relevant class of
Preferred Units, the Preferred Units shall not confer any right or claim in respect of
participation in the Deposited Property.
16. Redemption of Preferred Units
16.1 Redemption Right and Procedures
The Preferred Units of each class may be redeemable, in full or in part, at the option of the
Manager and/or the relevant Preferred Unitholders, subject to restrictions on redemption, if
any, or may not be redeemable at all. Any entitlement of the Manager and/or the relevant
Preferred Unitholder to redeem any class of Preferred Units (and the terms and conditions
of such entitlement and the procedure for exercising the right of redemption, if any) shall be
separately determined in respect of each class of Preferred Units, provided that the other
provisions of this paragraph 16 shall apply in the event that the Preferred Units of the
relevant class are redeemable.
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16.2 Cancellation of Redeemed Preferred Units
16.2.1 Any Preferred Units properly redeemed in accordance with the Preferred Unit Terms
relating to the relevant class of Preferred Units shall be cancelled.
16.2.2 Where only a part of the Preferred Units held by a Preferred Unitholder has been
redeemed, a new confirmation note reflecting the remaining number of Preferred
Units held by the Preferred Unitholder shall be issued by the Manager, or the Agent
appointed by the Manager and the provisions of paragraph 6.2 (or paragraph 6.4,
as the case may be) above shall mutatis mutandis apply.
16.2.3 The Trustee shall remove or procure the removal of the name of the Preferred
Unitholder from the Register of Preferred Unitholders in respect of such number of
Preferred Units of each class redeemed, upon the delivery to the Trustee of a
written statement signed by or on behalf of the Manager that such specified number
of Preferred Units of each class held by such Preferred Unitholder have been
redeemed.
17. Conversion of Preferred Units into Units
17.1 Conversion Right and Procedures
The Preferred Units of each class may be convertible, in full or in part, into Units at the
option of the Manager and/or the relevant Preferred Unitholders, subject to restrictions on
conversion, if any, or may not be convertible at all. Any entitlement of the Manager and/or
the relevant Preferred Unitholder to convert any class of Preferred Units into Units (and the
terms and conditions of such entitlement and the procedure for exercising the right of
conversion, if any) shall be separately determined in respect of each class of Preferred
Units, provided that the other provisions of this paragraph 17 shall apply in the event that
the Preferred Units of the relevant class are convertible into Units.
17.2 Taxes and Duties
17.2.1 The relevant Preferred Unitholder must pay directly to the relevant authorities any
Preferred Unit Conversion Taxes, comprising Taxes and capital, stamp, issue and
registration duties (i) arising on conversion of the Preferred Units of the relevant
class (other than any Taxes or capital or stamp duties payable in Singapore and, if
relevant, in the place of the Recognised Stock Exchange, by the Manager and/or
the Trust (as the case may be) in respect of the allotment and issue of Units and
listing of the Units on the SGX-ST or a Recognised Stock Exchange on conversion)
or (ii) arising by reference to any disposal or deemed disposal of a Preferred Unit
of the relevant class in connection with such conversion.
17.2.2 The relevant Preferred Unitholder shall provide an acknowledgement in the
Conversion Notice that it shall be responsible for paying all relevant Preferred Unit
Conversion Taxes.
17.2.3 Neither the Trustee nor the Manager shall be responsible or liable in any way to
anyone for any failure or omission by the relevant Preferred Unitholders to pay the
Preferred Unit Conversion Taxes.
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17.3 Registration of Conversion
17.3.1 For so long as the Preferred Units of any class are Unlisted, a conversion of the
Preferred Units of the relevant class and corresponding issue of Units shall be in
accordance with such procedures to be separately determined in respect of each
such class of Preferred Units.
17.3.2 The Manager will upon the conversion of the Preferred Units of the relevant class
into Units pursuant to the exercise of the Conversion Right:
(i) allot and issue the relevant number of Units for credit to the Securities Account
designated for the purpose in the Conversion Notice for so long as the Units
are Listed on the SGX-ST; or if the Units are not Listed on the SGX-ST, allot
and issue the relevant number of Units to the person or persons designated for
the purpose in the Conversion Notice;
(ii) (for so long as the Units are Listed on the SGX-ST) issue or cause to be issued
to the Depository a confirmation note confirming the allotment of Units in
accordance with this Deed, and the Depository shall issue to each relevant
Depositor such contract statements, confirmation notes, statements of
accounts balances and statements of transactions and accounts balances,
and at such intervals, as may be provided for in the Depository’s terms and
conditions for operation of Securities Accounts;
(iii) (if the Units are not Listed on the SGX-ST) issue or cause to be issued to the
person or persons designated for the purpose in the Conversion Notice a
confirmation note confirming the allotment of Units in accordance with this
Deed;
(iv) (where only a part of the Preferred Units of the relevant class held by the
relevant Preferred Unitholder have been converted and the Preferred Units of
the relevant class are Listed on the SGX-ST) issue or cause to be issued to the
Depository a new confirmation note reflecting the remaining number of
Preferred Units of the relevant class held by the Depository and the provisions
of paragraph 6.2 of this Schedule 2 shall mutatis mutandis apply; and
(v) (where only a part of the Preferred Units of the relevant class held by the
relevant Preferred Unitholder have been converted and the Preferred Units of
the relevant class are Unlisted) issue or cause to be issued to the Preferred
Unitholder a new confirmation note reflecting the remaining number of
Preferred Units of the relevant class held by the Preferred Unitholder and the
provisions of paragraph 6.4 of this Schedule 2 shall mutatis mutandis apply.
17.3.3 The Trustee shall, upon the conversion of the Preferred Units of the relevant class
into Units pursuant to the exercise of the Conversion Right, remove or procure the
removal of the name of the relevant Preferred Unitholder from the Register of
Preferred UnithoIders as holder in respect of all or (as the case may be) such
number of Preferred Units converted, and register or procure the registration of the
Depository or the person or persons designated for the purpose in the Conversion
Notice (as the case may be) in the Register as holder(s) in respect of the relevant
number of Units allotted and issued pursuant to the conversion, upon the delivery
to the Trustee of a written statement signed by or on behalf of the Manager stating
that all or (as the case may be) a specified number of Preferred Units of the relevant
class held by such Preferred Unitholder have been converted and the relevant
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number of Units have been allotted and issued in the name of the Depository or the
person or persons designated for the purpose in the Conversion Notice (as the case
may be).
17.3.4 The person or persons designated in the Conversion Notice shall become the
holder(s) on record of the number of Units issuable upon conversion with effect from
the Registration Date, being (i) where the Units are Listed on the SGX-ST, the date
the relevant Units are credited to their respective accounts with the Depository or (ii)
where the Units are Unlisted, the date of registration of such person or persons as
holders in the Register.
18. Payment of Moneys to Preferred Unitholders
18.1 Place and Conditions of Payment
18.1.1 Save as otherwise expressly provided in the Preferred Unit Terms relating to the
relevant class of Preferred Units, any moneys payable by the Trustee or the
Manager to any Preferred Unitholder under the provisions of the Preferred Unit
Terms relating to the relevant class of Preferred Units shall be paid by cheque sent
through the post to the registered address of such Preferred Unitholder or, in the
case of Preferred Unit Joint Holders, to the registered address of the Preferred Unit
Joint Holders who is first named in the Register of Preferred Unitholders or to the
registered address of any other of the Preferred Unit Joint Holders as may be
authorised by all of them. Every such cheque shall be made payable to the order of
the person to whom it is delivered or sent and payment of the cheque by the banker
upon whom it is drawn shall be a satisfaction of the moneys payable and shall be
a good discharge to the Trustee or the Manager (as the case may be).
18.1.2 Where the Trustee or Manager (as the case may be) receives the necessary
authority in such form as the Trustee or Manager (as the case may be) shall
consider sufficient, the Trustee or Manager (as the case may be) shall pay the
amount due to any Preferred Unitholder to his bankers or other agent and the
receipt of such an amount by such bankers or other agent shall be a good discharge
therefor.
18.1.3 No amount payable to any Preferred Unitholder shall bear interest.
18.1.4 Unless otherwise expressly provided in the Preferred Unit Terms relating to the
relevant class of Preferred Units, all moneys payable by the Trustee or the Manager
to any Preferred Unitholder under the provisions of the Preferred Unit Terms relating
to the relevant class of Preferred Units shall be paid in Singapore dollars.
18.2 Deductions
18.2.1 Without prejudice to any other provisions of the Preferred Unit Terms relating to the
relevant class of Preferred Units, before any payment is made to a Preferred
Unitholder, there shall be deducted such amounts as any law of Singapore or any
law of any other country in which such payment is made may require or allow in
respect of any income or other Taxes, charges or assessments whatsoever and
there may also be deducted the amount of any stamp duties or other government
taxes or charges payable by the Manager or (as the case may be) the Trustee for
which the Manager or (as the case may be) the Trustee may be made liable in
respect of or in connection therewith.
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18.2.2 Neither the Manager nor the Trustee shall be liable to account to a Preferred
Unitholder for any payment made or suffered to be made by the Manager or (as the
case may be) the Trustee in good faith and in the absence of fraud, gross
negligence, wilful default or a breach of this Deed or a breach of trust to any duly
empowered fiscal authority of Singapore or elsewhere for Taxes or other charges in
any way arising out of or relating to any transaction of whatsoever nature under this
Deed notwithstanding that any such payments ought not to be, or need not have
been, made or suffered to be made.
18.3 Receipt of Preferred Unitholders
The receipt of the Preferred Unitholder for any amounts payable in respect of the Preferred
Units shall be a good and absolute discharge to the Manager or (as the case may be) the
Trustee and if several persons are registered as Preferred Unit Joint Holders, or in
consequence of the death of a Preferred Unitholder, are entitled to be so registered, any
one of them may give effective receipts for any such amounts.
18.4 Unclaimed Moneys
18.4.1 Any moneys payable to a Preferred Unitholder under the provisions of the Preferred
Unit Terms relating to the relevant class of Preferred Units which remain unclaimed
after a period of 12 months shall be accumulated in the Unclaimed Moneys Account
from which the Trustee may, from time to time, make payments to a Preferred
Unitholder claiming any such moneys.
18.4.2 Subject to Clause 26 of this Deed and the Preferred Unit Terms relating to the
relevant class of Preferred Units, the Trustee shall cause such sums which
represent moneys remaining in the Unclaimed Moneys Account for five years after
the date of payment of such moneys into the Unclaimed Moneys Account and
interest, if any, earned thereon to be paid into court after deducting from such sums
all fees, costs and expenses incurred in relation to the payment into court
PROVIDED THAT if the moneys are insufficient to meet all such costs, the Trustee
shall be entitled to have recourse to the Deposited Property.
19. Provision of Annual Report
The Manager shall, after the Listing Date, send to Preferred Unitholders within such period
as may be prescribed under this Deed for despatch to Holders, an annual report disclosing
the matters set out in the Property Funds Appendix, the Listing Rules and any other matters
as may be prescribed by the relevant authorities.
20. Provision of Accounts
The Trustee shall send or cause to be sent to Preferred Unitholders, once a year (and within
such period as may be prescribed under this Deed for despatch to Holders) after the end
of the period to which they relate) together with the relevant annual report, Accounts which
contain such information as may be prescribed under the Property Funds Appendix, where
applicable, and such other information as the Manager may from time to time determine.
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21. Meetings and Voting Rights
21.1 Meetings of Unitholders
The Preferred Unitholders of each class of Preferred Units shall not be entitled to attend
and vote at meetings of Holders except in the following circumstances:
(i) during such period as the Preferred Distribution in respect of the Preferred Units of the
relevant class so declared or any part thereof remains in arrears and unpaid for at
least 12 months after the relevant Preferred Distribution Date when the Preferred
Distribution should otherwise have been paid if declared by the Manager;
(ii) in respect of any resolution which varies or abrogates any right, preference or privilege
of the Preferred Units of the relevant class (including, without limitation, the
authorisation, creation or issue of any securities, ownership interests or obligations of
the Trust ranking senior to (but excluding, for purposes of this paragraph 21.1 only,
those ranking pari passu with) the Preferred Units of the relevant class in respect of
the entitlement to participate in the distributions of the Trust and/or (in the event of any
dissolution or winding up of the Trust) the Deposited Property); or
(iii) in respect of any resolution for the dissolution or winding up of the Trust,
and every Preferred Unitholder who is present in person at such general meetings shall
have on a show of hands, one vote and on a poll, one vote for every Preferred Unit of which
he is the holder.
21.2 Meetings of Preferred Unitholders
21.2.1 The Preferred Unitholders of each class of Preferred Units shall be entitled to attend
and vote at meetings of the relevant class of Preferred Unitholders. The provisions
set out in Schedule 1 of this Deed shall mutatis mutandis apply to any meeting of
the Preferred Unitholders, provided that such provisions shall be read with and (in
the event of any inconsistency) amended, only to the extent of such inconsistency,
or supplemented by the provisions set out in paragraphs 21.3, 21.4, 21.5, 21.6 and
21.7 below.
21.2.2 A resolution passed at a meeting of Preferred Unitholders of each class of Preferred
Units is binding on all Preferred Unitholders of such class of Preferred Units.
21.3 Convening Meetings
21.3.1 A meeting of the Preferred Unitholders of each class of Preferred Units may be
convened at the request in writing of not less than 50 Preferred Unitholders of each
class of Preferred Units or such number of Preferred Unitholders of such class of
Preferred Units representing not less than 10 per cent. of the issued Preferred Units
of such class.
21.3.2 A meeting of Preferred UnithoIders of each class of Preferred Units duly convened
and held in accordance with the provisions of this paragraph 21 shall be competent
by Extraordinary Resolution to make any decision which is stated in the Preferred
Unit Terms relating to the relevant class of Preferred Units as requiring the consent
of the Preferred Unitholders of the relevant class of Preferred Units by way of an
Extraordinary Resolution, and shall have such further or other powers under such
terms and conditions as may be determined by the Manager with the prior written
approval of the Trustee.
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21.4 Notice of Meetings of Preferred Unitholders of the Relevant Class
The Trustee or the Manager shall cause a notice of any meeting at which any Preferred
Unitholder of the relevant class is entitled to vote, and any voting forms, to be mailed to
each Preferred Unitholder of the relevant class in accordance with paragraph 24 of this
Schedule 2.
21.5 Quorum
Save in the event where one Preferred Unitholder of the relevant class of Preferred Units
holds all the Preferred Units of such class in issue, the quorum for any meeting of Preferred
Unitholders of each class of Preferred Units shall not be less than two Preferred Unitholders
of such class of Preferred Units (whether present in person or by proxy), provided that the
quorum at a meeting of Preferred Unitholders of each class of Preferred Units to approve
any variation or abrogation of the rights, preferences or privileges of the Preferred Units of
the relevant class shall be such number of Preferred UnithoIders of such class of Preferred
Units holding or representing not less than two-thirds of the outstanding number of
Preferred Units of such class.
21.6 Voting
A poll may be demanded by such number of Preferred Unitholders of the relevant class of
Preferred Units present at the meeting (in person or by proxy) and having the right to vote
on the resolution, holding not less than one-tenth in value of the Preferred Units of such
class in issue.
21.7 Resolutions
A resolution in writing signed by or on behalf of at least 75 per cent. of the Preferred
Unitholders of the relevant class of Preferred Units for the time being entitled to receive
notice of any meeting of Preferred Unitholders of such class of Preferred Units shall be as
valid and effectual as a resolution (including an Extraordinary Resolution) passed at a
meeting of those Preferred Unitholders duly called and constituted. Such resolution may be
contained in one document or in several documents in the like form each signed by or on
behalf of one or more of the Preferred Unitholders concerned.
22. Variations of Right
22.1 Subject to paragraph 22.2 below, unless otherwise required by the Relevant Laws,
Regulations and Guidelines, any variation or abrogation of the rights, preferences or
privileges of the Preferred Units of any class (including, without limitation, the authorisation,
creation or issue of any securities, ownership interests or obligations of the Trust ranking
pari passu with or senior to the Preferred Units of the relevant class as to the entitlement
to participate in the distributions of the Trust and/or (in the event of any dissolution or
winding up of the Trust) the Deposited Property) by way of amendment of this Deed, the
Preferred Unit Terms relating to such class of Preferred Units or otherwise shall require:
(i) the consent in writing of such number of Preferred Unitholders of the relevant class of
Preferred Units holding an aggregate of at least 75 per cent. of the outstanding
number of Preferred Units of the relevant class; or
(ii) the sanction of an Extraordinary Resolution passed at a separate meeting of the
relevant Preferred Unitholders.
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22.2 No consent or sanction of the Preferred Unitholders of the relevant class of Preferred Units
shall be required in respect of any variation or abrogation of the rights, preferences or
privileges of such class of Preferred Units if such variation or abrogation is.
(i) necessary in order to comply with applicable fiscal, statutory or official requirements
(whether or not having the force of law), including, without limitation, requirements
under the Relevant Laws, Regulations and Guidelines; or
(ii) made to correct a manifest error.
22.3 For the avoidance of doubt, the authorisation, creation or issue of further Units or other
securities, ownership interests or obligations of the Trust ranking junior to the Preferred
Units of the relevant class in respect of the entitlement to participate in the distributions of
the Trust and/or (in the event of any dissolution or winding up of the Trust) the Deposited
Property shall not be deemed to be a variation or abrogation of the rights, preferences or
privileges of such class of Preferred Units.
23. Transfer of Preferred Units
23.1 The Preferred Units of each class may be freely transferable, may be subject to restrictions
on transfer or may not be transferable at all. The transferability of any class of Preferred
Units (and the terms and conditions of such transfer, if any) shall be separately determined
in respect of each class of Preferred Units, provided that the other provisions of this
paragraph 23 shall apply if the Preferred Units of the relevant class are determined to be
transferable. In any case of transfer, all charges in relation to any transfer as may be
imposed by the Manager and/or the Depository shall be borne by the Preferred Unitholder
of the relevant class or (as the case may be) the Preferred Unit Depositor who is the
transferor.
23.2 For so long as the Preferred Units of the relevant class are Unlisted, the following
provisions shall apply to a transfer of any Preferred Units of such class:
23.2.1 Any Preferred Unitholder of the relevant class of Preferred Units who wishes to
transfer any of his Preferred Units of such class shall issue and deliver a Transfer
Instrument to the Manager at its registered office duly signed by the transferor and
transferee.
23.2.2 The Transfer Instrument shall be in such form as the Manager and the Trustee may
from time to time approve, and shall specify the number of Preferred Units of the
relevant class to be transferred and the name of the transferee.
23.2.3 The Transfer Instrument must be duly stamped (if required by law) and left with the
Manager for registration accompanied by:
(i) any necessary declarations or other documents that may be required by in
consequence of any Relevant Laws, Regulations and Guidelines for the time
being in force and by such evidence as the Manager may require to prove the
title of the transferor or his right to transfer the Preferred Units, and
(ii) the relevant confirmation note representing the Preferred Units to be
transferred.
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23.2.4 No notice of transfer or purported transfer shall be entered on the Register of
Preferred Unitholders, and no transfer or purported transfer of a Preferred Unit of
the relevant class shall entitle the transferee to be registered as a Preferred
Unitholder of such class of Preferred Units, unless the transfer has been properly
effected in accordance with the Preferred Unit Terms relating to such class of
Preferred Units.
23.2.5 Following the delivery of the notice, the Manager or the Agent appointed by the
Manager shall, in accordance with paragraph 6.4, issue to the transferee a
confirmation note confirming the number of Preferred Units of such class held by it
and, where the transferor has transferred only a part of the Preferred Units of the
relevant class held by it, issue to the transferor a confirmation note confirming the
remaining number of Preferred Units of such class held by it upon completion of the
transfer.
23.2.6 The Trustee shall remove or procure the removal of the name of the transferor from
the Register of Preferred Unitholders in respect of all or (as the case may be) such
number of Preferred Units of the relevant class transferred, upon the delivery to the
Trustee of a written statement signed by or on behalf of the Manager that all the
Preferred Units or a specified number of Preferred Units held by such transferor
have been transferred, and shall register the name of the transferee in respect of
such number of Preferred Units of the relevant class as may be transferred to it
pursuant to the transfer.
23.3 For so long as the Preferred Units of the relevant class are Listed on the SGX-ST, the
following provisions shall apply to a transfer of any Preferred Units of such class:
23.3.1 Any transfer shall be subject to compliance with the Relevant Laws, Regulations
and Guidelines.
23.3.2 Transfers of the Preferred Units of the relevant class between the Preferred Unit
Depositors shall be effected electronically through the Depository making an
appropriate entry in the Preferred Unit Depository Register in respect of the
Preferred Units of the relevant class that have been transferred in accordance with
the Depository Requirements and the provisions of paragraph 23.2 shall not apply.
23.3.3 The Manager shall be entitled to appoint the Depository to facilitate transactions of
the Preferred Units of the relevant class within the Depository and maintain records
of Preferred Unitholders of that class credited into Securities Accounts and to pay
out of the Deposited Property all fees, costs and expenses of the Depository arising
out of or in connection with such services to be provided by the Depository.
23.3.4 Any transfer or dealing in the Preferred Units of the relevant class on the SGX-ST
between a Preferred Unit Depositor and another person shall be transacted at a
price agreed between the parties and settled in accordance with the Depository
Requirements.
23.3.5 The broker or other financial intermediary effecting any transfer or dealing in
Preferred Units of the relevant class on the SGX-ST between a Preferred Unit
Depositor and another person shall be deemed to be the agent duly authorised by
any such Preferred Unit Depositor or person on whose behalf the broker or
intermediary is acting.
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23.3.6 In any case of transfer, all charges in relation to such transfer as may be imposed
by the Manager and/or the Depository shall be borne by the Preferred Unit
Depositor who is the transferor.
23.3.7 In the case of a transfer of the Preferred Units of the relevant class from a Securities
Account into another Securities Account, the instrument of transfer (if applicable)
shall be in such form as provided by the Depository and the transferor shall be
deemed to remain the Preferred Unit Depositor of the Preferred Units of the relevant
class transferred until the relevant Preferred Units have been credited into the
Securities Account of the transferee or transferred out of a Securities Account and
registered in the Preferred Unit Depository Register.
23.3.8 No transfer or purported transfer of a Preferred Unit Listed on the SGX-ST other
than a transfer made in accordance with this paragraph 23.3 (or such other
procedures as may be separately determined in respect of the relevant class of
Preferred Units) shall entitle the transferee to be registered in respect thereof.
23.4 If the Preferred Units of the relevant class are Listed on any other Recognised Stock
Exchange, the transfer of the Preferred Units of that class shall be in accordance with the
requirements of the relevant Recognised Stock Exchange.
23.5 Successors in Title
The successor in title of any Preferred Unitholder resulting from a merger or amalgamation
shall, upon producing such evidence as may be required by the Manager and the Trustee
of the succession, be the only person recognised by the Trustee and the Manager as having
title to the relevant Preferred Units.
24. Delivery of Documents and Notices
The provisions of Clause 27 of this Deed shall mutatis mutandis apply to any notice or other
document served by the Trustee or the Manager upon any Preferred Unitholder, or vice
versa, and the service of any such notices or other documents to the relevant recipient.
25. Destruction of Documents
Subject to any Relevant Laws, Regulations and Guidelines, the Trustee (or the Manager or
its Agents with the approval of the Trustee) shall (subject as hereinafter provided) be
entitled to destroy:
(i) all distribution mandates which have been cancelled or lapsed at any time after the
expiration of six years from the date of cancellation or lapse;
(ii) all notifications of change of address after the expiration of one year from the date of
the recording of the notification;
(iii) all forms of proxy in respect of any meeting of Preferred Unitholders of each class of
Preferred Units, one year from the date of such meeting in respect of which the proxy
was given; and
(iv) the Register of Preferred Unitholders, statements and other records and documents
relating to the Trust at any time after the expiration of six years from the date of
termination of the Trust,
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and neither the Trustee nor the Manager nor its Agents shall be under any liability
whatsoever in consequence thereof and unless the contrary be proved every document so
destroyed shall be deemed to have been a valid and effective instrument in accordance with
the recorded particulars thereof.
PROVIDED THAT:
(a) the provisions aforesaid shall apply only to the destruction of a document in good faith
and without notice of any claim (regardless of the parties thereto) to which the
document may be relevant;
(b) nothing in this paragraph 25 shall be construed as imposing upon the Trustee or the
Manager or its Agents any liability in respect of the destruction of any document earlier
than as aforesaid or in any case where the conditions of paragraph 25 are not fulfilled;
and
(c) references herein to the destruction of any document include references to the
disposal thereof in any manner.
26. Appointment of Agents
Without in any way affecting the generality of its powers, the Manager and/or the Trustee,
in carrying out and performing their respective duties and obligations under the Preferred
Unit Terms relating to each class of Preferred Units, may from time to time appoint such
person or persons (including, without limitation, the Registrar and (where applicable) the
Agents) to exercise any or all of their respective powers and discretions and to perform all
or any of their respective obligations hereunder provided that the Manager or, as the case
may be, the Trustee, shall be liable for all acts and omissions of such persons as if such
acts or omissions were its own acts or omissions and all disbursements, expenses, duties
and outgoings in relation thereto shall be paid from the Deposited Property as an expense
of the Trust.
27. Directors’ Disclosure Obligations
27.1 Without prejudice to his obligations under the Relevant Laws, Regulations and Guidelines,
each director of the Manager shall give notice to the Manager of:
(i) his acquisition of Preferred Units or of an interest in Preferred Units, and
(ii) changes to the number of Preferred Units which he holds or in which he has an
interest,
within two Business Days after the acquisition or the occurrence of the event giving rise to
the change.
27.2 A director of the Manager has an interest in Preferred Units:
(i) if the director is the beneficial owner of a Preferred Unit (whether directly through a
direct Securities Account or indirectly through a Depository Agent or otherwise);
(ii) if a body corporate is the beneficial owner of a Preferred Unit and the director is
entitled to exercise or control the exercise of not less than 20 per cent. of the votes
attached to the voting shares in the body corporate;
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(iii) if the director’s spouse or Minor child (including step-child and adopted child) has any
interest in a Preferred Unit (including in the circumstances contemplated by
paragraphs (i) and (ii) above);
(iv) if the director, his spouse or Minor child (including step-child and adopted child):
(a) has entered into a contract to purchase a Preferred Unit;
(b) has a right to have a Preferred Unit transferred to any of them or to their order,
whether the right is exercisable presently or in the future and whether on the
fulfilment of a condition or not;
(c) has the right to acquire a Preferred Unit under an option, whether the right is
exercisable presently or in the future and whether on the fulfilment of a condition
or not; or
(d) is entitled (otherwise than by reason of any of them having been appointed a
proxy or representative to vote at a meeting of Preferred Unitholders) to exercise
or control the exercise of a right attached to a Preferred Unit, not being a
Preferred Unit of which any of them is the holder; and
(v) if property subject to a trust consists of or includes a Preferred Unit and the director
knows, or ought reasonably to know or has reasonable grounds for believing, that he
or any of the persons referred to in paragraph 27.2(iv) above has an interest under the
trust and the trust property consists of or includes the Preferred Unit.
28. Acting Consistently with the Purpose of the Preferred Units
The Trustee and the Manager each hereby acknowledges that the Preferred Unit Terms are
intended to confer certain rights, preferences and privileges on the Preferred Units over
certain classes of securities (including Units) as set out in this Deed and hereby undertakes
to give full effect to such intention and not to carry out any act or take any action which may
be inconsistent with or contrary to such intention and which may prejudice the rights and
entitlements of Preferred Unitholders hereunder.
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APPENDIX B
TERMS OF THE CONVERTIBLE PERPETUAL PREFERRED UNITS
The specific terms and conditions of the CPPUs to be issued pursuant to the proposed Trust Deed
Supplement are as follows:
TERMS OF THE CONVERTIBLE PERPETUAL PREFERRED UNITS
The specific terms and conditions of the CPPUs to be issued pursuant to the Trust Deed
Supplement are as follows:
1. Interpretation
1.1 Definitions
Unless the context otherwise requires, the following words or expressions shall have the
meaning respectively assigned to them, namely:
“Agent” means each of the Registrar and such other agent as may from time to time be
appointed by the Manager or the Trustee to administer the procedures relating to the
CPPUs;
“Conversion Dates” means the dates on which the CPPU Holders are entitled to convert
their CPPUs into Units, as described in paragraph 22.2 of these terms;
“Conversion Notice” means the notice issued by a CPPU Holder to convert all (or part)
of the CPPUs held by such CPPU Holder into Units;
“Conversion Price” means the price at which the Units will be issued upon conversion of
the CPPUs, as adjusted from time to time;
“Conversion Right” means the right of a CPPU Holder to convert any CPPU into Unit(s);
“Conversion Taxes” means the Taxes and capital, stamp, issue and registration duties (i)
arising on conversion of the CPPUs (other than any Taxes or capital or stamp duties
payable in Singapore and, if relevant, in the place of the Recognised Stock Exchange, by
the Manager and/or the Trust (as the case may be) in respect of the allotment and issue
of Units and listing of the Units on the SGX-ST or a Recognised Stock Exchange on
conversion) or (ii) arising by reference to any disposal or deemed disposal of a CPPU in
connection with such conversion;
“CPPU Holder” means, in relation to CPPUs which are Unlisted, a registered holder for the
time being of the CPPUs including persons so registered as CPPU Joint Holders, and in
relation to CPPUs which are Listed on the SGX-ST, means the Depository, and the term
“CPPU Holder” shall, in relation to CPPUs which are Listed and registered in the name of
the Depository, mean, where the context requires (including without limitation, the
redemption or conversion of the CPPUs hereunder, where applicable), a CPPU Depositor
PROVIDED THAT for the purposes of meetings of CPPU Holders, such CPPU Holder shall
mean a CPPU Depositor as shown in the records of the Depository 48 hours prior to the
time of a meeting of CPPU Holders, supplied by the Depository to the Manager;
“CPPU Joint Holders” means such persons for the time being entered in the Register of
Preferred Unitholders as joint CPPU Holders in respect of a CPPU, either as CPPU
Joint-All Holders or CPPU Joint-Alternate Holders;
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“CPPU Joint-All Holders” means CPPU Joint Holders whose mandate the Manager and
the Trustee shall act upon only if given by all of the CPPU Joint Holders or, where any
CPPU Joint-All Holder is a Minor, where the mandate is given by all of the adult Joint-All
Holder(s);
“CPPU Joint-Alternate Holders” means CPPU Joint Holders whose mandate the
Manager and the Trustee shall act upon if given by any of the CPPU Joint Holders (other
than a Minor);
“CPPU Terms” means the terms and conditions of offer and issue of the CPPUs described
in paragraph 2.1.1 below, and as may be amended, modified or supplemented from time
to time;
“CPPUs” means the convertible perpetual preferred units, issued in accordance with, and
subject to, the CPPU Terms;
“CPPU Depositor” means:
(i) a direct account holder with the Depository; or
(ii) a Depository Agent, but, for the avoidance of doubt, does not include a Sub-Account
Holder,
whose name is entered in the Depository Register in respect of the CPPUs held by him
(where the CPPUs are Listed on the SGX-ST);
“CPPU Depository Register” means the electronic register of CPPUs deposited with the
Depository maintained by the Depository;
“Distribution Amount” has the meaning ascribed to it in paragraph 14.1.1 below;
“Exercise Day” means the first Business Day of the month immediately preceding the
relevant Redemption Date or Conversion Date (as the case may be);
“Issue Price” means the price at which each CPPU is to be issued to the CPPU Holders;
“Permitted Reorganisation” means a solvent reconstruction, amalgamation,
reorganisation, merger or consolidation whereby all or substantially all the business,
undertaking and assets of the Trust which are held by the Trustee are transferred to a
successor entity which assumes all the obligations of the Trustee and/or the Manager (as
the case may be) in relation to the CPPUs;
“Preferred Distribution” means the preferential distribution which may be declared by the
Manager in its sole discretion in respect of the CPPUs in accordance with paragraph 14.1
below;
“Preferred Distribution Calculation Date” means such date or dates, identical to the
Distribution Calculation Dates in respect of the Units, on which the Preferred Distribution
(excluding Special Preferred Distribution) in respect of any Preferred Distribution Period
shall be calculated, if the Manager elects at its sole discretion to declare such Preferred
Distribution;
“Preferred Distribution Date” means a Business Day, which is no later than 90 calendar
days (or such other period as may be determined by the Manager) after the Preferred
Distribution Calculation Date in respect of the relevant Preferred Distribution Period;
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“Preferred Distribution Entitlement” means the entitlement to the Distribution Amount
determined in accordance with paragraph 14.1.1 below;
“Preferred Distribution Period” means:
(i) for the first Preferred Distribution Period, the period from, and including, the date of
issue of the CPPUs to, and including, 31 December 2015; and
(ii) in all other cases, such periods, identical to the Distribution Periods in respect of the
Units, for which the Preferred Distribution shall accrue;
“Priority Amount” means the sum of (i) the Issue Price multiplied by the number of
CPPUs held by the relevant CPPU Holder and (ii) any Preferred Distributions and Special
Preferred Distributions which have been declared to be payable to the relevant CPPU
Holder but which remain unpaid as at the date of the dissolution or winding up of the Trust;
“Redemption Amount” means the amount payable by the Manager to the CPPU Holders
pursuant to the redemption of their CPPUs, as described in paragraph 21.6 of these terms;
“Redemption Dates” mean the dates on which redemption of the CPPUs occurs, as
described in paragraph 21.3 of these terms;
“Redemption Notice” means the notice issued by the Manager to a CPPU Holder to
redeem all (or a part) of the CPPUs held by that CPPU Holder;
“Redemption Right” means the right of the Manager to redeem any CPPU;
“Register of Preferred Unitholders” means the register of Preferred Unitholders holding
such classes of Preferred Units from time to time in issue maintained by or on behalf of
the Trustee;
“Registrar” means such person as may from time to time be appointed by the Trustee to
keep and maintain the Register of Preferred Unitholders;
“Registration Date” means the date on which the person or persons designated in the
Conversion Notice shall become the holder of record of the number of Units issuable upon
conversion, such date being (i) the date the relevant Units are credited to his or their
respective accounts with the Depository (for so long as the Units are Listed on the
SGX-ST) or (ii) the date of registration of such person or persons as holders in the
Register (if the Units are not Listed on the SGX-ST);
“Relevant Accounting Standards” means the accounting standards applicable to the
Trust;
“Restriction Period” means the period of four years commencing from the date of
issuance of the CPPUs;
“Special Preferred Distribution” means the special distribution which may be declared in
respect of each Special Preferred Distribution Period in accordance with paragraph 21.8
of these terms;
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“Special Preferred Distribution Period”, in relation to the calculation of the distribution
entitlement of CPPUs for purposes of paragraph 21.8 of these terms, means the period
commencing the day after the end of the last distribution period (whether in respect of a
Preferred Distribution or Special Preferred Distribution) immediately preceding the
relevant Redemption Date, up to, and including, the last day of the calendar quarter
immediately preceding the relevant Redemption Date;
“Transfer Instrument” means the instrument of transfer, in such form as the Manager and
the Trustee may from time to time approve, to be signed by the transferor and transferee
and delivered to the Manager at its registered office for the purposes of effecting a transfer
of CPPUs; and
“Trust Deed” means the deed of trust dated 10 October 2013 constituting the Trust, as
amended, modified or supplemented from time to time.
“Unitholder” shall have the meaning ascribed to the term “Holder” in Clause 1.1 of the
Trust Deed.
For the purposes of the provisions herein, capitalised terms not specifically defined in this
paragraph 1.1 of these terms shall have the meanings ascribed to them in Clause 1.1 of
the Trust Deed (or as the case may be) Schedule 2 thereof.
1.2 Miscellaneous Construction
Words importing the singular number only shall include the plural and vice versa; words
importing the masculine gender only shall include the feminine and neuter genders and
vice versa; words importing persons include corporations; the words “written” or “in
writing” include printing, engraving, lithography, or other means of visible reproduction or
partly one and partly the other. References to “Clauses” and the “Schedule” are to be
construed as references to the clauses of and the schedules to the Trust Deed. The word
“including” or “includes” means, depending on the context, “including but not limited to”
or “including without limitation”.
1.3 Headings
The headings in the provisions herein are for convenience only and shall not affect the
construction hereof.
2. Issue of CPPUs
2.1 CPPU Terms
2.1.1 The provisions expressly contained herein shall together with Schedule 2 of the
Trust Deed set out all the terms governing the CPPUs and shall bind each CPPU
Holder and all persons claiming through it and, to the extent of any conflict or
inconsistency between the provisions expressly contained herein and Schedule
2 of the Trust Deed, the provisions expressly contained herein shall prevail.
