CPN Retail Growth Leasehold REIT - Investor Presentation FY2018 February 2019
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CPN Retail Growth Leasehold REIT
Investor Presentation FY2018
February 2019
Disclaimer
• The information contained in this presentation is for information purposes only and does not constitute an offer
or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for units in CPN Retail
Growth Leasehold REIT (CPNREIT and units in CPNREIT, “Units”) in any jurisdiction nor should it or any part of it
form the basis of, or be relied upon in any connection with, any contract or commitment whatsoever.
• This presentation may include information which is forward-looking in nature. Forward-looking information
involve known and unknown risks, uncertainties and other factors which may impact on the actual outcomes,
including economic conditions in the markets in which CPNREIT operates and general achievement of CPNREIT
business forecasts, which will cause the actual results, performance or achievements of CPNREIT to differ,
perhaps materially, from the results, performance or achievements expressed or implied in this presentation.
• This presentation has been prepared by the CPN REIT Management Company Limited as the REIT Manager of
CPNREIT. The information in this presentation has not been independently verified. No representation, warranty,
express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness
or correctness of the information and opinions in this presentation. None of the REIT Manager or Property
Manager or any of its agents or advisers, or any of their respective affiliates, advisers or representatives, shall
have any liability (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or
its contents or otherwise arising in connection with this presentation.
• This presentation is made, furnished and distributed for information purposes only. No part of this presentation
shall be relied upon directly or indirectly for any investment decision-making or for any other purposes.
• This presentation and all other information, materials or documents provided in connection therewith, shall not,
either in whole or in part, be reproduced, redistributed or made available to any other person, save in strict
compliance with all applicable laws.
Prepared by Investor Relations, CPN REIT Management Co., Ltd. Disclaimer Page 2
Agenda
CPNREIT Overview
Business Updates
Key Financial Highlights
Prepared by Investor Relations, CPN REIT Management Co., Ltd. Agenda Page 3
CPNREIT Overview
Page 4
Establishment and investment track record
A robust and diversified portfolio of high-quality assets
5 2 1 2017
Conversion of
Shopping Centers Office Buildings Hotel
CPNRF to
CPNREIT (2)
Acquisition of
CentralPlaza Rama 2 Acquisition of
CentralPlaza Rama 3 CentralPlaza Chiangmai Airport
2009 Acquisition of
CentralFestival Pattaya Beach
1st Follow-on Hilton Pattaya Hotel
Offering
2005
Initial Public
Offering of 2014
CPNRF (1) 2nd Follow-on
Offering
Acquisition of
CentralPlaza Pinklao
Note: (1) CPN Retail Growth Leasehold Property Fund
(2) The conversion of CPNRF to CPNREIT, along with the two assets acquired, was completed on December 1, 2017
Prepared by Investor Relations, CPN REIT Management Co., Ltd. CPNREIT Overview Page 5
Top-class assets at prime locations
Front-running properties in Greater Bangkok and major provinces for locals and tourists
CentralPlaza Pinklao Pinklao Tower A & B
Year acq. 2009 Year acq. 2009 CentralPlaza Chiangmai Airport
Lease end Dec-2024 Lease end Dec-2024 Year acq. 2014
NLA (sqm) 27,585 NLA (sqm) 34,320 Lease end Apr-2044
Occ. rate 99% Occ. rate 90% NLA (sqm) 37,803
Occ. rate 93%
CentralPlaza Rama 2
Chiangmai
Year acq. 2005
Lease end Aug-2025 Thailand
NLA (sqm) 82,590
Occ. rate 96%
CentralFestival Pattaya Beach
Pattaya
Year acq. 2017
Lease end Aug-2037
Bangkok
NLA (sqm) 29,404
Metropolitan
Occ. rate 98%
Area
Hilton Pattaya2
Year acq. 2017
CentralPlaza Rama 3 Lease end Aug-2037
Year acq. 2005 Rooms 302
Lease end(1) Aug-2095 Occ. rate 93%
NLA (sqm) 37,122
Occ. rate 94%
Note: Asset information as 31 December 2018
(1) Includes option to extend lease 2 more times at 30 years each.
