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

really about lodging, which is the escorts out of business. So if you look at the development business, we have articulated that we want to focus in terms of development. We have been buying up residential pipeline in Singapore in a very disciplined manner. replenishing and this particular transaction would add to the pipeline, development pipeline in our core markets and also markets in India. So that's one stream of income. In terms of the fund management side of the business, Little Andrew will give you a bit more details. It will essentially increase our fee income by 40% from the fund management and the range of the different assets again the different market will give you possibilities to

create new funds, to form new REITs and to drive earnings and ROE for the company. The third limb of the business is really about the escut I mentioned earlier. This business is very global in nature, one that we can scale and we are going to organize it quite independently and at some point in time if it goes to a certain level of scale is not ready we may consider liquidity options even the possibility of spinning it off by still too early we are not making any decision but this is a possible consideration down the road depending on how the growth how we envisage the growth of the of the of the lodging platform so that's really a

a broad summary of what I wanted to explain about the transaction, but as in all major transactions of this nature, the success of the transaction would really be about integration. Are we able to integrate the business together? Are we able to integrate the people, the culture, so that we can really unlock the synergy, the values underlying the portfolio and to continue to drive good returns on a sustainable basis for the combined entity. We are quite confident. I mean we have spent quite a lot of time with the management team on the Ascender SimBridge site. I really want to take this chance to really command

Miguel and his team for running a sender sim bridge very well, highly profitable, and build new capabilities in new asset classes, new geographies and that's why I'm confident that if we were to put the two themes together, the two sets of portfolio capabilities will position capital N for a much stronger future. So that's all I have. I'll leave Andrew to give you all the details behind the deal and then before we take the Q&A. Thank you. Thanks, Shikun. And good morning

everyone. Thanks for coming. And the cause of the last couple of years, I think many of you who I've met on investor road shows and our deal road, non-deal road shows, often complain that there's nothing to write about for for Capital Land. Give us a story. So we hope with this announcement today we have done so. So thank you for coming in the next couple of, in the next half an hour or so. I'll walk you through two elements of the transaction. One, what we see in a sender's sink bridge that really attracts us to this business, this platform. And secondly, on the other side of the coin, what it will do to Capital Land and what will Capital Land 3.0 look

like. So this slide to speak to some of Chikun's points or quantify some of Chikun's points talks about how we want to transform capital land into the next phase of growth and the key word here is growth. I think in order to do that we've identified a couple of mega trends that we think are very important and these are things like urbanization e-commerce and so on and so forth. So we want we We wanted to identify a sector or a business that would allow us to pivot into and capture these mega trends because this is what is going to drive growth going forward in real

estate. Going to three o'clock, you all are very aware of our core markets, our growth markets. So, as part of any consideration on acquiring or combining with a new business, we wanted to ensure that we are able to deepen and strengthen our presence in both our core markets and our growth markets. And I'll give you a sense of how we've been able to do that or will be able to do that. Going to 9 o'clock, this is very important from a returns and a growth perspective. Any combination, any consideration for a new business acquisition must take into account our ability to grow profitably and also our ability to grow return on equity to our

shareholders. You've also talked about an importance of recurring income. And again, as we will demonstrate, we believe that the Sander Singh Bridge business brings within a very stable, very secure source of recurring income that will combine into Capital Land's own stability and recurring income stream. We've also reorganized the business, as Chikun talked about, and I'll spend a bit of time on that. But none of these things happen without the talent that must come with the business. And so, combining the skills and the complementarity of what Asender Sync Bridge brings into the Capital Land platform, I think gives us the ability to attract the best in class talent

as we take Capital Land into 3.0. So let's talk about the first bit, which is why Asender Sync Bridge? If you pull out to 10,000 feet, this gives you a snapshot of what the ASB business looks like. And I want to give you a sense of three things that we find very interesting to us. Number one is obviously the fund management platform. So you see three listed REITs. One of them is the largest in Singapore. The other one is the only listed REIT that gives you exposure into the Indian business space market. And obviously we have a very strong Ascenders Hospitality Trust platform that complements what Ascot Residence Trust

is able to offer to investors as well. Number two, if you focus on the right hand side the chart. You see that the bulk of the sender's platform is in the new economy space, allowing us to pivot into these mega trends that I spoke about. And number three, if you focus on the left hand side, where you see their business is concentrated from a geographic standpoint, you see again that they have the bulk of their business in Capital Lens core markets, which allows us to dovetail our platform onto theirs. They They bring with them a very exciting new growth market in India, a market that you will know

we have had trouble unlocking before, despite some very strong attempts. And they have a very strong rest of the world platform, namely in the developed markets in the US, as well as the UK and Australia. So pull up and you see again three very strong attributes that I will again spend a bit more time touching on. Number one, ascenders is Asia's leading business space and urbanization solutions provider. Again, the exposure to the mega trends that I talked about are one of the key attributes. If you drill down into the AUM that underpins ascenders, you'll see that more than 80% of the AUM is in business spaces.