2.1.2 A copy of this document (including any modifications and/or supplements thereto)
will be made available for inspection, together with a copy of the Trust Deed, at
the respective registered offices of the Trustee and the Manager at all times
during usual Business Hours.
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2.2 No Fractions
2.2.1 No fractions of a CPPU shall be issued, converted or redeemed.
2.2.2 In issuing the number of CPPUs as corresponds to the relevant subscription
proceeds, the Manager shall, in respect of each CPPU Holder’s entitlement to the
CPPUs, round down to the nearest whole CPPU and any balance arising from
rounding down shall be retained as part of the Deposited Property.
3. Length of Term
The CPPUs shall be perpetual instruments with no fixed term.
4. Issue Price
The CPPUs shall be issued at the Issue Price of S$1.00 per CPPU.
5. Listing
The CPPUs may be Listed or Unlisted at the sole discretion of the Manager and subject
to the Relevant Laws, Regulations and Guidelines.
6. No Certificates
6.1 No certificate shall be issued to the CPPU Holders by either the Manager or the Trustee
in respect of the CPPUs (whether Listed or Unlisted) issued to the CPPU Holders.
6.2 Where the CPPUs are Listed on the SGX-ST, the Manager, or the Agent appointed by the
Manager, shall issue to the Depository not more than 10 Business Days after the issue of
the CPPUs, a confirmation note confirming their holdings of such CPPUs (it being
understood that such confirmation note shall prima facie be deemed to be a certificate
evidencing title to the CPPUs issued to or held by the Depository).
6.3 Where the CPPUs are Listed on the SGX-ST and registered in the Register of Preferred
Unitholders in the name of, and deposited with, the Depository as the registered CPPU
Holder, the Manager will endeavour to ensure that the Depository will, within the relevant
periods, issue to each CPPU Depositor the relevant confirmation notes, monthly
statements and statements of account on account of transactions in CPPUs completed in
respect of the relevant CPPU Depositor’s Securities Account.
6.4 Where the CPPUs are Unlisted, the Manager or, the Agent appointed by the Manager,
must (i) issue to each CPPU Holder not more than one month after the allotment of any
CPPUs a confirmation note confirming the allotment, such confirmation note shall prima
facie be deemed to be a certificate evidencing title to the CPPUs issued; and (ii) issue to
each CPPU Holder, on a calendar quarterly basis (or such other period as may be agreed
between the Manager and the Trustee), a statement of holdings relating to the CPPUs
(“Statement of Holdings”). A Statement of Holdings in respect of CPPUs must:
(A) be dated and specify the number of CPPUs held by each CPPU Holder in respect of
the preceding quarter (or such other relevant period) and the transactions in respect
of the CPPUs; and
(B) be in such form as may from time to time be agreed between the Manager and the
Trustee.
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7. Record of CPPU Holders
7.1 Registrar
The Trustee may, with the approval of the Manager, at any time and from time to time,
appoint the Registrar to keep and maintain on its behalf the Register of Preferred
Unitholders. The fees and expenses of the Registrar (as may be agreed from time to time
between the Manager, the Trustee and the Registrar) shall be payable out of the
Deposited Property.
7.2 Register of Preferred Unitholders
All CPPUs issued or held from time to time by any person as a CPPU Holder will be
represented by entries in an up-to-date Register of Preferred Unitholders kept or cause to
be kept in Singapore by the Trustee or the Registrar in accordance with the Relevant
Laws, Regulations and Guidelines. The Register of Preferred Unitholders must be
maintained at all times whether the CPPUs are Listed or Unlisted. The Trustee or the
Registrar shall record each CPPU Holder as the registered holder of CPPUs held by such
CPPU Holder.
7.3 Information in the Register of Preferred Unitholders
There shall be entered in the Register of Preferred Unitholders, in respect of each CPPU
Holder or person who has ceased to be or becomes a CPPU Holder, the following
information as soon as practicable after the Trustee or the Registrar receives the following
relevant information:
(i) the name and address of the CPPU Holder;
(ii) the number of CPPUs held by each CPPU Holder;
(iii) the date on which every such person entered in respect of the CPPUs standing in its
name became a CPPU Holder and where it became a CPPU Holder by virtue of an
instrument of transfer, a sufficient reference to enable the name and address of the
transferor to be identified;
(iv) the date on which any transfer is registered and the name and address of the
transferee; and
(v) (where applicable) the date on which any CPPU has been redeemed or converted
into Units.
7.4 Discrepancies
The entries in the Register of Preferred Unitholders shall (save in the case of manifest
error) be conclusive evidence of the number of CPPUs held by each CPPU Holder and, in
the event of any discrepancy between the entries in the Register of Preferred Unitholders
and the details appearing on any confirmation note issued to the CPPU Holder, the entries
in the Register of Preferred Unitholders shall prevail unless the CPPU Holder proves, to
the satisfaction of the Manager and the Trustee, that the Register of Preferred Unitholders
is incorrect.
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7.5 Change of Name or Address
Any change of name or address on the part of any CPPU Holder shall forthwith be notified
to the Manager in writing or in such other manner as the Manager may approve. If the
Manager is satisfied with the change in name or address and that all formalities as may
be required by the Manager have been complied with, the Manager shall notify the Trustee
or the Registrar of the same and the Trustee or the Registrar shall alter or cause to be
altered the Register of Preferred Unitholders accordingly.
7.6 Inspection of the Register of Preferred Unitholders
7.6.1 Except when the Register of Preferred Unitholders is closed in accordance with
paragraph 7.7 of these terms, the Register of Preferred Unitholders shall during
Business Hours (subject to such reasonable restrictions as the Trustee or the
Registrar may impose but so that not less than two hours in each Business Day
shall be allowed for inspection) be open to the inspection of any CPPU Holder
without charge.
7.6.2 If the Register of Preferred Unitholders is kept on magnetic tape or in accordance
with some mechanical or electrical system, the provisions of paragraph 7.6.1
above may be satisfied by the production of legible evidence of the contents of
the Register of Preferred Unitholders.
7.7 Closure of the Register of Preferred Unitholders
Subject to the Relevant Laws, Regulations and Guidelines, the Register of Preferred
Unitholders may be closed at such times and for such periods as the Trustee may from
time to time determine, provided that the Register of Preferred Unitholders must not be
closed for more than 30 days in any one Year.
8. CPPUs to be Held Free from Equities
A CPPU Holder entered in the Register of Preferred Unitholders as the registered holder
of CPPUs shall be the only person recognised by the Trustee or by the Manager as having
any right, title or interest in or to the CPPUs registered in his name. The Manager may
recognise the relevant CPPU Holder as absolute owner of the CPPUs and shall not be
bound by any notice to the contrary or to take notice of or to see to the execution of any
trust, express, implied or constructive, save as herein expressly provided or save as
required by some court of competent jurisdiction to recognise any trust or equity or other
interest affecting the title to any CPPU. No notice of any trust shall be entered on the
Register of Preferred Unitholders.
9. CPPU Joint Holders
Where CPPU Joint Holders are registered as CPPU Holders they are, for the purposes of
the administration of the Trust and not otherwise, deemed to hold the relevant CPPUs as
joint holders, on the following conditions:
(i) except when otherwise required by the Listing Rules or any other Relevant Laws,
Regulations and Guidelines, the Manager is not bound to register more than three
persons as the CPPU Joint Holders in respect of a CPPU;
(ii) the CPPU Joint Holders are jointly and severally liable in respect of all payments,
including payment of Tax, which ought to be made in respect of a CPPU;
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(iii) on the death of any one of the CPPU Joint Holder and subject to any Relevant Laws,
Regulations and Guidelines, the survivor or survivors, upon producing such evidence
of death as the Manager or the Trustee may require, shall be the only person or
persons whom the Trustee and the Manager will recognise as having any title to a
CPPU, PROVIDED THAT where the sole survivor is a Minor, the Manager or the
Trustee shall act only on the requests, applications or instructions of the surviving
Minor after he attains the age of 18 years and shall not be obligated to act on the
requests, applications or instructions of the heirs, executors or administrators of the
deceased CPPU Joint Holder, and shall not be liable for any claims or demands
whatsoever by the heirs, executors or administrators of the deceased CPPU Joint
Holder, the Minor CPPU Joint Holder or the Minor CPPU Joint Holder’s legal guardian
in omitting to act on any request, application or instruction given by any of them (in
the case of the Minor, before he attains the age of 18 years);
(iv) any one of the CPPU Joint Holders may give an effective receipt which will discharge
the Trustee and the Manager in respect of any payment or distribution in respect of
a CPPU;
(v) the CPPU Joint Holders of a CPPU are counted as a single CPPU Holder of the
relevant CPPU for the purposes of calculating the number of CPPU Holders or
requisitionists who have requisitioned for a Meeting; and
(vi) only the person whose name appears first in the Register of Preferred Unitholders as
one of the CPPU Joint Holders is entitled to delivery of any notices, cheques or
communications from the Trustee or the Manager, and any notice, cheque or
communication given to that person is deemed to be given to all the CPPU Joint
Holders.
10. Minors
10.1 A Minor shall not be registered as:
(i) a sole CPPU Holder; or
(ii) a CPPU Joint-Alternate Holder.
10.2 A Minor may be registered as a CPPU Joint-All Holder if each of the other CPPU Joint-All
Holders is a person who has attained the age of 18 years.
10.3 If one of the CPPU Joint-All Holders is a Minor, the Manager and the Trustee need only
act on the instructions given by the other CPPU Joint-All Holder or CPPU Joint-All
Holder(s) who has or have attained the age of 18 years.
11. Obligations of the Manager and the Trustee
Neither the Trustee nor the Manager owes any obligation to the CPPU Holder other than
the obligation to comply with the CPPU Terms.
12. Rights, Benefits and Obligations of CPPU Holders
12.1 All rights, benefits and obligations contained in the CPPU Terms shall apply for the benefit
of and bind each CPPU Holder.
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12.2 A CPPU Holder has no equitable or proprietary interest in the Deposited Property and is
not entitled to the transfer to it of the Deposited Property or any part of the Deposited
Property or of any estate or interest in the Deposited Property or any part of the Deposited
Property.
12.3 Save as otherwise expressly provided in the CPPU Terms, a CPPU Holder has no other
rights against the Trust, the Trustee and/or the Manager other than the right to enforce the
CPPU Terms against the Trustee and/or the Manager and to enjoy the benefits conferred
on the CPPU Holder under the CPPU Terms.
12.4 The rights and benefits of the Unitholders are subject to the CPPU Terms. Where the
interests of CPPU Holders and Unitholders conflict, the Manager and the Trustee must
prefer the interests of CPPU Holders.
13. No Further Liability
13.1 Save as otherwise expressly provided in the CPPU Terms, the liability of each CPPU
Holder in its capacity as such is limited to the CPPU Holder’s investment in the Trust.
13.2 A CPPU Holder is not required to indemnify the Manager or the Trustee (or a creditor of
either or both of them) against any liability of the Trustee or the Manager in respect of the
Trust.
13.3 Nothing in or under the Trust Deed nor the provisions herein shall make either the Trustee
or the Manager an agent of a CPPU Holder.
14. Preferred Distributions
14.1 Preferred Distribution Entitlement
14.1.1 Subject to paragraphs 14.1.2, 16.1, 21.8 and 22.12 of these terms, each CPPU
in issue shall entitle a CPPU Holder to receive a Preferred Distribution of an
amount equivalent to 1.0 per cent. per annum of the Issue Price (the
“Distribution Amount”) pro-rated over the relevant Preferred Distribution
Period, on each Preferred Distribution Date.
14.1.2 Any and all decisions regarding the declaration of any Preferred Distribution in
respect of the CPPU Holders shall be at the sole and absolute discretion of the
Manager.
14.1.3 Any Preferred Distribution or part thereof not due or payable pursuant to the
CPPU Terms shall not accumulate for the benefit of the CPPU Holders or entitle
the CPPU Holders to any claim in respect thereof against the Trust, the Trustee
and/or the Manager.
14.1.4 The CPPUs shall, in respect of the entitlement to participate in the distributions
of the Trust, rank:
(i) junior to any securities or ownership interests and all obligations of the Trust
(excluding debt obligations) that are expressed to rank senior to the CPPUs;
(ii) pari passu with (a) each other and (b) any other securities or ownership
interests and all obligations of the Trust (excluding debt obligations) that are
expressed to rank pari passu with the CPPUs; and
(iii) senior to the Units.
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15. Preferred Distribution and Capital Stopper
In the event any Preferred Distribution referred to in paragraph 14.1 (taking into account
the Special Preferred Distribution declared in accordance with paragraph 21.8) is not
declared in full for any reason in respect of any Preferred Distribution Period, the Trust
shall not, and shall procure that the subsidiaries of the Trust shall not, in respect of the
same period:
(i) declare or pay any distributions in respect of, or repurchase or redeem, any Units or
any other securities or ownership interests of the Trust ranking pari passu with or
junior to the CPPUs; and
(ii) contribute any moneys to a sinking fund for the payment of any distributions in respect
of, or for the redemption or repurchase of, any such Units or any other securities or
ownership interests,
except where required pursuant to under any Relevant Laws, Regulations and Guidelines.
16. Payment of Preferred Distributions or Special Preferred Distributions
16.1 The Preferred Distribution in respect of each Preferred Distribution Period shall be
payable on the relevant Preferred Distribution Date, and no Preferred Distribution or any
part thereof shall become due or payable on any such Preferred Distribution Date unless
the Manager has declared or resolved to pay the Preferred Distribution on that Preferred
Distribution Date.
16.2 The Special Preferred Distribution in respect of each Special Preferred Distribution Period
shall be payable on the relevant Redemption Date, and no Special Preferred Distribution
or any part thereof shall become due or payable on any such relevant Redemption Date
unless the Manager has declared or resolved to pay the Special Preferred Distribution on
that relevant Redemption Date.
16.3 The Preferred Distributions and the Special Preferred Distributions shall only be satisfied
by payments in the form of cash.
16.4 For the purpose of identifying the persons who are entitled to the Preferred Distribution or
Special Preferred Distribution, as the case may be, payable in respect of any Preferred
Distribution Period or Special Preferred Distribution Period, as the case may be, the
persons who are CPPU Holders on the record date as determined by the Manager in its
sole discretion for that Preferred Distribution Period or Special Preferred Distribution
Period, as the case may be, shall have an absolute, vested and indefeasible interest in the
relevant Preferred Distribution or Special Preferred Distribution.
16.5 The Manager and the Trustee may retain from each CPPU Holder’s Preferred Distribution
or Special Preferred Distribution all amounts which:
(i) equal any amount of Tax which has been paid or which the Manager determines is
or may be payable by the Trustee or the Manager in respect of the portion of the
income of the Trust attributable to such CPPU Holder or the amount of the distribution
otherwise distributable to such CPPU Holder;
(ii) are required to be deducted by law, the Tax Ruling, the Trust Deed and/or the CPPU
Terms; or
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(iii) are payable by the CPPU Holder to the Trustee or the Manager,
and the Manager must notify each CPPU Holder, following the end of each Financial Year,
of any amounts deducted under paragraphs 16.5(i) and 16.5(ii) above.
17. CPPU Holder Notification
17.1 Each CPPU Holder must, as and when required by the Manager, provide such information
as to its place of residence for taxation purposes as the Manager may from time to time
determine.
17.2 The Trustee and the Manager shall be entitled to rely absolutely on any declaration of tax
residence which may be received from a CPPU Holder or applicant for CPPUs.
18. Tax Declaration Forms and Tax Preferred Distribution Vouchers
18.1 The Manager shall, where necessary before a Preferred Distribution or Special Preferred
Distribution is paid, issue to a CPPU Holder a tax declaration form in a form approved by
the Trustee and/or the IRAS for the purpose of that CPPU Holder declaring its tax status.
18.2 The Manager and the Trustee may rely on any representation made by a CPPU Holder as
to its tax status made on each relevant tax declaration form returned to the Manager (or
its Agent) or the Trustee to determine whether or not to deduct tax from the Preferred
Distribution or Special Preferred Distribution which that CPPU Holder is entitled to receive.
18.3 If a CPPU Holder fails to make a declaration in time for a Preferred Distribution or Special
Preferred Distribution, the Manager and the Trustee shall deduct the appropriate amount
of tax with respect to the Preferred Distribution or Special Preferred Distribution which that
CPPU Holder is entitled to receive.
18.4 After a Preferred Distribution or Special Preferred Distribution has been paid, the Trustee
shall where necessary issue to each CPPU Holder a tax distribution voucher prepared by
the Manager in a form approved by the Trustee and/or the IRAS.
18.5 In the case of any Preferred Distribution or Special Preferred Distribution paid or on
termination of the Trust, each tax distribution voucher shall show what proportion of the
Preferred Distribution or Special Preferred Distribution represents capital, what proportion
represents income exempt from Singapore income tax or income subject to Singapore
income tax and what proportion represents the portion of any Tax payable by the Trustee
on income and gains attributable to the CPPU Holders.
19. No Further Rights to Participate in Distributions
Save as expressly set out in the CPPU Terms, the CPPUs shall not confer any right or
claim as regards participation in any distribution of the Trust.
20. Liquidation of the Trust
20.1 Upon the dissolution or winding up of the Trust, the CPPU Holders are only entitled to
receive their respective Priority Amounts and no further amounts.
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20.2 Ranking
In the event of the commencement of any dissolution or winding up of the Trust (other than
pursuant to a Permitted Reorganisation), the CPPUs shall, in respect of the Priority
Amounts, rank:
(i) junior to (a) all debt of the Trust (including, without limitation, all amounts due under
Clause 26.5 of the Trust Deed, all costs of the Trustee in its capacity as trustee of the
Trust (including, but not limited to, liabilities owed to any CPPU Holder or Unitholder
who is a creditor of the Trust) and subordinated debt), and (b) any securities or
ownership interests and all obligations of the Trust that are expressed to rank senior
to the CPPUs;
(ii) pari passu with (a) each other and (b) any other securities or ownership interests and
all obligations of the Trust that are expressed to rank pari passu with the CPPUs; and
(iii) senior to the Units.
20.3 On a dissolution or winding up of the Trust, the CPPU Holders shall be entitled to recover
their respective Priority Amounts out of the Deposited Property after the repayment and
discharge of the following:
(i) all debts of the Trust (including, without limitation, all amounts due under Clause 26.5
of the Trust Deed, all costs of the Trustee in its capacity as trustee of the Trust
(including, but not limited to, liabilities owed to any CPPU Holder or Unitholder who
is a creditor of the Trust) and all subordinated debt); and
(ii) payments due to securities or ownership interests and all obligations of the Trust that
are expressed to rank senior to the CPPUs.
20.4 Payment of Priority Amount
20.4.1 The Trustee may make a payment of the Priority Amount to any CPPU Holder
only if that holder delivers to the Manager any evidence of title required by the
Manager together with any form of receipt and discharge required by the Trustee.
20.4.2 The Priority Amount may not be satisfied by a distribution in specie of the
Deposited Property to a CPPU Holder.
20.5 Deductions for Contingent Liabilities
The Trustee, at the direction of the Manager, may retain for as long as the Manager thinks
fit any part of the Priority Amounts which, in the Manager’s opinion, may be required to
meet any actual or contingent liability of the Trustee or the Manager or any amounts
payable actually or contingently to the Trustee or the Manager under the Trust Deed,
including but not limited to under Clause 26.5 of the Trust Deed.
20.6 Pro Rata Entitlement
If, upon any such dissolution or winding up of the Trust, the amount available for payment
of the Priority Amounts of the CPPU Holders is insufficient to fully satisfy the entire sum
of Priority Amounts of all the CPPU Holders, each CPPU Holder shall be entitled to recover
such proportion of his Priority Amount calculated based on the proportion of the amount
of the CPPU Holder’s entitlement relative to the total amount of all entitlements of the
holders of any securities or ownership interests and all obligations of the Trust which rank
pari passu with the CPPU Holder.
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20.7 No Further Rights to Participate in the Deposited Property
Save as expressly set out in the CPPU Terms, the CPPUs shall not confer any right or
claim as regards participation in the Deposited Property.
21. Redemption of CPPUs
21.1 Right of Redemption
21.1.1 No CPPU shall be redeemable at the option of a CPPU Holder.
21.1.2 Subject to paragraphs 21.3, 22.2.3 and 22.2.4 of these terms, the Manager shall
have the sole right to redeem any number of CPPUs for the time being issued and
outstanding in accordance with this paragraph 21.
21.1.3 Where the Manager exercises its right to redeem any CPPUs in accordance with
this paragraph 21, and there is more than one CPPU Holder, the number of
CPPUs sought to be redeemed in respect of each CPPU Holder shall be
pro-rated based on the proportion which the number of CPPUs owned by each
CPPU Holder bears to the total number of CPPUs for the time being issued and
outstanding provided that the number of CPPUs to be redeemed shall be rounded
up to the nearest whole number, where necessary.
21.2 Early Redemption at the Option of the Manager upon Occurrence of a Special Event
21.2.1 The Manager may at its sole discretion, redeem the CPPUs in whole but not in
part, upon the occurrence of the following events:
(i) a Gross-up Event;
(ii) an Accounting Event; or
(iii) a Rating Agency Event.
21.2.2 A “Gross-up Event” occurs when there is a change in, or amendment to, the laws
or regulations of Singapore or any political subdivision or any authority thereof or
therein having power to tax, or any change in the application or official
interpretation of such laws or regulations, which change or amendment becomes
effective on or after the date of issue of the CPPUs, the Trust would be required
to pay additional amounts such as withholding tax, in respect of the CPPUs and
such obligation cannot be avoided by the Trust, as the case may be, taking
reasonable measures available to it.
21.2.3 An “Accounting Event” occurs when the CPPUs must not or must no longer be
recorded as “equity” of the Trust pursuant to the Relevant Accounting Standard
prevailing on that date.
21.2.5 A “Rating Agency Event” occurs when there is a change in, or amendment, in
the equity credit criteria, guidelines or methodology of Fitch, Moody’s or any
other rating agency of equivalent international standing which results in a lower
equity credit for the CPPUs than the equity credit assigned on the issue date of
the CPPUs or, if equity credit is not assigned on the issue date of the CPPUs, at
the date when equity credit is assigned for the first time.
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21.3 Redemption Dates
The Manager shall be entitled (but shall not be obliged) to redeem any number of CPPUs
on each Redemption Date, being a Business Day to be determined at the Manager’s
discretion.
21.4 Redemption Notice
21.4.1 In the event the Manager wishes to exercise its Redemption Right, it shall issue
and deliver the Redemption Notice to the Registrar between 9.00 a.m. and 5.00
p.m. on the relevant Exercise Day.
21.4.2 Each Redemption Notice shall specify inter alia:
(i) the Redemption Date; and
(ii) the number of CPPUs to be redeemed on the Redemption Date.
21.4.3 The Redemption Notice shall be delivered in accordance with paragraph 29 of
these terms.
21.4.4 The Redemption Notice once delivered by the Manager to the Registrar shall be
irrevocable and may not be withdrawn.
21.4.5 No defect in the Redemption Notice shall affect the validity of the redemption
proceedings.
21.5 Confirmation of Redemption
The Registrar shall, as soon as practicable, notify the Manager and each CPPU Holder in
writing of the number of CPPUs, if any, to be redeemed from such holder on the relevant
Redemption Date and the Redemption Amount determined in accordance with paragraph
21.6 below. Such notification shall be conclusive and binding on each CPPU Holder. The
outcome of the exercise of Redemption Right by the Manager shall be announced on the
SGXNET as soon as practicable upon the Manager’s receipt of the notification from the
Registrar.
21.6 Redemption Amount
The Redemption Amount payable to a CPPU Holder on redemption of the CPPUs held by
it shall be the sum of:
21.6.1 100.0 per cent. of the Issue Price multiplied by the number of CPPUs to be
redeemed on the relevant Redemption Date; and
21.6.2 all the Preferred Distributions and Special Preferred Distributions which have
been declared but which remain unpaid as at the relevant Redemption Date.
21.7 Payment of Redemption Amount
21.7.1 Where the CPPUs are Unlisted, a redemption of the CPPUs and payment of the
Redemption Amount shall be made only if the CPPU Holder has delivered the
confirmation note(s) representing the CPPUs being redeemed at least two
Business Days prior to such redemption. No confirmation note needs to be
delivered where the CPPUs are Listed.
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21.7.2 The Manager shall have the option of issuing a cheque or relying on such other
method of payment as the Manager may specify in the Redemption Notice for the
purposes of paying the Redemption Amount.
21.7.3 The Redemption Amount shall be paid in cash only.
21.8 Special Preferred Distribution Entitlements upon Redemption
Where any CPPUs are to be redeemed, the Manager may, at its sole discretion, elect to
declare a Special Preferred Distribution of an amount per CPPU equivalent to the
Distribution Amount pro-rated over the relevant Special Preferred Distribution Period, on
all CPPUs for the relevant Special Preferred Distribution Period, which shall be payable on
the relevant Redemption Date and the provisions contained in paragraphs 16 and 18 of
these terms shall mutatis mutandis apply to the payment of Special Preferred
Distributions, provided that the Special Preferred Distribution in respect of each CPPU
shall, together with all prior distributions declared in respect of each CPPU in the relevant
year, not exceed the Distribution Amount.
21.9 Cancellation of Redeemed CPPUs
21.9.1 Any CPPUs properly redeemed in accordance with the CPPU Terms shall be
cancelled.
21.9.2 Where the CPPUs are Unlisted and only a part of the CPPUs held by a CPPU
Holder have been redeemed, a new confirmation note reflecting the remaining
number of CPPUs held by the CPPU Holder shall be issued by the Manager, or
the Agent appointed by the Manager, to the CPPU Holder and the provisions of
paragraph 6.4 above shall mutatis mutandis apply.
21.9.3 Where the CPPUs are Listed and only a part of the CPPUs registered in the name
of the Depository have been redeemed, a new confirmation note reflecting the
remaining number of CPPUs registered in the name of the Depository shall be
issued by the Manager, or the Agent appointed by the Manager, to the Depository
and the provisions of paragraph 6.2 above shall mutatis mutandis apply.
21.9.4 The Trustee shall remove or procure the removal of the name of the CPPU Holder
from the Register of Preferred Unitholders in respect of such number of CPPUs
redeemed, upon the delivery to the Trustee of a written statement signed by or on
behalf of the Manager that all the CPPUs or a specified number of CPPUs held
by such CPPU Holder have been redeemed.
21.10 Restrictions on Trading and Transfer of CPPUs in connection with Redemption and
Conversion
A CPPU may be subject to such trading (if the CPPUs are Listed) and/or such transfer
restrictions or other procedures as the Manager may, in consultation with the Trustee and,
where appropriate, the Agent and/or the Depository (where the CPPUs are Listed),
determine to be necessary to facilitate the conversion and redemption of CPPUs in
accordance with the terms hereunder and for compliance with paragraph 28. If the
Manager shall determine any restrictions on trading (if applicable) and/or transfer to be
necessary, the Manager shall notify such restrictions to the CPPU Holders by way of
SGXNET announcement as soon as practicable, and in any case, before the relevant
record date for determining entitlement of CPPU Holders to exercise their Conversion
Right hereunder.
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22. Conversion of CPPUs into Units
22.1 Right of Conversion
22.1.1 No CPPU shall be convertible into Units at the option of the Manager.
22.1.2 A CPPU Holder shall have the sole right to convert any number of CPPUs into
Units on any one or more Conversion Dates in accordance with this paragraph
22, provided that the number of CPPUs converted in each Financial Year shall
not exceed one-third of the total number of CPPUs initially issued to the CPPU
Holder.
22.2 Conversion Dates
22.2.1 Subject to paragraph 22.2.3 below, no CPPUs shall be convertible into Units
during the Restriction Period.
22.2.2 Subject to paragraphs 22.1.2, 22.2.4 and 22.2.5 and without prejudice to
paragraph 22.2.3 below, following the expiry of the Restriction Period, a CPPU
Holder shall be entitled (but shall not be obliged) to convert its CPPUs into Units
on each Conversion Date, being a Business Day to be determined at the CPPU
Holder’s discretion.
22.2.3 In the event that (i) an intention to make a general offer to acquire the Units,
including Units, if any, held by the CPPU Holders is announced in accordance
with the Singapore Code on Take-overs and Mergers or (ii) the Manager
announces an intention to carry out a Permitted Reorganisation, the CPPU
Holders shall, notwithstanding the Restriction Period and anything else to the
contrary in the other provisions of the CPPU Terms but to the extent permitted by
law and subject to any ruling from any relevant authority, be entitled (but shall not
be obliged) to exercise their Conversion Right to convert all or part of their
CPPUs into Units by delivering the Conversion Notice and the confirmation
note(s) representing the CPPUs being converted to the Registrar in accordance
with paragraph 22.5 below save that the Conversion Notice shall be issued and
delivered, together with the relevant confirmation note(s), on a Business Day
within 14 days from the date of the announcement of the general offer, and the
CPPUs shall be converted into Units on a Conversion Date occurring as soon as
reasonably practicable and in any event not more than two Business Days after
the delivery of the Conversion Notice and the relevant confirmation note(s).
22.2.4 If and whenever the Manager issues a Unit Redemption Notice, the Manager
shall at the same time issue a Unit Redemption Notice to the CPPU Holders as
if they were Unitholders. After the expiry of the Restriction Period and upon the
issuance of the Unit Redemption Notice, the CPPU Holders shall,
notwithstanding anything else to the contrary in the other provisions of the CPPU
Terms, be entitled (but shall not be obliged) to exercise their Conversion Right to
convert up to one-third of the total number of CPPUs initially issued into Units by
delivering the Conversion Notice and the confirmation note(s) representing the
CPPUs being converted to the Registrar in accordance with paragraph 22.5
below, save that the Conversion Notice shall be issued and delivered on a
Business Day together with the relevant confirmation note(s), within 14 days from
the date of the issuance of the Unit Redemption Notice. The CPPUs shall be
converted into Units on a Conversion Date occurring as soon as reasonably
practicable and in any event not more than two Business Days after the delivery
of the Conversion Notice and the relevant confirmation note(s). The CPPU
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Holders shall be entitled (but not be obliged) to redeem all or a part of their Units
issued upon such conversion on the terms and in the manner as set out in the
Unit Redemption Notice and subject to Clause 7 of the Trust Deed (save as
otherwise expressly provided in this paragraph 22.2.4). For the avoidance of
doubt, the CPPU Holders shall not be entitled to exercise their Conversion Right
when the Manager issues a Unit Redemption Notice during the Restriction
Period.
22.2.5 During the Restriction Period, the CPPU Holders shall not be entitled to exercise
their Conversion Right when the Manager exercises its Redemption Right. After
the expiry of the Restriction Period and in the event that the Redemption Right is
exercised in respect of any of the CPPUs, the CPPU Holders shall be entitled (but
shall not be obliged) at any time to exercise their Conversion Right to convert up
to one-third of the total number of CPPUs initially issued into Units in accordance
with paragraph 22.5 on a date no later than five Business Days prior to the date
fixed for redemption thereof. For the avoidance of doubt, any exercise of the
Conversion Right by the CPPU Holders in respect of their CPPUs which are the
subject of the Redemption Right shall prevail and the Redemption Notice shall be
disregarded in respect of such CPPUs, provided that the CPPU Holders have
exercised their Conversion Right no later than five Business Days prior to the
date fixed for redemption of such CPPUs.
22.2.6 For the purpose of computing the one-third limit on the CPPUs to be converted
pursuant to paragraphs 22.2.4 and 22.2.5 and determining the CPPUs which are
entitled to be converted, the Conversion Notices which are first served on the
Manager by the CPPU Holders in accordance with paragraph 22.5 shall prevail.
22.3 Conversion Ratio
The number of Units to be issued on conversion of a CPPU shall be determined by dividing
the Issue Price for such CPPU by the Conversion Price applicable as at the relevant
Conversion Date.
22.4 Fractions of Units
Fractions of Units will not be issued on conversion and no cash adjustments will be made
in respect thereof.
22.5 Conversion Notice
22.5.1 A CPPU Holder wishing to exercise its Conversion Right shall issue and deliver
to the Registrar between 9.00 a.m. and 5.00 p.m. on the relevant Exercise Day,
a Conversion Notice in the form (for the time being current) obtainable from the
specified office of the Registrar.
22.5.2 Each Conversion Notice shall specify, inter alia:
(i) the Conversion Date;
(ii) the number of CPPUs to be converted on the Conversion Date; and
(iii) (for so long as the Units are Listed on the SGX-ST) the details of the
Securities Account of the person or persons in respect of which the Units will
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be issued pursuant to the conversion will be credited, or (if the Units are not
Listed on the SGX-ST) details of the person or persons in respect of which
the Units to be issued pursuant to the conversion will be credited,
and shall contain, inter alia:
(a) a representation, warranty and undertaking from the CPPU Holder to the
Manager that, for the purposes of conversion on the relevant Conversion
Date and in respect of such number of CPPUs which the Registrar shall
declare as being convertible on that Conversion Date, (a) (where the
CPPUs are Unlisted), it is the registered holder of and will be the registered
holder of such number of CPPUs on the relevant Conversion Date; and (b)
(where the CPPUs are Listed), such number of CPPUs is held in its
Securities Account and will be held in its Securities Account on the relevant
Conversion Date; and
(b) an acknowledgement from the CPPU Holder that it shall be responsible for
paying all relevant Conversion Taxes.
22.5.3 The Conversion Notice shall be delivered by the CPPU Holder in accordance with
paragraph 29 below.
22.5.4 A Conversion Notice once delivered by the CPPU Holder shall be irrevocable and
may not be withdrawn unless the Manager consents to such withdrawal.
22.5.5 No defect in the Conversion Notice or in its issuance shall affect the validity of the
conversion proceedings.
22.6 Confirmation of Conversion
The Registrar shall, as soon as practicable, notify the Manager and the relevant CPPU
Holders in writing of the number of CPPUs to be converted on the relevant Conversion
Date at the Conversion Price. Such notification shall be conclusive and binding on each
CPPU Holder. The outcome of the exercise of Conversion Right by the CPPU Holders
shall on an aggregated basis, be announced on the SGXNET as soon as practicable upon
the Manager’s receipt of the notification from the Registrar.
22.7 Conversion Price
22.7.1 Subject to paragraph 22.7.2 below, the Conversion Price at which Units will be
issued upon conversion of the CPPUs shall be at a premium of 15 per cent.
above the theoretical ex-rights price (“TERP”) per Unit where:
TERP =A + B
C
Where:
A : market capitalisation of the Trust based on the Closing
Price
B : gross proceeds from the Rights Issue
C : the number of Units in issue after the Rights Issue
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Closing
Price
: The closing price of S$0.810 per Unit on the last trading
day of the Units prior to the announcement of the Rights
Issue
Rights Issue : The underwritten renounceable rights issue where new
Units would be offered to eligible holders of Units to raise
gross proceeds of approximately S$218.3 million.
22.7.2 The Conversion Price shall be subject to adjustment from time to time in the
manner provided in paragraph 22.8 below.
22.8 Adjustments to Conversion Price
22.8.1 The Conversion Price will be subject to adjustment in the following events:
(i) Consolidation or Subdivision or any Unit Buy-back
(a) If and when there shall be an alteration to the number of issued Units
as a result of consolidation or subdivision or as a result of any
buy-back of Units by the Trustee in accordance with the Listing Rules,
the Conversion Price shall be adjusted by multiplying the Conversion
Price in force immediately before such alteration by the following
fraction:
A
B
Where:
A : the aggregate number of issued Units immediately before
such alteration
B : the aggregate number of issued Units immediately after
such alteration
(b) Such adjustment shall become effective on the date the alteration
takes effect.