(2) Property subleased to CPN Pattaya Hotel Co., Ltd.in which CPNREIT earns rental income
Prepared by Investor Relations, CPN REIT Management Co., Ltd. CPNREIT Overview Page 6
Solid operating performance track record
~maintain
High occupancy levels across
all properties 249 YoY 95 %
Outstanding
performances of
newly acquired
properties
98
% 93 %
CentralFestival
Pattaya Beach Hilton Pattaya
Note: Asset information as of December 31, 2018
Healthy revenue generated from operations Growing TAV from higher property value
and acquisition
~13%
Unit: THB bn Unit: THB / unit ~12%
5Y CAGR
5Y CAGR
21.27 21.18
4.93
3.31 3.53 3.53 14.01 14.82 15.19
3.14 12.09
2.71
2013 2014 2015 2016 2017 2018
2013 2014 2015 2016 2017 2018
Prepared by Investor Relations, CPN REIT Management Co., Ltd. CPNREIT Overview Page 7
Flexible funding capacity for portfolio expansion
Borrowing and Gearing Limit
Borrowing NAV Liabilities % Gearing
50000
Unit: THB mn 47,056 46,850
45000 Conversion to
40000
CPNREIT
CPNRF Rights 33,604
35000
Offering 32,784
30,991
REIT Gearing
30000
Limit (IG)
29,242 29,993 29,462 29,995
25000 27,690 60% of TAV
19,780
20000
REIT Gearing
Limit (non-IG)
15000 17,827 31% of TAV 31% of TAV 35% of TAV
10000
Property Fund
Gearing Limit 5000
7%
2% of NAV
of NAV 7% of NAV 6% of NAV
0.10x of NAV 0
2013 2014 2015 2016 2017 2Q18
Loans from
Financial 3Y Tenure
Institutions(1)
Unused
Debt Profile
31% 18%
Total
CPNREIT
42% available 14,499 2.51%
credit avg. cost
THB mn
58% of bonds
facilities
Used 69% 51%
Corporate
10Y Tenure
Note: Debt profile as of 31 December 2018. Debentures
(1) All loans from financial institutions are under fixed rate with an average cost of debt at 2.43%
Prepared by Investor Relations, CPN REIT Management Co., Ltd. CPNREIT Overview Page 8
Consistently high distribution yields
Distribution per Unit and Yield
THB/unit 1Q 2Q 3Q 4Q Sector Ave.
1.80 1.3260 8%
1.2283 1.617
1.60 1.1528 CPNRF/CPNREIT
1.1371 (1) 7%
6.7% Distribution Yield
1.40 1.0081 6.3%
6%
5.8% 5.9%
1.20 5.6%
1.00
5.1% 5%
4.8%
4.7%
0.80 4.1% 4.1% 4%
3.8% 3.9% Sector Average (2)
0.60
3%
0.40
2%
0.20
0.00 1%
2013 2014 2015 2016 2017 2018
Distribution
Policy
90 %
minimum payout of
distributable income 4 times per year
distribution to unitholders
Source: CPNRF and CPNREIT announcements; SETSMART
Note: Yield on unit distribution based on last twelve months’ accumulated distribution and the pre-record date trade price
(1) 4Q17 distribution was announced as a capital reduction due to the absorption of CPNRF’s retained earnings into CPNREIT’s unit capital
(2) Sector average represents the SET Property Fund and REIT sector dividend yield as of the end of each period.
Prepared by Investor Relations, CPN REIT Management Co., Ltd. CPNREIT Overview Page 9
Growth strategy and focus areas
Continuous effort to identify, study,
Geographical expansion assess and review, jointly with the REIT
Manager and Property Manager, new
investment opportunities
M&A
Asset diversification
Provide long-term returns to unitholders
Remerchandizong tenant mix and improve zoning of malls
Asset Optimize NLA and common area utilization
Enhancement
Initiatives (AEI) Improve accessibility to increase shopper traffic
Upgrade amenities for better convenience
Maximize Secure new tenants and lease renewals
occupancy levels
Organic with minimal
Develop strong tenant relationships
business interruption
Growth
Steady rental rate growth Optimize rental contract mix
with upside potential
Prepared by Investor Relations, CPNREIT Management Co., Ltd. CPNREIT Strategy Page 10Why invest in CPNREIT?