More than 50% of the AUM are in the very sectors that are exposed to the new economy, business parks, logistics, data centers. So you see examples of these assets across the Sanders-Simbridge platform. Logistics facilities in India, campus style business parks in Science Park, Singapore, suburban offices in the US. Equally important, we are looking at a full value chain in these new economy sectors. A developer, owner, operator and fund manager with the Sanders-Reed and the Sanders-India Trust as the off-take platforms. This model should look very familiar to those of you who are familiar with capital land, because it's exactly what we seek to do in our existing sectors of retail, office, and

hospitality or lodging. So this brings a high degree of complementarity and confidence that we are combining with a platform in the new economy that is very similar to our own. Now a key capability that ASB possesses is that they are a leading urbanization solutions provider. Again, this goes back to a mega trend that we have all read about, this urbanization globally. You will know that the urbanization platform in the center of Singbridge combines the Singbridge business that was merged into Asandas back in 2015. They now refer to this as the Sustainable Urban Development Division, or SUD for short.

Now, there are very good examples of such projects. We have the Guangzhou Knowledge City. We have the Tech Park in Gagawan, India, and we have Science Park here in Singapore. What is very attractive to us is that we are acquiring a very large land bank of more than 18 million square feet of developable land bank in our coal markets of Singapore and China. This is a profitable business. Singbridge business or the SUD business contributed 165 million to the ASB profit as of the last 12 months ending September 2018. So it is a large scale and profitable platform. And finally, we have invested in commercially driven projects

or ASB has rather, with strong local partners. So this is a story about acquiring embedded NAV growth. These are projects that are invested in at the early stage where you acquire land at good prices, you develop using your core skillset, You harvest for sale or for operations, and you do that over and over again. These are large scale, they've demonstrated an ability to do this profitably. And this is a skill set that we are very excited about. I won't spend too much time on this slide because I think this one speaks for itself. 66% of the AUM in the Sander Sing Bridge is in fund management.

We will inherit three listed platforms and seven private funds to complement our existing read and fund business. Second point is on the financial strength of a Sander's Sing Bridge. Here we've set out a few of these key metrics to show you that on a trajectory level, particularly in Patmee and in ROE and in AUM, their trajectory very much resembles Capital Land's trajectory. If you look at ROE at 10.2%, again, this is something that we are striving towards. So we think that by combining the two platforms, the two businesses, we dovetail two very similar businesses in terms of the trajectory of profitability and ROE growth.

You get growth of income, as you can see from this slide, but equally important, you require quality of income. And I'll touch on that in a little while. The third point I'd like to make about the sender's same bridge is that it's highly complementary to capital land. In this slide, what we have done is we've looked the key Ascenders businesses and we've grouped them into existing asset classes and new asset classes. So in the existing asset classes they complement our presence in existing markets, core CBD office in Singapore and China. They complement our existing US presence through the suburban office portfolio

and they have a global hospitality platform through Ascenders Hospitality Trust. They bring a new core CBD office presence into Korea which is a market that we have, we are currently not in. And that's the left hand side. Turn to the right hand side. These are new asset classes, namely logistics, business parks, industrials, and new economy businesses. Throughout our core and growth markets and adding that new India market for us, you see the complementarity of what Ascender's Singbridge does to the CL platform. It deepens our footprint in our core markets by adding 21% AUM, and it adds an attractive new economy sector by adding 13% AUM

on a pro forma basis. The commercial platform is another way that we believe Ascender Singbridge is highly complementary. Currently, Capital Land is present in seven countries, mainly in the CBD core. What Ascender brings is additional three countries and a diversification into the suburban office market. So this will grow our commercial exposure by 19% on an AUM basis. In addition to deepening the commercial platform, we allow ourselves to diversify into complementary sub-sectors as I mentioned earlier. Here we are at CBD office. Ascenders brings us presence in suburban and business parks.

