Proposed Acquisition of Ascendas-Singbridge Briefing

Morning ladies and gentlemen great to see so many of you here Happy New Year. My name is Grace Chen. I'm the head of investor relations for capital land We're starting 2019 on a very exciting note Many of you would agree with that and we can't wait to take you through the details of this transaction So bringing together a sanders sink bridge and capital land will create the largest diversified real estate group in Asia In our opinion, it is a transaction that will set us up for a transformational growth. This is Capital Land 3.0. So in a few minutes' time, I will invite our President and Group CEO, Mr. Li Chi-kun, to

take us through the rationale of this transaction and where it would take Capital Land. Our Group CFO, Mr. Andrew Lim, will then share in greater detail about the portfolio. We will have a Q&A session after both their presentations, which will be joined by the rest of our senior management team. If you're joining us through a webcast, please feel free to send us your questions by clicking the post question tab. And without further ado, I would like to invite Chikun, our president and group CEO, to take the stage. Chikun, please. Hi. Good morning. Thank you for coming at such a short notice. Obviously, we can't get everybody to inform you any earlier than we could or we wanted.

Today's announcement, it marks a very important milestone for Capitoland's transformation journey. We have, of course, been discussing and deliberating on this deal for some time. glad that we managed to reach a landing over the weekend after a very intensive few months of structuring the deal for one that would make sense for both for CapitalN for the shareholders, for the company, and to create a more exciting future. Strategically, this deal makes sense for CapitalN for the following few reasons. and foremost, it adds interesting asset classes, especially in the new economy sectors driven

by technology, e-commerce growth in areas relating to logistics, to business parks, to data center, to industrial. And we'll add on to the portfolio of asset classes that Capital N is traditionally strong at residential shopping mall offices. I think with the whole range of asset classes it gives us more choice to deploy capital. We can decide on how to deploy capital on which asset classes depending on the property cycle. The second strategic rationale is that it really this particular combination with

with a Sander Singh Bridge give us a more broader geographical spread. I mean, if you look at Capitaland today, even though we are global, our exposure is mainly in Singapore and China. This particular transaction will give us meaningful skill in key growth markets like India, which brings a lot of promise and excitement. And the sectors that Sander Singh Bridge is in, in the industrial and logistics and business markets, that's growing and doing very, very well, accutals to the team, and then Europe, and also in the US. And again, if you look at it from capitalized perspective, it gives us bigger options to deploy capital more globally

for us to decide how to deploy capital between the developed markets and the emerging markets. And third point is that it also helps to add business to our core markets, especially in Singapore and in China. There's a lot of synergy in the business capabilities in these two areas where we can unlock both in terms of capabilities, in terms of asset classes. And I think that that will continue to help to drive the income for the group. And the fourth, and I would say the one of the most important reasons behind this is you actually create the largest, I would say the fund manager in Asia, 116 billion AUM.

And now if you put us on a global scale, we will rank about top 10. With the scale, the market options globally, the different range of asset classes, it really, position capital land strongly to compete on a global scale in the fund management space. And I think this brings tremendous promise to capital land. Okay so so that's roughly the the broad rationale for the deal. I just go a bit more into the financials. So the whole deal it's about 11 billion okay. Six billion is the consideration out of which three billion dollar is debt funded

three billion dollar is equity that is essentially paid to the vendor. The consideration mix is done after you know extensive evaluation of our balance sheet it is a debt that we are taking on is something that we are comfortable. gearing post transaction will be slightly above 0.7 and we are comfortable with that and still give us capacity to invest to especially to give us a growth capital to support the various activities that we are trying to do. Of course if you couple that with the very disciplined and active recycling activities that the company has been doing over the last few years,

I think that will continue to help to drive our returns on a sustainable basis above our cost of equity in terms of the 50% equity That's being issued at the premium to spot About seven over percent if you look at what is one month or three month view up. It's more than 11 percent That's the level of our shares and the whole deal is constructed such that we are not expecting any shareholder to cough up any capital. And the company does not expect that there will be any changes to the dividend policy,

Meaning that the dividends that the other shareholders will not be affected by this transaction. Okay, so that's roughly the financial construct. Of course, because we are issuing shares at below NAV, there's some level of dilution. But we looked at the entire portfolio that we are acquiring, $6 billion that we are paying. If you break down the $6 billion, really it's the assets which we are paying at book value, okay, book value, meaning whether it's the assets on the development pipeline and also the assets that are operational, we are paying book value. The listed REIT units, we are paying market price, but we pay a multiple in terms of

the fund management platform. And the multiples that we pay for the platform will essentially give us that skill in terms of the fund management platform to really become a global player in this space, which I think will really help to position the company for the future. I understand that some of the investors may be concerned that after this transaction, capital land will be even more complex. I would like to maybe present you in a different perspective. If you look at capital land, really there are three key earnings drivers. One is development, one is the fund management type of the business, and the third limb is