Proposed Acquisition of the TT International Tradeparkir.ascendas-reit.com/newsroom/proposed...

Proposed Acquisition of the TT International Tradepark

21 November 2003

Agenda

• The Property• Impact on A-REIT

– Pro forma Financial Effect

– Portfolio Diversification

– Lease Expiry Profile

– Property Yield

• Timetable for Completion • Acquisition Summary

2

TT International Tradepark

pp1]

3


10 Toh Guan Road

TT International TradeparkProperty Details

7.87% Property Yield (1)

(before acquisition costs)

S$3.8mAcquisition Costs

S$92.0m (S$8.8m deferred for a period of three yrs)Purchase Price

S$92.0m by CB Richard Ellis (Pte) LtdValuation (as at 1 November 2003)

Leasehold of 30 years commencing 16 October 1995, with an option to renew for a further 30 years

Title

20,876 sqm (subject to survey)Site Area

42,765 sqmNet Lettable Area

A ten-storey office building and a six-storey warehouse with an automated storage and retrieval system

Building type

4

The Property

Impact on A-REIT

Timetable for Completion

(1) Calculation excludes deferred component. Forecasted yield on payment of the deferred component is 7.8%

Acquisition Summary

TT International TradeparkLeasing Details

S$6.6mAnnual Rent

100%Occupancy

Stepped rental increases of 9% (year 4), 6% (year 7) and 9% (year 10)

Rent Escalation

Estimated to be March 2004Commencement Date

T.T. International Tradepark Pte LtdTenant(s)

10 yrsLease Term

Lease management cost to be paid by lessor(A-REIT).

All property tax, land rent, maintenance and utility expenses to be paid by lessee (T.T. International Tradepark Pte Ltd).

Outgoings

5

The Property

Impact on A-REIT


Acquisition Summary

Agenda

• The Property• Impact on A-REIT




– Property Yield


6

Distribution Per Unit (“DPU”) Positive

Note:*Calculated based on A-REIT holding the property for six months ended 30 September 2003 and assuming that the acquisition is funded at an optimal gearing level of 30 per cent. debt / 70 per cent. equity.

7

The Property

Impact on A-REIT


Acquisition Summary0.06

0.12

DPU Impact (Based on possible

debt/equity funding of 30/70)*

DPU Impact(proforma impact on 6 mthsended 30 September 2003)

DPU annualised impact


Agenda

• The Property • Impact on A-REIT




– Property Yield


8

Well Located, Diversified Portfolio

Honeywell Building at Changi Business Park

Techlink at Kaki Bukit Ave 3

The Alpha, Aries, Capricorn and Gemini at Singapore Science Park II

Techplace II at Ang Mo Kio Ave 5 Techplace I at

Ang Mo Kio Ave 10

OSIM Building at Ubi Ave 1

Ghim Li Building at Changi South Ave 2

9

Ultro Building at ChangiBusiness Park

Proposed acquisition of Infineon Technologies Building at Kallang Sector (building expected to be completed by August 2004) *

IDS HQ at JalanAhmad Ibrahim(purchase expected to complete in or before March 2004)

TT International Tradepark at Toh Guan Rd

The Property

Impact on A-REIT


Acquisition Summary

* A-REIT has an option to acquire the Infineon Building

Ultro3%

Gemini9%

Capricorn12%

Aries6%

Alpha7%

OSIM4%

TT Int'l Tradepark

8%

IDS HQ5%

Techlink9%

Ghim Li2%

Honeywell6%

Techplace II16%

Techplace I13%

Diversifies LeasesBefore Acquisition After Acquisition

28%Long term leases

The Property

Impact on A-REIT


Acquisition Summary

Note : Calculated using net property income as at 30 September 2003. Assumes all existing properties in the portfolio as well as new acquisitions are held for the full six months ended 30 September 2003.

Gemini10%

Capricorn13%

Aries6%

Alpha7%

Ghim Li2%

OSIM4%

IDS HQ6%

Techlink10%

Honeywell7%

Ultro3%

Techplace II18%

Techplace I14%

22%Long term leases

Information Technology7%

Electronics 28%

Logistics9%

Others17%

Telecom 4%

Healthcare5%

R&D13%

Engineering17%

Diversifies Tenant Industry Mix

Notes:(1) Calculated using net lettable area leased as at 30 September 2003 including Ghim Li and Ultro Buildings acquired on 13 and 30 October 2003 respectively.(2) Includes electrical products & components(3) Includes fabricated metal products, machinery & equipmentSource : Ascendas-MGM Funds Management Limited

Information Technology6%

Electronics 38%

Logistics7%

Others15%

Telecom 3%

Healthcare5%

R&D11%

Engineering15%

Before Acquisition After Acquisition

(2)

(3)

(2)

(3)

The Property

Impact on A-REIT


Acquisition Summary

Agenda





– Property Yield


12

Extends Lease Expiry Profile

A-REIT Lease Expiry Profile

8.7% 14

.9% 26

.5%

18.8

%

7.9%

3.0%

3.5%

4.6%

6.3%

4.7%

1.0%

7.1% 12

.2% 21

.7%

15.4

%

6.4%

2.5%

2.8%

3.7%

23.3

%

3.8%

0.8%

0%

5%

10%

15%

20%

25%

30%

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Existing 11 Properties Existing 11 Properties + IDS HQ + Tradepark

The Property

Impact on A-REIT


Acquisition Summary

% o

f NLA

Financial Year

Note : A-REIT’s financial year end is 31 March.Source : Ascendas-MGM Funds Management Limited (information as at 30 September 2003)

Agenda





– Property Yield


14

Yield-Accretive

7.87% *Yield Before Acquisition Costs (for year one)

6.55Net Income

0.07Property Expenses

6.62Income

TT International Tradepark($ million)

For Year One

15

Source : Ascendas-MGM Funds Management Limited

The Property

Impact on A-REIT


Acquisition Summary

* Based on partly paid purchase price of S$83.2m to be paid at settlement. Remainder of S$8.8m to be paid at the end of year 3 whereupon the rent also increases commensurately to S$7.2m.

Agenda





– Property Yield


16


Signed Put and Call Option AgreementNov 2003


• Exercise option • Execution of Sale and Purchase and Lease

Agreement • Completion

Mar 2004

TT International Limited (holding company of T.T. International Tradepark Pte Ltd) to hold EGM to obtain approval for sale of property

Dec 2003/ Jan 2004

17

The Property

Impact on A-REIT


Acquisition Summary

Agenda





– Property Yield


18

Acquisition Summary

19

The Property

Impact on A-REIT


Acquisition Summary

• Well located property • Diversifies property portfolio• Strengthens tenancy profile• Diversifies tenant mix and industry type• Extends lease expiry profile• Yield-accretive• DPU positive

• The value of units in A-REIT (“Units”) and the income 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 A-REIT is not necessarily indicative of the future performance of A-REIT.

This release may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments, shifts in expected levels of property rental income, changes in operating expenses, including employee wages, benefits and training, property expenses and governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. You are cautioned not to place undue reliance on these forward looking statements, which are based on current view of management on future events.

- End -

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