The other level of complementarity is in the platforms. We have an office of the future platform that we are growing very enthusiastically at Capital Land, Ascenders has a similar platform. They call them the flexible workplace solutions provider. This will bring us that capability to develop topics like co-working, flexible workspace into the entire office ecosystem. So that is, I think, in a nutshell, hopefully summarizes why we believe Ascenders Singbridge is the right fit for Capital Land. The next section summarizes what Capital Land 3.0 will look like.

Here's that same slide again from before. And now we pull again, we pull back out and we look at the overlay and the transposition of the Ascente Sing Bridge business in green and Capital Land's existing business in blue. Now, again, what I want to leave with you is I believe that this adds tremendous balance and diversification to Capital Land. I'll give you some examples. If you look at the sector mix, previously retail comprised about 36% of Capital Land's AUM. That trims down to 32%. Lodging and commercial remain key business pillars, 20%, 26%, respectively. They slightly come down. And we have an exciting new vertical in logistics and industrial comprising 13% of AUM.

on a sector basis. If you look at a country basis, what has happened is that our Singapore exposure has increased from 30 to 33 percent by AUM basis, and our China exposure trims down from 48 to 41 percent. So despite adding a new India business, 3 percent, the DMEM makes, again, on an AUM basis, I think the balance improves. Before we were 42, 58 on an AUM basis, pro forma we are 4852, demonstrating better EMDM balance. Okay, so again I want to take this away, I want you to take away that Asia's largest diversified group is not just a sexy title. Okay, we truly believe we get better balance and diversification both on a sector basis

and a country basis from this combination. There'll be four subsections here and each of these are directly linked to Capital 3.0 and how we want to pivot into that model. The first of these is the potential to accelerate growth in ROE and NAV. We see multiple growth drivers for Capital Land going forward. Starting from left to right, these are familiar to you. We've talked about our fund management platform. We are adding, we will have $67 billion in AUM and we will grow our fees revenue about 40% to $337 million on a pro forma basis with underpinned by 31 wheat and private funds.

This gives you growth in AUM and recurring income. Secondly, development pipeline, again very important part of our business, is our trading business. We estimate about $11.5 billion in development book value to allow us to grow the development pipeline in our key markets where we have a development business. Number three, our investment properties and our operating platforms. We will have 44.9 billion of investment properties across all of our sectors. And this is excluding what AIT and A-I-T have because we don't, as Senator Sengbij does not consolidate them. This gives you growth in recurring income from our IP and gives us lots of options

when we look at how we are going to reconstitute or continue to reconstitute the portfolio. And last but certainly not least, the new economy growth sectors that we will have as a result of the combination with Asenders incrementally adds $12.4 billion in AUM, which gives us growth in an exciting new economy vertical. So we add up these four growth drivers. We are very, very excited by the potential to drive ROE and NAV going forward in 3.0. The next two slides talks you through the core markets as well as the growth markets. In our core market of Singapore, our existing presence you can see is centered around the

central core as well as the CBD in our retail as well as our office portfolio. What Ascender Singbridge brings is very good coverage of the east, the north and the west principally through A REIT's ownership of logistics and business park assets. We add over 200% in GFA, over about 30% in land bank for development as well as rejuvenation, and 40% in AUM growth. In China, we are focused on our five city clusters, and that will not change because the Sender Singbrij's China exposure is similarly concentrated in these five clusters. So from a core market perspective, which is something that's very important to us, what

Ascender Sing Bridge brings is an ability to deepen the presence in both of these markets. We have identified three growth markets and regions to complement our core market presence. Number one is very exciting new growth market of India. Obviously this is all Ascenders. They have a presence that is concentrated in the business parks, but they have already started to grow their logistics business or logistics presence. And that is an area where we believe has tremendous growth because in India, Ascenders is a first mover and they have a great advantage. As we had mentioned earlier, they also have the benefit of a full chain

business platform that starts from development all the way down to AIT. And so they have an ability to recycle capital from development to monetizing mature and operating assets. Vietnam will remain a key business for us, a key growth market. We have already an existing presence across our sectors. What we are able to do now is to bolt on that key new sector of logistics and business parks. Asenders has one in Saigon. And finally, in the US and Europe, where we have a strong developed markets exposure in investment properties. The senders brings with it a 1 billion suburban office portfolio to complement our multi-family portfolio there.