(ii) Capitalisation of Profits or Reserves:
(a) If and when any Units are issued, credited as fully paid to the Holders
or the Depositors (as the case may be) by way of capitalisation of
profits or reserves, save where Units are issued in lieu of the whole or
any part of a specifically declared cash distribution (the “Relevant
Cash Preferred Distribution”), being a distribution which the Holders
concerned would or could otherwise have received (a “Scrip Preferred
Distribution”), the Conversion Price shall be adjusted by multiplying
the Conversion Price in force immediately before such issue by the
following fraction:
A
B
B-19
Where:
A : the aggregate number of issued Units immediately before
such issue
B : the aggregate number of issued Units immediately after
such issue
(b) In the case of an issue of Units by way of a Scrip Preferred Distribution
where the Market Price on the last trading day preceding the date on
which the Scrip Preferred Distribution is publicly announced of such
Units exceeds 105 per cent. of the amount of the Relevant Cash
Preferred Distribution or the relevant part thereof, the Conversion
Price shall be adjusted by multiplying the Conversion Price in force
immediately before the issue of such Units by the following fraction:
A + B
A + C
Where:
A : the aggregate number of Units in issue immediately before
such announcement
B : the aggregate number of Units issued by way of such Scrip
Preferred Distribution multiplied by a fraction of which (i) the
numerator is the amount of the whole, or the relevant part, of
the Relevant Cash Preferred Distribution and (ii) the
denominator is the Market Price on the last trading day
preceding the date on which the Scrip Preferred Distribution
is publicly announced, issued by way of Scrip Preferred
Distribution in respect of each existing Unit in lieu of the
whole, or the relevant part, of the Relevant Cash Preferred
Distribution
C : the aggregate number of Units issued by way of such Scrip
Preferred Distribution
or by making such other adjustment as the Independent Financial
Institution (acting as an expert), shall certify to the Trustee is fair and
reasonable.
(c) Such adjustment as set out in (a) and (b) shall become effective on the
date of issue of such Units or if a record date is fixed therefor, the day
immediately after such record date.
(iii) Rights Issues of Units or Options over Units
(a) If and when Units are issued to all or substantially all the Holders or the
Depositors (as the case may be) as a class by way of rights, or any
options, warrants or other rights to subscribe for or purchase any Units
are issued or granted to all or substantially all the Holders or the
Depositors (as the case may be), in each case at less than 95 per cent.
of the Market Price per Unit on the last trading day preceding the date
of the announcement of the terms of such issue or grant, the
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Conversion Price shall be adjusted by multiplying the Conversion Price
in force immediately before such issue or grant by the following
fraction:
A + B
A + C
Where:
A : the number of Units in issue immediately before such
announcement
B : the number of Units which the aggregate amount (if any)
payable for the Units issued by way of rights or for the
options or warrants or other rights issued by way of rights
and for the total number of Units comprised therein would
purchase at such Market Price per Unit
C : the aggregate number of Units issued or, as the case may
be, comprised in the issue or grant
(b) Such adjustment shall become effective on the date of issue of such
Units or issue or grant of such options, warrants or other rights (as the
case may be).
(iv) Rights Issues of Other Securities
(a) If and when any securities in the Trust (other than Units or options,
warrants or other rights to subscribe for or purchase Units) are issued
to all or substantially all the Holders or the Depositors (as the case may
be) as a class by way of rights, or any options, warrants or other rights
to subscribe for or purchase any securities (other than Units or options,
warrants or other rights to subscribe or purchase Units), the
Conversion Price shall be adjusted by multiplying the Conversion Price
in force immediately before such issue or grant by the following
fraction:
A − B
A
Where:
A : the Market Price of each Unit on the last trading day
preceding the date on which such issue or grant is publicly
announced
B : the fair market value on the date of such announcement, as
determined in good faith by an independent financial
institution (acting as an expert) (“Independent Financial
Institution”, and the fair market value, the “Fair Market
Value”), of the portion of the rights attributable to each Unit
(b) Such adjustment shall become effective on the date of issue of the
securities or grant of such rights, options or warrants (as the case may
be).
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(v) Issues of Units at less than the Market Price
(a) If and when any Units (other than Units issued on the exercise of
Conversion Rights, or on the exercise of any other rights of conversion
into, or exchange or subscription for, Units) are issued (otherwise than
as set out in paragraph 22.8.1(iii) above) or any options, warrants or
other rights to subscribe for or purchase Units are issued or granted
(otherwise than as set out in paragraph 22.8.1(iii) above), in each case
at a price per Unit which is less than 90 per cent. of the Market Price
on the last trading day preceding the date of announcement of the
terms of such issue, the Conversion Price shall be adjusted by
multiplying the Conversion Price in force immediately before such
issue by the following fraction:
A + B
C
Where:
A : the number of Units in issue immediately before the issue of
such additional Units or the grant of such options, warrants
or other rights to subscribe for or purchase any Units
B : the number of Units which the aggregate consideration
receivable for the issue of such additional Units would
purchase at such Market Price per Unit
C : the number of Units in issue immediately after the issue of
such additional Units
(b) References to additional Units in the above formula shall, in the case
of an issue of options, warrants or other rights to subscribe or purchase
Units, mean such Units to be issued, or otherwise made available,
assuming that such options, warrants or other rights are exercised in
full at the initial exercise price (if applicable) on the date of issue of
such options, warrants or other rights.
(c) Such adjustment shall become effective on the date of issue of such
additional Units or, as the case may be, the grant of such options,
warrants or other rights.
(vi) Issues of Other Securities at less than the Market Price
(a) Save in the case of an issue of securities arising from a conversion or
exchange of other securities in accordance with this paragraph
22.8.1(vi), if and when any securities (other than CPPUs) in the Trust
are issued (otherwise than as set out in paragraphs 22.8.1(iii),
22.8.1(iv) and 22.8.1(v) above) by the Manager, any subsidiary of the
Trust or any other company, person or entity at the direction or request
of or pursuant to any arrangements with the Trustee, the Manager or
any subsidiary of the Trust which by their terms of issue carry rights of
conversion into, or exchange or subscription for, Units to be issued
upon conversion, exchange or subscription at a consideration per Unit
which is less than 95 per cent. of the Market Price on the last trading
day preceding the date of announcement of the terms of issue of such
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securities, the Conversion Price shall be adjusted by multiplying the
Conversion Price in force immediately before such issue by the
following fraction:
A + B
A + C
Where:
A : the number of Units in issue immediately before such issue
B : the number of Units which the aggregate consideration
receivable by the Trust for the Units to be issued on
conversion or exchange or on exercise of the right of
subscription attached to such securities would purchase at
such Market Price per Unit
C : the maximum number of Units to be issued on conversion or
exchange of such securities or on the exercise of such rights
of subscription attached thereto at the initial conversion,
exchange or subscription price or rate
(b) Such adjustment shall become effective on the date of issue of such
securities.
(vii) Modification of Rights of Conversion etc
(a) Any conversion, exchange or subscription attaching to any such
securities as are mentioned in paragraph 22.8.1(vi) above (other than
in accordance with the terms applicable to such securities) so that the
consideration per Unit (for the number of Units available on
conversion, exchange or subscription following the modification) is
less than 95 per cent. of the Market Price on the last trading day
preceding the date of announcement of the proposals for such
modification. In such an event, the Conversion Price shall be adjusted
by multiplying the Conversion Price in force immediately before such
modification by the following fraction:
A + B
A + C
Where:
A : the number of Units in issue immediately before such
modification
B : the number of Units which the aggregate consideration (if
any) receivable by the Trust for the Units to be issued, or
otherwise made available, on conversion or exchange or on
exercise of the right of subscription attached to such
securities, in each case so modified, would purchase at such
Market Price per Unit on the last trading day preceding the
date of the announcement of the proposals or, if lower, the
existing conversion, exchange or subscription price of such
securities
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C : the maximum number of Units to be issued, or otherwise
made available, on conversion or exchange of such
securities or on the exercise of such rights of subscription
attached thereto at the modified conversion, exchange or
subscription price or rate but giving credit in such manner as
an Independent Financial Institution (acting as an expert),
considers appropriate (if at all) for any previous adjustment
under paragraph 22.8.1(vi) above or this paragraph
22.8.1(vii)
(b) Such adjustment shall become effective on the date of modification of
the rights of conversion, exchange or subscription attaching to such
securities.
(viii) Other Offers to Unitholders
(a) The issue, sale or distribution by or on behalf of the Trust or any
subsidiary of the Trust or (at the direction or request of or pursuant to
any arrangements with the Manager or any subsidiary of the Trust) any
other company, person or entity of any securities in connection with an
offer by or on behalf of the Trust or any of its subsidiary(ies) or such
other company, person or entity pursuant to which offer the Holders
generally (meaning for these purposes the holders of at least 60 per
cent. of the Units outstanding at the time such offer is made) are
entitled to participate in arrangements whereby such securities may be
acquired by them (except where the Conversion Price falls to be
adjusted under paragraph 22.8.1(iii), 22.8.1(iv) or 22.8.1(v) above). In
such an event, the Conversion Price shall be adjusted by multiplying
the Conversion Price in force immediately before such issue by the
following fraction:
A − B
A
Where:
A : the Market Price of one Unit on the last trading day
preceding the date on which such issue is publicly
announced
B : the Fair Market Value on the date of such announcement, of
the portion of the rights attributable to one Unit.
(b) Such adjustment shall become effective on the date of issue of the
securities.
22.8.2 The Trustee shall not be under any duty to monitor whether any event or
circumstance has happened or exists which may require an adjustment to be
made to the Conversion Price and will not be responsible to CPPU Holders for
any loss arising from any failure by it to do so.
22.8.3 On any adjustment, the relevant Conversion Price shall be rounded down to the
nearest S$0.0001.
B-24
22.8.4 Any adjustment not required to be made, and any amount by which the
Conversion Price has not been rounded down, shall be carried forward and taken
into account in any subsequent adjustment.
22.8.5 No adjustment shall be made to the Conversion Price:
(i) where such adjustment (rounded down if applicable) would be less than 1.0
per cent. of the Conversion Price applicable at the time of such adjustment,
but instead carried forward in accordance with paragraph 22.8.4;
(ii) where such adjustment would result in a reduction of the Conversion Price
such that, on conversion of the CPPUs, Units would be issued in any
circumstances not permitted by applicable law; or
(iii) where such adjustment would result in an increase in the Conversion Price,
except in the case of a consolidation of the Units as referred to in paragraph
22.8.1(i) above or to correct a manifest error.
22.9 Notice of Adjustment in the Conversion Price
The Manager shall give notice to the CPPU Holders in accordance with paragraph 29
below of any change in the Conversion Price as soon as practicable after the
determination thereof. Any such notice relating to a change in the Conversion Price shall
set forth:
(i) the event giving rise to the adjustment;
(ii) the Conversion Price prior to such adjustment;
(iii) the adjusted Conversion Price; and
(iv) the effective date of such adjustment.
22.10 Taxes and Duties
22.10.1 A CPPU Holder must pay directly to the relevant authorities any Conversion
Taxes.
22.10.2 The relevant CPPU Holder shall provide an acknowledgement in the Conversion
Notice that it shall be responsible for paying all relevant Conversion Taxes.
22.10.3 Neither the Trustee nor the Manager shall be responsible or liable in any way to
anyone for any failure or omission by the CPPU Holders to pay the Conversion
Taxes.
22.11 Registration
22.11.1 For so long as the CPPUs are Unlisted, a conversion of the CPPUs and
corresponding issue of Units pursuant to such conversion shall be made only if
the CPPU Holder has delivered the confirmation note(s) representing the CPPUs
being converted at least two Business Days prior to such conversion.
B-25
22.11.2 The Manager will, on the Conversion Date, upon the conversion of the CPPUs
into Units pursuant to the exercise of the Conversion Right:
(i) allot and issue the relevant number of Units for credit to the Securities
Account designated for the purpose in the Conversion Notice for so long as
the Units are Listed on the SGX-ST; or if the Units are not Listed on the
SGX-ST, allot and issue the relevant number of Units to the person or
persons designated for the purpose in the Conversion Notice;
(ii) (for so long as the Units are Listed on the SGX-ST) issue or cause to be
issued to the Depository a confirmation note confirming the allotment of
Units in accordance with the Trust Deed, and the Depository shall issue to
each relevant Depositor such contract statements, confirmation notes,
statements of accounts balances and statements of transactions and
accounts balances, and at such intervals, as may be provided for in the
Depository’s terms and conditions for operation of Securities Accounts;
(iii) (if the Units are not Listed on the SGX-ST) issue or cause to be issued to
the person or persons designated for the purpose in the Conversion Notice
a confirmation note confirming the allotment of Units in accordance with the
Trust Deed;
(iv) (where only a part of the CPPUs held by a CPPU Holder have been
converted and the CPPUs are Listed on the SGX-ST) issue or cause to be
issued to the Depository a new confirmation note reflecting the remaining
number of CPPUs held by the Depository and the provisions of paragraph
6.2 above shall mutatis mutandis apply; and
(v) (where only a part of the CPPUs held by a CPPU Holder have been
converted and the CPPUs are Unlisted) issue or cause to be issued to the
CPPU Holder a new confirmation note reflecting the remaining number of
CPPUs held by the CPPU Holder and the provisions of paragraph 6.4 above
shall mutatis mutandis apply.
22.11.3 The Trustee shall, upon the conversion of the CPPUs into Units pursuant to the
exercise of the Conversion Right on the Conversion Date, remove or procure the
removal of the name of the relevant CPPU Holder from the Register of Preferred
Unitholders as holder in respect of all or (as the case may be) such number of
CPPUs converted, and register or procure the registration of the Depository or
the person or persons designated for the purpose in the Conversion Notice (as
the case may be) in the Register as holder(s) in respect of the relevant number
of Units allotted and issued pursuant to the conversion, upon the delivery to the
Trustee of a written statement signed by or on behalf of the Manager stating that
all the CPPUs or a specified number of CPPUs held by such CPPU Holder have
been converted and the relevant number of Units have been allotted and issued
in the name of the Depository or the person or persons designated for the
purpose in the Conversion Notice (as the case may be).
22.11.4 The person or persons designated in the Conversion Notice shall become the
holder(s) on record of the number of Units issuable upon conversion with effect
from the Registration Date, being (i) where the Units are Listed on the SGX-ST,
the date the relevant Units are credited to their respective accounts with the
Depository or (ii) where the Units are Unlisted, the date of registration of such
person or persons as holders in the Register.
B-26
22.12 Rights and Preferred Distribution Entitlements upon Conversion
22.12.1 The Units issued upon conversion of the CPPUs shall, in respect of entitlement
to distributions which may be declared in respect of Units and in all other
respects, rank pari passu with the existing Units in issue on the relevant
Registration Date, provided that a holder of Units issued on conversion of any
CPPUs shall not be entitled to any rights the record date for which precedes the
relevant Registration Date.
22.12.2 Where the Units to be issued upon conversion of the CPPUs shall entitle the
relevant holder to receive a distribution which may be declared in respect of the
Units for a Distribution Period, the CPPUs which are to be converted shall not
entitle the CPPU Holder to receive any Preferred Distributions in respect of any
Preferred Distribution Period coinciding with that Distribution Period.
23. Payment of Moneys to CPPU Holders
23.1 Place and Conditions of Payment
23.1.1 Save as otherwise expressly provided in the CPPU Terms, any moneys payable
by the Trustee or the Manager to any CPPU Holder under the provisions of the
CPPU Terms shall be paid by cheque sent through the post to the registered
address of such CPPU Holder or, in the case of CPPU Joint Holders, to the
registered address of the CPPU Joint Holders who is first named in the Register
of Preferred Unitholders or to the registered address of any other of the CPPU
Joint Holders as may be authorised by all of them. Every such cheque shall be
made payable to the order of the person to whom it is delivered or sent and
payment of the cheque by the banker upon whom it is drawn shall be a
satisfaction of the moneys payable and shall be a good discharge to the Trustee
or the Manager (as the case may be).
23.1.2 Where the Trustee or Manager (as the case may be) receives the necessary
authority in such form as the Trustee or Manager (as the case may be) shall
consider sufficient, the Trustee or Manager (as the case may be) shall pay the
amount due to any CPPU Holder to its bankers or other agent and the receipt of
such an amount by such bankers or other agent shall be a good discharge
therefor.
23.1.3 No amount payable to any CPPU Holder shall bear interest.
23.1.4 Unless otherwise expressly provided in the CPPU Terms, all moneys payable by
the Trustee or the Manager to any CPPU Holder under the provisions of the
CPPU Terms shall be paid in Singapore dollars.
23.2 Deductions
23.2.1 Without prejudice to any other provisions of the CPPU Terms, before any
payment is made to a CPPU Holder, there shall be deducted such amounts as
any law of Singapore or any law of any other country in which such payment is
made may require or allow in respect of any income or other Taxes, charges or
assessments whatsoever and there may also be deducted the amount of any
stamp duties or other government taxes or charges payable by the Manager or
(as the case may be) the Trustee for which the Manager or (as the case may be)
the Trustee may be made liable in respect of or in connection therewith.
B-27
23.2.2 Neither the Manager nor the Trustee shall be liable to account to a CPPU Holder
for any payment made or suffered to be made by the Manager or (as the case
may be) the Trustee in good faith and in the absence of fraud, gross negligence,
wilful default or a breach of this Deed or a breach of trust to any duly empowered
fiscal authority of Singapore or elsewhere for Taxes or other charges in any way
arising out of or relating to any transaction of whatsoever nature under the Trust
Deed notwithstanding that any such payments ought not to be, or need not have
been, made or suffered to be made.
23.3 Receipt of CPPU Holders
The receipt of the CPPU Holder for any amounts payable in respect of the CPPUs shall
be a good and absolute discharge to the Manager or (as the case may be) the Trustee and
if several persons are registered as CPPU Joint Holders, or in consequence of the death
of a CPPU Unitholder, are entitled to be so registered, any one of them may give effective
receipts for any such amounts.
23.4 Unclaimed Moneys
23.4.1 Any moneys payable to a CPPU Holder under the CPPU Terms which remain
unclaimed after a period of 12 months shall be accumulated in the Unclaimed
Moneys Account from which the Trustee may, from time to time, make payments
to a CPPU Holder claiming any such moneys.
23.4.2 Subject to Clause 26 of the Trust Deed and the CPPU Terms, the Trustee shall
cause such sums which represent moneys remaining in the Unclaimed Moneys
Account for five years after the date for payment of such moneys into the
Unclaimed Moneys Account and interest, if any, earned thereon to be paid into
court after deducting from such sum all fees, costs and expenses incurred in
relation to such payment into court PROVIDED THAT if the said moneys are
insufficient to meet all such fees, costs and expenses, the Trustee shall be
entitled to have recourse to the Deposited Property.
24. Provision of Annual Report
The Manager shall, after the Listing Date, send to CPPU Holders within such period as
may be prescribed under the Trust Deed for despatch to Unitholders, an annual report
disclosing the matters set out in the Property Funds Appendix, the Listing Rules and any
other matters as may be prescribed by the relevant authorities.
25. Provision of Accounts
25.1 The Trustee shall send or cause to be sent to CPPU Holders, once a year (and within such
period as may be prescribed under the Trust Deed for despatch to Unitholders after the
end of the period to which they relate) together with the relevant annual report, Accounts
which contain such information as may be prescribed under the Property Funds Appendix,
where applicable, and such other information as the Manager may from time to time
determine.
B-28
26. Meetings and Voting Rights
26.1 Meetings of Unitholders
The CPPU Holders shall not be entitled to attend and vote at meetings of Unitholders
except in the following circumstances:
(i) during such period as the Preferred Distribution or Special Preferred Distribution so
declared or any part thereof remains in arrears and unpaid for at least 12 months
after the date when the Preferred Distribution or Special Preferred Distribution should
otherwise have been paid if declared by the Manager;
(ii) in respect of any resolution which varies or abrogates any right, preference or
privilege of the CPPUs (including, without limitation, the authorisation, creation or
issue of any securities or ownership interests and all obligations of the Trust ranking
senior to (but excluding, for purposes of this paragraph 26.1 only, those ranking pari
passu with) the CPPUs as to entitlement to participate in the distributions and/or (in
the event of any dissolution or winding up of the Trust) the Deposited Property); or
(iii) in respect of any resolution for the dissolution or winding up of the Trust,
and every CPPU Holder who is present in person at such general Meetings shall have on
a show of hands, one vote and on a poll, one vote for every CPPU of which it is the holder.
26.2 Meetings of CPPU Holders
26.2.1 The CPPU Holders shall be entitled to attend and vote at meetings of the CPPU
Holders. The provisions of Schedule 1 of the Trust Deed shall mutatis mutandis
apply to any meeting of the CPPU Holders, except as otherwise provided in
paragraphs 26.3, 26.4, 26.5, 26.6 and 26.7 below.
26.2.2 A resolution passed at a meeting of CPPU Holders is binding on all CPPU
Holders.
26.3 Convening Meetings of CPPU Holders
26.3.1 A meeting of the CPPU Holders may be convened at the request in writing of such
number of CPPU Holders representing not less than 10 per cent. of the issued
CPPUs or by not less than 50 CPPU Holders.
26.3.2 A meeting of CPPU Holders duly convened and held in accordance with the
provisions of this paragraph 26 shall be competent by Extraordinary Resolution
to make any decision which is stated in the CPPU Terms as requiring the consent
of the CPPU Holders by way of an Extraordinary Resolution, and shall have such
further or other powers under such terms and conditions as may be determined
by the Manager with the prior written approval of the Trustee.
26.4 Notice of Meetings of CPPU Holders
The Trustee or the Manager shall cause a notice of any meeting at which any CPPU
Holder is entitled to vote, and any voting forms, to be mailed to each CPPU Holder in
accordance with paragraph 29 below.
B-29
26.5 Quorum
Save in the event where one CPPU Holder holds all the CPPUs in issue (in which case that
CPPU Holder shall constitute the quorum), the quorum for any meeting of CPPU Holders
shall not be less than two CPPU Holders (whether present in person or by proxy), provided
that the quorum at a meeting of CPPU Holders to approve any variation or abrogation of
the rights, preferences or privileges of the CPPUs shall be such number of CPPU Holders
holding or representing not less than two-thirds of the outstanding number of CPPUs.
26.6 Voting
A poll may be demanded by such number of CPPU Holders present at the meeting (in
person or by proxy) and having the right to vote on the resolution, holding not less than
one-tenth in value of the CPPUs in issue.
26.7 Resolutions
A resolution in writing signed by or on behalf of at least 75 per cent. of the CPPU Holders
for the time being entitled to receive notice of any meeting of CPPU Holders shall be as
valid and effectual as a resolution (including an Extraordinary Resolution) passed at a
meeting of those CPPU Holders duly called and constituted. Such resolution may be
contained in one document or in several documents in the like form each signed by or on
behalf of one or more of the CPPU Holders concerned.
27. Variations of Rights
27.1 Subject to paragraph 27.2 below, unless otherwise required by the Relevant Laws,
Regulations and Guidelines, any variation or abrogation of the rights, preferences or
privileges applicable to the CPPUs (including, without limitation, the authorisation,
creation or issue of any securities or ownership interests and all obligations of the Trust
ranking pari passu with or senior to the CPPUs as to entitlement to participate in the
distributions of the Trust and/or (in the event of any dissolution or winding up of the Trust)
the Deposited Property) by way of amendment of the Trust Deed or otherwise shall
require:
(i) the consent in writing of such number of CPPU Holders holding an aggregate of at
least 75 per cent. of the outstanding number of the CPPUs; or
(ii) the sanction of an Extraordinary Resolution passed at a separate meeting of the
relevant CPPU Holders.
27.2 No consent or sanction of the relevant CPPU Holders shall be required in respect of any
variation or abrogation of the rights, preferences or privileges applicable to the CPPUs if
such variation or abrogation is:
(i) necessary in order to comply with applicable fiscal, statutory or official requirements
(whether or not having the force of law), including, without limitation, requirements
under the Relevant Laws, Regulations and Guidelines; or
(ii) made to correct a manifest error.
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27.3 For the avoidance of doubt, the authorisation, creation or issue of further Units or other
securities or ownership interests and all obligations of the Trust ranking junior to the
CPPUs as to entitlement to participate in the distributions and/or (in the event of any
dissolution or winding up of the Trust) the Deposited Property shall not be deemed to be
a variation or abrogation of the rights, preferences or privileges of the CPPUs.
28. Transfer of CPPUs
28.1 Save as provided in paragraph 21.10 above, there are no restrictions on the transfer of the
CPPUs. In any case of transfer, all charges in relation to such transfer as may be imposed
by the Manager and/or the Depository shall be borne by the CPPU Holder or (as the case
may be) the CPPU Depositor who is the transferor.
28.2 For so long as the CPPUs are Unlisted, the transfer of any CPPUs shall comply with the
following procedures:
28.2.1 Any transfer shall be subject to compliance with laws, regulations and
requirements under the Listing Rules.
28.2.2 Any CPPU Holder who wishes to transfer any of its CPPUs shall issue and deliver
a Transfer Instrument to the Manager at its registered office duly signed by the
transferor and transferee.
28.2.3 The Transfer Instrument shall be in such form as the Manager and the Trustee
may from time to time approve, and shall specify the number of CPPUs to be
transferred and the name of the transferee.
28.2.4 The Transfer Instrument must be duly stamped (if required by law) and left with
the Manager for registration accompanied by:
(i) any necessary declarations or other documents that may be required by in
consequence of any Relevant Laws, Regulations and Guidelines for the
time being in force and by such evidence as the Manager may require to
prove the title of the transferor or his right to transfer the CPPUs, and
(ii) the relevant confirmation note(s) representing the CPPUs to be transferred.
28.2.5 No notice of transfer or purported transfer shall be entered on the Register of
Preferred Unitholders, and no transfer or purported transfer of a CPPU shall
entitle the transferee to be registered as a CPPU Holder, unless the transfer has
been properly effected in accordance with the CPPU Terms.
28.2.6 Following the delivery of the notice, the Manager or the Agent appointed by the
Manager shall, in accordance with paragraph 6.4 above, issue to the transferee
a confirmation note confirming the number of CPPUs held by it and, where the
transferor has transferred only a part of the CPPUs held by it, issue to the
transferor a confirmation note confirming the remaining number of CPPUs held
by it upon completion of the transfer.
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28.2.7 The Trustee shall remove or procure the removal of the name of the transferor
from the Register of Preferred Unitholders in respect of all or (as the case may
be) such number of CPPUs transferred, upon the delivery to the Trustee of a
written statement signed by or on behalf of the Manager that all the CPPUs or a
specified number of CPPUs held by such transferor have been transferred, and
shall register the name of the transferee in respect of such number of CPPUs as
may be transferred to it pursuant to the transfer.
28.3 For so long as the CPPUs are Listed on the SGX-ST, the following provisions shall apply
to a transfer of any Preferred Units of such class:
28.3.1 Any transfer shall be subject to compliance with the Relevant Laws, Regulations
and Guidelines.
28.3.2 Transfers of the CPPUs between the CPPU Depositors shall be effected
electronically through the Depository making an appropriate entry in the CPPU
Depository Register in respect of the CPPUs that have been transferred in
accordance with the Depository Requirements and the provisions of paragraph
28.2 shall not apply.
28.3.3 The Manager shall be entitled to appoint the Depository to facilitate transactions
of the CPPUs within the Depository and maintain records of CPPU Holders
credited into Securities Accounts and to pay out of the Deposited Property all
fees, costs and expenses of the Depository arising out of or in connection with
such services to be provided by the Depository.
28.3.4 Any transfer or dealing in the CPPUs on the SGX-ST between a CPPU Depositor
and another person shall be transacted at a price agreed between the parties and
settled in accordance with the Depository Requirements.
28.3.5 The broker or other financial intermediary effecting any transfer or dealing in the
CPPUs on the SGX-ST between a CPPU Depositor and another person shall be
deemed to be the agent duly authorised by any such CPPU Depositor or person
on whose behalf the broker or intermediary is acting.
28.3.6 In any case of transfer, all charges in relation to such transfer as may be imposed
by the Manager and/or the Depository shall be borne by the CPPU Depositor who
is the transferor.
28.3.7 In the case of a transfer of CPPUs from a Securities Account into another
Securities Account, the instrument of transfer (if applicable) shall be in such form
as provided by the Depository and the transferor shall be deemed to remain the
CPPU Depositor in respect of the CPPUs transferred until the relevant CPPUs
have been credited into the Securities Account of the transferee or transferred
out of a Securities Account and registered in the CPPU Depository Register.
28.3.8 No transfer or purported transfer of a CPPU Listed on the SGX-ST other than a
transfer made in accordance with this paragraph 28.3 shall entitle the transferee
to be registered in respect thereof.
28.4 If the CPPUs are Listed on any other Recognised Stock Exchange, the transfer of the
CPPUs shall be in accordance with the requirements of the relevant Recognised Stock
Exchange.
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28.5 Successors in Title
The successor in title of any CPPU Holder resulting from a merger or amalgamation shall,
upon producing such evidence as may be required by the Manager and the Trustee of the
succession, be the only person recognised by the Trustee and the Manager as having title
to the CPPUs.
29. Delivery of Documents and Notices
The provisions of Clause 27 of the Trust Deed shall mutatis mutandis apply to any notice
or other document that may be served by the Trustee or the Manager upon any CPPU
Holder, or vice versa, and the service of any such notices or other documents to the
relevant recipient.
30. Destruction of Documents
Subject to any Relevant Laws, Regulations and Guidelines, the Trustee (or the Manager
or the Agent with the approval of the Trustee) shall (subject as hereinafter provided) be
entitled to destroy:
(i) all distribution mandates which have been cancelled or lapsed at any time after the
expiration of six years from the date of cancellation or lapse;
(ii) all notifications of change of address after the expiration of one year from the date
of the recording of the notification;
(iii) all forms of proxy in respect of any meeting of CPPU Holders, one year from the date
of such meeting in respect of which the proxy was given; and
(iv) the Register of Preferred Unitholders, statements and other records and documents
relating to the Trust at any time after the expiration of six years from the date of
termination of the Trust,
and neither the Trustee nor the Manager nor its Agents shall be under any liability
whatsoever in consequence thereof and unless the contrary be proved every document so
destroyed shall be deemed to have been a valid and effective instrument in accordance
with the recorded particulars thereof.
PROVIDED THAT:
(a) the provisions aforesaid shall apply only to the destruction of a document in good
faith and without notice of any claim (regardless of the parties thereto) to which the
document may be relevant;
(b) nothing in this paragraph 30 shall be construed as imposing upon the Trustee or the
Manager or its Agents any liability in respect of the destruction of any document
earlier than as aforesaid or in any case where the conditions of paragraph 25 are not
fulfilled; and
(c) references herein to the destruction of any document include references to the
disposal thereof in any manner.
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31. Appointment of Agents
Without in any way affecting the generality of its powers, the Manager and the Trustee, in
carrying out and performing their respective duties and obligations under the CPPU
Terms, may appoint such person or persons (including, without limitation, the Registrar or
any other Agents) to exercise any or all of their respective powers and discretions and to
perform all or any of their respective obligations hereunder PROVIDED THAT the Manager
or, as the case may be, the Trustee, shall be liable for all acts and omissions of such
persons as if such acts or omissions were its own acts or omissions and all disbursements,
expenses, duties and outgoings in relation thereto shall be paid from the Deposited
Property as an expense of the Trust.
32. Directors’ Disclosure Obligations
32.1 Without prejudice to his obligations under Relevant Laws, Regulations and Guidelines,
each director of the Manager shall give notice to the Manager of:
(i) his acquisition of CPPUs or of an interest in CPPUs, and
(ii) changes to the number of CPPUs which he holds or in which he has an interest,
within two Business Days from the acquisition or the occurrence of the event giving rise
to the change.
32.2 A director of the Manager has an interest in CPPUs:
(i) if the director is the beneficial owner of a CPPU (whether directly through a direct
Securities Account or indirectly through a Depository Agent or otherwise);
(ii) if a body corporate is the beneficial owner of a CPPU and the director is entitled to
exercise or control the exercise of not less than 20 per cent. of the votes attached to
the voting shares in the body corporate;
(iii) if the director’s spouse or Minor child (including step-child and adopted child) has any
interest in a CPPU (including in the circumstances contemplated by paragraphs
32.2(i) and 32.2(ii) above);
(iv) if the director, his spouse or Minor child (including step-child and adopted child):
(a) has entered into a contract to purchase a CPPU;
(b) has a right to have a CPPU transferred to any of them or to their order, whether
the right is exercisable presently or in the future and whether on the fulfilment of
a condition or not;
(c) has the right to acquire a CPPU under an option, whether the right is exercisable
presently or in the future and whether on the fulfilment of a condition or not; or
(d) is entitled (otherwise than by reason of any of them having been appointed a
proxy or representative to vote at a meeting of CPPU Holders) to exercise or
control the exercise of a right attached to a CPPU, not being a CPPU of which any
of them is the holder; and
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(v) if property subject to a trust consists of or includes a CPPU and the director knows,
or ought reasonably to know or has reasonable grounds for believing, that he or any
of the persons referred to in paragraph 32.2(iv) above has an interest under the trust
and the trust property consists of or includes the CPPU.
33. Acting Consistently with the Purpose of the CPPUs
The Trustee and the Manager each hereby acknowledges that the CPPU Terms are
intended to confer certain rights, preferences and privileges on the CPPUs over certain
classes of securities (including Units) as set out in the Trust Deed and hereby undertakes
to give full effect to such intention and not to carry out any act or take any action which may
be inconsistent with or contrary to such intention and which may prejudice the rights and
entitlements of CPPU Holders hereunder.
34. Power to Implement Additional Procedures
The Manager shall have the power to implement such additional procedures or make
amendments to the terms hereunder (to the extent they are procedural or administrative
in nature) as it may, in consultation with the Trustee and, where appropriate, the Agent
and/or the Depository (where the CPPUs are Listed on the SGX-ST), determine in its sole
discretion to be necessary in order to facilitate the administration of the CPPUs.
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APPENDIX C
PROFIT FORECAST
Statements contained in this section which are not historical facts may be forward-lookingstatements. Such statements are based on the assumptions set forth in this section and aresubject to certain risk and uncertainties which could cause actual results to differ materially fromthose projected. Under no circumstances should the inclusion of such information herein beregarded as a representation, warranty or prediction with respect to the accuracy of the underlyingassumptions by the Manager or any other person nor that these results will be achieved or arelikely to be achieved.
The following table sets out OUE C-REIT Group’s Forecast Statement of Total Return for theperiod from 1 October 2015 to 31 December 2015 (the “Forecast Period”) (the “Profit Forecast”).The Profit Forecast has been examined by the Independent Accountants and should be readtogether with their report set out in Appendix D of this Circular as well as the assumptions andsensitivity analysis set out below.
The Profit Forecast is presented based on the following:
(A) Scenario A – Based on the acquisition of a 75.0% indirect interest in OUBC
Scenario A has been prepared based on the following assumptions:
• OUE C-REIT acquires a minimum indirect interest of 75.0% in OUBC;
• the estimated Total Acquisition Cost is S$1,061.2 million comprising the expectedPurchase Consideration of S$1,034.0 million and Acquisition Fee payable in Units tothe Manager of S$9.6 million and estimated debt and/or equity financing related costs,stamp duty, professional and other expenses related to the proposed Acquisition isS$17.6 million;
• the Purchase Consideration for the proposed Acquisition, the financing-related andAcquisition-related costs are funded through the following:
− issue of 393,305,817 Rights Units to Eligible Unitholders on the basis of 9 RightsUnits for every 20 existing Units at the Rights Issue Price of S$0.555;
− debt/borrowings of approximately S$333.3 million;
− issuance of S$500.0 million of CPPUs with a preferred distribution of 1.0% perannum; and
− issuance of 13.2 million new Units as satisfaction of the Acquisition Fee of S$9.6million to the Manager; and
• the proposed Acquisition is completed on 1 October 2015.
(B) Scenario B – Based on the acquisition of an 83.33% indirect interest in OUBC
Scenario B has been prepared based on the following assumptions:
• OUE C-REIT acquires a maximum indirect interest of 83.33% in OUBC;
• the estimated Total Acquisition Cost is S$1,178.3 million comprising the expectedPurchase Consideration of S$1,148.8 million, Acquisition Fee payable in Units to theManager of S$10.7 million and estimated debt and/or equity financing related costs,stamp duty, professional and other expenses related to the proposed Acquisition isS$18.8 million;
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• the Purchase Consideration for the proposed Acquisition, the financing-related andAcquisition-related costs are funded through the following:
− issue of 393,305,817 Rights Units to Eligible Unitholders on the basis of 9 RightsUnits for every 20 existing Units at the Rights Issue Price of S$0.555;
− debt/borrowings of approximately S$399.3 million;
− issuance of S$550.0 million of CPPUs with a preferred distribution of 1.0% perannum; and
− issuance of 14.7 million new Units as satisfaction of the Acquisition Fee of S$10.7million to the Manager; and
• the proposed Acquisition is completed on 1 October 2015.