Invested properties size
The largest retail REIT in Thailand
1 with over THB 44 billion worth of invested properties
of Thailand’s retail PFs/REITs (1)
Unit: THB bn
60.3
45.1
Top-class assets in prime locations
2 diversified throughout Bangkok and major provinces in
Thailand
12.4 8.0
3.7 4.2
Strong professional network
3 comprising leaders in mixed-use property development and
asset management industries
CPNREIT TLGF FUTUREPF LHSC CRYSTAL MJLF
Solid performance track record
in both financial and operating results 4
Flexible funding capacity for expansion
investments through leveraged financing 5
Consistently high distribution yields
and reward sustainable returns to unitholders 6
Note: (1) Based on announcements of latest financial results for Property Funds and REITs on the Stock Exchange of Thailand (as of 1 Mar 19)
Prepared by Investor Relations, CPN REIT Management Co., Ltd. CPNREIT Proposition Page 11Business Updates
Page 12Grand opening @ CentralPlaza Rama 3
Concept :
“Where Nature Meets
Urban Living”
Date :
9 August 2018
Prepared by Investor Relations, CPN REIT Management Co., Ltd. Business Updates Page 13Grand opening @ CentralPlaza Rama 3 Prepared by Investor Relations, CPN REIT Management Co., Ltd. Business Updates Page 14
Debentures
• CPNREIT was given rated “AA” with “stable” outlook for both company and
debenture ratings by Tris Rating on 25 May 2018 and 29 June 2018.
• CPNREIT issued 4 tranches of debentures since August 2018. The objective of
issuance of debentures was for bank loans repayment, details are as follows;
Amount Tenor Coupon
Bond Issue Date Maturity Date
(MB) (Year) (%)
CPNREIT218A 2,650 17-Aug-18 17-Aug-21 3 2.70
CPNREIT288A 7,390 17-Aug-18 17-Aug-28 10 3.80
CPNREIT212A 2,700 8-Feb-19 8-Feb-21 2 2.54
CPNREIT232A 1,795 8-Feb-19 8-Feb-23 4 3.30
Total 14,535 3.30
Prepared by Investor Relations, CPN REIT Management Co., Ltd. Business Updates Page 15Debentures
• CPNREIT won the award “Deal of the Year” from The Best Bond Award 2018
organized by ThaiBMA on 21 February 2019, from the issuance of bond in
2018.
Prepared by Investor Relations, CPN REIT Management Co., Ltd. Business Updates Page 16Key Financial Highlights
Page 176Y (2013-2018) NLA and occupancy rates
‘000 sqm NLA (1) CentralFestival
CentralPlaza Pattaya Beach
300 Chiangmai Airport
247 249
224 224
218 Acquired Projects
200 180
218
181
Existing Projects
100
0
2013 2014 2015 2016 2017 2018
(1)
Occ. Rate (%)
100
97 97 95 Rama 2
90 92 91 91
Rama 3
80 Pinklao (Retail)
Pinklao (A&B)
70 Chiangmai Airport
Pattaya Beach
60 (2)
Hilton Pattaya
96 9810098 97 94 98 96 99 96 92 67 97 97 87 90 96 90 97 94 78 99 85 93 98 93 96 94 99 90 93 98 93
50 Total (Excl.Hilton)
2013 2014 2015 2016 2017 2018
Major Renovation Major Renovation
@ CentralPlaza @ CentralPlaza
Pinklao Rama 3
Note: (1) Anchor and in-line tenants only
(2) Average full year occupancy rate
Prepared by Investor Relations, CPN REIT Management Co., Ltd. Financial Highlights Page 18New and renewed leases
From 1 January to 31 December 2018
Project Renewals and New Leases /1
No. of Leases Area (sqm) % of Total /2
CentralPlaza Rama 2 181 15,778 20.0%
CentralPlaza Rama 3 124 12,518 35.8%
CentralPlaza Pinklao (Retail) 67 9,808 36.0%
Pinklao Tower A and B 91 17,701 57.3%
CentralPlaza Chiangmai Airport 260 18,669 53.3%
CentralFestival Pattaya Beach 127 11,635 40.2%
Total/Average 850 86,110 36.5%
Note:
/1
Exclude rental agreements < 1 year
/2
Percentage of leasable area exclude Anchor area as at 31 December 2018