They also have through a good presence in the UK through the business parks. So again, I think I want to leave with you the core market deepening as well as an attractive exposure through our growth markets of India, Vietnam, and the US Europe developed market axis. As Chikun mentioned, Capital Land will be Asia's largest real estate investment manager. We will meet our target of 100 billion AUM that we set for ourselves, hopefully substantially ahead of time. We will leapfrog from our current position, number 14 to number 9, which will put us in league with some very established fund manager, investment manager names, and allow us to compete

globally for blue chip capital partners and funding. and fund management fees will grow about 40% pro forma. We will have the honor of sponsoring the four largest SREEDs in these key sectors of hospitality, commercial, retail, and logistics. And we will be able to call on eight REEDs and 23 private funds as off-tech vehicles as we search for capital partners. So here we have a growth of recurring income and scale to grow our fund management business. I mentioned earlier that with growth in income equally important is to retain the quality

of that income. And what we'd like to set out for you here is that on a combined basis, this is our Patmee as of LTM 2018 September, we combine Asender, Sing, Bridges, Patmee, we have about 2 billion in Patmee. But there is no degradation in operating Patmee and there is no degradation in cash Patmee. We are able to retain the high-quality recurring income nature of our business. This is very important because it allows us to sustain our dividend policy and it allows us to think and implement a discipline deleveraging strategy as we get our gearing back down to a sustainable level. We've organized ourselves slightly differently and again

Chikun touched on this to better allow us to pivot into 3.0. Now the reason we have organized Singapore and international and China along geographical terms is that if you look at the sectors that these underpin residential, retail and commercial they are very tightly entwined requiring local presence and on the ground knowledge. If you look at our Raffles City product, that is a great example of why these things have to be tightly meshed together. And so we have organized these two markets, sorry, these two business units by market. And Chikun talked about lodging being high growth and a global business for us. So we've wanted to keep them independent and able to drive this growth semi-autonomously.

Similarly, the logistics, industrials and business park sector, because of its unique nature, will fold in under a separate BU for capital land. And last but not least, a wish that many of you have expressed, we will begin to separately report our asset management business fee income. So underpinning all of this are centers of excellence. We talked about what Ascender Sync Bridge brings in terms of digital platforms, Office of the Future, and data analytics. Okay, we will obviously continue to focus and have centers of excellence for our existing verticals, retail and lodging.

The focus on future proofing and business innovation remains undiminished. So again, some examples here of complementary platforms that Ascender brings, both in apps as well as office of the future flexible workspace solutions. These were dovetail very, very neatly onto the Capital Land platform. And again, perhaps the most important and hardest to quantify is the human capital. We want to be able to develop the best in class talent pool, which will be a function of mobility, culture, and talent development. We want Capital Land to remain an employee of choice in Singapore and globally.

So I think I'm a bit too eager to finish. Here's some pro forma financial highlights. So what we've done here is we have updated the numbers on a pro forma basis to 30th September for both businesses. Give you better flavor of what the pro forma combination will do financially. As Chikun mentioned, this is immediately EPS-accretive, immediately ROE-accretive, two metrics that are very important to us and our shareholders. There will be a slight NAV dilution, which is a mathematical output, but we believe, and I hope I have demonstrated to you, that this is a business that holds tremendous potential for NAV growth. And so we would ask shareholders to come with us on moderate NAV dilution as we drive growth

through the platforms. These numbers will change when the circular comes out because we will be updating financials by three months or so. But I think it's important to remember directionally, we don't expect these numbers to move. Our credit metrics, whilst higher, I believe remain robust. Net debt to equity will rise from 0.51 as of 30th of September, 2.72. This is further updated for investments that we have made in the fourth quarter. So you'll see in the footnote, we have added the debt in. for some of these assets, including the multifamily portfolio, our investment in Pearl Bank, the

mixed development in the same kind, and H-55 in Shanghai, which was done through one of our funds. So this proforma debt-to-equity number takes into account what we, the large investments that we made in Q4 plus the acquisition of a sender-sing bridge combination, I should say. Net debt to equity again rises, but we believe that this is in line with some of our peers and remains robust. If I look at the maturity profile, so what we have done here is we just added the acquisition debt of 3 billion plus. Now this we will look to term out so that we can deliver similarly stable and robust debt towers across the platform.