Forecast Statement of Total Return
Forecast Period(1 October 2015 – 31 December 2015)
ExistingPortfolio
Enlarged Portfolio(1)
S$’000 Scenario A Scenario B
Gross revenue 19,740 40,263 40,263Property operating expenses (5,259) (11,334) (11,334)
Net property income 14,481 28,929 28,929Other income 2,174 2,174 2,174Amortisation of intangible asset (1,047) (1,047) (1,047)Manager’s management fees (1,290) (2,293) (2,404)Trustee’s fee (75) (135) (140)Other expenses (408) (685) (685)
Finance income 19 19 19Finance cost (5,143) (11,850) (12,516)
Net finance costs (5,124) (11,831) (12,497)
Total return for the period before tax 8,711 15,112 14,330Tax expense (1,084) (2,983) (2,983)
Total return for the period 7,627 12,129 11,347
Attributable to:Unitholders 7,627 9,889 9,853Non-controlling interest – 2,240 1,494
Total return for the period 7,627 12,129 11,347
Reconciliation from total return for theperiod to amount available for distributionto UnitholdersTotal return attributable to Unitholders 7,627 9,889 9,853Distribution adjustments(2) 4,306 6,077 6,306
11,933 15,966 16,159Distribution attributable to CPPU Holders(3) – (1,250) (1,375)
Amount available for distribution 11,933 14,716 14,784
Number of Units entitled to Distribution (’000) 878,774(4) 1,286,996(5) 1,288,615(6)
Assuming CPPUs are not converted:DPU (cents) 1.36 1.14 1.15DPU Yield (annualised) 6.6%(7) 6.2%(8) 6.2%(8)
DPU Yield based on Rights Issue Price(annualised) N/A 8.2% 8.2%
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Notes:
(1) Enlarged Portfolio comprises Existing Portfolio and 75.0% indirect interest in OUBC and 83.33% indirect
interest in OUBC under Scenario A and Scenario B respectively.
(2) Distribution adjustments comprise non-tax deductible and other adjustments, mainly 100% of the Manager’s
management base fee payable in Units, amortisation of intangible assets, amortisation of debt-related
transaction costs, trustee’s fee, depreciation expense and deferred tax expense.
(3) Assumes the issuance of S$500.0 million and S$550.0 million of CPPUs with a preferred distribution of 1.0%
per annum for Scenario A and Scenario B respectively.
(4) Comprises 874.0 million Units issued as at the Latest Practicable Date and estimated 4.8 million Units to be
issued in satisfaction of the Manager’s management base fee from the Latest Practicable Date to 31
December 2015.
(5) Comprises 874.0 million Units issued as at the Latest Practicable Date and estimated 6.5 million Units to be
issued in satisfaction of the Manager’s management base fee from the Latest Practicable Date to 31
December 2015, 13.2 million new Units to be issued in satisfaction of the Acquisition Fee payable to the
Manager for the proposed Acquisition and 393.3 million new Units to be issued for the Rights Issue at the
Rights Issue Price of S$0.555.
(6) Comprises 874.0 million Units issued as at the Latest Practicable Date and estimated 6.6 million Units to be
issued in satisfaction of the Manager’s management base fee from the Latest Practicable Date to 31
December 2015, 14.7 million new Units to be issued in satisfaction of the Acquisition Fee payable to the
Manager for the proposed Acquisition and 393.3 million new Units to be issued for the Rights Issue at the
Rights Issue Price of S$0.555.
(7) Based on closing market price of S$0.815 per Unit as at the Latest Practicable Date.
(8) Based on TERP of S$0.731 per Unit.
1. Assumptions
The major assumptions made in preparing the Profit Forecast are set out below. The
Manager considers these assumptions to be appropriate and reasonable at the date of this
Circular.
1.1 Gross Revenue for the Properties
1.1.1 Gross Revenue
Gross revenue comprises the following:
(i) gross rental income which consist of base rental income, turnover rent and
service fee income (“Gross Rental Income”);
(ii) other property related income derived from the properties; and
(iii) net of 5.65% business tax and surcharges for Lippo Plaza.
For the Existing Portfolio, the gross revenue is forecasted to be S$19.7 million for the
Forecast Period for both scenarios.
The percentage of projected Gross Rental Income attributable to committed leases
(including legally binding letters of offer which have been accepted) for the Existing
Portfolio as at 31 March 2015 are estimated as follows:
Percentage of Gross Rental Income
attributable to committed leases (%) Existing Portfolio
OUE Bayfront 95.6%
Lippo Plaza 92.2%
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Following the expiry of a committed lease, the Manager has used the following
process to forecast the gross rent for the period following such expiry:
(i) The Manager has assessed the market rent for each portion of lettable area as
at 31 March 2015. The market rent is the rent which the Manager believes could
be achieved if each lease was renegotiated as at 31 March 2015 and is
estimated with reference to (a) gross rent payable pursuant to comparable
leases for tenancies that have recently been negotiated, (b) the effect of
competing retail and office properties, (c) assumed tenant retention rates on
lease expiry, (d) likely market conditions, (e) inflation levels and (f) tenant
demand levels.
(ii) If a committed lease expires in the Forecast Period, the Manager has assumed
that the rental rates payable under the new lease (or lease renewal) will be the
market rent, or the actual rent committed (if the lease agreement or letter of
offer has been entered into).
For One Raffles Place, the gross revenue is forecasted to be S$20.5 million. The
Manager has assumed the market rent, which the Manager believes could be
achieved and is estimated with reference to (a) the effect of competing office and
retail properties, (b) assumed tenant retention rates on lease expiry, (c) likely market
conditions, (d) inflation levels and (e) tenant demand levels.
1.1.2 Vacancy Allowance
For leases expiring during the Forecast Period, where the actual vacancy period are
already known pursuant to commitment to leases which are in place as at 31 March
2015, the actual vacancy periods have been used in the forecast.
For the leases expiring during the Forecast Period which are assumed not to be
renewed, it has been assumed that these leases will experience a vacancy period of
between 2.0 to 6.0 months for OUE Bayfront and Lippo Plaza and 6.0 months for One
Raffles Place before rent becomes payable under a new lease.
1.1.3 Other Income earned from the Properties
Other income comprises car park revenue, and other income attributable to the
operation of the Properties, including items such as license fees, profit rent,
temporary air-conditioning and chilled water supply. The assessment of other income
is based on existing agreements, historical income collections and the Manager’s
assessment of the properties.
1.2 Property Operating Expenses
Property operating expenses consist of property-related taxes, property management fee,
centre management fee and other property expenses (including operating and maintenance
expenses, energy and utilities expenses and marketing expenses) relating to the
properties. The assumptions made in calculating the property operating expense are set out
below:
1.2.1 Property-related Taxes
Property-related taxes have been estimated based on the assumptions below:
(i) OUE Bayfront: property tax is payable at 10.0% of the annual value of the
property and income support from OUE Limited.
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(ii) Lippo Plaza: real estate tax will remain at 12.0% of the gross rental income and
other income.
(iii) One Raffles Place: property tax is payable at 10.0% of the Manager’s estimate
of the annual value of the Property.
1.2.2 Property Management Fee
For OUE Bayfront, the property manager is entitled to the following fees:
(i) 2.0% per annum of gross revenue in respect of property management services
(ii) 2.0% per annum of net property income (calculated before accounting for the
property management fee in that financial period) in respect of property
management services
(iii) 0.5% per annum of the net property income (calculated before accounting for
the property management fee in that financial period) in respect of leasing
management services
No property management fee is payable for Lippo Plaza and One Raffles Place.
1.2.3 Centre Management Fee
For each of Lippo Plaza and One Raffles Place, there is a team dedicated to the
management of the property. Centre management fee relates to the salaries and
related expenses to these dedicated teams. These expenses are estimated after
taking into consideration the actual historical fees, and expected inflation.
1.2.4 Other property operating expenses
Operating and maintenance expenses relate to costs incurred for the upkeep of the
properties, including cleaning, security, repair and maintenance, insurance as well as
other general and administrative expenses. These expenses are estimated after
taking into consideration the actual historical operating and maintenance costs, and
expected inflation.
Energy and utilities costs are estimated based on the historical rates, expected rate
increments and expected utilisation.
Marketing expenses relate to the costs incurred in marketing, advertising and
promoting the properties. Such expenses are estimated after taking into
consideration the actual historical expenses and expected inflation.
For Lippo Plaza and One Raffles Place, there is an additional leasing commission
expense applicable to each new tenant leased up payable to the respective letting
agent, for an amount of between 1.0 to 1.25 months of contracted rental income.
1.3 Other Income
Other income comprises income support relating to the top-up payments from the Sponsor.
Under the deed of income support entered into with the Sponsor (“Deed of Income
Support”), the Sponsor will provide income support to OUE C-REIT for a period of up to five
years from 27 January 2014 in respect of OUE Bayfront. The income support is calculated
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as the shortfall between the target gross rental income of OUE Bayfront in each quarter as
set out in the Deed of Income Support and the actual gross rental income. The Manager has
projected an income support amount of S$2.2 million for the Forecast Period.
1.4 Amortisation of Intangible Asset
Intangible asset represents the unamortised income support receivable by OUE C-REIT
from the Sponsor pursuant to the Deed of Income Support as described in Section 1.3. The
amortisation of the intangible asset represents the amortisation of the asset over its
estimated useful life. The amortisation expense does not have impact on the amount
available for distribution to Unitholders.
1.5 Manager’s Management Fees
The base fee is 0.3% per annum on the value of the gross assets of OUE C-REIT and the
performance fee is 25.0% per annum of the difference in DPU in a financial year with the
DPU in the preceding full financial year (calculated before accounting for the performance
fee but after accounting for the base fee in each financial year) multiplied by the weighted
average number of units in issue for such financial year. The Manager has opted to receive
payment in Units for the Forecast Period.
The Manager has assumed that there is no performance fee payable for the financial year
ending 31 December 2015.
1.6 Other Expenses
Other expenses include recurring operating expenses such as annual listing fees, auditing
and tax advisers’ fees, registry fees, valuation costs, costs associated with the preparation
and distribution of reports to Unitholders, investor communication costs, debt facility agent
fees, credit rating maintenance fees, operating costs for OUE C-REIT Group and other
miscellaneous expenses. These expenses are estimated after taking into consideration the
actual historical operating costs, and expected inflation.
1.7 Finance Costs
As at the Latest Practicable Date, OUE C-REIT has put in the place the following secured
facilities:
(i) term loan facilities with loan maturities of three to five years of S$580.0 million,
comprising (a) a five-year term loan facility of S$280.0 million and (b) a three-year
term loan facility of S$300.0 million,
(ii) revolving credit facility, comprising a three-year revolving credit facility of S$100.0
million, and
(iii) term loan facility for Lippo Plaza, with a loan maturity of three years of RMB248.9
million.
The Manager intends to put in place, on a secured basis, a senior term loan facility with loan
maturity of three years of between S$333.3 million and S$399.3 million to finance the
proposed Acquisition of the indirect interest in OUBC.
An existing S$370.0 million secured three-year senior term loan facility has been put in
place in OUBC.
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The Manager has also entered into derivative instruments of varying tenures to fix the
interest that is payable under the current facilities. The Manager has assumed an average
cost of debt of about 3.54% and 3.56% for the loans of OUE C-REIT Group, inclusive of the
cost of derivative instruments, for Scenario A and B respectively.
1.8 Income Tax Expense
The following taxes have been taken into account in the Forecast Period:
(i) 17% tax on the net profit of OUBC;
(ii) 10% PRC withholding tax;
(iii) 25% PRC deferred tax; and
(iv) 25% PRC income tax.
1.9 Capital Expenditure
The table below sets out the projected capital expenditure for the properties which is
projected based on the proposed asset enhancement works and the Manager’s estimated
cost to be incurred for improvement works.
Year ending 31 December 2015
Capital Expenditure S$’000
OUE Bayfront 1,813
Lippo Plaza 4,725
Total 6,538
Forecast Period
Capital Expenditure S$’000
One Raffles Place 5,000
Capital expenditure incurred is capitalised in investment properties and has no impact on
net income or distribution income of OUE C-REIT.
1.10 Investment Properties
For the Forecast Period, it has been assumed that the valuation of the Existing Portfolio will
remain unchanged from those as of 31 December 2014, except to the extent of the capital
expenditure incurred as described in Section 1.9. It is assumed that the valuation of the
OUBC Interest of S$1,734 million is based on the valuation as at 5 June 2015 except to the
extent of the capital expenditure to be incurred as described in Section 1.9. These
assumptions are made when estimating the value of the Deposited Property for the
purposes of forecasting the base component of the asset management fees and Trustee’s
fees.
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1.11 Rights Issue
The Profit Forecast has been prepared based on the Rights Issue Price of S$0.555 per new
Unit issued under the Rights Issue and on the assumption that the proceeds from the Rights
Issue will be used to part finance the proposed Acquisition.
The costs associated with the Rights Issue are expected to be S$9.7 million and will be paid
by OUE C-REIT on completion of the Rights Issue. These costs will be charged against
Unitholders’ funds in OUE C-REIT’s statement of financial position and have no impact on
its net income or distribution income.
1.12 Foreign Exchange Rates
The Manager has assumed the following exchange rates for the Profit Forecast:
Foreign Exchange Rate Forecast Period
Renminbi/Singapore Dollar 4.75
1.13 Accounting Standards
The Manager has assumed that there will be no change in the applicable accounting
standards or other financial reporting requirements that may have a material effect on the
forecast or projected net income. A summary of the significant accounting policies of OUE
C-REIT may be found in the FY 2014 Audited Financial Statements.
1.14 Other Assumptions
The Manager has made the following additional assumptions in preparing the Profit
Forecast:
(i) Other than the proposed Acquisition, OUE C-REIT’s property portfolio remains
unchanged.
(ii) No new Units will be issued by OUE C-REIT other than the new Units proposed to be
issued under the Rights Issue and new Units proposed to be issued in payment of the
Acquisition Fees and base fees for the manager’s management fee.
(iii) There will be no material change to the taxation legislation or other legislation.
(iv) There will be no material change to the tax rulings previously obtained.
(v) All the lease agreements in relation to the properties are enforceable and will be
performed in accordance with their terms during the Forecast Period.
(vi) All the credit facilities as described in section 1.7 are available for the Forecast Period.
(vii) Fair value of any derivative financial instruments are assumed to be unchanged over
the Forecast Period.
(viii) 100.0% of OUE C-REIT’s amount available for distribution is distributed for the
Forecast Period.
(ix) 100.0% of the base management and acquisition fees are paid to the Manager in
Units.
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2. Sensitivity Analysis for the Enlarged Portfolio
The Profit Forecast is based on a number of key assumptions that have been outlined earlier.
Unitholders should be aware that future events cannot be predicted with any certainty and
deviations from the figures forecast in this Circular are to be expected. To assist Unitholders
in assessing the impact of these assumptions on the Profit Forecast, the sensitivity of DPU
to changes in the key assumptions are set out below.
The sensitivity analysis below is intended as a guide only, and variation 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.
2.1 Gross Rental Income
Changes in the Gross Rental Income will impact the net property income of OUE C-REIT and,
consequently, the DPU. The assumptions for Gross Rental Income have been set out earlier
in this section. The effect of variation in the Gross Rental Income on the DPU is set out
below:
DPU pursuant to changes in Gross Rental Income
(cents)
Scenario A Scenario B
5.0% above base case 1.19 1.20
Base case 1.14 1.15
5.0% below base case 1.09 1.09
2.2 Property Operating Expenses
Changes in the property operating expenses will impact the net property income of OUE
C-REIT and, consequently, the DPU. The assumptions for property operating expenses have
been set out earlier in this section. The effect of variation in the property operating expenses
on the DPU is set out below:
DPU pursuant to changes in Property Operating Expenses(cents)
Scenario A Scenario B
5.0% above base case 1.11 1.11
Base case 1.14 1.15
5.0% below base case 1.18 1.18
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2.3 Finance Costs
Changes in interest rates will impact the finance costs and net income of OUE C-REIT and
consequently, the DPU. The effect of variation in finance costs on the DPU is set out below:
DPU pursuant to changes in Finance Costs
(cents)
Scenario A Scenario B
25 basis points increase in the
applicable interest rate above base
case 1.11 1.11
Base case 1.14 1.15
25 basis points decrease in the
applicable interest rate below base
case 1.18 1.19
2.4 Foreign Exchange Rates
Change in the foreign exchange rate for Renminbi to Singapore dollar will impact the amount
available for distribution of OUE C-REIT and consequently, the DPU. The effect of variation
in foreign exchange rates on the DPU is set out below:
DPU pursuant to changes in Foreign Exchange Rates
(cents)
Scenario A Scenario B
5.0% S$ appreciation 1.13 1.14
Base case 1.14 1.15
5.0% S$ depreciation 1.16 1.16
2.5 Conversion of Convertibles Perpetual Preferred Units (“CPPUs”)
Conversion of the CPPUs will impact the number of Units in issue and consequently, the
DPU. The effect of conversion of the CPPUs on the DPU is set out below based on the
conversion price of S$0.841 per Unit at the beginning of the Forecast Period.
DPU pursuant to conversion of CPPUs
(cents)
Scenario A Scenario B
Base case 1.14 1.15
Conversion of one-third of
CPPUs(1) 1.02 1.01
Full conversion of CPPUs(2) 0.85 0.83
Notes:
(1) Assume one-third of the original amount of CPPUs are converted on 1 October 2015. The CPPU holder is
entitled to ordinary distribution upon conversion of one-third of the CPPUs. The remaining two-third of the
CPPUs are entitled to the preferred distribution.
(2) Assume CPPUs are all converted on 1 October 2015. The CPPU Holder is entitled to ordinary distribution
upon conversion with no preferred distribution.
C-10
APPENDIX D
INDEPENDENT ACCOUNTANTS’ REPORT ON THE PROFIT FORECAST
The Board of Directors
OUE Commercial REIT Management Pte. Ltd.
(in its capacity as Manager of OUE Commercial Real Estate Investment Trust)
50 Collyer Quay #04-08
OUE Bayfront
Singapore 049321
DBS Trustee Limited
(in its capacity as Trustee of OUE Commercial Real Estate Investment Trust)
12 Marina Boulevard
Marina Bay Financial Centre Tower 3
Singapore 018982
1 July 2015
Dear Sirs
Letter from the Independent Accountants on the profit forecast for the period from 1
October 2015 to 31 December 2015
This letter has been prepared for inclusion in the circular of OUE Commercial Real Estate
Investment Trust (“OUE C-REIT”) dated 1 July 2015 (the “Circular”) in connection with the
proposed acquisition of an indirect interest in One Raffles Place.
The directors of OUE Commercial REIT Management Pte. Ltd. (the “Directors”) are responsible for
the preparation and presentation of the forecast statement of total return of the OUE C-REIT and
its subsidiaries (the “Group”) for the period from 1 October 2015 to 31 December 2015 (the “Profit
Forecast”) as set out on pages C-2 and C-3 in Appendix C of the Circular, which has been
prepared on the basis of the assumptions set out on pages C-3 to C-8 in Appendix C of the
Circular (the “Assumptions”).
We have examined the Profit Forecast of the Group for the period from 1 October 2015 to 31
December 2015 as set out on pages C-2 and C-3 in Appendix C of the Circular in accordance with
Singapore Standard on Assurance Engagements 3400 The Examination of Prospective Financial
Information. The Directors are solely responsible for the Profit Forecast including the Assumptions
set out on pages C-3 to C-8 in Appendix C of the Circular on which they are based.
Based on our examination of the evidence supporting the relevant 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 OUE C-REIT, 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 purpose of this
letter) issued by the Institute of Singapore Chartered Accountants, which is the framework
adopted by the Group in the preparation of its financial statements.
D-1
Events and circumstances frequently do not occur as expected. Even if the events anticipated
under the hypothetical assumptions 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 that 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 set out on pages
C-9 and C-10 in Appendix C of the Circular.
Yours faithfully
KPMG LLP
Public Accountants
and Chartered Accountants
Singapore
D-2
APPENDIX E
INDEPENDENT FINANCIAL ADVISER’S LETTER
DELOITTE & TOUCHE CORPORATE FINANCE PTE LTD
(Incorporated in the Republic of Singapore)
Company Registration Number: 200200144N
1 July 2015
The Independent Directors and Audit and Risk Committee
OUE Commercial REIT Management Pte. Ltd.
(as manager of OUE Commercial Real Estate Investment Trust)
50 Collyer Quay #04-08
OUE Bayfront
Singapore 049321
DBS Trustee Limited
(as the trustee of OUE Commercial Real Estate Investment Trust) (The “Trustee”)
12 Marina Boulevard
Marina Bay Financial Centre Tower 3
Singapore 018982
Dear Sirs
THE PROPOSED ACQUISITION OF AN INDIRECT INTEREST IN ONE RAFFLES PLACE AND
THE PROPOSED CPPU ISSUE
For the purpose of this letter, capitalised terms not otherwise defined shall have the meaning
given to them in the circular dated 1 July 2015 to the unitholders of OUE Commercial Real Estate
Investment Trust (the “Circular”).
1. INTRODUCTION
OUE Commercial Real Estate Investment Trust (“OUE C-REIT”) is a real estate
investment trust listed on the Main Board of Singapore Exchange Securities Trading
Limited (the “SGX-ST”). OUE C-REIT is established with the principal investment strategy
of investing, directly or indirectly, in a portfolio of income-producing real estate used
primarily for commercial purposes (including real estate used primarily for office and/or
retail purposes) in financial and business hubs within and outside of Singapore, as well as
real estate-related assets. OUE C-REIT is managed by OUE Commercial REIT
Management Pte. Ltd. (the “Manager”), a wholly-owned subsidiary of OUE Limited (the
“Sponsor”).
1.1. The Proposed Acquisition
The Manager of OUE C-REIT proposes to acquire an indirect interest in One Raffles Place
(the “Property”) from the Sponsor through the acquisition of the entire issued share
capital of Beacon Property Holdings Pte. Ltd. (“BPHPL”), which holds a percentage of the
issued share capital in OUB Centre Limited (“OUBC”) (the “Proposed Acquisition”). The
Property is an integrated commercial development comprising One Raffles Place Tower 1,
One Raffles Place Tower 2 and One Raffles Place Shopping Mall, with approximately
860,000 sq feet (“sq ft”) of aggregate net lettable area (“NLA”). One Raffles Place Tower
1 was completed in 1986 and is one of the tallest buildings in the Singapore CBD. It
comprises a 62-storey Grade-A office building with a rooftop restaurant and observation
E-1
deck. One Raffles Place Tower 2, which is a new tower completed in 2012, is a 38-storey
Grade-A office building. It has been awarded the Platinum Green Mark Award by the
Building and Construction Authority for its energy efficiency and environmentally
sustainable design. One Raffles Place Shopping Mall is a six-storey retail podium that has
undergone refurbishment works which were completed in May 2014. It is the largest
purpose-built shopping mall in Raffles Place, accounting for about 10% of existing retail
stock in the CBD1. Its basement level is seamlessly linked to the Raffles Place MRT
interchange station via an underground pedestrian walkway. The Property has a total of
326 basement car park lots.
OUBC is the registered owner of the Property and it owns 81.54% of the beneficial interest
in the Property for itself (the “OUBC Interest”), with the remaining 18.46% interest being
held by OUBC on trust for an unrelated third party. The Sponsor and its wholly-owned
subsidiary BPHPL collectively hold a 50.0% interest in OUBC. The remaining 50.0%
interest is held by several third parties, including the Kuwait Investment Office (“KIO”),
which holds a 33.33% interest in OUBC.
Pursuant to an agreement entered into between the Sponsor, BPHPL and KIO on 10 June
2015 in relation to KIO’s divestment of its 33.33% interest in OUBC (the “Framework
Agreement”), BPHPL will acquire an additional interest in OUBC of a minimum of 25.0%
and up to a maximum of 33.33%. This is because pursuant to the articles of association
of OUBC, if a shareholder wishes to divest its shares (the “Divested Shares”), the
remaining shareholders are entitled to acquire the Divested Shares pro rata in accordance
with their existing shareholding. Upon KIO giving notice of its intention to dispose of its
33.33% interest, BPHPL would have a pro rata entitlement to acquire a 25.0% interest in
OUBC2, bringing its total interest in OUBC to 75.0%. If the remaining shareholders do not
exercise their entitlement to acquire the Divested Shares, then BPHPL would be able to
acquire up to a maximum of 33.33% interest in OUBC2 bringing its total interest in OUBC
to 83.33%. Therefore, the final purchase consideration shall be determined based on the
amount of the OUBC shares to be acquired by BPHPL, which is between 75.0% to 83.33%
of the OUBC shares (the “Purchase Consideration”).
Based on the acquisition of a 75.0% to 83.33% of OUBC Interest, OUE C-REIT shall
acquire BPHPL for the expected Purchase Consideration of S$1,034.0 million to
S$1,148.8 million, respectively. The expected Purchase Consideration assumes the
Proposed Acquisition is completed on 1 October 2015, BPHPL Group’s expected net asset
value (“NAV”) as at 30 September 2015 and the repayment of shareholder’s loan which
shall be extended by the Sponsor to BPHPL for the acquisition of the Divested Shares,
details of which are set out in Section 3.2.2 of this letter.
1.2. The Proposed Transactions
The Proposed Acquisition will be satisfied by a combination of debt and equity financing,
including the proposed convertible perpetual preferred units issue (the “Proposed CPPU
Issue”) and the proposed rights issue (the “Rights Issue”). The Proposed Acquisition, the
CPPU Issue and the Rights Issue are collectively, the “Proposed Transactions”. The
Sponsor, through its subsidiaries and the Manager, is regarded as “controlling Unitholder”
of OUE C-REIT under the Listing Manual of the SGX-ST (the “Listing Manual”) and the
Property Funds Appendix. In addition, as the Manager is a wholly-owned subsidiary of the
Sponsor, the Sponsor is therefore regarded as a “controlling shareholder” of the Manager
1 Source: The independent market research report dated 24 April 2015 by DTZ Debenham Tie Leung (SEA) Pte Ltd.
2 BPHPL currently holds a 45.0% interest in OUBC. The Sponsor holds the remaining 5.0% interest in OUBC and will
transfer such interest to BPHPL prior to completion of the Proposed Acquisition. Upon the transfer of the Sponsor’s
5.0% interest in OUBC to BPHPL, BPHPL would have (i) a pro rata entitlement to acquire a 25.0% interest in OUBC
and (ii) the ability to acquire the maximum of 33.33% interest in OUBC.
E-2
under both the Listing Manual and the Property Funds Appendix. As the Sponsor is the
vendor of BPHPL under the sale and purchase agreement (“SPA”), for the purposes of
Chapter 9 of the Listing Manual and Paragraph 5 of the Property Funds Appendix, the
Sponsor (being 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) as “interested party” of OUE C-REIT.
Therefore, the Proposed 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.
We, Deloitte & Touche Corporate Finance Pte Ltd (“DTCF”), have been appointed as
independent financial adviser (“IFA”) to the Independent Directors, the Audit and Risk
Committee and the Trustee in respect of whether the Proposed Acquisition and the
Proposed CPPU Issue are on normal commercial terms and not prejudicial to the interests
of OUE C-REIT and its minority Unitholders.
This letter, which sets out our evaluation for the Independent Directors and the Audit and
Risk Committee in respect of this engagement, is an integral part of the Circular.
2. TERMS OF REFERENCE
Our responsibility is to provide our opinion in respect to the Proposed Acquisition and the
Proposed CPPU Issue.
We were neither a party to the negotiations entered into in relation to the Proposed
Transactions, nor were we involved in the deliberations leading up to the decision on the
part of the Directors to enter into the Proposed Transactions.
We do not, by this letter or otherwise, advise or form any judgement on the strategic or
commercial merits or risks of the Proposed Transactions. All such evaluations, advice,
judgements or comments remain the sole responsibility of the Directors and their advisors.
We have however drawn upon such evaluations, judgements and comments as we deem
necessary and appropriate in arriving at our opinion.
The scope of our appointment does not require us to express, and nor do we express, a
view on the future growth prospects, earnings potential or value of OUE C-REIT. We do not
express any view as to the price at which the Units may trade upon completion of the
Proposed Transactions nor on the future value, financial performance or condition of OUE
C-REIT after the Proposed Transactions.
It is also not within our terms of reference to compare the merits of the Proposed
Transactions to any alternative transactions that were or may have been available to OUE
C-REIT. Such comparison and consideration remain the responsibility of the Directors and
their advisors.
In the course of our evaluation, we have held discussions with the management of the
Manager, and have considered the information contained in the Circular, publicly available
information collated by us as well as information, both written and verbal, provided to us
by the management. We have relied upon and assumed the accuracy of the relevant
information, both written and verbal, provided to us by the aforesaid parties and have not
independently verified such information, whether written or verbal, and accordingly cannot
and do not warrant, and do not accept any responsibility for the accuracy, completeness
and adequacy of such information. We have not independently verified and have assumed
E-3
that all statements of fact, belief, opinion and intention made by the Directors in the
Circular have been reasonably made after due and careful enquiry. Accordingly, no
representation or warranty (whether express or implied) is made and no responsibility is
accepted by us concerning the accuracy, completeness or adequacy of such information.
We have nonetheless made reasonable enquiries and exercised our judgement on the
reasonable use of such information and have found no reason to doubt the reliability of
such information.
We have not made any independent evaluation or appraisal of the assets and liabilities
(including, without limitation, the real properties) of OUE C-REIT or the Proposed
Transactions. We have been furnished with the valuation reports for the Property prepared
by Savills Valuation and Professional Services (S) Pte Ltd (“Savills”) and Cushman &
Wakefield VHS Pte. Ltd. (“Cushman & Wakefield”) (collectively, the “Independent
Valuers”). With respect to such reports, we are not experts and do not hold ourselves to
be experts in the evaluation of the assets concerned and have relied solely upon such
reports.
Our views are based on market, economic, industry, monetary and other conditions (where
applicable) prevailing on and our analysis of the information made available to us as at the
Latest Practicable Date. We assume no responsibility to update, revise or re-affirm our
opinion, factors or assumptions in light of any subsequent development after the Latest
Practicable Date that may affect our opinion or factors or assumptions contained herein.
The Unitholders should take note of any announcements relevant to their considerations
of the Proposed Transactions which may be released by OUE C-REIT after the Latest
Practicable Date.
OUE C-REIT has been separately advised by its own legal advisor in the preparation of the
Circular other than this letter. We have had no role or involvement and have not provided
any advice whatsoever in the preparation, review and verification of the Circular other than
this letter. Accordingly, we take no responsibility for, and express no views, whether
express or implied, on the contents of the Circular except for this letter.
Our opinion in relation to the Proposed Acquisition and the Proposed CPPU Issue should
be considered in the context of the entirety of this letter and Circular. While a copy of this
letter may be reproduced in the Circular, OUE C-REIT may not reproduce, disseminate or
quote this letter or any part thereof for any purpose, other than for the purpose stated
herein, without our prior written consent in each instance.
We have not had regard to the general or specific investment objectives, financial
situation, tax position, risk profiles or unique needs and constraints of any Unitholder. As
the Unitholders will have different investment objectives, we advise the Independent
Directors to recommend that any Unitholder who may require specific advice in relation to
his or her specific investment objectives or portfolio should consult his or her stockbroker,
bank manager, solicitor, accountant, tax advisor or other professional advisors.
3. THE PROPOSED ACQUISITION AND THE CPPU ISSUE
3.1. Description of One Raffles Place
A detailed description of One Raffles Place is set out in Section 2.1 of the Letter to
Unitholders in the Circular.
In overview, One Raffles Place is strategically located at the junction of Raffles Place and
Chulia Street, in the heart of Singapore’s main financial district, Raffles Place. It is situated
above the Raffles Place MRT station, and has a direct and seamless link to the Raffles
E-4
Place MRT interchange station via an underground pedestrian walkway. The Property is
an integrated commercial development comprising One Raffles Place Tower 1, One
Raffles Place Tower 2 and One Raffles Place Shopping Mall, with approximately 860,000
sq ft of aggregate NLA. One Raffles Place Tower 1 was completed in 1986 and is one of
the tallest building in the Singapore CBD. It comprises a 62-storey Grade-A office building
with a rooftop restaurant and observation deck. One Raffles Place Tower 2, which is a new
tower completed in 2012, is a 38-storey Grade-A office building. One Raffles Place
Shopping Mall is a six-storey retail podium that has undergone extensive refurbishment
works which were completed in May 2014. Its basement level is seamlessly linked to the
Raffles Place MRT interchange station via an underground pedestrian walkway. The
Property has a total of 326 basement car park lots.
3.2. Key Terms of the Proposed Acquisition
3.2.1. Details of the Proposed Acquisition
Details of the Proposed Acquisition structure are set out in Section 2.1.2 of the Letter to
Unitholders in the Circular. We recommend that the Independent Directors advise the
Unitholders to read this section of the Circular carefully.
On 10 June 2015, the Trustee entered into conditional SPA with OUE to acquire the entire
issued share capital of BPHPL. This was arrived at on a willing-buyer and willing-seller
basis, taking into account the independent valuations of the Independent Valuers.
The principal terms of the SPA are set out in Section 2.1.6 of the Letter to Unitholders in
the Circular.
3.2.2. The Purchase Consideration
The Purchase Consideration payable to the Sponsor in connection with the Proposed
Acquisition shall be the NAV of BPHPL Group after taking into account the agreed value
of S$1,715.0 million for the OUBC Interest (comprising 81.54% interest in the Property)
and the shareholder’s loan to be repaid by BPHPL upon completion of the Proposed
Acquisition. The Purchase Consideration shall be paid to the Sponsor in a combination of
cash and CPPUs. The Purchase Consideration has been negotiated on a willing-buyer
and willing-seller basis, after taking into account the independent valuations of the
Independent Valuers.
The agreed value for 75.0% of the OUBC Interest is S$1,286.3 million and the agreed
value for 83.33% of the OUBC Interest is S$1,429.2 million.
Assuming that:
(a) OUE C-REIT acquires BPHPL which owns a 75.0% interest in OUBC;
(b) the Proposed Acquisition is completed on 1 October 2015;
(c) based on the agreed value of S$1,286.3 million for the 75.0% indirect interest in
OUBC; and
(d) BPHPL Group’s assumed NAV and the repayment of a shareholder’s loan which shall
be extended by the Sponsor to BPHPL for the acquisition of the Divested Shares,
the expected Purchase Consideration shall be S$1,034.0 million.
E-5
Assuming that:
(a) OUE C-REIT acquires BPHPL which owns an 83.33% interest in OUBC;
(b) the Proposed Acquisition is completed on 1 October 2015;
(c) based on the agreed value of S$1,429.2 million for the 83.33% indirect interest in
OUBC; and
(d) BPHPL Group’s assumed NAV and the repayment of a shareholder’s loan which shall
be extended by the Sponsor to BPHPL for the acquisition of the Divested Shares,
the expected Purchase Consideration shall be S$1,148.8 million.
The expected Purchase Consideration shall be adjusted to reflect the actual NAV
attributable to the controlling shareholder of the BPHPL Group on the date of the
completion of the Proposed Acquisition.
We note that the Manager intends to finance all acquisition costs relating to the Proposed
Acquisition (excluding the Acquisition Fee payable in Units) through a combination of debt
and equity financing, including the Proposed CPPU Issue and the Rights Issue.
The table below sets out a summary of the method of financing as provided in Section
2.1.5 in the Letter to Unitholders of the Circular.
S$’ million
75.0% of the
OUBC Interest
83.33% of the
OUBC Interest
Sources
CPPU Issue 500.0 550.0
Rights Issue 218.3 218.3
Debt/borrowings 333.3 399.3
Issue of Acquisition Fee Units 9.6 10.7
Total 1,061.2 1,178.3
Applications
Acquisition of BPHPL including any
repayment of shareholder’s loan 1,034.0 1,148.8
Acquisition Fee 9.6 10.7
Transaction Costs 17.6 18.8
Total 1,061.2 1,178.3
3.2.3. The Proposed CPPU Issue
The Manager intends to issue up to S$550.0 million CPPUs to the Sponsor (or its
nominees) as part payment of the Purchase Consideration. The key characteristics and
the redemption review process of the CPPUs are set out in Section 2.3.1 and 2.3.2 of the
Letter to Unitholders in the Circular, respectively. We recommend that the Independent
Directors advise the Unitholders to read the section of the Circular carefully.
E-6
4. EVALUATION OF THE PROPOSED ACQUISITION AND THE PROPOSED CPPU ISSUE
In reaching our recommendation in respect of the Proposed Acquisition and the Proposed
CPPU Issue, we have given due consideration to the following factors:
(i) the rationale for and the benefits of the Proposed Acquisition and the Proposed
CPPU Issue;
(ii) the valuations of OUBC Interest in One Raffles Place prepared by the Independent
Valuers;
(iii) comparison with relevant past transactions in Singapore;
(iv) comparison with recent valuations of comparable properties in Singapore;
(v) terms of the CPPUs;
(vi) recent convertible financial instruments issued by Singapore listed real estate
companies;
(vii) redemption review process of the CPPUs; and
(viii) pro forma financial effects of the Proposed Transactions.