Prepared by Investor Relations, CPN REIT Management Co., Ltd. Financial Highlights Page 19Lease expiry profile
% of occupied area and expiry by year
Note: Information as of 31 December 2018
Lease expiry includes contracts of anchors and in-line tenants
Prepared by Investor Relations, CPN REIT Management Co., Ltd. Financial Highlights Page 20Rental structure
% of occupied area
40
Total 38
Portfolio CentralPlaza 42 CentralPlaza
Rama 2 Rama 3
60 58
62
Fixed Rent % of Tenant Sales
35 34 Central
CentralPlaza Pinklao CentralPlaza Festival
48
Pinklao Tower A&B Chiangmai Pattaya 52
Airport Beach
65 66
100
Note: Information as of 31 December 2018
Prepared by Investor Relations, CPN REIT Management Co., Ltd. Financial Highlights Page 21Balance Sheet
CPNREIT
Unit: Baht Million
31 Dec 17 31 Mar 18 30 Jun 18 30 Sep 18 31 Dec 18
Investments in properties at fair value 44,310 44,301 44,675 44,677 44,750
CentralPlaza Rama 2 7,186 6,997 6,997 6,900 6,962
CentralPlaza Rama 3 9,179 10,151 10,525 10,662 10,698
CentralPlaza Pinklao 5,543 5,778 5,778 5,721 5,678
CentralPlaza Chiangmai Airport 10,494 10,653 10,653 10,658 10,658
CentralFestival Pattaya Beach 8,154 7,272 7,272 7,283 7,289
Hilton Pattaya 3,754 3,450 3,450 3,453 3,465
Investment in securities at fair value 990 992 994 997 999
Cash on hand and at banks 1,052 482 510 610 342
Other assets 703 729 733 751 759
Total assets 47,056 46,504 46,913 47,034 46,850
Account payable and accrued expenses 1,466 657 592 644 528
Deposits received from customers 1,424 1,461 1,489 1,529 1,544
Unearned lease and service income 51 62 84 73 53
Borrowing 14,454 14,456 14,459 4,466 4,469
Debentures - - - 10,030 10,030
Other liabilities 198 212 219 224 231
Total liabilities 17,593 16,848 16,842 16,966 16,855
Net assets 29,462 29,656 30,071 30,068 29,995
Capital received from unitholders 29,653 29,016 29,016 29,016 29,016
Equalisation account 216 216 216 216 216
Retained earning (deficit) (407) 423 839 835 763
NAV per unit (in Baht) 13.3164 13.4040 13.5917 13.5902 13.5573
Prepared by Investor Relations, CPN REIT Management Co., Ltd. Financial Highlightss Page 22Statement of income
CPNREIT CPNRF Change Change CPNREIT CPNRF Change
Unit: Baht Million FY2018 FY2017/1 29 Nov - 1 Jan - 4Q18 3Q18 4Q17/2 29 Nov - 1 Oct -
YoY QoQ YoY
31 Dec 4 Dec 31 Dec 4 Dec
Property income 4,923 3,522 378 3,144 40% 1,257 1,253 0.3% 935 378 558 34%
Rental and service income 4,739 3,410 369 3,041 39% 1,214 1,212 0.2% 909 369 539 34%
Other income 184 112 8 103 65% 42 41 3.2% 26 8 18 60%
Interest income 4 4 1 4 (5%) 1 1 (9.1%) 1 1 1 (37%)
Total income 4,927 3,526 378 3,148 40% 1,258 1,254 0.3% 937 378 558 34%
Property expenses 772 652 109 543 18% 205 184 11.4% 209 109 100 (2%)
Cost of rental and service 141 142 17 125 (0%) 38 36 5.0% 43 17 26 (12%)
Selling and administrative expenses 117 83 23 60 41% 39 26 52.2% 31 23 8 25%
Property management fee 513 427 69 358 20% 129 123 4.7% 135 69 66 (5%)
Finance costs 401 95 30 65 322% 121 104 15.5% 42 30 12 186%
Other management fees and expenses 177 55 16 39 220% 45 45 (0.4%) 23 16 7 93%
Total expense 1,350 802 155 647 68% 371 334 11.1% 274 155 120 35%
Net investment income 3,578 2,724 224 2,500 31% 886 920 (3.6%) 662 224 439 34%
Net realised gain (loss) from changes in
investment value (3) (25) (25) 2,138 87% (0) (1) 98.6% (25) (25) n.a. n.a.
Net unrealised gain (loss) from changes in
investment value 252 (606) (606) (3,884) 142% (40) (25) (59.0%) (606) (606) n.a. n.a.
Net increase (decrease) in net assets from
3,827 2,093 (407) 754 83% 847 894 (5.2%) 31 (407) n.a. n.a.
