Central Pattana Plc. Property Development and Investment CentralPlaza Rama 3 dbTisco Thailand Property Development Corporate Day 26 May 2017
Contents ► Our Company ► Growth ► Financing ► Looking ahead ► Appendices 2
Our company CPN at a Glance VISION To be the most admired and dynamic regional retail property developer with world-class rewarding experience Mixed-use Project Development Malls Other related business Property funds Residential Commercial Hotel CPNRF CPNCG 2 7 Office Buildings Hotels 1 1 Residence • Lardprao CPNRF: • Pinklao Tower A Central City Residence 22 RM2, RM3, PKO, CMA, • @ Bangna Pinklao Tower B Pinklao Tower A&B • 6 Bangna • CentralWorld Tower 1 centralmarina • Chaengwattana CPNCG: • Rama9 The Offices @ CentralWorld 1 st Rank 30 1.6 mn sqm 94%* 21% Shopping Malls NLA Occ. Rate Retail Developer Market Share in BKK * Includes area transferred to CPNRF and CPNCG, 1Q17 occ. rate was 93%. 3
Our company Strategic Shareholders CPN is one of the flagship businesses of the Central Group (Chirathivat Family) . As a strong and supportive shareholder, the Chirathivat family brings to CPN a wealth of retail-related expertise through the family‟s long record and successful leadership in Thailand‟s dynamic and competitive landscape of shopping mall developments and department store / specialty store operations. Chirathivat Family Local 27% funds 18% Foreign Free float 53% 47% funds 74% Individuals Central 8% Group 26% Source: TSD as of 31 March 2017 4
Our company Strategic Shareholder CPN‟s strong synergy with the Central Group helps CPN to attract dynamic tenants, increase people traffic and command higher rents. Central Group Central Pattana Public Company Limited (53%)* Central Department Store Group (100%)* Central Food Retail Group (100%)* Central Hotel & Resort Group (65%)* Central Restaurant Group (65%)* Central Hardlines Group (100%)* Central Marketing Group (100%)* Central Online (50%)* * Percentage held by Central Group 5 Listed Company: CPN , CENTEL (CHi & CRG), ROBINS (Central Department Store Group holds 62%), and COL
Our company Property Development and Management Property Developer & Property Manager Department Store Shopping Mall & Category killers Other Other Other Other Tenants Tenants Tenants Tenants CRG Other Other Other Other Tenants Tenants Tenants Tenants CMG CRG & CMG Other tenants Joint developers • • • ~12% of total leasable areas ~88% of total leasable areas and also in Sharing cost of land and common and also in term of total term of total revenue area • revenue Owning its investment cost and assets • Pricing criteria as same as others 6
Our company Property Locations Existing Projects (30) Shopping Centers (13 BMA, 17 Provinces) Offices (7) Hotels (2) 1 (BMA) Residence (1) 23 (11 BMA, 12 Provinces) 6 ( 1 BMA, 5 Provinces) Chaengwattana Ramindra WestGate Ladprao Bangkok Rattanathibet EastVille Metropolitan Area (BMA) Salaya Grand Rama 9 Pinklao Bangna Rama3 Rama2 7 Note: As of March 2017
Growth CPN‟s Growth Aspiration 5 year target : top line growth of 14-15% CAGR for 2017-2021 Mixed-use Project Development Malls Property funds Other related business Condominium 15 New projects: 2018: ESCENT Khonkaen 2017 : 14 Domestic projects ESCENT Chiangmai CPNRF Conversion to REIT (BKK:Provinces = 50:50) ESCENT Rayong 1 Overseas project (i-City in Malaysia) Target : 3 projects/year Renovation projects: Other mixed-use projects 2017 : CPN : CTW and PKT CPNRF : RM3, RM2, CMA 2019-2021 : 1-3 projects 2018-2021 : approx. 2-3 projects/year 8
Growth Future Leasable Area & Occupancy Rate Retail NLA Occupancy Rate (mn sqm) (%) 94 94 94 94 94 94 2.3 100 90 2.2 45 80 2.1 42 70 2.0 39 60 1.9 50 36 1.8 40 1.7 30 33 1.6 20 30 1.5 10 1.4 0 2016F 2017F 2018F 2019F 2020F 2021F No. of Malls 2016F 2017F 2018F 2019F 2020F 2021F Domestic 30 33 35 38 41 44 Overseas 1 1 1 1 NLA (mn sqm) 1.60 1.76 1.87 1.97 2.08 2.22 Residential 3 6 9 12 Other mixed-use 1-3 projects Source: Company estimate as at 30 December 2016. 9 9 Retail space: Includes leasable area of CentralPlaza Rama 2, CentralPlaza Rama 3, CentralPlaza Pinklao, and CentralPlaza Chiangmai Airport, which were partially transferred to CPNRF, but still under CPN’s management .