4.1. The rationale for and the benefits of the Proposed Acquisition and the Proposed
CPPU Issue
The Manager’s views of the key benefits of the Proposed Acquisition and the Proposed
CPPU Issue are set out in Section 4 of the Letter to Unitholders in the Circular. We
recommend that the Independent Directors advise the Unitholders to read this section of
the Circular carefully.
We have reproduced below excerpts of this section in respect of the Proposed Acquisition
and the Proposed CPPU Issue:
4.1 Acquisition of a majority interest in a landmark commercial property in the
Singapore CBD
The proposed Acquisition represents a unique opportunity for OUE C-REIT to acquire
a majority interest in One Raffles Place. It is expected to increase OUE C-REIT’s
exposure to its core Singapore office market and the Property possesses the
following competitive strengths arising from its positioning as a Grade-A commercial
property;
(i) it is strategically located in the heart of Raffles Place, which is in the traditional
financial and business hub within Singapore’s CBD. Raffles Place is perceived
as the most accessible office location within the CBD, and is expected to remain
as a focal point of the CBD even with the expansion of the Marina Bay precinct,
with One Raffles Place’s strategic location being a strong pull-factor for existing
and prospective tenants.
One Raffles Place is situated above and linked to the Raffles Place MRT
interchange station, one of Singapore’s major MRT interchange stations, via
underground pedestrian access through the basement of its retail podium which
is also connected to a comprehensive underground network of pedestrian
E-7
walkways linking to other developments within Raffles Place as well as Marina
Bay. The Property also enjoys enhanced accessibility to other parts of
Singapore via its proximity to the Marina Coastal Expressway, the Central
Expressway and the East Coast Parkway;
(ii) it is a prominent iconic development with Grade-A building specifications. One
Raffles Place Tower 1 comprises a 62-storey office tower and is one of the
tallest buildings in the CBD, with its upper levels enjoying a 360-degree
panoramic view of the city. One Raffles Place Shopping Mall, a six-storey retail
podium that has undergone refurbishment works recently, faces the entire
length of the Raffles Place Park, within the very heart of Raffles Place. As the
largest purpose-built shopping mall in Raffles Place, it offers a diverse range of
shopping, dining and leisure options catering to the needs of the working
population in the CBD. The main anchor tenants of One Raffles Place Shopping
Mall include H&M, Uniqlo and other well-known local and international brand
names such as Paris Baguette Café, The Hour Glass, Pandora and Tumi;
(iii) The two office towers offer quality and efficient column-free office space with
regular floor plates. As a result, the Property enjoys an established blue-chip
tenant base which include reputable banking, insurance, financial, information
and technology, media and telecommunications companies and multi-national
corporations (“MNCs”). Key tenants include Petrobras Singapore Pte Ltd, Alipay
Singapore E-commerce Private Limited, Virgin Active Singapore Pte Ltd,
Pramerica Investment Management (Singapore) Pte Ltd and China Merchant
Bank Co. Ltd;
(iv) One Raffles Place Tower 2 has been accredited with the prestigious BCA Green
Mark Platinum Certification for its environmentally sustainable features, and
such accreditation is increasingly sought after by blue-chip tenants and MNCs
when sourcing potential office space; and
(v) The Property is situated primarily on three land plots with three different tenures
with remaining long land leases of about 812 years, 69 years and 67 years
respectively, translating to a remaining weighted average land lease expiry (by
value) of 435 years. The long land leases provide an attractive investment
opportunity and the proposed Acquisition is expected to increase the remaining
land lease expiry of OUE C-REIT, from its current remaining weighted average
land lease expiry of approximately 72 years to 258 years, which is
approximately 3.6 times from its current remaining weighted average land lease
expiry.
E-8
Remaining Weighted Average Land Lease Expiry
72 Years
258 Years
3.6x
Existing Portfolio Enlarged Portfolio
4.2 Acquisition of a quality commercial property at an attractive price
While the proposed Acquisition is not immediately yield-accretive, it represents an
opportunity for OUE C-REIT to acquire an interest in a quality commercial property
in the prime Raffles Place area at an attractive price of S$2,382 per square foot
(“psf”) compared to the transacted prices of Grade-A properties in the area, as
illustrated in the following table1.
Property
Remaining
Lease
Date of
Transaction
Transacted
Price
Transacted
Price psf
OUBC Interest2 Weighted
average of
435 years
In progress S$1,715.0
million
S$2,382 psf
Straits Trading
Building
847 years September
2014
S$450.0
million
S$2,830 psf
Prudential
Tower3
80 years May 2014 S$512.0
million
S$2,316 psf
OUE Bayfront 92 years January 2014 S$1,005.0
million
S$2,498 psf
Hitachi Tower4 More than
840 years
January 2013 S$660.0
million
S$2,374 psf
1 Unless otherwise indicated, the information in the table is based on the information provided in the valuation report
of the OUBC Interest by Cushman & Wakefield dated 9 June 2015.
2 This Is specific information provided by the Manager for the purpose of comparison.
3 Based on the sale of a 92.8% stake in Prudential Tower.
4 Based on the sale of a 51% stake in Hitachi Tower which valued the property at around S$660.0 million.
E-9
4.3 Favourable growth profile from potential increase in occupancy, positive rental
reversion and limited new office supply in Raffles Place
According to the Independent Market Research Report, rents for Grade-A office
buildings in Raffles Place, especially those which are well-located e.g. with direct
access to the MRT station, are expected to be relatively resilient, given that there are
no known premium and Grade-A office developments expected to be completed in
the area from 2015 to 2018. In addition, existing Grade-A offices in Raffles Place are
uniquely positioned, offering mainly mid-sized floor plates (typically at around 10,000
sq ft), compared with recent and future office developments that offer floor plates of
20,000 sq ft and above.
Many companies in Singapore continue to favour the CBD as a choice location, with
Raffles Place widely regarded as the most established business location within the
CBD. Offices with mid-sized floor plates in Raffles Place offer a strong value
proposition to these companies. Coupled with the growing diversity of tenants in the
CBD, the demand for mid-sized floor plates in Raffles Place is expected to remain
relatively firm. Despite the development of Marina Bay, Raffles Place continues to be
perceived as the most accessible location in the CBD. As at 1Q 2015, the
Independent Market Research Consultant estimates the average office rent in Marina
Bay to be 20% higher than that in Raffles Place, providing a strong value proposition
for businesses to be located in Raffles Place.
Based on the Independent Market Research Report, the current office occupancy
rate of One Raffles Place is estimated to be about 85.0% to 90.0%, as compared to
the average occupancy rate for Grade-A offices in Raffles Place in 1Q 2015 of about
97.2%. Based on the above occupancy estimates, there is potential for One Raffles
Place to increase its occupancy rate by about 7 to 12 percentage points to reach an
occupancy level in line with the market.
Potential Upside in Occupancy
Current EstimatedOffice Occupancy Rate
of the Property
Average Occupancy Ratefor Grade-A offices in
Raffles Place in 1Q 2015
85%
90%
97.2%
+12ppt
+7ppt(1)
Estimated
range {
Note:
(1) Ppt: percentage point.
E-10
Furthermore, the current office rent at One Raffles Place is estimated to be S$9.50
to S$10.00 psf per month, compared to the average rent for Grade-A offices in
Raffles Place in 1Q 2015 of about S$11.50 psf per month. Based on the above rent
estimates, OUE C-REIT can potentially achieve positive rental reversion to market
rents of between 15% to 21%.
Potential Upside in Office Rents
Current EstimatedOffice Rent of the
Property
Average Rent for Grade-Aoffices in Raffles Place
in 1Q 2015
9.50
10.00
11.50
+21%
+15%
Estimated
range
S$ psf per month
{
4.4 Achievement of transformational scale for OUE C-REIT through the proposed
Acquisition which will significantly enlarge the size of its portfolio and
strengthen its competitive position in Singapore
Following the completion of the proposed Acquisition, OUE C-REIT’s assets-under-
management (“AUM”) is expected to increase from S$1,630.6 million (as at 31
December 2014) to S$3,364.6 million, representing an increase of 106.3%.
The larger asset base post-Acquisition is expected to enhance OUE C-REIT’s overall
capital management flexibility. With a larger asset base, OUE C-REIT will have
greater debt headroom before reaching the aggregate leverage limit under the
Property Funds Appendix (which is with reference to OUE C-REIT’s Deposited
Property). A larger asset base will also support more equity issuances by OUE
C-REIT in future. These will, in turn, facilitate future acquisitions and asset
enhancement initiatives to be undertaken by OUE C-REIT.
Further, the proposed Acquisition is expected to increase OUE C-REIT’s proportion
of Singapore AUM from 69.6% to 85.3%, as well as increase the total net lettable
area of OUE C-REIT’s asset portfolio from approximately 825,000 sq ft to 1,545,000
sq ft, thereby enlarging OUE C-REIT’s footprint within the Singapore CBD and
strengthening its competitive position as a landlord in the Singapore office market.
E-11
Proportion of Singapore Assets under Management
Enlarged Portfolio
(OUBC Interest)
Existing Portfolio
69.6%
30.4%
85.3%
14.7%
Singapore AUM Overseas AUM
4.5 Enhanced portfolio diversification and resilience, as well as reduced asset
concentration risk
The proposed Acquisition is expected to benefit Unitholders by enhancing the
diversification and resilience of the Existing Portfolio through the following ways:
(i) Increasing OUE C-REIT’s gross revenue contribution denominated in
Singapore dollars
The proposed Acquisition is expected to increase the gross revenue
contribution denominated in Singapore dollars, and in turn reduce the impact of
foreign exchange fluctuations on OUE C-REIT’s total distributable income.
Post-Acquisition, the proportion of gross revenue received by OUE C-REIT
denominated in Singapore dollars is expected to increase from 68.5% to 82.3%
and 83.1% in the Forecast Period after the completion of the proposed
Acquisition of 75.0% and 83.33% indirect interest in OUBC, respectively.
Proportion of Portfolio Gross Revenue Contribution
denominated in Singapore dollars(1)
Existing Portfolio
Enlarged Portfolio
(75.0% indirect interest in
OUBC)
Enlarged Portfolio
(83.33% indirect interest in
OUBC)
31.5%
68.5%
17.7%
82.3%
16.9%
83.1%
Gross revenue denominated inSingapore dollars
Gross revenue denominatedin foreign currency
Note:
(1) For the Forecast Period from 1 October 2015 to 31 December 2015.
E-12
(ii) Reducing the concentration risk of OUE C-REIT’s income stream from any
single property
The proposed Acquisition is expected to enhance OUE C-REIT’s income
diversification and reduce its asset concentration risk. No single property is
expected to account for more than 43.8% to 46.4% of OUE C-REIT’s gross
revenue, after the completion of the proposed Acquisition of 75.0% and 83.33%
indirect interest in OUBC, respectively, compared to 68.5% before the proposed
Acquisition.
Portfolio Gross Revenue Contribution by Property(1)
Existing Portfolio
Enlarged Portfolio
(75.0% indirect interest in
OUBC)
Enlarged Portfolio
(83.33% indirect interest in
OUBC)
31.5%
68.5%
43.8%
17.7%
38.5%
46.4%
16.9%
36.7%
OUE Bayfront Lippo Plaza Proposed Acquisition
Note:
(1) For the Forecast Period from 1 October 2015 to 31 December 2015.
(iii) Enhancing the quality of OUE C-REIT’s tenant base
The proposed Acquisition is expected to enhance the quality of OUE C-REIT’s
tenant base, with the addition of several established MNCs which include
Petrobras Singapore Pte Ltd, Alipay Singapore E-commerce Private Limited,
Virgin Active Singapore Pte Ltd, Pramerica Investment Management
(Singapore) Pte Ltd and China Merchant Bank Co. Ltd, thereby adding to OUE
C-REIT’s existing core of blue chip tenants. The stronger and more diverse
tenant base is also expected to improve the resilience of OUE C-REIT’s
cashflows.
4.6 Strong support from the Sponsor through the proposed CPPU Issue and its
take-up of the pro rata stake in the Rights Issue
The proposed Acquisition is in line with the Sponsor’s commitment to OUE C-REIT
at the time of its initial public offering, when the Sponsor granted a right of first refusal
to OUE C-REIT for its potential future acquisitions of income-producing real estate
used primarily for commercial purposes. The proposed issuance of the CPPUs to the
Sponsor as part payment for the proposed Acquisition and its undertaking to procure
the Subscribing Entities to take up their full pro rata stake in the Rights Issue will
further align the interests of the Sponsor with that of OUE C-REIT and its Unitholders.
This also demonstrates the Sponsor’s commitment to support OUE C-REIT’s
acquisition growth strategy. Specifically, the Sponsor’s commitment to take up the
CPPUs and to procure the Subscribing Entities’ take-up of their pro rata stake in the
Rights Issue, demonstrates its long-term commitment to grow OUE C-REIT into an
efficient platform for holding commercial properties, with both the Sponsor and the
Manager being incentivised to maximise distributions to Unitholders. The strong
E-13
support of the Sponsor for the proposed Transactions also reflects its confidence in
the growth prospects in One Raffles Place, underlining its importance as a key asset
in OUE C-REIT’s portfolio.
4.7 Increased market capitalisation and potential increased liquidity through the
Rights Issue
To part finance the proposed Acquisition, up to 393,305,817 new Units will be issued
under the Rights Issue. As at the Latest Practicable Date, the new Units will
constitute 45.0% of the Units in issue. The issue of the new Units is expected to
increase the market capitalisation of OUE C-REIT and may facilitate improvement in
the trading liquidity of Units on the SGX-ST. The Manager believes that the increased
market capitalisation and liquidity would provide OUE C-REIT with increased visibility
within the investment community.
4.8 Diversification of sources of funding
The proposed CPPU issue enables the Manager to widen the pool of capital available
to OUE C-REIT and enhances its financial flexibility. The CPPUs will be treated as
equity of OUE C-REIT and not as borrowings or deferred payments under the
Property Funds Appendix. Therefore, the proposed CPPU Issue will not increase
OUE C-REIT’s aggregate leverage and refinancing risk. Assuming that OUE C-REIT
acquires the maximum 83.33% indirect interest in OUBC, its pro forma aggregate
leverage is expected to be 41.9%1.
In addition, the Manager has the option but not the obligation to redeem the CPPUs.
In this regard, there is no refinancing risk arising from the proposed CPPU Issue as
the CPPU Holder does not have the right to procure the Manager to redeem the
CPPUs.
4.9 Future ordinary equity injection into OUE C-REIT at a premium to the TERP
through the conversion of the CPPUs
The CPPUs are convertible at a premium of 15.0% above the TERP into ordinary
Units after the expiry of the four-year restriction period. In order to ensure an orderly
conversion of the CPPUs, not more than one-third of the CPPUs initially issued shall
be converted in any one year. If the CPPUs are converted, this will allow OUE C-REIT
to issue ordinary equity at a premium to the TERP at announcement of the Rights
Issue.
1 OUE C-REIT’s pro forma aggregate leverage is expected to be 40.9% if it acquires the minimum 75.0% indirect
interest in OUBC.
E-14
4.2. The valuations of OUBC Interest in One Raffles Place prepared by the Independent
Valuers
The Trustee has commissioned an independent valuer, Savills and the Manager had
commissioned an independent valuer, Cushman & Wakefield, to value the OUBC Interest.
The appraised value ascribed by the Independent Valuers in respect of the OUBC Interest
are summarised in the table below:
Valuation/
Consideration
(S$ million)
Savills 1,734.0
Cushman & Wakefield 1,733.0
Agreed value for the OUBC Interest 1,715.0
Agreed value for the OUBC Interest
– 75.0% interest in OUBC 1,286.3
– 83.33% interest in OUBC 1,429.2
Expected Purchase Consideration for OUBC Interest1
– 75.0% interest in OUBC 1,034.0
– 83.33% interest in OUBC 1,148.8
Notes:
(1) The expected Purchase Consideration assumes the Proposed Acquisition is completed on 1 October
2015, BPHPL Group’s expected NAV as at 30 September 2015 and repayment of shareholders’ loan which
shall be extended by the Sponsor to BPHPL for the acquisition of the Divested Shares, details of which are
set out in Section 3.2.2 of this letter.
The salient points we highlight from the Valuation Certificates are as follows:
(i) the basis of valuation used is “Market Value”;
(ii) the relevant date for the valuations undertaken by the Savills is 5 June 2015 and the
relevant date for the valuations undertake by Cushman & Wakefield is 5 June 2015;
(iii) the Independent Valuers arrived at their valuations by considering the income
capitalisation approach and market comparison method. Both approaches are widely
accepted methods for the purpose of valuing income producing properties;
(iv) the Independent Valuers arrived at their valuations by relying on, inter alia,
assumptions set out in the Valuation Certificates and their valuation reports; and
(v) the agreed value for the OUBC Interest of S$1,715.0 million is lower than the market
value of S$1,734.0 million and S$1,733.0 million valued by Savills and Cushman &
Wakefield, respectively. The difference between the two independent valuations is
S$1.0 million (or 0.06%).
Further, we note that the market value of One Raffles Place attributable to OUBC as at 31
December 2014 based on information disclosed in the annual report of OUE Limited for
the financial year ended 31 December 2014 is S$1,737.0 million.
E-15
We have set out below the capitalisation rates used by the Independent Valuers in the
income capitalisation approach. We note that both the Independent Valuers have used
similar rates for a significant component of the property including Tower 1 and Tower 2
Office valuation.
Savills – assumptions used for income capitalisation approach
Capitalisation
Rate (%)
Tower 1 – Office 3.75
Tower 1 – F&B 4.25
Tower 2 4.25
841-Year Leasehold Retail Podium 4.50
99-Year Leasehold Retail Podium 5.00
Cushman & Wakefield – assumptions used for income capitalisation approach
Capitalisation
Rate (%)
Tower 1 – Office/Retail 3.75
Tower 2 – Office/Retail 3.95
841-Year Leasehold Shopping Mall 5.00
99-Year Leasehold Shopping Mall 5.25
We have also set out below the capitalisation rates used for the purpose of valuation of
selected comparable commercial properties held by Singapore listed REITs.
Property Name Location
Lease
Tenure
(Years to
Expiry)
Market
Value
(S$ million)
Capitalisation
Rate (%)
OUE Bayfront &
OUE Tower Collyer Quay 92 1,135 3.75
Six Battery Road Battery Road 810 1,330 3.75
One George Street George Street 87 975 3.85
HSBC Building Collyer Quay 835 450 3.85
Sources: Annual reports of OUE C-REIT & CapitaLand Commercial Trust as at 31 December 2014.
4.3. Comparison with relevant past transactions in Singapore
We have identified a list of recent transactions that took place in Singapore for the period
from 1 January 2013 to the Latest Practicable Date for which information is publicly
available and extracted the relevant information from similar commercial properties
transactions in Singapore (“Comparable Transactions”) in order to compare the price per
NLA of One Raffles Place with the Comparable Transactions.
E-16
The information in the table below is for illustration purposes only. The commercial
properties which are the subjects of the Comparable Transactions differ from One Raffles
Place in terms of property size and design, property age, location, accessibility, land title,
tenure, revenue mix, market risks, future prospects, operating history, branding and other
relevant criteria. There is no property under the Comparable Transactions which may be
considered identical to One Raffles Place in terms of the abovementioned factors.
For the above reasons, while the Comparable Transactions taken as a whole may provide
a broad and indicative benchmark for assessing the Proposed Acquisition, care has to be
taken in the selection and use of any individual data point for the same purpose.
Property Location
Transaction
Date
Lease Tenure
(Years to
Expiry)
Price
(S$ million)
NLA
(sq ft ’000)
Price/
NLA
(S$ psf)
One Raffles Place1 Raffles
Place2015 67 – 8121 1,7152 720 2,382
MBFC Tower 33 12 Marina
BoulevardSep-14 92 1,248 447 2,790
Straits Trading
Building
9 Battery
RoadSep-14 N.M.4 450 159 2,830
Anson House72 Anson
RoadJul-14 82 172 76 2,252
Equity Plaza 20 Cecil St Jun-14 74 550 252 2,181
Prudential Tower 30 Cecil St May-14 81 512 221 2,316
OUE Bayfront50 Collyer
QuayJan-14 92 1,005 402 2,498
Finexis Building5 108 Robinson
RoadJan-14 Freehold 124 54 2,300
Robinson Point39 Robinson
RoadJun-13 Freehold 349 135 2,580
16 Collyer Quay5 16 Collyer
QuayJan-13 N.A.6 660 278 2,374
High 2,830
Low 2,181
Sources: Annual report, company announcements, circulars and press releases.
Notes:
(1) The Property comprised Tower 1 leasehold of 812 years remaining, Tower 2 leasehold of 67 years
remaining, 99-Year leasehold retail podium of 70 years remaining and 841-Year leasehold retail podium
of 812 years remaining.
(2) S$1,715 million is the agreed value of the OUBC Interest.
(3) This transaction refers to an acquisition of 30% interest in MBFC Tower 3 by Keppel REIT.
(4) N.M. Straits Trading Building resides on parcels of land of varying lease tenure, which are not publicly
disclosed.
(5) Based on 100% interest in the properties.
(6) N.A.16 Collyer Quay has a 999-year leasehold, but the remaining lease tenure is not publicly disclosed.
E-17
Based on the table above, we highlight the comparison between the implied value per NLA
of One Raffles Place of S$2,382 psf and the price or NLA of the Comparable Transactions
that are located in the Singapore CBD:
(i) the implied price per NLA of One Raffles Place is lower than the price per NLA of
Straits Trading Building and Robinson Point of S$2,830 psf and S$2,580 psf,
respectively; and
(ii) the implied price per NLA of One Raffles Place is higher than the price per NLA of
Equity Plaza, Anson House, Finexis Building, Prudential Tower and 16 Collyer Quay
of S$2,181 psf, S$2,252 psf, S$2,300 psf, S$2,316 psf and S$2,374 psf, respectively.
4.4. Comparison with recent valuations of comparable properties in Singapore
We have compiled information that is publicly available in respect of the recent valuations
of commercial properties (the “Comparable Properties”) in Singapore in order to provide
benchmarks for the net property income (“NPI”) yield and value per NLA implied by the
One Raffles Place Interest Purchase Consideration. The comparison can serve as an
illustrative guide only and must be caveated by the knowledge that One Raffles Place
differs from the Comparable Properties in many aspects, such as location, accessibility,
profile, proximity to major venues and/or attractions, outstanding lease tenure and other
relevant factors.
Property Name Location
Lease
Tenure
(Years to
Expiry)
Market
Value
(S$ million)
Attributable
NLA
(sq ft ’000)
NPI
(S$ million)
NPI
Yield
(%)
Value
/NLA
(S$ psf)
One Raffles
Place
Raffles
Place67 – 8121 1,7152 720 583 3.43 2,382
Bugis Junction
Towers
Victoria
Street74 527 245 16 3.1 2,151
Ocean Financial
Centre4
Collyer
Quay96 2,560 885 130 – 2,894
OUE Bayfront &
OUE Tower5
Collyer
Quay
92
OUE Link 10 1,135 403 45 – 2,819
Underpass 86
Suntec City6 Temasek
Boulevard73 5,202 2,249 173 3.3 2,314
One Raffles
Quay7
Raffles
Quay85 1,228 445 30 2.4 2,762
Marina Bay
Financial Centre
Tower 1 and 2
and Marina Bay
Link8
Marina
Boulevard89 1,641 581 599 – 2,823
Six Battery
Road
Battery
Road810 1,330 494 51 3.9 2,691
One George
Street
George
Street87 975 447 40 4.1 2,179
E-18
Property Name Location
Lease
Tenure
(Years to
Expiry)
Market
Value
(S$ million)
Attributable
NLA
(sq ft ’000)
NPI
(S$ million)
NPI
Yield
(%)
Value
/NLA
(S$ psf)
CapitaGreenMarket
Street58 1,526 702 N.A.10 N.A.10 2,174
HSBC BuildingCollyer
Quay835 450 200 20 4.5 2,245
High 4.5 2,894
Low 2.4 2,151
Average 3.6
Median 3.6
Sources: Annual reports of respective REITs listed in SGX-ST and respective REITs presentations
Notes:
(1) The Property comprised Tower 1 leasehold of 812 years remaining, Tower 2 leasehold of 67 years
remaining, 99-Year leasehold retail podium of 70 years remaining and 841-Year leasehold retail podium
of 812 years remaining.
(2) S$1,715 million is the agreed value of the OUBC Interest.
(3) Net property income and NPI yield computation is based on annualising the management’s forecast
presentation provided in Appendix C of the Circular.
(4) Net property income of S$129.6 million (rounded up to S$130.0 million) which implies a yield of 5.1%
consists of S$82.7 million of income contribution and S$46.9 million of rental support. As the property has
rental support, the NPI yield is not comparable for the purpose of this analysis.
(5) Net property income of S$45.0 million consists of S$37.1 million of income contribution and S$7.9 million
of rental support. As the property has rental support, the NPI yield is not comparable for the purpose of
this analysis.
(6) Market value of S$5,202 million includes the market value of a 60.8% interest in Suntec Singapore from
Suntec REIT.
(7) Keppel REIT and Suntec REIT each has a one-third interest in One Raffles Quay. The figures represent
each of the one-third interest respectively.
(8) Keppel REIT has a one-third interest in Marina Bay Financial Towers 1 & 2 and the Marina Bay Link Mall.
The NPI yield of 3.6% is based on NPI which includes income support and hence not comparable.
(9) S$58.5 million include $1.4 million of rental support.
(10) N.A. refers to not available.
Based on the table above, we note the following:
(i) the implied NPI yield of One Raffles Place of 3.4% is within the range of NPI yields
of 2.4% to 4.5% of the Comparable Properties. As stated in section 4.3 of the Letter
to Unitholders in the Circular, One Raffles Place could achieve potential NPI growth
from increase in occupancy, potential positive rental reversion, and limited new office
supply in Raffles Place. This may enhance NPI yield of 3.4% stated above.
(ii) the implied value per NLA of One Raffles Place is lower than the value per NLA of
Ocean Financial Centre, One Raffles Quay and Six Battery Road and of S$2,894 psf,
S$2,762 psf and S$2,691 psf, respectively.
(iii) the implied value per NLA of One Raffles Place is higher than the value per NLA of,
Suntec City, One George Street and HSBC Building of S$2,314 psf, S$2,179 psf and
S$2,245 psf, respectively.
E-19
4.5. Terms of the CPPUs
We note that the CPPU is a structured instrument, incorporating terms which are specific
to the Proposed Transactions and the positions of the parties. Therefore, it is important
that the Unitholders fully understand the principal terms of the CPPUs. We highlight the
following as key terms:
(i) KPMG LLP, as the auditors of OUE C-REIT, has confirmed that the CPPUs will be
classified as equity securities under the Financial Reporting Standards 32;
(ii) that the CPPUs will be treated as equity subject to the approval and confirmation
being received by OUE C-REIT from Inland Revenue Authority of Singapore;
(iii) The CPPU Holders are entitled to receive a distribution (the “CPPU Distribution”) of
an amount equivalent to 1.0% per annum of the issue price of each CPPU;
(iv) The CPPUs are convertible by the CPPU Holders after a Restriction Period of four
years commencing from the date of issuance of the CPPUs, provided that the number
of CPPUs converted in any one year shall not exceed one-third of the total number
of CPPUs initially issued to the CPPU Holder;
(v) During the Restriction Period, the CPPU Holders shall not be entitled to exercise their
Conversion Right when the Manager exercises its right to redeem any of the CPPUs;
(vi) The conversion price shall be an amount equivalent to a premium of 15.0% above the
theoretical ex-rights price (“TERP”) per Unit in relation to the Rights Issue;
(vii) In the event that both a conversion notice as well as a redemption notice are issued
at the same time, the conversion notice shall prevail;
(viii) The CPPU Distribution is discretionary and non-cumulative;
(ix) While the distribution is declared at the discretion of the Manager, in the event that
any distribution is not declared in full for any reason in respect of any distribution
period, OUE C-REIT shall not, and shall procure that the subsidiaries of the OUE
C-REIT shall not, in respect of the same period:
(a) declare or pay any distributions in respect of, or repurchase or redeem, any
Units or any other securities, or ownership interests of the OUE C-REIT ranking
pari passu with or junior to the CPPUs; and
(b) contribute any moneys to a sinking fund for the payment of any distributions in
respect of, or for the redemption or repurchase of, any such Units, or any other
securities or ownership interests,
except where required pursuant to under any relevant laws, regulations and
guidelines; and
(x) In the event of liquidation, the CPPUs shall rank junior to all debt of OUE C-REIT and
any securities or ownership interests and all obligations of OUE C-REIT that are
expressed to rank senior to the CPPUs; and senior to the Units.
Please refer to Section 2.3.1 of the Letter to Unitholders in the Circular for detailed key
characteristics of the CPPUs.
E-20
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E-22
In reviewing the information above, we note the following:
(i) the distribution on the CPPUs of 1.0% is below both the yield-to-maturity and the
coupon rate of the selected convertible and perpetual financial instruments;
(ii) the premium on conversion of the CPPUs (a premium of 15.0% above the TERP in
relation to the Rights Issue) is below the range of the convertible bonds issued by
CCT (at 19.8%) and by CapitaLand (at 32.6%);
(iii) the Restriction Period of four years commencing from the date of the issuance of the
CPPUs is higher than that of FCOT CPPUs and Starhill CPUs which have a
restriction period of three years and higher than all other selected convertible and
perpetual instruments;
(iv) the Manager has the option but not the obligation to redeem the CPPUs at the
principal amount similar to the terms of FCOT CPPU and Starhill CPU;
(v) post four years the CPPU conversion is further restricted to only one-third of the
CPPUs initially issued in any one year which is not the case in any of the above
selected convertible and perpetual financial instruments presented above; and
(vi) There is no restriction on the number of units that can be redeemed in a financial
year, hence giving the Manager the flexibility to redeem based on the outcome of the
redemption review process.
As stated in Section 4.5 of this letter, the CPPU is a structured instrument, incorporating
terms which are specific to the Proposed Transactions and the positions of the parties. The
structure is intended for the Sponsor to provide funding support for OUE C-REIT in the
near-term as the REIT seeks to grow NPI through positive rental reversion and increase
in occupancy. The proposed issuance of the CPPUs to the Sponsor as part payment for
the Proposed Acquisition demonstrates the Sponsor’s commitment to support OUE
C-REIT’s acquisition growth strategy and reflects the Sponsors’ confidence in the growth
prospects in One Raffles Place.
We also wish to highlight that the pricing of convertible instruments is influenced by many
factors including the market capitalisation, size of operations, composition of business
activities, asset base, geographical spread, track record, financial performance, operating
and financial leverage, risk profile, liquidity, future prospects and other relevant criteria of
the issuer. As a result, any comparisons drawn can serve only as an illustrative
guide.
4.7. Redemption review process of the CPPUs
We wish to highlight that, in relation to the redemption of the CPPUs, the Manager intends
to put in place a redemption review process following the issuance of the CPPUs. The
Manager will, on a semi-annual basis in every financial year after the issuance of the
CPPUs, prepare an internal report as to whether to redeem the CPPUs, taking into
account relevant funding costs, market conditions, benefits and risks of redemption.
The internal report shall set out the factors taken into consideration by the Manager as well
as the financial conditions of OUE C-REIT and such other information as the Manager may
consider necessary for the consideration of the Audit and Risk Committee of the Manager.
E-23
The Audit and Risk Committee will then review the internal report, deliberate and decide
if OUE C-REIT should redeem any CPPUs, taking into consideration the best interest of
OUE C-REIT and its minority Unitholders. Any member of the Audit and Risk Committee
who is a non-Independent Director shall abstain from voting on any resolution relating to
the redemption of the CPPUs at the meeting of the Audit and Risk Committee.
Under Clause 5.1.4 of the Trust Deed, the Manager has the power to issue further CPPUs
of the same class with the CPPUs already issued.
4.8. Pro forma financial effects of the Proposed Transactions
The pro forma financial effects of the Proposed Transactions are set out in Section 6 of the
Letter to Unitholders in the Circular. The pro forma financial effects have been computed
under two scenarios:
(i) Scenario A – OUE C-REIT is acquiring a minimum 75.0% indirect interest in OUBC
(“Scenario A”); and
(ii) Scenario B – OUE C-REIT is acquiring a maximum 83.33% indirect interest in OUBC
(“Scenario B”).
The tables below set out the pro forma financial effects of the Proposed Transactions on
the DPU, DPU yield and NAV per Unit. For illustrative purposes, the pro forma DPU, DPU
yield and NAV per Unit are shown as if the CPPUs were fully converted and if one-third of
the CPPUs were converted on 27 January 2014, although (i) the CPPUs cannot be
converted during the four-year Restriction Period save in certain limited circumstances
and (ii) not more than one-third of the CPPUs initially issued can be converted in any one
year.
Scenario A (Acquisition of a 75.0% Indirect Interest in OUBC)
FY 2014
Before the
Proposed
Transactions
Pro Forma Adjusted for the Proposed Transactions
CPPUs are not
converted
One-third of
CPPUs are
converted
CPPUs are all
converted
DPU (cents) 5.27 4.37 3.89 3.23
DPU Yield
(annualised) 6.9% 6.4% 5.7% 4.8%
NAV per Unit (S$) 1.10 0.92 0.91 0.89
Scenario B (Acquisition of an 83.33% Indirect Interest in OUBC)
FY 2014
Before the
Proposed
Transactions
Pro Forma Adjusted for the Proposed Transactions
CPPUs are not
converted
One-third of
CPPUs are
converted
CPPUs are all
converted
DPU (cents) 5.27 4.38 3.86 3.16
DPU Yield
(annualised) 6.9% 6.4% 5.7% 4.7%
NAV per Unit (S$) 1.10 0.92 0.91 0.89
E-24
The pro forma financial effects are for illustrative purposes and do not represent OUE
C-REIT’s DPU post-completion of the Proposed Transactions. The Unitholders should
note that FY 2014 is not representative of One Raffles Place’s full year performance as its
retail podium was only re-opened in May 2014 and hence did not have a full year
contribution for FY 2014.
We wish to highlight that as stated in Section 4.8 of the Letter to Unitholders in the
Circular, the Proposed CPPU Issue will not increase aggregate leverage. Assuming that
OUE C-REIT acquires 75.0% to 83.33% indirect interest in OUBC, its pro forma aggregate
leverage is expected to be 40.9% to 41.9% respectively.
As stated in Section 4.3 of the Letter to Unitholders in the Circular, One Raffles Place
could achieve potential growth from increase in occupancy, potential positive rental
reversion and limited new office supply in Raffles Place. This may reduce the DPU dilution
as stated above.
5. OUR RECOMMENDATION
In arriving at our recommendation, we have taken into account the following factors which
we consider to have a significant bearing on our assessment of the Proposed Acquisition
and the Proposed CPPU Issue.
(i) the rationale and the benefits of the Proposed Acquisition and the Proposed CPPU
Issue;
(ii) Savills and Cushman & Wakefield have estimated the market value of the OUBC
Interest is S$1,734.0 million and S$1,733.0 million, respectively;
(iii) the approach used by the Independent Valuers in making their opinions are
consistent with the market standards;
(iv) the market value of One Raffles Place attributable to OUBC as at 31 December
2014 based on information disclosed in the annual report OUE for the financial year
ended 31 December 2014 is S$1,737.0 million;
(v) the implied price per NLA of One Raffles Place is lower than the price per NLA of
Straits Trading Building and Robinson Point of S$2,830 psf and S$2,580 psf,
respectively;
(vi) the implied price per NLA of One Raffles Place is higher than the price per NLA of
Equity Plaza, Anson House, Finexis Building, Prudential Tower and 16 Collyer Quay
of S$2,181 psf, S$2,252 psf, S$2,300 psf, S$2,316 psf and S$2,374 psf,
respectively;
(vii) the implied NPI yield of One Raffles Place of 3.4% is within the range of NPI yields
of 2.4% to 4.5% of the Comparable Properties. As stated in Section 4.3 of the Letter
to Unitholders in the Circular, One Raffles Place could achieve potential NPI growth
from increase in occupancy, potential positive rental reversion and limited new office
supply in Raffles Place. This may enhance NPI yield of 3.4%;
(viii) the implied value per NLA of One Raffles Place is lower than the value per NLA of
Ocean Financial Centre, One Raffles Quay and Six Battery Road and of S$2,894
psf, S$2,762 psf and S$2,691 psf, respectively;
(ix) the implied value per NLA of One Raffles Place is higher than the value per NLA of,
Suntec City, One George Street and HSBC Building of S$2,314 psf, S$2,179 psf and
S$2,245 psf, respectively;
E-25
(x) the distribution on the CPPUs of 1.0% is below both the yield to maturity and the
coupon rate of the selected convertible and perpetual instruments; and
(xi) the premium on conversion of the CPPUs (a premium of 15.0% above the TERP in
relation to the Rights Issue) is below range of the convertible bonds issued by CCT
(at 19.8%) and by CapitaLand (at 32.6%);
(xii) the Restriction Period of four years commencing from the date of the issuance of the
CPPUs is higher than that of FCOT CPPUs and Starhill CPUs and higher than all
other selected convertible and perpetual instruments;
(xiii) post four years the CPPU conversion is further restricted to only one-third of the
CPPUs initially issued in any one year which is not the case in any of the selected
convertible and perpetual financial instruments;
(xiv) There is no restriction on the number of units that can be redeemed in a financial
year, hence giving the Manager the flexibility to redeem based on the outcome of the
redemption review process;
(xv) the CPPU is a structured instrument, incorporating terms which are specific to the
Proposed Transactions and the positions of the parties. The structure is intended for
the Sponsor to provide funding support for OUE C-REIT in the near-term as the
REIT seeks to grow NPI through positive rental reversion and increase in
occupancy;
(xvi) the intention of the Manager to put in place a redemption review process to evaluate
the commercial viability of redemption of the CPPUs; and
(xvii) the pro forma financial effects of the Proposed Transactions.