operation
/1&/2
Financial Statements from 29 November (date of incorporation) to 31 December 2017 and Independent Auditor’s Report of CPNREIT and Financial Statements from 1 January to
4 December 2017 and Financial Statements for the three-month and nine-month periods ended 30 September 2017 of CPNRF
Prepared by Investor Relations, CPN REIT Management Co., Ltd. Financial Highlights Page 23Distribution Summary
Distribution Period 1 October 2018 – 31 December 2018
Distribution Per Unit THB 0.4163
XD 8 March 2019
Book Closing Date 12 March 2019
Payment Date 25 March 2019
Bt/Unit Distribution of returns
0.4200 0.4157 0.4163
0.4100 0.4055
0.4000
0.3900
0.3795
0.3800
0.3700
0.3600
1Q 2Q 3Q 4Q
Prepared by Investor Relations, CPN REIT Management Co., Ltd. Financial Highlights Page 24End of presentation
For more information, please contact:
Investor Relations
CPN Retail Growth Leasehold REIT (CPNREIT)
CPN REIT Management Company Limited
31st Fl, the Offices at CentralWorld
999-9 Rama I Rd., Patumwan District
Bangkok 10330
@ ir_cpnreit@cpn.co.th
Thailand
+662 667 5555 ext. 1660 http://www.cpnreit.com
Prepared by Investor Relations, CPN REIT Management Co., Ltd. Q&A Page 25Appendices
Page 26CPNREIT transparent management structure
Investment in CPNREIT Distribution
REIT Manager Management Trustee
Fee Trustee Fee
Management
Represents
Services
Interest of
Property Unitholders
Management
Services Net Property
Invest in Assets
Income
Property Manager
Property
Management
Fee Hotel Manager
HILTON PATTAYA
Subleases Rental Income
CPN Pattaya Hotel Co., Ltd.
Prepared by Investor Relations, CPN REIT Management Co., Ltd. Appendices Page 27Diversified unitholder structure
Strong support from retail and institutional
unitholders, as well as from Central Pattana
PCL (CPN) as the Sponsor
Unitholders Unit: % of total units outstanding
Foreign
Trustee
26.7 10.1
2,212.48
million units
REIT Manager outstanding 32.1 Retail
Local 31.2
Institutions
5 Shopping
Hilton Hotel
Centers & 2
Pattaya Manager
Office Buildings Market Capitalization (THB mn) 60,290
Unit Price (THB/share) 27.25
Source: SETSMART as of March 1, 2019
TSD booking record as of December 28, 2018
Property CPN Pattaya
Manager Hotel Co., Ltd. Experienced SCB Asset Management Co., Ltd.
Trustee managed CPNRF for nearly 10 years
and is one of the largest, most
experienced and accomplished asset
management companies in Thailand.
Prepared by Investor Relations, CPN REIT Management Co., Ltd. Appendice Page 28Strong relationship with industry leaders
REIT and its underlying assets are managed
by professional leaders in the industry
Experienced
Unitholders REIT manager
High caliber professionals
Trustee with extensive experience
in retail asset investment
and management
Regionally acclaimed
REIT Manager property manager
Over 30 years of experience
and one of Southeast Asia’s
largest property developer
5 Shopping and manager for 32 world
Hilton Hotel
Centers & 2 class mixed-use development
Pattaya Manager projects in Thailand
Office Buildings
Sublease World-class hotel
Agreement
manager
Property CPN Pattaya Nearly a century of hotel
operatorship and one of the
Manager Hotel Co., Ltd. leading global hospitality
brands
Prepared by Investor Relations, CPN REIT Management Co., Ltd. Appendice Page 29Asset information
Rama 2 Rama 3 Pinklao Chiangmai Pattaya Hilton
Airport Beach Pattaya
Location Bangkok Bangkok Bangkok Chiangmai Pattaya, Pattaya,
Chonburi Chonburi
Gross Floor Area 251,182 169,740 188,345 122,991 70,095 49,686
incl. Parking
(sqm)
Net Leasable 82,590 37,122 61,905 37,803 29,404 302 rooms
Area (sqm)
Land Area 53-2-38.4 12-2-44.6 24-2-84 32-3-56.85 - -
(rai-ngan-sqw)
Land Tenure Leasehold Leasehold Leasehold Leasehold - -
tenure of 20 tenure of tenure of tenure of 15
years ending 30+30+30 approximately years ending
15 Aug 2025 years ending 15 years ending 22 Apr 2044
15 Aug 2095 31 Dec 2024
Building & Utility Leasehold • Building – Leasehold Leasehold Leasehold Leasehold
Systems tenure of 20 Leasehold tenure of tenure of 15 tenure of tenure of
years ending same tenure approximately years ending approximately approximately
15 Aug 2025 as land 15 years ending 22 Apr 2044 20 years ending 20 years ending
• Utility Systems 31 Dec 2024 31 Aug 2037 31 August 2037
– Ownership
Movable Assets Ownership Ownership Ownership Ownership Ownership Ownership
Valuation 6,962 10,698 5,678 10,658 7,289 3,465
As at 31
December 2018
(THB million)
Note: Fair value as of 31 December 2018
Prepared by Investor Relations, CPN REIT Management Co., Ltd. Appendices Page 30You can also read
