Frasers Commercial Trust 2Q2009 Financial Results 28 July 2009
Important notice Certain statements in this Presentation constitute “forward - looking statements”, including forward -looking financial information. Such forward-looking statement and financial information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of FCOT or the Manager, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward- looking statements and financial information. Such forward-looking statements and financial information are based on numerous assumptions regarding the Manager’s present and future business strategies and the environment in which FCOT or the Manager will operate in the future . Because these statements and financial information reflect the Manager’s current views concerning future events, these statements and financial informati on necessarily involve risks, uncertainties and assumptions. Actual future performance could differ materially from these forward-looking statements and financial information. The Manager expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement or financial information contained in this Presentation to reflect any change in the Manager’s expectations with regard thereto or any cha nge in events, conditions or circumstances on which any such statement or information is based, subject to compliance with all applicable laws and regulations and/or the rules of the SGX-ST and/or any other regulatory or supervisory body or agency. The value of Frasers Commercial Trust units (“Units”) and the income derived from them, if any, may fall or 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 should note that they 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 Singapore Exchange Securities Trading Limited (“SGX - ST”) . Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. This document is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for the Units. The past performance of REIT and the Manager is not necessarily indicative of the future performance of Frasers Commercial Trust and the Manager. This Presentation contains certain information with respect to the trade sectors of the Trust’s tenants. The Manager has det ermined the trade sectors in which the Trust’s tenants are primarily involved based on the Manager’s general understanding of the business activities conducted by s uch tenants. The Manager’s knowledge of the business activities of the Trust’s tenants is necessarily limited and such tenants may conduct business acti vities that are in addition to, or different from, those shown herein. This Presentation includes market and industry data and forecast that have been obtained from internal survey, reports and studies, where appropriate, as well as market research, publicly available information and industry publications. Industry publications, surveys and forecasts generally state that the information they contain has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of such included information. While the Manager has taken reasonable steps to ensure that the information is extracted accurately and in its proper context, the Manager has not independently verified any of the data from third party sources or ascertained the underlying economic assumptions relied upon therein.
Agenda 3 2Q2009 Results Quarter in review Market conditions Recapitalisation measures initiated Financial highlights Distribution payment Portfolio review Valuations Lease expiry profile Stability of income Key tenants of the Enlarged Portfolio Mid-term rent reviews Asset updates Capital management Snapshot & debt statistics Refinancing structure Debt maturity profile Portfolio detail Net property income Asset diversification Asset profiles
2Q2009 Results
2Q2009 Results – Quarter in review 5 2Q2009: announced significant recapitalisation measures, DPU holding from previous quarter Management’s focus : Asset valuations: Refinancing of maturing loans – Holding values from aggregate writedowns of 19% – 12 June: announced extension of July-maturing debt to since September 2008 31 December 2009 – No changes to underlying values, change only – 30 June: announced that terms were agreed for S$500.0 attributable to carrying values from changed million and A$150.0 million transferable term loan currency translation rates on JPY and AUD assets facilities of 3 years each, conditional upon completion of Rights Issue and Acquisition of Alexandra Technopark Alexandra Technopark Recapitalisation plan – 30 June: announced measures to increase the strength of FCOT’s balance sheet and ensure short term debt was refinanced » Rights Issue » Acquisition of Alexandra Technopark » Creation and issue of preferred equity for consideration Continued active asset management of portfolio – Ongoing strengthening of the retail component of KeyPoint and China Square Central with FCL retail leasing expertise
2Q2009 Results – Market conditions 6 Commercial office sectors in all markets showed continued weakness in fundamentals, however the rate of decline has softened in 2Q2009 and there are brighter signs ahead Challenges still apparent for commercial property owners – Slowing pressure on property values – Decline in tenant demand for office space but at a slowed rate for 2Q2009 FCOT’s position: – Property values unchanged from 1Q2009 – Weighted average lease expiry almost 5 years, near term lease expiries for the Enlarged Portfolio* are less than 20% of current gross rental income – Continued sponsor support from Frasers Centrepoint Limited as demonstrated in the recapitalisation exercise FCOT will finalise its recapitalisation in 3Q2009 and return its focus to active asset management, optimising the performance of each individual asset through tenant retention, minimisation of expenses and new leasing *The Enlarged Portfolio includes the current properties held by FCOT (inclusive of the investment in the Australian Wholesale Property Fund (“AWPF”)) as well as Alexandra Technopark. For calculations in relation to lease expiry, rentals, and other property terms, AWPF is included.
2Q2009 Results – Recapitalisation measures initiated 7 Transforming FCOT into a strong, developer-sponsored REIT backed by the blue-chip Fraser & Neave Group New management Capitalise on Build a Robust from August 2008, Recapitalise to Relationship platform for completed portfolio refinance with Sponsor future growth review and finalised measures to recap Recapitalise via Strong and stable Strong support Rights Issue and cashflow from FCL Acquisition Well diversified Sub-underwriting Remove refinancing property portfolio beyond pro rata uncertainty entitlement Reduce leverage Right of First from 58.3% to Refusal from FCL 38.5% (1) (1) On a pro forma basis, assuming that the Transactions occurred on 31 March 2009
2Q2009 Results – Financial highlights 8 2Q2009 v 1Q2009: slight increase on 1Q2009 numbers, total 1H2009 DPU of 1.44 cents 2Q2009 1Q2009 Change Contributing factors (S$’000) (S$’000) (%) Lower contribution from KeyPoint following full utilisation of 5.4% Gross Revenue 22,673 23,962 outstanding income support Small increase in property expenses attributable to stronger Less Property Expenses (5,600) (5,294) 5.8% AUD for the quarter 5.2% Net Property Income 17,703 18,668 Decline in NPI carried through Distributable income 5,570 5,417 Stable level recorded from 1Q 2.8% Equal quarterly contributions to total 1H2009 DPU payment of 1.4% DPU (cents per Unit) 0.73 0.72 1.44 cents per Unit
2Q2009 Results – Distribution payment 9 1H2009 DPU: 1.44 cents per Unit to be paid on Friday, 28 August 2009 Distribution Period 1 January 2009 to 30 June 2009 Distribution of 1.44 cents per Unit comprising: a) taxable income distribution of 0.91 cents; Distribution Rate b) tax-exempt income distribution of 0.27 cents; and c) capital distribution of 0.26 cents Last day of trading on “cum” basis Monday, 3 August 2009 Ex-distribution trading commence Tuesday, 4 August 2009 Distribution Books Closure Date Thursday, 6 August 2009 at 5.00 pm Distribution payment date Friday, 28 August 2009
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