Having considered the above and subject to the assumptions and qualifications set out
herein and taking into account the prevailing conditions as at Latest Practicable Date, we
are of the opinion that the Proposed Acquisition and the Proposed CPPU Issue are on
normal commercial terms and will not be prejudicial to the interests of the OUE C-REIT
and its minority Unitholders.
Accordingly, we advise that the Independent Directors may recommend that the
Unitholders vote in favour of the Proposed Acquisition and the Proposed CPPU Issue.
Our recommendation is addressed to the Independent Directors, the Audit and Risk
Committee and the Trustee for their benefit in connection with and for the purpose of their
consideration of the Proposed Transactions. Any recommendation made by the
Independent Directors and the Audit Committee in respect of the Proposed Transactions
shall remain their responsibility.
Our recommendation is governed by the laws of Singapore and is strictly limited to the
matters stated herein and does not apply by implication to any other matter.
Yours faithfully
Deloitte & Touche Corporate Finance Pte Ltd
Ng Jiak See
Executive Director
E-26
Savills Valuation andProfessional Services (S) Pte Ltd
Reg No : 200402411G
30 Cecil Street#20-03 Prudential Tower
Singapore 049712
T: (65) 6836 6888F: (65) 6536 8611
savills.com
Our Ref : MKT/2015/C-OUE/AQ/0341
5 June 2015
DBS Trustee Limited in its capacity as Trustee of OUE Commercial Real Estate Investment Trust 12 Marina Boulevard Level 44 Marina Bay Financial Centre Tower 3 Singapore 018982
Dear Sirs
VALUATION OF: OUBC’S INTEREST IN 1 RAFFLES PLACE, ONE RAFFLES PLACE SINGAPORE 048616 (“THE PROPERTY”)
In accordance with your instructions to us, we are to provide our opinion of the current Market Value of OUB Centre Limited (“OUBC”)’s interest in the Property, based on (a) the unexpired leasehold interest in the Property; and (b) with vacant possession, for the purposes of acquisition and financing.
We have prepared this valuation certificate for the purpose of inclusion in a circular to unitholders.
Our valuation is our opinion of the market value of OUBC’s interest in the Property which we would define as intended to mean “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing, wherein the parties had each acted knowledgeably, prudently and without compulsion.”
The market value is the best price reasonably obtainable in the market by the seller and the most advantageous price reasonably obtainable in the market by the buyer. This estimate specifically excludes an estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale and leaseback arrangements, joint ventures, management agreements, special considerations or concessions granted by anyone associated with the sale, or any element of special value. The market value of a property is also estimated without regard to costs of sale and purchase, and without offset for any associated taxes.
In arriving at our opinion of market value, we have adopted the Income Capitalisation Approach and Market Comparison Method.
We have fully relied on information provided by the Manager as well as obtained from reliable agencies and sources in the public domain. In the event that the actual information of the Property such as dimensions, measurements and areas when made available to us, differs from our estimates we reserve the right to review our valuation.
F-1
APPENDIX F – VALUATION CERTIFICATES
F-2
APPENDIX F – VALUATION CERTIFICATES
Our Ref : MKT/2015/C-OUE/AQ/0341
VALUATION CERTIFICATE
The Property Brief Description Current Market
Value of OUBC’s Interest
1 Raffles Place ONE RAFFLES PLACE Singapore 048616 Legal Description/ Tenure
TS 1 Lot 716L: Leasehold - 99 years commencing from 1 November 1985
TS 1 Lot 718M: Leasehold - 841 years 3 months 20 days commencing from 1 November 1985
TS 1 Lot 721M: Leasehold - 99 years commencing from 26 May 1983
TS 1 Lot 696V: Leasehold - 99 years commencing from 26 May 1983
The Property is a commercial development comprising a 62-storey office tower (Tower 1, completed in 1986), a 38-storey office tower (Tower 2, completed in 2012), a 5-storey plus 1 basement retail podium (major refurbishment completed in 2014) with 3 basement levels of car parking lots.
The Property is strategically situated in the heart of Raffles Place, Singapore’s Central Business District and with direct link to the Raffles Place MRT interchange station.
There is easy access to other parts of Singapore via the ECP, MCE, AYE and Nicoll Highway.
Towers 1 & 2 of the Property offer Grade-A office space.
For Tower 1, the uppermost 12 levels have near-trapezoidal shaped floor plates while the floor plates of its lower 43 levels are rectangular-shaped, providing a continuous office floor plate that ranges from approximately 5,000 sq feet to 9,000 sq feet in lettable area. The newer Tower 2 awarded the Green Mark Platinum Award has a typical L-shaped column-free office floor plate of about 11,000 sq feet
The shops in the retail podium (except for Basement 1 which has an open concept F&B layout and Level 2 which is wholly let to an anchor) are generally arranged around a central concourse where the escalators are located.
The Property occupies a total land area of 6,985.7 sq metres (75,193 sq feet).
The total gross floor area is 119,713.97 sq metres (1,288,589 sq feet). According to the Manager, OUBC’s estimated net lettable area (“NLA”) totals 66,890 sq metres (720,000 sq feet), comprising as follows:
1 sq metre = 10.7639 sq feet approximately (some error may arise from rounding off).
Use/Location Sq Metres Sq Feet Office (Tower 1) 29,265 315,000 Office (Tower 2) 27,406 295,000 F&B (Tower 1) 929 10,000 Retail Podium 9,290 100,000
S$1,734,000,000/- (Singapore Dollars One Billion Seven
Hundred And Thirty-Four Million Only)
Registered Owner OUB Centre Limited
F-3
APPENDIX F – VALUATION CERTIFICATES
Cushman & Wakefield VHS Pte. Ltd. Company Registration No. 200709839D 3 Church Street #09-03 Samsung Hub Singapore 049483 Tel: (65) 6535 3232 Fax: (65) 6535 1028 www.cushmanwakefield.com
9 June 2015
The Board of Directors OUE Commercial REIT Management Pte. Ltd. (as manager of OUE Commercial Real Estate Investment Trust) 50 Collyer Quay #04-08 OUE Bayfront Singapore 049321
Dear Sirs
ONE RAFFLES PLACE TOWER 1, ONE RAFFLES PLACE TOWER 2 AND ONE RAFFLES PLACE SHOPPING MALL AT 1 RAFFLES PLACE, SINGAPORE 048616 (COLLECTIVELY REFERRED TO AS “THE PROPERTY”)
Cushman & Wakefield VHS Pte Ltd (“C&W”) have been instructed by OUE Commercial REIT Management Pte Ltd, to provide the market value as at 5 June 2015 and formal valuation report in respect of the above mentioned property (“the Property”), as disclosed.
C&W have prepared the formal valuation report (the “Report”) in accordance with the requirements of the instructions and the following international definition of Market Value:
“Market Value is the estimated amount for which an asset or liability should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction, after property marketing, wherein the parties had each acted knowledgeably, prudently and without compulsion”.
The valuations have been made on the assumption that the owner sells the Property on the open market in their existing state without the benefit of a deferred term contract, joint venture or any similar arrangement which would affect the value of the Property.
For the specific purposes of this Circular, we provide a valuation summary of the Report with a brief description of the Property together with the key factors that have been considered in determining the market value of the Property. The value conclusions reflect all information known by the valuers of C&W who worked on the valuation in respect to the Property, market conditions and available data.
Reliance on This Letter
This letter together with its attachments is a summary of the full Report that C&W have carried out and it does not contain all the necessary information and assumptions that are included in the Report. Further reference may be made to the Report, copies of which are held by the management.
The valuations contained in the Report are not guarantees or predictions but are based on the information obtained from reliable and reputable agencies and sources, the owner and other related parties. Whilst C&W have endeavoured to obtain accurate information, it has not independently verified all the information provided by the management or other reliable and reputable agencies.
Due to the nature of the instructions, detailed information pertaining to the Property could not be supplied to us. For the purpose of this valuation and as instructed, we have relied on available public sources of information as well as our own internal sources of information. Primarily, we have relied on published information found in OUE Limited Annual Report 2014, as well as those found in the public domain www.onerafflesplace.com.sg, for property information such as the approximate Gross Floor Area, dates of completion and all other relevant matters in our valuation. In addition, we have also relied on the Net Lettable Area provided to us by the Manager. Where applicable, information as to ownership, site area and zoning has been obtained from our searches at the local authorities. Also, we have assumed that all leases and tenancy agreements are legally valid and enforceable and the Property have proper legal titles that can be freely transferred, leased and sub-leased in the market without
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APPENDIX F – VALUATION CERTIFICATES
Page 2
VALUATION OF ONE RAFFLES PLACE SINGAPORE 048616 _________________________________________________________________________________
being subject to any land premium or any extra charges. C&W have no reason to doubt the truth and accuracy of information provided to us by the management which is material to the valuation.
No allowance has been made in the valuation for any charges, mortgages or amounts owing on the Property. C&W have assumed that the Property is free from encumbrances, restrictions or other outgoings of an onerous nature which would affect their market value, other than those which have been made known to C&W.
The methodologies used in valuing the Property, namely, the Capitalization Approach, is based on a set of assumptions as to the income and expenses taking into considerations the changes in economic conditions and other relevant factors affecting the Property. The resultant value is, in our opinion, the best estimate but it is not to be construed as a guarantee or prediction and it is fully dependent upon the accuracy of the assumptions made. This summary does not contain all the necessary support data and details included in our Report. For further information on that, reference should be made to the Report to understand the complexity of the methodology and the variables involved in order to appreciate the context in which the values are arrived at.
Due to the nature of the instructions, we could only inspect the exterior and, where we can access, typical areas of the interior of the Property. No structural surveys have been made, but in the course of our cursor inspection, we did not note any serious defect to the completed buildings where we can see. We are not, however, able to report that the Property is free from rot, infestation or any structural defect. No tests were carried out to any of the services.
We have also not carried out investigations on site in order to determine the suitability of ground conditions, nor have we undertaken archaeological, ecological or environmental surveys. Our valuation is on the basis that these aspects are satisfactory.
Valuation Rationale
In arriving at our valuation, we have considered relevant general and economic factors and in particular have investigated recent sales transactions of comparable Property that have occurred in the vicinity or in similar standard localities. We have utilized the Capitalization Approach and Comparison Method, where appropriate, in undertaking our assessment for the Property.
Capitalization Approach
Where appropriate, we have cross-checked the property interests using the Capitalization Approach by taking into account estimated sustainable revenues of the property, adjusting to reflect anticipated operating expenses or outgoings, deriving a net income which is then capitalized at appropriate capitalization rate over the remaining lease term or tenure. Capitalization rate was obtained by comparing capitalization rates of similar properties in market transactions, where available.
Comparison Method
Where appropriate, we have cross-checked the property interests by the Comparison Method by making reference to comparable sale transactions as available in the relevant market. Appropriate adjustments are made for any differences between the Property and the comparables.
More property details and the key valuation assumptions for the Property are found in the Valuation Certificate attached to this letter.
Our valuation is undertaken on a Goods and Services Tax exclusive basis.
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APPENDIX F – VALUATION CERTIFICATES
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APPENDIX F – VALUATION CERTIFICATES
Page 4
VALUATION OF ONE RAFFLES PLACE SINGAPORE 048616 _________________________________________________________________________________
VALUATION CERTIFICATE
Date of Valuation: 5 June 2015
Property: One Raffles Place Tower 1, One Raffles Place Tower 2 and One Raffles Place Shopping Mall at 1
Raffles Place, Singapore 048616 (collectively referred to as the “The Property”)
Legal Description/
Land Area/ Tenure:
Legal Description (all of Town Subdivision 1)
Land Area (sq m) Tenure/ Interest Valued
Lot 716L 2,529.5 Leasehold 99 years commencing from 1 November 1985
Lot 718M 2,670.7 Leasehold 841 years 3 months 20 days commencing from 1 November 1985
Lots 721M 1,645.7 Leasehold 99 years commencing from 26 May 1983
Lot 696V 139.8 Leasehold 99 years commencing from 26 May 1983
Brief Description of
Property:
The Property is strategically located at the junction of Raffles Place and Chulia Street, in the heart
of Raffles Place financial centre and within the Central Business District of Singapore. It is
connected to the Raffles Place MRT Interchange via underground passageways through the
connecting Raffles Xchange. Surrounding developments comprise mainly commercial
developments as well as several hotel and high-end residential developments.
The Property is an integrated development comprising a 62-storey Grade A office building with a
rooftop restaurant and observation deck known as One Raffles Place Tower 1, a 38-storey Grade
A office building known as One Raffles Place Tower 2, a 6-storey retail mall (5 levels above ground
and one basement level) known as One Raffles Place Shopping Mall and 3 basement car park
levels with 326 lots.
Registered Owner: OUB Centre Limited.
Town Planning: Zoned “Commercial” use
Gross Floor Area
(“GFA”)1:
Approximately 119,725.8 sq m/ 1,288,717 sq ft
Net Lettable Area
(“NLA”)2:
Office Tower 1 Approximately 30,193.5 sq m/ 325,000 sq ft
Office Tower 2 Approximately 27,406.4 sq m/ 295,000 sq ft
Retail Mall Approximately 9,290.3 sq m/ 100,000 sq ft
Total Approximately 66,890.2 sq m/ 720,000 sq ft
Tenancy Details: We observed that the Property is multi-tenanted and there are some vacant units within the office
towers and shopping mall. However, we were unable to ascertain the tenancy details.
Methods of Valuation: Capitalization Approach and Comparison Method
Capitalization Rate: Office (Tower 1) Office (Tower 2) Retail Mall (Leasehold 841 years) Retail Mall (Leasehold 99 years) Car park (Leasehold 841 years) Car park (Leasehold 99 years)
3.75% 3.95% 5.00% 5.25% 6.25% 6.50%
1 Information obtained from OUE Limited Annual Report 2014.2 Approximate figures provided by the Manager.
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VALUATION OF ONE RAFFLES PLACE SINGAPORE 048616 _________________________________________________________________________________
Market Value: S$1,733,000,000/-
Value psm of GFA:
Value psm of NLA:
S$14,475/-
S$25,908/-
Remarks: This Valuation Certificate is a summary of the full report that Cushman & Wakefield have carried
out and it does not contain all the necessary information, assumptions and limiting conditions that
are included in the report. Further reference may be made to the report, copies of which are held
by client.
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APPENDIX F – VALUATION CERTIFICATES
Independent Market Study for the Office and Retail Real Estate Markets in the Singapore CBD
April 24, 2015
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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Independent Market S tudy for the Of f i ce and Reta i l Rea l Es ta te Markets in the S ingapore CBD | Contents
TABLE OF CONTENTS
Terms of Reference .......................................................................................................................................1
Section 1 Socio-economic Overview .............................................................................................................1
1.1 GDP Growth, Unemployment and Inflation
1.2 Economic Profile
1.3 Sectoral Performance
1.4 Population
1.5 Personal Disposable Income and Private Consumption Expenditure
1.6 Major Government Plans, Policies and Initiatives
1.7 Outlook
Section 2 Office Real Estate Market Overview .............................................................................................5
2.1 Major Office Locations
2.2 Supply, Demand and Occupancy
2.3 Potential Supply
2.4 Rental Values
2.5 Capital Values
2.6 Investment Market
2.7 Outlook
Section 3 Retail Real Estate Market Overview ........................................................................................... 19
3.1 Major Retail Locations
3.2 Supply, Demand and Occupancy
3.3 Potential Supply
3.4 Rental Values and Rents
3.5 Capital Values and Prices
3.6 Outlook
Section 4 Site and SWOT Analysis ............................................................................................................ 30
4.1 Location and Accessibility
4.2 Property Description
4.3 Property Particulars
4.4 SWOT Analysis: Office
4.5 SWOT Analysis: Retail
Section 5 Conclusion .................................................................................................................................. 39
Limiting Conditions
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Terms of Reference DTZ was appointed by OUE Commercial REIT Management Pte. Ltd. to conduct an independent market study of the office and retail property markets in Singapore, for the proposed acquisition of One Raffles Place (ORP) located at 1 Raffles Place, Singapore 048616.
This report is addressed to OUE Commercial REIT Management Pte. Ltd. and DBS Trustee Limited, in its capacity as Trustee of OUE-C REIT.
The forward statements in this report are based on our expectations and forecasts for the future. These statements should be regarded as our assessment of the future, based on certain assumptions on variables which are subject to changing conditions. Changes in any of these variables may significantly affect our expectations and forecasts.��
Section 1 Socio-economic Overview
1.1 GDP Growth, Unemployment and Inflation Global economic growth in 2014 was modest at 3.4%, due to the uneven recovery in the major economies. While the performance of the US economy was stronger than expected, growth in Mainland China, the Eurozone and Japan was lacklustre. Notwithstanding, Asia remained as the world’s growth leader in 2014, as overall consumption in the region was relatively robust.
Singapore’s economy continued to grow in 2014, albeit at a moderate 2.9%, compared with 4.4% in 2013 (Figure 1.1). This was also slower than the average annual real Gross Domestic Product (GDP) growth of 6.5% from 2004 to 2013. Apart from the global economic uncertainty, the moderated growth was also due to the ongoing labour market pressures and weak productivity growth.
Figure 1.1: Real GDP Growth, Unemployment Rate and Inflation
�
Source: Oxford Economics, Department of Statistics of Singapore, DTZ Consulting & Research, April 2015
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 F 2016 F 2017 F 2018 F
%
Unemployment Rate Inflation Real GDP Growth
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Nonetheless, the economy came ahead of market expectations in Q1 2015, achieving a 2.1%1 YOY real GDP growth, same as that in Q4 2014. In particular, the services producing industries, which accounted for 75% of Gross Value Added (GVA), led economic growth for most of 2014 and Q1 2015.
Unemployment rate remained low at 2.0% in 2014, though marginally higher than the 1.9% in 2013.
Total employment grew by 3.7% (130,100) in 2014, lower than the 4.1% (136,200) in 2013. Employment gain was led by community, social & personal services (32,400) and wholesale & retail trade (20,500). Employment growth in finance & insurance (9,300), professional services (14,000) and administrative & support services (13,600), which traditionally drives the demand for office space, was also substantial in 2014.
Inflation eased from 2.4% in 2013 to 1.0% in 2014. This was below the average annual inflation over the past decade (2.8%). This trend is in line with the government’s ongoing efforts to manage inflation.
1.2 Economic Profile As at end 2014, Singapore’s GVA at current market prices was $368.5 billion2. Singapore’s economy is well-diversified, supported by manufacturing (18% of GVA), business & services (16%) and finance & insurance (12%). The wholesale & retail trade sector, which drives the demand for retail space, is also an important component of the economy, accounting for 17% of GVA.
1.3 Sectoral Performance According to the Economic Development Board, the services cluster in Singapore attracted the highest fixed asset investments in 2014, led by Infocommunications & Media and Headquarter & Professional Services. This reflected the growing technology clusters in Singapore and the strong extent they are driving the economy.
Of the services producing industries, the finance & insurance sector, a core driver of demand for Central Business District (CBD) office space, grew the most significantly by 7.7% in 2014. This is in line with Singapore continuing to be a leading global financial centre and a regional funding centre for trade flows in Asia as well as between Asia and the rest of the world.
On the back of rapid growth in the Telecommunications, Media and Technology (TMT) industry, demand for office space is increasingly being driven by non-financial companies. This is reflected by continued growth in the information & communications (3.6%) and business services (2.9%) sectors in 2014.
On the other hand, the wholesale & retail trade sector grew moderately by 1.7% in 2014, weighed by weak retail sales. Excluding motor vehicles, the Retail Sales Index (RSI) at constant prices declined by 0.7% in 2014, compared with the 1.1% growth in 2013. This was due to slowing Private Consumption Expenditure (PCE) growth and operational difficulties faced by retailers, including tighter manpower constraints.
The 3.0% decline in visitor arrivals to 15.1 million in 2014 partly weighed on retail sales, with the sales of discretionary goods such as recreational goods and apparels & footwear falling by 6.5% and 2.5% in 2014 respectively. Notwithstanding, tourism spending held firm at $23.5 billion in 2014, with a higher proportion of visitors staying longer and spending more on average.
1 Government’s advance estimate based on data from January and February 2015.2 All currencies in this report will be in SGD, unless stated otherwise.
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Singapore received 2.4 million visitors in the first two months of 2015, a decline of about 5% YOY. Nonetheless, tourism numbers are expected to return to growth in 2015, amid the expected rise in outbound travel to Asia and intra-Asia travel. Visitor arrivals are expected to increase by 0% to 3% to between 15.1 and 15.5 million, while tourism receipts are forecast to grow by 0% to 2% between $23.5 and $24.0 billion.
1.4 Population Singapore’s population has grown steadily over the past decade, by an average annual rate of 2.8%. As at end 2014, total population was 5.47 million, of which 71% (3.87 million) were Singapore residents3.
Although population growth slowed in 2013 (1.6%) and 2014 (1.3%) due to tighter immigration policies, the January 2013 Population White Paper provided a roadmap for population growth to reach 6.5 to 6.9 million by 2030. This translates to an average annual growth rate of 1.2% to 1.6%. In line with population growth, Singapore’s workforce is expected to grow by 1.0% to 2.0% per annum till 2030. Focus is on the creation of high value-added jobs, and this is expected to benefit the office and retail markets over time.
1.5 Personal Disposable Income and Private Consumption Expenditure Bolstered by its open and dynamic economy, Singapore enjoys a high per capita GDP (USD56,284 (SGD71,318) in 2014). The average annual growth of its per capita Personal Disposable Income (PDI)4
(4.3%) is higher than that for per capita PCE (3.7%) over the past decade. As at end 2014, Singapore’s per capita PDI was $40,424, about 20% higher than that for per PCE ($33,763), reflecting the resident population’s strong spending potential.
1.6 Major Government Plans, Policies and Initiatives
Budget 2015 Budget 2015 focused on building Singapore as an economy with firms driven by innovation and higher incomes, coming from deep skills and expertise in every job. In particular, five growth clusters of the future were identified, including Asian and Global Financial Services.
Key measures included providing businesses more time to adjust to the ongoing restructuring and shoring up the Small and Medium Enterprises (SME) industry. These include the extension of the Wage Credit Scheme and corporate income tax rebates, as well as strengthening support for innovation by enhancing grant support and enterprise financing.
Meanwhile, income tax concessions for Real Estate Investment Trusts (REITs) were extended till 2020 to promote the listing of REITs in Singapore and strengthen its position as a major REIT centre in Asia.
On the other hand, stamp duty concessions for REITs were allowed to lapse after 31 March 2015. These stamp duty concessions were intended to better enable the REIT industry to acquire a critical mass of local assets, as a base from which they can expand overseas.
3 Comprises Singapore citizens and permanent residents.4 Based on Singapore residents.
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I ndependent Market S tudy fo r the Of f i ce and Reta i l Rea l Es ta te Markets in the S ingapore CBD ���������
Proposed enhancements to the regulatory regime for REITs REITs in Singapore have become an attractive investment option that delivers tax-efficient, stable and regular returns for investors. Singapore has one of the largest REIT markets in Asia as at end 2014, with 28 REITs and six stapled trusts listed on the Singapore Exchange Securities Trading Limited (SGX-ST) and a combined market capitalisation of $66.7 billion.
To remain competitive as a major Asian REIT centre, the Monetary Authority of Singapore (MAS) published a consultation paper in October 2014 for the proposed enhancements to the regulatory regime for REITs and REIT Managers in Singapore. The proposals, which are expected to benefit the overall REIT market, include considerations on enhancing transparency, corporate governance, creating stronger disclosure standards and providing REITs with more operational flexibility, e.g.:
• Adopting a single-tier leverage limit of 45%, without requirement for credit rating; and • Allowing REITs to undertake development activities up to 25% of its deposited property.
Plans for the CBD The government has been pro-active in planning and facilitating Singapore’s physical development and ensuring that it remains competitive with other global and regional financial hubs. It has implemented place management initiatives in the city centre, including Marina Bay and Singapore River, to make these areas vibrant live-work-play environments. In addition, the Urban Redevelopment Authority (URA) is currently reviewing future plans for the CBD as well as growth areas outside the CBD.
The Ministry of National Development Land Use Paper released in 2013, highlighted strategies to rejuvenate the traditional CBD, further develop the New Downtown at Marina Bay as well as development of a Southern Waterfront City.
The Singapore River One (SRO) is a private sector-led initiative responsible for the place management of the entire Singapore River precinct, including Boat Quay, which is near the subject property. The URA envisages Singapore River as a premier mixed-user recreational destination, with enhanced economic and business activity. Key objectives of the SRO’s 5-Year Business Plan (2012 to 2016) for the precinct include increasing footfall, sales, property values, lease and occupancy rates.
1.7 Outlook According to the International Monetary Fund (IMF), global economic growth in 2015 (3.5%) is projected to be marginally stronger than that in 2014 (3.4%). Growth is likely to be stronger in advanced economies, but more subdued in emerging markets. Prospects in Asia are also expected to remain relatively positive, with the IMF projecting a steady 5.6% growth for the region.
Despite the soft global economic prospects and domestic restructuring, the Ministry of Trade and Industry expects Singapore’s economy to grow by 2.0% to 4.0% in 2015 (Figure 1.1 on page 1). Meanwhile, the MAS projects headline inflation at -0.5% to 0.5% in 2015.
In the longer term, Oxford Economics projects Singapore’s real GDP growth to sustain at around 3.4% to 3.6% per annum from 2016 to 2018. The services producing industries, which are expected to grow by 3.3% to 4.9% per annum over the same period, will underpin the growth.
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I ndependent Market S tudy fo r the Of f i ce and Reta i l Rea l Es ta te Markets in the S ingapore CBD ���������
Section 2 Office Real Estate Market Overview�
2.1 Major Office Locations This report focuses on the CBD office market, particularly Raffles Place, where the subject property is located. Singapore’s CBD comprises Raffles Place, Marina Bay (the New Downtown) and Shenton Way/ Robinson Road/ Cecil Street (Map 2.1).
Map 2.1: Major Office Locations (CBD and Fringe CBD)
Source: DTZ Consulting & Research, April 2015
Many global financial institutions and Multinational Corporations (MNCs) are located in Raffles Place and Marina Bay, which has a high concentration of premium and Grade-A offices. These two locations typically house global/ regional headquarters and front office functions. Together, Raffles Place and Marina Bay constitute the main financial and business district of Singapore.
Shenton Way/ Robinson Road/ Cecil Street is popular with professional/ business services companies and other financial, insurance and real estate companies. While a considerable proportion of the office stock in this micro-market is aging and relatively less well-specified, many are undergoing refurbishment or redevelopment.
Other major office locations outside the CBD are:
• Fringe CBD – Office locations fringing the CBD, which mainly serve companies that require proximity to their clients in the CBD. Micro-markets such as Anson Road/ Tanjong Pagar, Marina Centre and Beach Road/ North Bridge are emerging as attractive office locations, as there are many new premium and Grade-A offices completing in the next few years; and
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• Decentralised Areas – These locations are outside of the CBD and the Fringe CBD, including the suburban areas. These offices are usually closer to homes and are often complemented by amenities and accessible by the Mass Rapid Transit (MRT) network. These offices attract companies that do not need to be in the CBD as well as corporate support functions of financial institutions and other companies. Decentralised locations such as one-north and Jurong Gateway have seen many new Grade-A office additions in recent years.
2.2 Supply, Demand and Occupancy
Supply As at Q1 2015, there was about 24.3 million sq ft5 of office space in the CBD, which accounted for 36% of islandwide stock (68.6 million sq ft). Meanwhile, office stock in the Fringe CBD accounted for another 36% (24.8 million sq ft), with Anson Road/ Tanjong Pagar (6.2 million sq ft) being the largest Fringe CBD office micro-market. The remaining 28% (19.5 million sq ft) of islandwide office stock is in the Decentralised Areas.
Figure 2.1: Breakdown of Office Stock (Q1 2015)
Source: DTZ Consulting & Research, April 2015
Raffles Place is the most established business location in the CBD, accounting for majority (50%, 12.2 million sq ft) of office stock in the CBD, as at Q1 2015. Being the traditional core of the CBD, it has continuously been rejuvenated via refurbishment and redevelopment activities. It is also directly served by Raffles Place MRT interchange station, which is one of the three interchange stations that serve the major East-West and North-South Lines.
Accessibility and connectivity within and to Raffles Place has improved significantly over the years; key infrastructural improvements include the development of:
• The Marina Coastal Expressway (MCE) which better integrates the Ayer Rajah Expressway (AYE), East Coast Parkway (ECP) and Kallang-Paya Lebar Expressway (KPE) to the CBD;
• New MRT lines such as the Downtown Line and Circle Line, which connects to the East-West and North-South Lines; and
5 All supply and demand figures are in terms of Net Lettable Area, unless stated otherwise.
CBD Fringe24.8 million sq ft
36%
Decentralised Areas19.5 million sq ft
28%
Marina Bay6.3 million sq ft
9%(26% of CBD)
Raffles Place12.2 million sq ft
18% (50% of CBD)
Shenton Way/Robinson Road/
Cecil Street5.8 million sq ft
9%(24% of CBD)
CBD24.3 million sq ft
36%
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• A seamless network of air-conditioned underground walkways linking various office developments in Raffles Place and Marina Bay.
Raffles Place continues to be the heart of the CBD, a gateway to Singapore’s established centre of business and commerce. The high concentration of corporates in the micro-market also allows companies to be near their clients. Given its prestige and convenience, Raffles Place is a choice location – premium and Grade-A offices in the area are usually the preferred choice among leading MNCs and financial institutions. Some of these offices, including those in Marina Bay, are highlighted in Table 2.1.
Table 2.1: Selected Premium and Grade-A Offices6
Year of Completion Development Location NLA
(sq ft)
Estimated Occupancy (as at end Q1 2015)
Estimated Monthly Gross
Rent ($ per sq ft)
Raffles Place 2014 CapitaGreen Market Street 702,000 76.4%7 12.00 to 16.008
2011 Ocean Financial Centre Raffles Place 884,500 100.0% 11.00 to 13.00 e
2011 OUE Bayfront Collyer Quay 382,900 99.2% 11.60 to 14.508
2009 Straits Trading Building Battery Road 158,200 95.0% to 99.0% e
10.50 to 11.00 e
(asking) 2004 One George Street George Street 447,000 100.0% 11.00 to 11.208
Marina Bay 2013 Asia Square Tower 2 Marina View 784,100 80.0% to
85.0% e13.00 to 15.00 e
2012 Marina Bay Financial Centre Tower 3
Marina Boulevard
1.3 million
96.0% to 99.0% e
12.00 to 14.00 e
2011 Asia Square Tower 1 Marina View 1.2 million
85.0% to 90.0% e
14.00 to 16.00 e
2010 Marina Bay Financial Centre Tower 2
Marina Boulevard
1.0 million
100.0% e 11.00 to 12.00 e
2010 Marina Bay Financial Centre Tower 1
Marina Boulevard
630,800 100.0% e 11.00 to 12.00 e
Source: CapitaLand Commercial Trust, OUE Commercial REIT, Keppel REIT, DTZ Consulting & Research, April 20159
6 Figures have been rounded. 7 As at 21 April 2015.8 Committed rents for both renewal leases and new leases for Q1 2015.9 Occupancy and rental figures are generally based on publicly available information. Where information is not available, DTZ has provided estimates, indicated as “e”.
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Annual net supply10 in the CBD was substantial since 2010, above the average annual net supply from 2005 to 2014 (0.70 million sq ft), with the exception of 2013 (0.35 million sq ft) (Figure 2.2). Notably, there were significant terminations in the CBD (0.4 million sq ft) in 2013, especially in Raffles Place and Shenton Way/ Robinson Road/ Cecil Street.
Terminations in the CBD primarily stemmed from the increased redevelopment activities in these locations, alongside the government’s vision for a more vibrant CBD. Some of these buildings are redeveloping into mixed-use developments, e.g., V on Shenton (office and residential) and OUE Downtown (office, retail and serviced apartments), while some are redeveloping/ refurbishing into strata-titled offices, e.g., Oxley Tower and Robinson Tower.
Figure 2.2: Net Supply (CBD)
Source: DTZ Consulting & Research, April 2015
Notwithstanding, office supply in Raffles Place has been more measured and is relatively tight, with the exceptions of 2011 (1.31 million sq ft) and 2014 (0.71 million sq ft). Average annual net supply in Raffles Place over the past decade is estimated at 0.18 million sq ft, only a quarter of that for the entire CBD.
New supply in Raffles Place since 2011 comprised mainly premium and Grade-A offices. These offices achieved healthy commitments from a diverse range of established tenants such as ANZ Banking Group Limited, BNP Paribas, Drew & Napier LLC, Merrill Lynch International Bank Limited (Merchant Bank) and Michael Page International. This trend of strong interest continued in 2014, with CapitaGreen securing high profile tenants such as Apple, Cargill, Lloyd's Asia, Schroder and Twitter.
10 Refers to the change in total floor space over a specific period of time, either positive or negative. It excludes floor space that are not available for occupation due to refurbishment or redevelopment, but includes new supply. New supply refers to the total floor space ready for occupation.
-1,000,000
-500,000
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q1 2015
sq ft
Raffles Place Rest of CBD
Average Annual Net Supply from 2005 to 2014 (CBD): 0.70 million sq ft
Average Annual Net Supply from 2005 to 2014 (Raffles Place): 0.18 million sq ft
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Alongside the government’s long-term plan for decentralisation, there has been substantial new supply in the Fringe CBD and Decentralised Areas since 2013. These non-CBD projects include South Beach (0.5 million sq ft), The Metropolis at one-north (1.1 million sq ft), Jem and Westgate Tower (0.3 million sq ft each) as well as Paya Lebar Square (0.4 million sq ft). Many are located at major transport nodes, supported by a range of amenities, in well-specified commercial buildings.
Demand and Occupancy The demand for office space in the CBD has generally been healthy, with the average annual net demand11 in the past decade (0.78 million sq ft) exceeding that for supply (0.70 million sq ft) (Figure 2.3).
Figure 2.3: Net Supply, Net Demand and Occupancy (CBD)
Source: DTZ Consulting & Research, April 2015
Demand came from: • The regular mainstay, i.e. finance & insurance, professional and business services, as well as a
growing diversity of occupiers. These include companies in energy, commodities and TMT, particularly those in the Social, Media, Analytics and Cloud industries. These firms are usually willing to pay higher rents to locate in well-specified buildings, particularly those in prime and convenient locations, to facilitate client proximity, attract talent and strengthen their brand positioning;
• Serviced office providers are increasingly sought after due to their flexibility. Serviced offices at prime office addresses offer smaller and cost-conscious set-ups a strong brand positioning and this is popular, amid the burgeoning SME industry in Singapore;
• Tenants relocating within the CBD – some of which are moving due to their premises undergoing refurbishment/ redevelopment, e.g., the former Equity Plaza, now known as GSH
11 Net demand refers to the change in the total occupied or let floor space over a specified period of time, positive or negative. It only takes into account occupiers when they physically locate in the premises.