Growth Rental Contracts Type & Upside Upside from expirations of long-term lease contracts converted into short term contracts at market rental rate should help increase revenues. Reliable contract structure Long-term Lease: Potential higher revenue Types of rental contract (1) ≥'21 29 32 '20 17 Fixed Rent % of expired area to total Consignment long-term lease area (2) 47% '19 12 36% 5 (48%) (35%) '18 3 2017 3 % - 20 40 60 80 Retail shops Department Stores in Acquired Projects Rental Rate Reversion Times CPN‟s average ARR 5 Long-term Lease PKO 4 17% LT Lease (17%) 3 2 ST Lease 1 0 Retail Shops Department Store Source: Company estimate as of 31 March 2017 10 10 (1) Percentage based on occupied area. (%) 1Q16 figure (2) Total long-term lease area is 158,583 sq.m. with less than 4% rental income contribution.
Financing Additional CAPEX to drive future growth Capex will continue to focus on core business Capex 2016-2020F „17F „18F „19F „20F (THB bn) FY2016 Under construction 6.0 8.0 5.8 2.1 0.5 Enhancement 2.7 2.5 2.6 1.9 1.4 Potential 0.0 5.1 4.4 9.1 12.5 Total Malls 8.7 15.6 12.8 13.1 14.4 Residential 0.5 1.7 2.6 3.2 3.5 Total Capex 9.2 17.3 15.5 16.2 17.8 Source: Company estimate as of 30 December 2016. 11
Financing Solid balance sheet despite expansion Balance sheet and D:E Finance Costs and cost of debt (1) THB bn THB bn 1.2 5.0 60 0.9 0.82 4.4 4.3 4.5 0.8 3.9 1.0 50 4.0 0.7 3.3 3.1 3.3 3.1 3.0 3.5 0.8 40 0.6 3.0 0.49 0.5 0.6 2.5 30 0.39 0.4 2.0 0.29 0.28 0.4 20 0.3 1.5 0.21 0.2 1.0 10 0.2 0.1 0.5 - 0.0 - 0.0 '13 '14 '15 16 FY2012 1Q17 Cash¤t investment Interest bearing debts Equity RS: Net D:E Finance Costs RS: Cost of debt (1) Cost of debt was derived from interest expenses including interest capitalization for projects under development 12
2017 Growth Direction 2017 Strategic Directions CPN Shopping Mall = CENTER OF LIFE Innovative Education Lifestyle Shopping Mall Smart Sustainable Corporate Digital Development Growth Governance Solution Service Resource Excellence Management 13
Innovative Lifestyle Shopping Malls New format & concepts Think Space B2S – “Co - Working Space” Sky Run - A rooftop jogging track Pet Park Kids Playground 14
Our company Asset Enhancement - CentralPlaza Pinklao Before: Impact after renovation: Project background: • Rental rate growth: • Assets under CPNRF & CPN • Short-term contract: + 10-15% • 20,000 sqm under CPN‟s long -term lease converted to short-term • Long-term lease: + > 5 times Renovation cost: THB 1.9 bn • Revenue growth contribution: 2.3% • CPN‟s cost: THB 1.55 bn • Additional NLA: 6,000 sqm Food Destination • CPNRF‟s cost: THB 0.35 bn • New brands, New food destination 15
Our company Asset Enhancement - CentralPlaza Bangna Impact after renovation: Before: • Rental rate growth: 5% • Additional NLA: 4,000 sqm • Modern fashion brands • Food Balcony: Brand new restaurants • New Food Patio • Family facilities: Pororo Aquapark, Kidspace Project background: • Located in high competition area • Renovation cost: THB 2.0 bn 16
Our company Asset Enhancement - CentralMarina Impact after renovation: Before: • Rental rate growth: 10 - 15% • Additional NLA: 2,000 sqm • Brand new food park • Public House • Rest area • Marina Market Project background: • 20-year land lease renewal in 2015 • Renovation period: May - Dec 2016 • Renovation cost: THB 1.0 bn 17
2017 Growth Direction 2017 Strategic Directions “Smart Development & Sustainable growth toward mixed - use development” 2. Mixed-use development 1. Shopping mall business: • • New malls Residential development • Asset Enhancement SMART • New Formats & Concepts High growth potential in 2018 is • Space utilization expected, driven by new malls, AEI, DEVELOPMENT and Residential properties. 3. Acquiring land bank both domestic and overseas & seeking for acquisition opportunities 2018 2017 2019 Central i-City Ce ntralPlaza Nakhon Ratchasima 3 projects New Malls 2 Unannounced Malls CentralPlaza Mahachai Central Phuket CPN: Central World, Enhanced Malls 2 - 3 projects 2 - 3 projects C entralFestival Phuket 1 CPNRF: CentralPlaza Rama 3, CentralPlaza Rama 2, CentralPlaza Chiangmai Airport Condominium Escent Chaingma i , Khonkaen, Rayong 3 projects 18
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