0.75 million sq ft
0.40 million sq ft
93.0%
84.0
86.0
88.0
90.0
92.0
94.0
96.0
98.0
-1,000,000
-500,000
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 F 2016 F 2017 F 2018 F
%sq ft
Net Supply (LHS) Net Demand (LHS) Occupancy (RHS)
Average Annual Net Supply from 2005 to 2014: 0.70 million sq ft
Average Annual Net Demand from 2005 to 2014: 0.78 million sq ft
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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I ndependent Market S tudy fo r the Of f i ce and Reta i l Rea l Es ta te Markets in the S ingapore CBD ������ ���
Plaza. Some tenants are also relocating from developments in Marina Bay to Raffles Place, e.g., both Lloyd’s Asia from Asia Square Tower 1 and Jardine Lloyd Thompson from One Raffles Quay are moving to CapitaGreen, given the strong value proposition to locate in Raffles Place12; and
• Occupiers relocating to better quality offices. Some are relocating from the Fringe CBD to Raffles Place e.g., Cargill Group moving from The Concourse along Beach Road to CapitaGreen.
With some tenants scheduled only to move in from 2015 onwards, net demand in the CBD (0.40 million sq ft) did not match net supply (0.75 million sq ft) in 2014. The significant net supply in Raffles Place was due to the completion of CapitaGreen in December 2014.
Of the CBD locations, occupancy in Raffles Place is traditionally the most stable and resilient, and has remained at 90% and above in the past decade. Despite the ample new supply in 2014, occupancy remained at a healthy level of 92.2%, as at Q4 2014 (Figure 2.4). The termination of the former Equity Plaza, alongside committed tenants moving into their new premises, saw an increase in occupancy in Raffles Place to 92.5% in Q1 2015. Meanwhile, occupancy for Grade-A offices in Raffles Place increased from 96.4% in Q4 2014 to 97.2% in Q1 2015. Other CBD locations also experienced an increase in their occupancies, as supply remained tight.
Figure 2.4: Occupancy (CBD)13
Source: DTZ Consulting & Research, April 2015
12 As at Q1 2015, average monthly gross rental values in Marina Bay are 20% higher than that in Raffles Place.13 Occupancies for the respective locations in Figure 2.4 are based on a basket of office properties, including premium, Grade-A and Grade-B offices.
92.2%92.5%
94.4% 94.9%93.0%
95.9%
65.0%
70.0%
75.0%
80.0%
85.0%
90.0%
95.0%
100.0%
105.0%
Q4 2005 Q4 2006 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q1 2015
Raffles Place Marina Bay Shenton Way/ Robinson Road/ Cecil Street
Raffles Place (Grade-A): 97.2%
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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I ndependent Market S tudy fo r the Of f i ce and Reta i l Rea l Es ta te Markets in the S ingapore CBD ����������
2.3 Potential Supply Excluding projects that have not obtained Provisional Permission/ Written Permission (PP/ WP) and unawarded Government Land Sales (GLS) commercial/ white sites, there is about 8.3 million sq ft of islandwide pipeline supply from Q2 2015 to 2018. About 50% (3.8 million sq ft) will be in the CBD.
Following the completion of South Beach in Q1 2015, the pipeline office developments in 2015 are mostly small – 100,000 sq ft and lower. There is only one office development in the CBD completing in 2015, namely Crown@Robinson (78,300 sq ft). In addition, an estimated 0.26 million sq ft of office space was terminated in Raffles Place in Q1 2015. As such, the supply situation in the CBD, particularly Raffles Place, is likely to be very tight in 2015.
Major new supply is expected in 2016 (4.35 million sq ft), including Marina One at Marina Bay (1.88 million sq ft), Guoco Tower at Anson Road/ Tanjong Pagar (0.90 million sq ft) and DUO Tower (0.57 million sq ft) (Figure 2.5). These expected completions, particularly those at Marina Bay, are mainly premium offices and are relatively close to Raffles Place. As such, they are likely to compete with offices in Raffles Place.
Figure 2.5: Potential Supply (Islandwide)14
Source: URA, DTZ Consulting & Research, April 2015
There are concerns over the significant supply in 2016 as well as competition from high quality offices in the non-CBD areas. Nonetheless, offices in Raffles Place are expected to remain relatively resilient, as:
• There is very limited supply in Raffles Place, as majority (72%) of the new supply in the CBD in 2016 is in Marina Bay. Apart from GSH Plaza, a strata-titled office for sale, which is expected to complete in 2016, there is currently no known office supply in the Raffles Place micro-market till 2018;
14 Of the 658,500 sq ft of islandwide office space completed in Q1 2015, 518,700 sq ft (79%) is in the CBD Fringe, while the remaining 21% (139,900 sq ft) is in the Decentralised Areas. There were no completions in the CBD in Q1 2015.
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000
2015 F 2016 F 2017 F 2018 F
sq ft
Completed in Q1 2015 Raffles Place
Marina Bay Shenton Way/ Robinson Road/ Cecil Street
CBD Fringe Decentralised Areas
Average Annual NewSupply from 2005 to 2014: 1.7 million sq ft
Average Annual New Supply from 2015 F to 2018 F: 2.1 million sq ft
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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I ndependent Market S tudy fo r the Of f i ce and Reta i l Rea l Es ta te Markets in the S ingapore CBD ����������
• Decentralised offices are not expected to pose significant competition for CBD tenants, particularly in industries that require extensive client-facing e.g., finance and some professional services such as legal;
Notwithstanding, potential supply in 2017 and 2018 is expected to be moderate. While there is a white site at Marina View/ Union Street in Marina Bay (101,628 sq m/ 1.09 million sq ft GFA15) as well as a commercial site at Beach Road (88,313 sq m/ 0.95 million sq ft11) on the GLS Reserve List, these sites will only be launched for sale by the government if an interested developer submits a minimum acceptable bid.
Table 2.2 highlights selected office developments in the pipeline supply from Q2 2015 to 2018.
Table 2.2: Selected Office Developments in the Pipeline Supply (Islandwide)16
Development Area Location Estimated NLA (sq ft)2015
Crown at Robinson CBD Robinson Road 78,300
PS 100 Fringe CBD Peck Seah Street 47,800
Office development by Defence Science & Technology Agency
Decentralised Areas Depot Road 204,200
Innovis/ Synthesis/ Kinesis Decentralised Areas Ayer Rajah Avenue/ Fusionopolis Way
101,400
2016
Marina One CBD Marina Way/ Straits View 1.88 million sq ft
V on Shenton CBD Shenton Way 278,000
GSH Plaza (A&A) CBD Cecil Street 283,400
OUE Downtown 1 (A&A) CBD Shenton Way 56,800 (additional NLA)
Guoco Tower Fringe CBD Peck Seah Street 900,000
DUO Tower Fringe CBD Rochor Road 568,000
2017
SBF Centre CBD Robinson Road 226,900
Robinson Tower CBD Robinson Road 136,100
Office/ shopping development by Keppel Land Fringe CBD Hoe Chiang Road 220,700
Vision Exchange Decentralised Areas Venture Ave/ Jurong East Street 11
495,900
15 Based on maximum permissible GFA indicated by the URA. Part of the GFA may be allocated to other uses.16 Figures have been rounded.
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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I ndependent Market S tudy fo r the Of f i ce and Reta i l Rea l Es ta te Markets in the S ingapore CBD ����������
Development Area Location Estimated NLA (sq ft)2018
Frasers Tower CBD Cecil Street/ Telok Ayer Street 664,000
Woodlands Square Decentralised Areas Woodlands Avenue 5/ Woodlands Square 535,200
Source: URA, DTZ Consulting & Research, April 2015
2.4 Rental Values Grade-A office rental values in Raffles Place have generally held up well, compared with other CBD locations. In recent years, the tenant profile in Raffles Place has grown to be more diversified, providing some hedge against its traditional concentration of finance & insurance companies. Despite the development of Marina Bay, Raffles Place continues to be perceived as the most accessible location in the CBD. Its brand positioning as a premier business location also helped to sustain rentals.
During the Eurozone Crisis and significant supply influx (mainly Marina Bay) in 2010/11, rental values in the CBD were impacted. However, Grade-A office rental values in Raffles Place fell less extensively by 8.6% in 2012, compared with 12.5% in Marina Bay (Figure 2.6).
Figure 2.6: Average Monthly Gross Rental Values (Raffles Place and Marina Bay)17
Source: DTZ Consulting & Research, April 2015
Rental values in the CBD started to recover in 2013, owing to the tight supply as well as improved demand. On the back of sustained demand, Grade-A office rental values in Raffles Place rose by 12.2% to $11.50 per sq ft per month in 2014.
17 For Raffles Place, rental values are based on a basket of Grade-A offices. Meanwhile, all offices in Marina Bay are of premium-grade. The contracted rents are inclusive of service or maintenance charges under standard three-year lease terms.
11.5011.50
13.2513.75
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4.00
6.00
8.00
10.00
12.00
14.00
16.00
18.00
20.00
Q4 2005 Q4 2006 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q1 2015
$ per sq ft per month
Raffles Place (Grade-A) Marina Bay (Premium)
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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I ndependent Market S tudy fo r the Of f i ce and Reta i l Rea l Es ta te Markets in the S ingapore CBD ����������
Average monthly gross rental values for Grade-A offices in Raffles Place remained stable at $11.50 per sq ft in Q1 2015, while rental values in Marina Bay rose by 3.8% QOQ to $13.75 per sq ft. This reflects moderate rental growth, compared with the run-up in 2014. This is likely due to the 1.0 million sq ft of non-renewing office leases as well as 0.2 million sq ft of shadow space estimated to be released in 2015.
For the quality and convenience as well as exposure to a less volatile rental trend, premium and Grade-A offices in Raffles Place offer their own value proposition among other prime offices. Table 2.3 highlights the committed rents at selected premium and Grade-A offices in Raffles Place.
Table 2.3: Committed Rents at Selected Offices in Raffles PlaceDevelopment Current Committed Rents18 ($ per sq ft per month)
OUE Bayfront 11.60 to 14.50
CapitaGreen 12.00 to 16.00
Six Battery Road 12.00 to 14.60
One George Street 11.00 to 11.20 Source: OUE Commercial REIT, CapitaLand Commercial Trust, DTZ Consulting & Research, April 2015
2.5 Capital Values Office capital values have been rising since 2009, on the back of growing investor interest in the office sector, partly fuelled by the relative increase in the availability of strata-titled offices for sale and property cooling measures in the residential and industrial markets. While the global economic uncertainty as well as Total Debt Servicing Ratio (TDSR) framework in June 2013 weighed on yield-sensitive investors, the advent of office rental recovery in 2013 helped usher a second wind for capital values.
Average freehold capital values in Raffles Place rose from $2,600 per sq ft in Q4 2012 to $2,765 per sq ft in Q4 2014, and continued to edge up to $2,795 per sq ft in Q1 2015. Nonetheless, capital values remained about 14% below the previous peak in Q4 2007 (Figure 2.7). Despite the TDSR framework continuing to impact on the strata-titled office market, capital values for office space continued to hold up in 2014 and Q1 2015.
18 For both renewal and new leases.
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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I ndependent Market S tudy fo r the Of f i ce and Reta i l Rea l Es ta te Markets in the S ingapore CBD ����������
Figure 2.7: Average Freehold Capital Values (Raffles Place)
Source: DTZ Consulting & Research, April 2015
2.6 Investment Market Amid the uncertainty over the expected increase in the US Federal interest rates, overall real estate investment volume fell by 38% to $17.7 billion in 2014. Nonetheless, the office sector accounted for bulk of the activity and was the only sector that experienced an increase in investment volume, which grew by 16.6% to $5.8 billion in 2014.
The office sector, particularly developments in the CBD and Fringe CBD, continued to attract healthy investor interest, amid the increasing rentals and expected tight supply in the CBD in 2015. For instance, AXA Tower at Shenton Way was acquired by a consortium led by Perennial Real Estate Holdings for $1.17 billion ($1,735 per sq ft) in January 2015.
Table 2.4 highlights the major office building transactions in the CBD since 2013.
2,765 2,795
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APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
G-19
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APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
G-20
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APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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I ndependent Market S tudy fo r the Of f i ce and Reta i l Rea l Es ta te Markets in the S ingapore CBD ���������
2.7 Outlook
Despite the uneven global economic prospects, Singapore’s economy remains on track for growth. In particular, the services sector is expected to lead growth. According to the Q1 2015 Business Expectations Survey for the services sector, a weighted 70% of firms foresee the business climate to remain stable. It also showed that firms in the finance & insurance sector are the most optimistic. Hiring intentions in the information, technology & telecommunications sector are also healthy, based on the H1 2015 Hudson Report on Singapore’s hiring expectations.
New supply in 2015 is expected to be limited, especially in the CBD. The CBD accounts for only 11% (0.13 million sq ft) of new supply in the whole of 2015 (1.22 million sq ft), all of which is in Shenton Way/ Robinson Road/ Cecil Street.
Given the abovementioned, office rents in the CBD are expected to continue to rise in 2015, albeit at a slower pace compared to 2014. The limited supply in 2015 will be mitigated by office space from non-renewing leases as well as shadow space. In addition, some demand may be offset from occupiers relocating within the micro-market, who are usually moving from older buildings to more well-specified developments.
Going forward, rentals for Grade-A office buildings in Raffles Place, especially those which are well-located e.g., direct access to MRT station, are expected to be relatively resilient, given that there are no known premium and Grade-A offices in the pipeline in the area from 2015 to 2018. In addition, existing Grade-A offices in Raffles Place are uniquely positioned, offering mainly mid-sized floor plates (typically at around 10,000 sq ft), compared with recent and future office developments that offer floor plates of 20,000 sq ft and above.
Despite the challenging economic environment and some companies adopting more flexible working arrangements, many continue to favour the CBD as a choice location. Offices with mid-sized floor plates in Raffles Place offer a strong value proposition to these corporates. Coupled with the growing diversity of occupiers in the CBD, the demand for mid-sized floor plates in Raffles Place is expected to remain relatively firm.
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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I ndependent Market S tudy fo r the Of f i ce and Reta i l Rea l Es ta te Markets in the S ingapore CBD ���������
Section 3 Retail Real Estate Market Overview
3.1 Major Retail Locations
Singapore is an established shopping haven with a variety of shopping malls catering to both residents and visitors. The retail property market is anchored by Orchard/ Scotts Road, Singapore’s main shopping destination and entertainment hub, while residents in the Suburban Areas are served by large regional malls. Meanwhile, retail space in the CBD is part of the Other City Areas, which includes other Fringe CBD locations (Map 3.1).
Map 3.1: Major Retail Locations
Source: DTZ Consulting & Research, April 2015
Central Area
Suburban Areas
Orchard/Scotts Road
Other City Areas
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APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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I ndependent Market S tudy fo r the Of f i ce and Reta i l Rea l Es ta te Markets in the S ingapore CBD ���������
3.2 Supply, Demand, Occupancy
Supply In addition to office developments, there is about 0.9 million sq ft of retail space in the CBD, representing some 2% of retail stock in Singapore (39.9 million sq ft) (Figure 3.1). Unlike Orchard Road or suburban malls, retail offerings in the CBD mainly caters to the estimated 200,000 office workers in the CBD, as well as some business travelers.
As a result, majority of the retail and service offerings in the CBD mainly cater to office workers, e.g. fashion & accessories, banking, dry cleaning, tailors and salons. In addition, a large proportion of retail space in the CBD is for Food & Beverages (F&B). There is a wide variety of F&B offerings, from hawker centres and food courts, to specialty cafes and high-end restaurants.
Figure 3.1: Breakdown of Retail Stock (Q4 2014)20
Source: URA, DTZ Consulting & Research, April 2015
The retail scene in the CBD is evolving. In addition to the development of Marina Bay, the opening of One Raffles Place (98,500 sq ft) in 2014 added diversity to Raffles Place. It not only provided opportunities for new retail and F&B concepts, but also offered spaces for high street stores, e.g. H&M and Uniqlo, to operate in the hub of the CBD which was previously not available.
With about 10% of market share in the CBD, One Raffles Place is currently the largest purpose-built shopping mall in Raffles Place (Table 3.1).
20 Other City Area: Areas outside the Orchard/ Scotts Road corridor but within the city-limit (defined by URA as the Central Area) CBD includes Raffles Place, Shenton Way/ Robinson Road/ Cecil Street and Marina Bay.
Orchard/ Scotts Rd8.4 million sq ft
21%
Suburban Areas18.2 million sq ft
46%
CBD0.9 million sq ft
2%
Outside CBD12.4 million sq ft
31%
Other City Areas13.3 million sq ft
33%
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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I ndependent Market S tudy fo r the Of f i ce and Reta i l Rea l Es ta te Markets in the S ingapore CBD ���������
Table 3.1: Selected CBD Shopping Malls21
Development Location NLA (sq ft)
China Square Central Cross Street 99,300
One Raffles Place Raffles Place 98,500
Marina Bay Link Mall Marina Boulevard 94,300 One Fullerton (Part of The Fullerton Heritage) Fullerton Road 60,300
Asia Square Tower Marina View 60,000
Chevron House Raffles Place 43,800
The Sail @ Marina Bay Marina Boulevard 29,000
The Arcade Collyer Quay 28,400 Raffles Xchange (Retail space at Raffles Place MRT station) Raffles Place 28,000
Clifford Centre Raffles Place 27,200
16 Collyer Quay Collyer Quay 22,000
Marina Bayfront Marina Link 21,500
Republic Plaza Raffles Place 19,200 The Fullerton Waterboat House (Part of The Fullerton Heritage) Fullerton Road 18,700
Source: DTZ Consulting & Research, April 2015
There are also growing retail clusters in nearby Fringe CBD areas along the East West Line such as: • Anson Road/ Tanjong Pagar – Retail developments include 100am, ancillary retail e.g., Icon
Village and Orchid Hotel as well as conservation shophouse clusters at Tanjong Pagar; and • City Hall and Marina Centre – Existing developments include Suntec City Mall, Raffles City
Shopping Centre, City Link Mall and Marina Square, which are connected by underground pedestrian walkways.
Demand and Occupancy As the catchment for retail and F&B are mainly office workers, trading hours in the CBD tend to be limited to weekdays only. However, larger shopping malls like One Raffles Place and China Square Central open throughout the week. To attract shoppers outside of office hours and on the weekends, these shopping malls have special promotions, e.g. free parking after office hours and during weekends, although some retailers still find it tough to compete with the more popular shopping destinations where there is more variety.
Nevertheless, some landlords in the CBD allow retailers to operate only during weekdays. This is conducive for some retailers as it offers them more flexibility in their operations and allows them to better manage their operating costs.
21 Figures have been rounded.
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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The “Live-Work-Play” initiative by the URA for the CBD has injected resident population in the CBD. There are currently some 4,600 residential units in the Downtown Core Planning Area (Map 3.2) and another 2,400 units are expected in the next few years. The 970 hotel rooms in the CBD have also led to an increase in visitors to the area. These have increased the on-site catchment for the retail offerings in the CBD, especially for F&B, groceries and services. However, this benefit is not as evident for fashion retailers, whose target markets are mainly office workers.
Map 3.2: Downtown Core Planning Area
Source: URA, DTZ Consulting & Research, April 2015
Occupancy in the Other City Areas is marginally lower than that of Orchard/ Scotts Road and Suburban areas. As at end 2014, occupancy for retail spaces in the Other City Areas stood at 93.2%, 0.3%-pointslower than that islandwide (Figure 3.2).
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APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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Figure 3.2: Occupancy (Islandwide)
Source: DTZ Consulting & Research, April 2015
3.3 Potential Supply
An estimated 4.1 million sq ft of retail NLA will be completed from Q2 2015 to 2018. About 10% (0.4 million sq ft) of the potential supply is in the CBD, while majority (75%, 3.1 million sq ft) is in the Suburban Areas (Figure 3.3). Competition in the CBD is expected to increase, with the completion of a number of retail developments in the next two years. These include Marina One (GFA: 198,160 sq ft) at Marina Bay, as well as Downtown Galleria (GFA: 252,950 sq ft) at Shenton Way.
94.4%
93.2%93.4%93.5%
89.0%
90.0%
91.0%
92.0%
93.0%
94.0%
95.0%
96.0%
97.0%
98.0%
Q4 2005 Q4 2006 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014
Orchard/Scotts Rd Other City Areas Suburban Areas Islandwide
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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Figure 3.3: Potential Supply (Islandwide)22
Source: URA, DTZ Consulting & Research, April 2015
Tanjong Pagar Centre (GFA: 198,920 sq ft) at Tanjong Pagar in the Fringe CBD, one MRT station away along the East West Line, will also complete in 2016 (Table 3.2). There will also be retail spaces at mixed-use developments at Crown at Robinson and SBF Centre. While retail units at these two developments are not for sale, a total of eight cafes and 121 shops from the first to third storeys with sizes ranging from 100 to 800 sq ft, are available for sale at Oxley Tower.
Table 3.2: Selected Pipeline Supply Retail Developments23
Development Area Location GFA (sq ft) Remarks
2016
Marina One CBD Marina Way/ Straits View 198,200 -
Downtown Gallery CBD Shenton Way 253,000 -
Tanjong Pagar Centre Fringe CBD Wallich Street 198,900 -
2017
Robinson Tower CBD Robinson Road 79,800 -
Oxley Tower CBD Robinson Road 49,800 Strata-titled for sale
22 Of the 280,200 sq ft of islandwide retail space completed in Q1 2015, 55% (154,300 sq ft) is in the Other City Areas, followed by 41% (115,900 sq ft) in the Suburban Areas. The remaining 4% (10,000 sq ft) is in Orchard/ Scotts Road.23 Figures have been rounded.
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
2015 2016 2017 2018
Completed in Q1 2015 Orchard/ Scotts Road Other City Area (outside of CBD) Suburban Areas Other City Area (CBD)
sq ft
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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Development Area Location GFA (sq ft) Remarks
Crown at Robinson CBD Robinson Road 9,200
Pending approval for sale of office units (retail units are not for sale)
SBF Centre CBD Robinson Road 2,500 Office units are for strata sale
2018 and beyond Office/ Retail Development CBD Cecil Street/
Telok Ayer Street 30,700 -
Hotel Development CBD Cross Street 139,900 -
Source: URA, DTZ Consulting & Research, April 2015
3.4 Rental Values and Rents Due to the relatively weak retail market in Other City Areas, retail rentals in this area are lower than that in Orchard/ Scotts Road and Suburban Areas. With the steady growth of visitor numbers and retail sales, retail rentals in Singapore have been stable since 2010. As at Q1 2015, average monthly gross rental value for Other City Areas was $18.00 per sq ft (Figure 3.3).
Figure 3.3: Average Prime24 Monthly Gross Retail Rental Values
Source: DTZ Consulting & Research, April 2015
24 Only rents of prime specialty retail shops, for example those with good frontage or pedestrian footage, are used to compute average gross rents.
30.0330.13
17.9817.98
28.0528.05
15.00
17.00
19.00
21.00
23.00
25.00
27.00
29.00
31.00
33.00
35.00
Q4 2005 Q4 2006 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q1 2015
$ per sq ft per month
Orchard/ Scotts Road Other City Areas Suburban Areas
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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I ndependent Market S tudy fo r the Of f i ce and Reta i l Rea l Es ta te Markets in the S ingapore CBD ���������
First storey retail space, as well as units that enjoy street frontage and high footfall e.g. basement leading to MRT stations, usually command higher rents compared to upper storey units that do not enjoy the same visibility.
According to the URA, median monthly gross retail rents in Raffles Place were $17.03 per sq ft as at Q1 2015. The highest rental achieved in that quarter was $41.45 per sq ft, and the lowest at $4.76 per sq ft (Figure 3.4). Table 3.3 lists some examples of transacted rents in 2014, which range from $12.50 per sq ft for an upper level retail shop at One Raffles Place to $30.50 per sq ft for a lower level retail shop in The Arcade.
Figure 3.4: Median Retail25 Gross Rents (Raffles Place)26
Source: URA, DTZ Consulting & Research, April 2015
Table 3.3: Recent Transacted Rents (Raffles Place) Month of
Transaction Development Unit NLA
(sq ft) Monthly Rents
($ per sq ft) Sept 2014 One Raffles Place Level 4-6 592 12.50
July 2014 One Raffles Place #05-18 753 14.00
August 2014 The Arcade Level 1-3 377 30.50 Source: Streetsine, DTZ Consulting & Research, April 2015
25 The URA defines retail space as space used for shop, food & beverage (F&B), entertainment and health & fitness purposes.26 Data before Q1 2011 refers to shop space only, which is defined by the URA as space used or intended to be used for any trade where the primary purpose is the sale of goods by retail, for example, provision shop, take-away food shop, departmental store. Space used for the provision of services, such as tailoring, barber/beauty salon and photographic are also included.
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Q3
05Q
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06Q
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08Q
2 08
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APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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The current listings of retail spaces in Raffles Place are mainly for F&B. Asking monthly rents range from $14.00 per sq ft for upper storey space to $44.50 per sq ft for first storey space with street frontage (Table 3.4). Some landlords are also opened to performance-related rents, where a gross turnover rent is charged in place of/ in addition to the base rent.
Table 3.4: Selected Retail Asking Rents (Raffles Place) (Month of listing – April 2015)
Development Use –location of unit
NLA (sq ft)
Lease Term Conditions Monthly Rents
($ per sq ft)
One Raffles Place Retail – Level 3 & 5 150 3 years Bare 32.00
One Raffles Place F&B Kiosks – Basement 250 3 years Fully fitted;
no exhausts 42.00
One Raffles Place F&B - Level 4 1,350 - Grease trap and exhaust
14.00 (base rent plus 1% GTO)
Republic Plaza Retail 355 - No exhaust, light cooking only 25.00 to 28.00
The Arcade Retail – Level 2 320 - No waterpoint 23.40
The Arcade F&B – Ground floor (near entrance)
247 - No exhaust; light cooking only 44.50
One Fullerton F&B, Retail, Other retail – Level 2
8,202 2 years Grease trap & exhaust
16.00 to 17.00 (or 15% to18%
GTO whichever is higher)
The Fullerton Waterboat House
F&B – Level 3
2,066 + 832
rooftop 2 years Grease trap &
exhaust 17.00
Robinson Point Retail – Street level 807 - Water point 20.00
Source: ST Property, CommercialGuru, DTZ Consulting & Research, April 2015
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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3.5 Capital Values and Prices The retail strata sales market was boosted by the increase in demand from retail investors, after the implementation of the Additional Buyer’s Stamp Duty (ABSD) in Q1 2013 for residential properties. Average freehold capital values increased by as much as 16% YOY in both Q1 and Q2 2013 for Orchard/ Scotts Road. That for Other City Areas also increased by 6.4% YOY in Q1 2013 (Figure 3.5).
Figure 3.5: Average Freehold Resale Prime Retail Capital Values
Source: DTZ Consulting & Research, April 2015
Since then, with the slowdown of economy and the implementation of the TDSR framework in June 2013, the strata sales market stabilised. Average capital value for freehold resale prime retail units in the Other City Area was $3,180 per sq ft in Q1 2015. This was almost 50% lower than that for Orchard/ Scotts Road, where there is limited strata-titled stock.
There are limited sales transactions for retail in Raffles Place. Two units at The Arcade were transacted in Q1 2015, with unit prices ranging from $7,863 per sq ft for a 248 sq ft unit to $12,000 per sq ft for a 65 sq ft unit (Table 3.5).
Table 3.5: Recent Transactions for Retail Units (Raffles Place)
Transacted Date Project Name Tenure Area
(sq ft) Transacted
Price ($) Unit Price
($ per sq ft)
Feb 2015 The Arcade 99 Yrs from 1 October 1979 65 780,000 12,000
Jan 2015 The Arcade 99 Yrs from 1 October 1979 248 1,950,000 7,863
Source: URA, DTZ Consulting & Research, April 2015
4,7714,786
3,195 3,180
2,8282,850
0
1,000
2,000
3,000
4,000
5,000
6,000
Q4 2005 Q4 2006 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q1 2015
$per sq ft
Orchard/ Scotts Road Other City Areas Suburban Areas
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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3.6 Outlook The retail market in Singapore will continue to face challenges with increasing labour costs, revision of foreign hiring quota, as well as changing consumer habits and trends, e.g. the increasing use of e-retailing. The increasing affluence of Singapore residents and popularity of budget travelling has also led to leakage of shopper dollars. Malls in Singapore are no longer only competing among themselves, but also with those in the region.
While Orchard/ Scotts Road area will continue to be the main shopping destination in Singapore, attracting not only local shoppers but also visitors, the expected completion of commercial, residential and hotel developments will increase the primary catchment size in Raffles Place. DTZ estimates that office worker population in the CBD will increase from the existing 200,000 workers to some 235,000 workers in the next few years. The additional 2,200 residential units and almost 300 hotel keys in the area will also contribute to the increase in live-in population in the CBD.
However, retail offerings in the CBD will continue to focus on office workers with weekday trading. Competition of retail developments in the CBD will also intensify, with the completion of new retail spaces in the area. To attract shoppers and maintain competitiveness, retailers and shopping centre management in the CBD will have to continue to refresh their concepts and innovate. On the other hand, the sizable on-site catchment and relatively lower rental will continue to attract retailers, especially start-ups and niche retailers, to test their concepts, which in turn add dynamism and diversity to the retail scene in the CBD.
With the challenging overall retail market in Singapore, retail rents are not expected to grow significantly in the next three years. Nevertheless, Singapore will continue to be a popular shopping destination. With the government actively promoting Singapore not only as a tourist attraction but also as a regional Meetings, Incentives, Conventions and Exhibitions (MICE) destination, as well as the activities being held in 2015 to celebrate SG50, the retail market is expected to be relatively resilient.
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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Section 4 Site and SWOT Analysis
4.1 Location and Accessibility One Raffles Place comprises two Grade-A office towers – 62-storey Tower One and 38-storey Tower Two, as well as a five-storey retail podium with a basement level. The subject property is strategically located in the heart of Raffles Place, the traditional prime business and financial district of Singapore. (Map 4.1)
Map 4.1 Location of One Raffles Place in Singapore
Source: DTZ Consulting & Research, April 2015
One Raffles Place enjoys excellent connectivity. It is located directly above and seamlessly connected to Raffles Place MRT station, a major interchange for the East West and North South MRT Lines. Pedestrians enjoy convenient access to various buildings and amenities within the CBD via underground pedestrian linkages and multiple MRT station exits.
One Raffles Place is conveniently connected to major expressways, including AYE, CTE, ECP and MCE. These expressways connect the rest of Singapore to the CBD. In particular, ECP provides a direct routebetween the CBD and Changi Airport.
DT16
CE1
BAYF
RONT
NS
26E
W14
RA
FFLE
SP
LAC
E
Marina Bay
Singapore River
OUE Bayfront
One Raffles Place
OUE Downtown
OUE Tower
OUE Link
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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4.2 Property Description Tower One was completed in 1988. Following the success of Tower One, Tower Two was completed in 2012. Designed by Pritzer Prize laureate Kenzo Tange (Tower One) and Noritake Tange (Tower 2), this iconic landmark building is one of the tallest buildings (Tower One at 280m) in Raffles Place with over 700,000 sq ft of office NLA, providing column free floor plates between 8,800 and 10,500 sq ft.
The retail podium at One Raffles Place (about 98,500 sq ft) reopened in 2014 after alterations and additions work. It is currently the largest purpose-built shopping mall in Raffles Place, accounting for about 10% of retail stock in the CBD. Offering a wide range of retail, F&B and services, it provides exciting shopping and dining options, particularly to the substantial working population in the vicinity.
It also features 1-Altitude, which comprises three concepts: 1 Altitude Gallery & Bar on level 63, Stellar on level 62 and Altimate on level 61. On top of offering a variety of culinary options and premier clubbing experience, diners and club goers are able to enjoy 360 degree panoramic view of Singapore and beyond.
With its strategic location and quality building specifications, One Raffles Place has attracted many established tenants across different industries. These include Canadian Imperial Bank of Commerce, Michael Page International, Pramerica Real Estate Investors (Asia) Pte Ltd, Mitsui Chemicals Asia Pacific Ltd and TNT Express Worldwide N.V.
As for One Raffles Place shopping mall, established retailers including H&M, UNIQLO and Victoria’s Secret as well as a diverse range of F&B, e.g. The Daily Cut, Kotobuki Japanese Restaurant, Food Leisure opened their stores in One Raffles Place.
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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4.3 Property Particulars Table 4.1: Property Particulars (One Raffles Place)Name of Building One Raffles Place
Tower One One Raffles Place Tower Two
Retail Podium
Site Address 1 Raffles Place, Singapore 048616 Year of Completion 1988 2011 Refurbished in
2014 Land Tenure Tower One and retail podium:
Leasehold title of 841 years, three months and 20 days commencing 1 November 1985
Retail podium: 99-year leasehold title commencing 1 November 1985
Tower Two: 99-year leasehold title commencing 26 May 1983
Tower Two (former Service Road): 99-year leasehold title commencing 26 May 1983
Zoning Commercial with base plot ratio of 12.6+ Number of storeys 62 storeys with rooftop
viewing gallery (1-Altitude Gallery & Bar)
38 storeys 5 storeys and 1 basement level
Gross Floor Area 119,725.8 sq m (1,288,717 sq ft) Office NLA Approximately 761,500 sq ft - Retail NLA - - Approximately
98,500 sq ft Typical Office Floor Plate (sq ft)
8,800 10,500 -
Floor loading 3.5kN per sq m and 7.5kN per sq m for compactus loading along 1m width of core wall area
-
Electricity supply Dual feed for 22kV incoming power supply Electricity loading 60 Amp three phase
neutral isolator normal source
40 Amp three phase neutral isolator normal source, 20 Amp three phase neutral isolator emergency source
-
Number of Lifts 18 lifts 12 lifts 2 lifts Number of Car Parking Lots
326 lots
Source: OUE Limited, DTZ Consulting & Research, April 2015
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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4.4 Property Performance DTZ estimates that the overall office occupancy of the office towers of One Raffles Place at 85.0% to 90.0%, as at end Q1 2015, while that for the retail podium is estimated at 90.0% to 95.0%.
Meanwhile, the estimated monthly gross rents for the offices at One Raffles Place ranges from $9.50 to $10.00 per sq ft, as at end Q1 2015, while that for the retail podium is estimated at $14.00 to $15.00 per sq ft (Table 4.2).
Table 4.2: Estimated Occupancy and Rents (One Raffles Place) As at Q1 2015 One Raffles Place
(Towers One and Two) Retail Podium
Estimated Occupancy 85.0% to 90.0% 90.0% to 95.0%
Estimated Monthly Gross Rents ($ per sq ft)
9.50 to 10.00 14.00 to 15.00
Source: DTZ Consulting & Research, April 2015
One Raffles Place is a unique mixed-use development in the CBD, with a critical mass of Grade-A office space and one of the largest shopping malls in the area. With its excellent location at the heart of the Raffles Place and seamless connection to Raffles Place MRT interchange station, One Raffles Place is well-positioned vis-à-vis other premium and Grade-A offices in the vicinity (Table 4.3). In addition, One Raffles Place Tower Two is one of the most recent additions to Raffles Place, which has seen limited new supply over the past five years.
Average monthly Grade-A office rental values in Raffles Place have increased by more than 10% in the last three years. With some leases expiring this year, the subject property may experience some positive rental reversion in 2015.
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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e 4.
3: P
rope
rty
Part
icul
ars
(One
Raf
fles
Plac
e)N
ame
of B
uild
ing
One
Raf
fles
Plac
e
Tow
er O
ne
One
Raf
fles
Plac
e
Tow
er T
wo
Oce
an F
inan
cial
C
entr
e U
OB
Pla
za 1
R
epub
lic P
laza
1
Rep
ublic
Pla
za 2
Site
Add
ress
1
Raf
fles
Plac
e 10
Col
lyer
Qua
y 80
Raf
fles
Plac
e 9
Raf
fles
Plac
e Ye
ar o
f Com
plet
ion
1988
20
11
2011
19
92
1996
19
97
Num
ber o
f sto
reys
62
sto
reys
with
ro
ofto
p vi
ewin
g ga
llery
(1-
Altit
ude
Gal
lery
&
Bar
)
38 s
tore
ys
43 s
tore
ys
66 s
tore
ys
66 s
tore
ys
20 s
tore
ys
Offi
ce N
LA (s
q ft)
Ap
prox
imat
ely
761,
500
876,
900
623,
300
694,
300
77,5
00
Typi
cal O
ffice
Flo
or
Plat
e (s
q ft)
8,
800
10,5
00
20,0
00 to
23,
000
8,40
0 to
12,
400
5,
200
to 1
4,70
0 9,
700
Floo
r loa
ding
3.5k
N
per s
q m
3.
5kN
pe
r sq
m
3.0k
N
per s
q m
4.
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pe
r sq
m
4.0k
N
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q m
El
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icity
sup
ply
Dua
l fee
d fo
r 22k
V in
com
ing
pow
er s
uppl
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ual f
eed
for 2
2kV
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wer
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VA
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y ge
nera
tors
60A
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ase
per
floo
r 4
x 60
A si
ngle
-pha
se
per f
loor
Num
ber o
f Lift
s 18
12
28
24
15
6
Num
ber o
f Car
Pa
rkin
g Lo
ts
326
224
600
500
505
Estim
ated
O
ccup
ancy
(a
s at
Q1
2015
)
85.0
% to
90.
0%
100.
0%
100.
0%
95.0
% to
98.
0%
100.
0%
Estim
ated
Mon
thly
G
ross
Ren
ts
($ p
er s
q ft)
9.50
to 1
0.00
11
.00
to 1
3.00
12
.00
to 1
3.50
(a
skin
g)
10.0
0 to
11.
50
-
Sou
rce:
OU
E Li
mite
d, D
TZ C
onsu
lting
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esea
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Apr
il 20
15
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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4.5 SWOT Analysis: Office Strengths Opportunities • Strategically located in the heart of Raffles
Place, the traditional CBD. Raffles Place, together with Marina Bay, is Singapore’s financial and business hub. Raffles Place is expected to remain a focal point of the CBD, amid the rapid growth of the Marina Bay precinct and will benefit from the seamless expansion; subject property’s strategic location will remain a strong pull-factor to prospective tenants
• World class design - Designed by Pritzker Prize laureate Kenzo Tange (Tower One) and the internationally acclaimed architect Paul Noritaka Tange (Tower Two)
• Iconic and landmark building – One Raffles Place Tower One is one of the tallest buildings in the CBD (280m, 63-storeys). Enjoys 360 degree panoramic view of the entire city and beyond to the Straits of Singapore. o 1-Altitude, a multi-concept lifestyle F&B
and entertainment destination (16,000 sq ft) is located on levels 61 to 63 of One Raffles Place Tower One. It is one of the world’s highest al freasco bar. It is a popular venue for corporate/ business events.
• Excellent accessibilityo Served by Ayer Rajah Expressway (AYE),
Central Expressway (CTE), East Coast Expressway (ECP) and Marina Coastal Expressway (MCE)
o Located directly above and seamlessly linked to the Raffles Place MRT station, a major MRT interchange for the East West and North South Lines
o Connected to a comprehensive underground network of air-conditioned pedestrian walkways linking to other developments in Raffles Place e.g., OUE Bayfront, Ocean Financial Centre and Republic Plaza as well as Marina Bay e.g., One Raffles Quay and Marina Bay Financial Centre and Marina Bay Link Mall
• Limited completions in the vicinity – Office buildings in the surroundings are relatively old and apart from GSH Plaza (expected to complete in 2016), there are no other known office completions in the Raffles Place micro-market from 2015 to 2020
• Apart from the regular mainstay i.e., finance & insurance and business services, there are new industries driving the office markete.g., Telecommunications, Media and Technology (TMT), particularly companies in Social, Mobile, Analytics and Cloud (SMAC) activities. This is in line with the growth clusters earmarked by the government
• The subject property’s office floorplates are mid-sized (8,800 sq ft to 10,500 sq ft), compared with new and upcoming offices in the CBD (20,000 sq ft and above), making One Raffles Place unique
• Opportunity to command rental premium over other offices in the CBD due to its green features, which draws MNCs with strong environmental awareness and social corporate responsibility
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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• Direct access to One Raffles Place retail podium
• Proximity to complementary amenities and developments including retail, entertainment, hospitality and residential developments as well as Raffles Place Park
• Building specifications suitable for a diverse range of tenants including MNCs and professional firms. This includes: o Spacious and distinctive lobbies that
convey a strong sense of arrival and prestige
o Column-free floorplates o Dual power feed o Regular floorplates, raised floors and high
security features (bomb-blast protected)• One Raffles Place Tower Two is certified
BCA Greenmark Platinum for its eco-friendly green features such as double glazed low emission glass, photovoltaic cells and rainwater harvesting
• Diverse tenant base with established blue-chip tenants across many industries:o Finance & insurance – Canadian Imperial
Bank of Commerce, Lazard Asia Ltd and Pramerica Real Estate Investors (Asia) Pte Ltd
o Others – Michael Page International, Mitsui Chemicals Asia Pacific Ltd, Mubadala Petroleum (SE Asia) Limited, Protiviti Pte Ltd, TNT Express Worldwide N.V. and Virgin Active
Weaknesses Threats • Relatively older building - One Raffles Place
Tower One was completed in 1988• Competition from future CBD office
developments, especially in 2016 o Following the limited new supply in the CBD
in 2015 (0.1 million sq ft), there is significant supply expected in 2016 (2.3 million sq ft), from Marina One in Marina Bay and V on Shenton in Shenton Way/ Robinson Road/ Cecil Street
• Competition from offices in decentralised areas, particularly those with Grade-A specifications
Source: DTZ Consulting & Research, April 2015
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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4.6 SWOT Analysis: Retail Strengths Opportunities • The largest shopping centre (about 98,500
sq ft) in the heart of the Raffles Place • Excellent accessibility – Seamlessly
connected to Raffles Place MRT interchange station and other developments in the CBD
• Part of the retail cluster with other retail spaces in Raffles Place e.g. Chevron House, Change Alley, The Arcade, OUE Link and Raffles Xchange. Marina Bay Link Mall, is also directly linked to One Raffles Place via air-conditioned underground pedestrian walkways
• Enjoys a substantial captive catchment. Based on latest DTZ estimates, there is about: o 200,000 office workers working in the CBD o 4,600 residential units in the Downtown
Core Planning Area o 970 hotel27 keys in the Raffles Place micro-
market • Newly refurbished shopping centre
provides contemporary shopping experience compared to the surrounding retail offerings which are relatively dated
• The mall is well-positioned to cater to the office catchment and features a wide spectrum of retail, F&B and services. In particular, there are: o International fashion and accessories
brands e.g. H&M, UNIQLO, Melissa and Victoria’s Secret
o Unique F&B concepts, especially at the basement level, which are popular with office workers during weekday lunch
• Expected increased catchment, alongside the URA’s Live-Work-Play vision for the city centre (especially Marina Bay): o Live-in population in Downtown Core
Planning Area expected to increase, on the back of an expected completion of 2,400 residential units in the next six years
o About 840 hotel keys expected in Raffles Place in the next three years
o Potential spillover benefits from Singapore River One, a private sector-led initiative responsible for the place management of the entire Singapore River precinct, including Boat Quay, which is near the subject property
• Increase range of retail offerings to better cater to the live-in population and visitors e.g. business travellers, given the expected increase in these source marketso As the live-in and visitor catchments reach
critical mass, there is a potential to cater to weekday nights/ weekend events
o Continue to develop unique F&B concepts to attract both weekday and weekend crowds
27 Includes serviced apartments.
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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Weaknesses Threats • Raffles Place is not a destinated shopping
location, compared with Orchard Road – mainly perceived for convenience shopping and impulse buying
• The retail offerings cater mainly to office workers in the vicinity
• Short trading hours - while the shopping mall operates from 10am to 9pm daily, there is limited footfall aside from weekday lunch hours
• Competition from other retail developments in the CBD e.g., OUE Downtown. There are also sizeable retail clusters in nearby areas along the East West Line such as: o Tanjong Pagar – Existing developments
include 100am, ancillary retail e.g., Icon Village and Orchid Hotel as well as conservation shophouse cluster at Tanjong Pagar. Future developments include Tanjong Pagar Centre (expected TOP in 2016)
o City Hall and Marina Centre – Existing developments include Suntec City Mall, Raffles City Shopping Centre, City Link Mall and Marina Square, which are connected by underground pedestrian walkways
• Competition from suburban retail malls which are conveniently located near residents. Many of the newer suburban malls also have similar brands and offerings as those in the city centre, providing alternatives to shoppers
Source: DTZ Consulting & Research, April 2015
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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Section 5 ConclusionDespite the challenging global economic outlook, Singapore’s economy is still expected to grow, at around 2.0% to 4.0% in 2015. According to Oxford Economics, Singapore’s economy is expected to remain healthy, with real GDP growth from 2016 to 2018 projected at around 3.4% to 3.6% per annum.
Singapore’s CBD has evolved significantly into one of the leading global financial and business hubs. Coupled with the government pro-active efforts to maintain Singapore’s competitive edge e.g., by creating a comprehensive live-work-play environment in the CBD and developing the New Downtown at Marina Bay, the CBD possesses a dynamic office and increasingly vibrant retail market.
Raffles Place is the most established and accessible business location in the CBD, with a high concentration of corporates. In particular, premium and Grade-A offices in Raffles Place are typically the preferred choice for most financial institutions and MNCs.
Office supply in Raffles Place has been relatively tight over the past decade. Offices in the area, including those that were recently completed, have achieved healthy commitments. With its increasingly diversified tenant profile, rents in Raffles Place have held up well and are less volatile, especially for the better specified premium and Grade-A offices.
The retail market in the CBD has grown and evolved significantly. It is supported by the increase in working, live-in and transient (business visitors) population. While the CBD’s retail offerings are mainly driven by office workers, the area’s growing on-site catchment and relatively lower rents will continue to attract retailers.
The subject property, One Raffles Place, is a unique mixed-use development in the CBD, with a critical mass of Grade-A office space and one of the largest shopping malls in the area. With its excellent location at the heart of the Raffles Place and seamless connection to Raffles Place MRT interchange station, One Raffles Place is both a premier business and shopping destination in the CBD.
Going forward, rentals for Grade-A office buildings in Raffles Place, especially those which are well-located e.g., direct access to MRT station, are expected to be relatively resilient, given that there are no known premium and Grade-A offices in the pipeline in the area from 2015 to 2018. In addition, existing Grade-A offices in Raffles Place are uniquely positioned, offering mainly mid-sized floor plates (typically at around 10,000 sq ft), compared with recent and future office developments that offer floor plates of 20,000 sq ft and above.
Despite the challenging economic environment and some companies adopting more flexible working arrangements, many continue to favour the CBD as a choice location. Offices with mid-sized floor plates in Raffles Place offer a strong value proposition to these corporates. Coupled with the growing diversity of occupiers in the CBD, the demand for mid-sized floor plates in Raffles Place is expected to remain relatively firm.
With the challenging overall retail market in Singapore, retail rents are not expected to grow significantly in the next three years. Nevertheless, Singapore will continue to be a popular shopping destination and the retail market is expected to be relatively resilient.
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
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I ndependent Market S tudy fo r the Of f i ce and Reta i l Rea l Es ta te Markets in the S ingapore CBD ����
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Limiting ConditionsWhere it is stated in the report that information has been supplied to us in the preparation of this report by the sources listed, this information is believed to be reliable and we will accept no responsibility if this should be otherwise. All other information stated without being attributed directly to another party is obtained from our searches of records, examination of documents or enquiries with relevant government authorities.
The forward statements in this report are based on our expectations and forecasts for the future. These statements should be regarded as our assessment of the future, based on certain assumptions on variables which are subject to changing conditions. Changes in any of these variables may significantly affect our forecasts.
Utmost care and due diligence has been taken in the preparation of this report. We believe that the contents are accurate and our professional opinion and advice are based on prevailing market conditions as at the date of the report. As market conditions do change, we reserve the right to update our opinion and forecasts based on the latest market conditions.
DTZ gives no assurance that the forecasts and forward statements in this report will be achieved and undue reliance should not be placed on them.
APPENDIX G – INDEPENDENT MARKET RESEARCH REPORT
G-44
APPENDIX H
EXISTING INTERESTED PERSON TRANSACTIONS
The table below sets out details of all Existing Interested Person Transactions entered into
between (1) OUE C-REIT and (2) the Sponsor and its subsidiaries and associates, during the
course of the current financial year up to the Latest Practicable Date, which are the subject of
aggregation pursuant to Rule 906 of the Listing Manual.
No. Interested Person Nature of Transaction
Value of
Transaction
S$’000
1 Sponsor and its subsidiaries Leasing and related activities at OUE
Bayfront which includes rent-
adjustment in relation to the rent-
review provision in the lease
agreements, the surrender of lease
agreement, payment of car park fees
for season parking and consumption
of air-conditioning, chilled water and
utilities at the leased premises.
4,619
Total 4,619
The Existing Interested Person Transactions set out above has been subject to the internal control
procedures established by the Manager to ensure such transactions are undertaken on normal
commercial terms and are not prejudicial to the interest of OUE C-REIT and its minority
Unitholders. These procedures include the review and approval of such transactions by the Audit
and Risk Committee, as appropriate.
Details of the Existing Interested Person Transactions
The rent payable under the lease agreements entered into (i) between OUE C-REIT and the
Sponsor and (ii) between OUE C-REIT and the Manager were adjusted pursuant to the
rent-review provisions in the aforementioned lease agreements.
The Sponsor had entered into an agreement with OUE C-REIT for the surrender of the lease
relating to units #08-06 and #08-07 at OUE Bayfront and these units have since been leased to
third parties.
The Sponsor and its subsidiaries had made payment to OUE C-REIT for the car park fees for the
season parking and consumption of air-conditioning, chilled water and utilities at OUE Bayfront.
H-1
This page has been intentionally left blank.
NOTICE OF EXTRAORDINARY GENERAL MEETING
NOTICE IS HEREBY GIVEN that an EXTRAORDINARY GENERAL MEETING of OUE
Commercial Real Estate Investment Trust (“OUE C-REIT”) will be held at Marina Mandarin
Singapore, Marina Mandarin Ballroom, Level 1, 6 Raffles Boulevard, Singapore 039594 on
Monday, 27 July 2015 at 2.00 p.m. for the purpose of considering and, if thought fit, passing (with
or without modification) the following resolutions:
1. THE PROPOSED ACQUISITION OF AN INDIRECT INTEREST IN ONE RAFFLES PLACE
AND THE PROPOSED CPPU ISSUE (ORDINARY RESOLUTION)
That subject to and contingent upon the passing of Resolution 2:
(i) approval be and is hereby given for the proposed acquisition of an indirect interest in
One Raffles Place from OUE Limited (the “Sponsor”) through the acquisition of the
entire issued share capital of Beacon Property Holdings Pte. Ltd., which holds a
percentage of the issued share capital in OUB Centre Limited (the “Acquisition”), on
the terms and conditions set out in the sale and purchase agreement dated 10 June
2015 entered into between DBS Trustee Limited (in its capacity as trustee of OUE
C-REIT) (the “Trustee”) and the Sponsor (the “SPA”) as described in the circular to
unitholders of OUE C-REIT (“Unitholders”) dated 1 July 2015 (the “Circular”) and the
entry into the SPA be and is hereby approved and ratified;
(ii) approval be and is hereby given for the proposed issuance of new units in OUE C-REIT
(“Units”) for payment of the acquisition fee to OUE Commercial REIT Management Pte.
Ltd., as manager of OUE C-REIT (the “Manager”) for the proposed Acquisition;
(iii) approval be and is hereby given for the proposed issuance of up to S$550.0 million
convertible perpetual preferred units (“CPPUs”) to the Sponsor (or its nominees) (the
“CPPU Issue”) for part payment of the purchase consideration for the proposed
Acquisition;
(iv) approval be and is hereby given for the payment of all fees and expenses relating to the
proposed Acquisition and the proposed CPPU Issue;
(v) approval be and is hereby given for the entry by OUE C-REIT (whether directly or
indirectly through its subsidiaries) into all agreements and transactions in connection
with the proposed Acquisition and the proposed CPPU Issue and all ancillary
agreements contemplated thereby or incidental thereto, or which are necessary to give
effect to the proposed Acquisition and the proposed CPPU Issue; and
(vi) the Manager, any director of the Manager and the Trustee be and are hereby severally
authorised to do all such acts and things as they may consider necessary, desirable or
expedient for the purpose of giving effect to the proposed Acquisition and the proposed
CPPU Issue and/or the transactions contemplated under this resolution, including
without limitation to the foregoing, to negotiate, sign, execute and deliver all documents,
approve any amendments, alterations or modifications to any document (if required).
I-1
2. THE PROPOSED TRUST DEED SUPPLEMENT FOR THE ISSUE OF PREFERRED UNITS
(EXTRAORDINARY RESOLUTION)
That:
(i) approval be and is hereby given to supplement the trust deed constituting OUE C-REIT
dated 10 October 2013 (as amended and restated by a first amending and restating
deed dated 9 January 2014 and supplemented by a first supplemental deed dated 26
January 2015) (the “Trust Deed”) with the proposed Trust Deed Supplement (as
defined in the Circular) set out in Appendix A of the Circular; and
(ii) the Manager, any director of the Manager and the Trustee, be and are hereby severally
authorised to do all such acts and things as they may consider necessary, desirable or
expedient for the purpose of giving effect to the proposed Trust Deed Supplement
and/or the transactions contemplated under this resolution, including without limitation
to the foregoing, to negotiate, sign, execute and deliver all documents, approve any
amendments, alterations or modifications to any document (if required).
By Order of the Board
OUE Commercial REIT Management Pte. Ltd.
(as manager of OUE Commercial Real Estate Investment Trust)
(Company Registration No. 201327018E)
Ng Ngai
Company Secretary
1 July 2015
Important Notice:
(1) A holder of the Units in OUE C-REIT (“Unitholder”) entitled to attend and vote at the Extraordinary General Meeting
is entitled to appoint not more than two proxies to attend and vote in his stead. A proxy need not be a Unitholder.
(2) Where a Unitholder appoints more than one proxy, he/she must specify the proportion of his/her holding (expressed
as a percentage of the whole) to be represented by each proxy. Where a Unitholder appoints two proxies and does
not specify the proportion of his/her unitholding to be represented by each proxy, then the Units held by the
Unitholder are deemed to be equally divided between the proxies.
(3) The instrument appointing a proxy or proxies (as the case may be) must be lodged at the Unit Registrar’s office at
Boardroom Corporate & Advisory Services Pte. Ltd., 50 Raffles Place, #32-01 Singapore Land Tower, Singapore
048623, not less than 48 hours before the time appointed for the Extraordinary General Meeting.
Personal data privacy:
By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the EGM and/or
any adjournment thereof, a Unitholder (i) consents to the collection, use and disclosure of the Unitholder’s personal data
by the Manager and the Trustee (or their agents) for the purpose of the processing and administration by the Manager and
the Trustee (or their agents) of proxies and representatives appointed for the EGM (including any adjournment thereof) and
the preparation and compilation of the attendance lists, minutes and other documents relating to the EGM (including any
adjournment thereof), and in order for the Manager and the Trustee (or their agents) to comply with any applicable laws,
listing rules, regulations and/or guidelines (collectively, the “Purposes”), (ii) warrants that where the Unitholder discloses
the personal data of the Unitholder’s proxy(ies) and/or representative(s) to the Manager and the Trustee (or their agents),
the Unitholder has obtained the prior consent of such proxy(ies) and/or representative(s) for the collection, use and
disclosure by the Manager and the Trustee (or their agents) of the personal data of such proxy(ies) and/or
representative(s) for the Purposes, and (iii) agrees that the Unitholder will indemnify the Manager and the Trustee in
respect of any penalties, liabilities, claims, demands, losses and damages as a result of the Unitholder’s breach of
warranty.
I-2
OUE COMMERCIAL REAL ESTATEINVESTMENT TRUST(a real estate investment trust constituted on 10 October 2013
under the laws of the Republic of Singapore)
PROXY FORM
EXTRAORDINARY GENERAL MEETING
IMPORTANT
1. For investors who have used their CPF monies to buy units in OUECommercial Real Estate Investment Trust (“Units”), this Circular toUnitholders dated 1 July 2015 is forwarded to them at the request of their CPFApproved Nominees and is sent solely FOR THEIR INFORMATION ONLY.
2. This Proxy Form is not valid for use by such CPF investors and shall beineffective for all intents and purposes if used or purported to be used bythem.
3. CPF Investors who wish to attend the Extraordinary General Meeting as anobserver must submit their requests through their CPF Approved Nomineeswithin the time frame specified. If they also wish to vote, they must submittheir voting instructions to the CPF Approved Nominees within the time framespecified to enable them to vote on their behalf.
Personal Data Privacy
By submitting an instrument appointing a proxy(ies) and/or representative(s), theUnitholder accepts and agrees to the personal data privacy terms set out in theNotice of Extraordinary General Meeting dated 1 July 2015.
l/We (Name(s) with NRIC No./Passport No./
Company Registration No.) of (Address)being a unitholder/unitholders of OUE Commercial Real Estate Investment Trust (“OUE C-REIT”), herebyappoint:
Name AddressNRIC/Passport
Number
Proportion of
Unitholding
Number
of Units%
and/or (delete as appropriate)
Name AddressNRIC/Passport
Number
Proportion of
Unitholding
Number
of Units%
or, both of whom failing, Mr. Ng Lak Chuan or failing him, Mr. Loh Lian Huat or failing him, Mr. Carl GabrielFlorian Stubbe as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and if necessary,to demand a poll, at the Extraordinary General Meeting (“EGM”) to be held on Monday, 27 July 2015 at 2.00p.m. at Marina Mandarin Singapore, Marina Mandarin Ballroom, Level 1, 6 Raffles Boulevard, Singapore039594 and any adjournment thereof.
I/We direct my/our proxy/proxies to vote for or against the resolution to be proposed at the EGM as indicatedhereunder. If no specific direction as to voting is given, the proxy/proxies will vote or abstain from voting athis/their discretion, as he/they will on any other matter arising at the EGM.
To be used on ashow of hands
To be used in theevent of a poll
No. Resolution For* Against*Number ofVotes For**
Number ofVotes Against**
1 To approve the proposed acquisition of anindirect interest in One Raffles Place andthe proposed CPPU issue (OrdinaryResolution) (Conditional upon Resolution 2)
2 To approve the proposed Trust DeedSupplement for the issue of preferred units(Extraordinary Resolution)
* If you wish to exercise all your votes “For” or “Against”, please tick (u) within the box provided.
** If you wish to exercise all your votes “For” or “Against”, please tick (u) within the box provided. Alternatively, please indicate thenumber of votes as appropriate.
Dated this day of 2015.
Total No. of units held
Signature(s) of Unitholder(s) or Common Seal ofCorporate Unitholder
Important: Please read notes on the reverse side
-----------------------------------------------------------------------------------------------------------------------------------------------
"
OUE Commercial REIT Management Pte. Ltd.(as manager of OUE Commercial Real Estate Investment Trust)
c/o
Unit RegistrarBoardroom Corporate & Advisory Services Pte. Ltd.
50 Raffles Place#32-01 Singapore Land Tower
Singapore 048623
Postage will
be paid by
addressee.
For posting in
Singapore only.
Notes to Proxy Form1. A Unitholder entitled to attend and vote at the Extraordinary General Meeting is entitled to appoint not more than
two proxies to attend and vote in his/her stead.
2. Where a Unitholder appoints more than one proxy, he/she must specify the proportion of his/her holding (expressed as a percentage of the whole) to be represented by each proxy. Where a Unitholder appoints two proxies and does not specify the proportion of his/her unitholding to be represented by each proxy, then the Units held by the Unitholder are deemed to be equally divided between the proxies.
3. A proxy need not be a Unitholder.
4. A Unitholder should insert the total number of Units held. If the Unitholder has Units entered against his name in the Depository Register maintained by The Central Depository (Pte) Limited (“CDP”), he should insert that number of Units.
5. If the Unitholder is shown to not have any Units entered against his name as at 48 hours before the time fixed for the Extraordinary General Meeting, the instrument appointing a proxy or proxies (the “Proxy Form”) will be rejected.
6. The Proxy Form must be deposited at the Unit Registrar’s office at Boardroom Corporate & Advisory Services Pte. Ltd, 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623, not less than 48 hours before the time fixed for the Extraordinary General Meeting.
7. The Proxy Form must be signed by the appointor or of his attorney duly authorised in writing. Where the Proxy Form is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly authorised officer.
8. Where a Proxy Form is signed on behalf of the appointor by an attorney or a duly authorised officer, the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of such power or authority must (failing previous registration with the Manager) be lodged with the Proxy Form; failing which the instrument may be treated as invalid.
9. The Manager shall be entitled to reject a Proxy Form which is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified on the Proxy Form. In addition, in the case of Units entered in the Depository Register, the Manager may reject a Proxy Form if the Unitholder, being the appointor, is not shown to have Units entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Extraordinary General Meeting, as certified by CDP to the Manager.
10. All Unitholders will be bound by the outcome of the Extraordinary General Meeting regardless of whether they have attended or voted at the Extraordinary General Meeting.
11. At any meeting, a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded by (i) the Chairman, (ii) by five or more Unitholders present in person or by proxy and having the right to vote at the meeting, or (iii) by Unitholders present in person or by proxy representing not less than 10.0% of the total voting rights of all the Unitholders having the right to vote at the meeting. Unless a poll is so demanded a declaration by the Chairman that such a resolution has been carried or carried unanimously or by a particular majority or lost shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution.
12. On a show of hands, every Unitholder who (being an individual) is present in person or by proxy or (being a corporation) is present by one of its officers as its proxy shall have one vote. On a poll, every Unitholder who is present in person or by proxy shall have one vote for every Unit of which he is the Unitholder. A person entitled to more than one vote need not use all his votes or cast them the same way.
BUSINESS REPLY SERVICE PERMIT NO. 09222
2nd fold here
3rd fold here
1st fold (This flap for sealing) – “Glue all sides firmly.” Stapling & spot sealing is disallowed.
With a long remaining weighted average land lease expiry (by value) of 435 years, the proposed Acquisition is expected to increase the remaining land lease expiry of OUE C-REIT by approximately 3.6 times, from the current remaining weighted average land lease expiry of approximately 72 years to 258 years
KEY BENEFITS TO UNITHOLDERS
1. ACQUISITION OF A LANDMARK COMMERCIAL PROPERTY IN SINGAPORE
INCREASE IN REMAINING WEIGHTED AVERAGE LAND LEASE EXPIRY
72 Years
258 Years
3.6x
Existing Portfolio Enlarged Portfolio
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ONE RAFFLES PLACE
Raffles Place is perceived as the most accessible office location in the CBD and is expected to remain a focal point of the CBD, with its strategic location offering a strong pull-factor for existing and prospective tenants
The Property is situated above and seamlessly linked to the Raffles Place MRT interchange station, one of Singapore’s major interchange stations, which links to an extensive underground network of pedestrian walkways connecting other developments within Raffles Place as well as Marina Bay
Enjoys enhanced accessibility to other parts of Singapore via proximity to major expressways:- Marina Coastal Expressway- Central Expressway- East Coast Parkway- Ayer Rajah Expressway
2. ACQUISITION AT AN ATTRACTIVE PRICE
The agreed value for the OUBC Interest of S$1,715 million translates to an attractive price of S$2,382 per square foot (“psf”), compared to recently transacted prices of Grade-A properties in the Raffles Place area
Rents for Grade-A buildings in Raffles Place with direct access to the MRT station are expected to be relatively resilient:
- No known premium and Grade-A office developments to be completed in the area from 2015 to 2018
- Existing Grade-A offices in Raffles Place are uniquely positioned, offering mainly mid-sized floor plates of around 10,000 sq ft compared with recent and future office developments that offer floor plates of 20,000 sq ft and above
As at 1Q 2015, the Independent Market Research Consultant(1) estimates the average office rent in Marina Bay to be 20% higher than that in Raffles Place:
- Strong value proposition for businesses to be located in Raffles Place
Current office occupancy rate of the Property is estimated to be about 85.0% to 90.0%, as compared to the average occupancy rate for Grade-A offices in Raffles Place in 1Q 2015 of about 97.2%:
- Potential for occupancy rate to increase by about 7 to 12 percentage points (“ppt”)
Current office rent at the Property is estimated to be S$9.50 to S$10.00 psf per month, compared to the average rent for Grade-A offices in Raffles Place in 1Q 2015 of about S$11.50 psf per month:
- Potential for positive rental reversion of about 15% to 21%
Source: Unless otherwise indicated, the information in the chart is based on information provided in the valuation report of the OUBC interest by Cushman & Wakefield dated 9 June 2015 (1) This is specific information provided by the Manager for the purpose of comparison (2) Based on the sale of a 92.8% stake in Prudential Tower (3) Based on the sale of a 51% stake in Hitachi Tower which valued the property at around S$660.0 million
(1) DTZ Debenham Tie Leung (SEA) Pte Ltd (the “Independent Market Research Consultant”)
TRANSACTED PRICE (S$ psf)
85%
90%
97.2%
+12ppt
+7ppt
Current estimated office occupancy rate
of the Property
Average occupancy rate for Grade-A offices in
Raffles Place in 1Q 2015
Estimated range {
POTENTIAL UPSIDE IN OCCUPANCY: +7PPT TO 12PPT
3. GROWTH OPPORTUNITY FROM POTENTIAL IMPROVEMENT IN OCCUPANCY AND RENTAL RATES
9.50
10.00
11.50
+21%
+15%
Average rent for Grade-A offices in Raffles Place
in 1Q 2015
Estimated range {
S$ psf per month
POTENTIAL UPSIDE IN OFFICE RENTS: +15% TO 21%
Current estimated office rent of the
Property
2,830
Straits Trading Building(Sep 2014)
2,498
OUE Bayfront(Jan 2014)
2,382
OUBC Interest(1)
(in progress)
2,374
Hitachi Tower(3)
(Jan 2013)
2,316
Prudential Tower(2)
(May 2014)
847 years 92 yearsWeighted average of
435 yearsMore than 840 years
80 yearsRemaining Land Tenure:
Source: Independent Market Research Report by DTZ dated 24 April 2015
Circ
ular d
ated
1 July 2
015
www.ouect.com
Singapore Exchange Securities Trading Limited (the “SGX-ST”) assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this Circular. If you are in any doubt about its contents or as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.
Approval in-principle has been obtained from the SGX-ST for the listing and quotation of the Rights Units (as defined herein) in OUE Commercial Real Estate Investment Trust (“OUE C-REIT”), the Rights Issue (as defined herein) and the new Units to be issued upon conversion of the CPPUs (the “Conversion Units”) on the Main Board of the SGX-ST. The SGX-ST’s in-principle approval is not an indication of the merits of OUE C-REIT, the proposed Acquisition (as defined herein), the Rights Issue, the Rights Units, the CPPUs and the Conversion Units.
If you have sold or transferred all your units in OUE C-REIT (“Units”), please forward this Circular together with the Notice of Extraordinary General Meeting and the accompanying Proxy Form immediately to the purchaser or transferee to the stockbroker, bank or other agent through whom the sale was effected for onward transmission to the purchaser or transferee.
This Circular may not be sent to any person or any jurisdiction in which it would not be permissible to deliver the Rights Units and the “nil-paid” provisional allotment of Rights Units to Eligible Unitholders (as defined herein) under the Rights Issue (the “Rights Entitlements”) or make an offer of the Rights Units and the Rights Entitlements and the Rights Units and Rights Entitlements may not be offered, sold, resold, transferred or delivered, directly or indirectly, to any such person or in any such jurisdiction. The Rights Units and Rights Entitlements have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or under any securities laws of any state or other jurisdiction of the United States (“U.S.”) and may not be offered, sold, resold, allotted, taken up, exercised, renounced, pledged, transferred or delivered, directly or indirectly, within the U.S. except pursuant to an applicable exemption from, or a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the U.S.
Standard Chartered Securities (Singapore) Pte. Limited, CIMB Bank Berhad, Singapore Branch and Oversea-Chinese Banking Corporation Limited were the joint global coordinators and issue managers for the initial public offering of OUE C-REIT.
MANAGED BY
OUE Commercial REIT Management Pte. Ltd.Joint Lead Managers and
Underwriters for the Rights Issue
Joint Financial Advisers for the CPPU Issue and
the Rights Issue
Independent Financial Adviser to the Independent Directors of OUE Commercial REIT Management Pte. Ltd. and to
DBS Trustee Limited (as trustee of OUE C-REIT) for the Acquisition and the CPPU Issue
IMPORTANT DATES AND TIMES FOR UNITHOLDERS
EVENT DATE AND TIME
Last date and time for lodgement of Proxy Forms
Saturday, 25 July 2015 at 2.00 p.m.
Date and time of Extraordinary General Meeting
Monday, 27 July 2015 at 2.00 p.m.
Place of Extraordinary General Meeting
Marina Mandarin SingaporeMarina Mandarin Ballroom, Level 16 Raffles Boulevard, Marina SquareSingapore 039594
CIRCULAR TO UNITHOLDERS IN RELATION TO:
(1) THE PROPOSED ACQUISITION OF AN INDIRECT
INTEREST IN ONE RAFFLES PLACE AND THE PROPOSED
CPPU ISSUE; AND
(2) THE PROPOSED TRUST DEED SUPPLEMENT FOR THE
ISSUE OF PREFERRED UNITS.
CIRCULAR DATED 1 JULY 2015THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
(a real estate investment trust constituted on 10 October 2013 under the laws of the Republic of Singapore)
DELOITTE & TOUCHE CORPORATE FINANCE PTE LTD(Incorporated in the Republic of Singapore)(Company Registration No.: 200200144N)
The overview section 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 55 to 61 of this Circular.
THE PROPOSED ACQUISITION
OUE C-REIT proposes to acquire an indirect interest in One Raffles Place (“the Property”) through the acquisition of between 75.0% and 83.33% interest in OUB Centre Limited (“OUBC”) from OUE Limited (the “Sponsor”), via the acquisition of its wholly-owned subsidiary Beacon Property Holdings Pte. Ltd. (“BPHPL”) (the “Acquisition”).
OUBC is the registered owner of the Property and owns 81.54% of the beneficial interest in the Property (the “OUBC Interest”).
The agreed value of the OUBC Interest is S$1,715 million.
OVERVIEW OF THE TRANSACTION
OVERVIEW OF ONE RAFFLES PLACE
Description One Raffles Place is an integrated commercial development comprising two Grade-A office towers and a retail podium
Gross Floor Area (“GFA”) Approximately 119,725.8 sq m (1,288,717 sq ft)
Net Lettable Area (“NLA”) One Raffles Place Tower 1: Approximately 38,090.3 sq m (410,000 sq ft)
One Raffles Place Tower 2: Approximately 32,516.1 sq m (350,000 sq ft)
One Raffles Place Shopping Mall: Approximately 9,290.3 sq m (100,000 sq ft)
Total: Approximately 79,896.7 sq m (860,000 sq ft)
Car Park Lots 326 car park lots located in Basements 2 to 4
Title One Raffles Place Tower 1: 841-year leasehold title commencing 1 November 1985
One Raffles Place Tower 2: 99-year leasehold title commencing 26 May 1983
One Raffles Place Shopping Mall - the retail podium straddles two land plots:
– approximately 75% of the retail podium NLA is on a 99-year leasehold title commencing 1 November 1985
– the balance 25% is on the 841-year leasehold title commencing 1 November 1985
ABOUT ONE RAFFLES PLACE
One Raffles Place, comprising One Raffles Place Tower 1, One Raffles Place Tower 2 and One Raffles Place Shopping Mall, is a prominent, iconic integrated commercial development with Grade-A building specifications strategically located in the heart of Singapore’s main financial district Raffles Place.
One of the tallest buildings in the Singapore central business district (“CBD”), One Raffles Place Tower 1 comprises a 62-storey Grade-A office building, with a rooftop restaurant and observation deck offering panoramic views of the city skyline.
One Raffles Place Tower 2 is a 38-storey Grade-A office building completed in 2012, awarded the Platinum Green Mark Award by the Building and Construction Authority for its energy efficiency and environmentally sustainable design.
Offering a diverse range of shopping, dining and leisure options which cater to the needs of the working population in the CBD, One Raffles Place Shopping Mall is a six-storey retail podium that has undergone extensive refurbishment works which were completed in May 2014. It is currently the largest purpose-built shopping mall in Raffles Place.
Situated above and with a direct underground link to the Raffles Place Mass Rapid Transit (“MRT”) interchange station through the basement of its retail podium, One Raffles Place enjoys excellent connectivity along the North-South and East-West MRT lines, as well as easy accessibility to other developments within Raffles Place as well as Marina Bay.
ACQUISITION STRUCTURE
(After the Proposed Acquisition)
Other ThirdParties
100%
75.0% to 83.33%
81.54%
16.67% to 25.0%
OUBC
One Raffles Place
BPHPL
VALUATION OF THE OUBC INTEREST
As at 5 June 2015 S$ million
Savills 1,734.0
Cushman & Wakefield 1,733.0