The target is such that none of these towers should be over 20%. Okay, so that will be a focus for Capital Land and the Treasury team upon closing of the transaction. We have assumed for now that the 3 billion debt is taken on in 2020. And last but not least, I think we should acknowledge that this drives our gearing to 0.72. Okay, so that must be in place, a very focused deleveraging plan. And here are some of the details I can share with you now. We've talked before about what is the sustainable debt to equity ratio on a run rate basis, and I think I've shared it as 0.64.

So as an immediate plan in the short term, I think step one is to take Capital N back down to that sustainable level of 0.64. We estimate that this implies that we have to take a net delivering of about $3 billion. If you think about where this can come from, I think there are sort of three sources that you can rely on in the next 18 to 24 months. Number one is the pace of capital recycling. Last year, Capital Land recycled north of $4 billion on gross value terms. Ascenders Singbridge also have their own recycling program. If you bring both of these recycling programs together, that gets you in the neighbourhood

of $4 billion to $5 billion on a pro forma basis and our target remains to drive at least $3 billion annually. That's number one. Number two is operating income growth. We combined with the Sanders-Singh Bridge have about $2 billion in Patmee. If I pay out a sustainable dividend of about $600 million based on the last dividend, we have $1.2 billion to $1.4 billion of Patmee that will grow the equity base and give us that ability to manage our debt to equity. And last but not least, we have a number of securitizable platforms as well as our private equity funds with committed but undrawn capital that will allow us to tap third party capital

in the next 18 to 24 months. So when you combine these three buttons that we can push, I think we are very confident that we can get back down to 0.64 by the end of 2020. That remains our target. Okay, I think it remains for me to just give you a quick summary of the post-combination steps. The most important, I think, in the short term is that we will create an integration committee comprising members of both companies. It's equally important to make sure that the culture, the skills, and the capabilities come across and mesh seamlessly with what we have in capital land. None of the pro-former financials assume any synergies and I'm sure there will be a question that some of you will ask

We have not assumed any cost synergies because we believe that this combination is about additive revenue growth and additive profit growth and so in the months ahead we will Identify and see how the two businesses mesh together to allow us to drive ROE drive NAV and drive profitability So I think I'll just end on a note that says that 3.0 is something that we are very, very excited about. It involves the ability to combine effectively with a world-class platform, particularly in new economies. It allows us to bring in best-in-class management to retain that talent. It will allow us the ability to tap on blue chip capital providers through an enlarged

fund management platform. And we will continue to develop very, very strong local partnerships. Thank you very much. Okay. Thank you, Andrew. I would now like to invite the rest of our senior management bench to join us on stage, and we will start the Q&A session shortly. I would like to introduce the rest of our senior management team who have just joined

us. So firstly, starting from the right, we have Mr. Tan-Seng Chai, our group chief people officer and Mr. Lucas Lo, president China and investment management and we have Mr. Li Chi Kun and Mr. Andrew Lim and followed by Mr. Jason Liao, president Asian retail and lastly we have Mr. Wun Kai-Ming beside Mr. Jason Liao and if you would like to ask the questions please raise your hands and my colleagues on Needers After All will pass you the microphone. And for the benefit of everyone in this audience, I would like for you to mention your name and your company. And for people joining us through a live webcast,

please join us by sending us your questions by clicking the post question tab. And with that, I would like to open the floor for the first question. Please, Brendan. Hi, Brendan from Citi. Just a couple of questions on the evaluation portion. Can you share with us the valuation portion? Yeah, can you share with us on the fee multiple that you're paying for the fund management business for ASB? And does it also include payment for the property management platform? Yeah, that's my first question. My second question would be, could you sort of explain to us, aside from the valuation pay for the fund management business,

how did the NAV for ASB grow to $6 billion from the 1.8 billion as of March 18th. Thanks. Hi, Brandon. Welcome back. So the blended multiple that we

factored into for the fund management business is between 15 to 16 times. Blended multiple implies it is for both the FM and the PM business. And your second question around NEV for ASP. So, ASP. Okay. For us, the NAV is constructed through, as you could mention, a number of pillars. So we picked up the IP at 5.3. We valued the IP at 5.3 billion. This is on a total basis before we take out debt. We have book value of development properties of about 2.5 billion. And then we have the stakes in our listed reads which are picked up at market. So if you add those three up and you compute your multiple for your funds management business,

you get to the enterprise value and then you get to that consideration of 6 billion for the equity, for the NAB. Thanks. Can we have the next question? David, please. Good morning. David, I'm from Daiwa. My question is regarding the process of deleveraging 3 billion from your balance sheet to get to your target gearing. If you deleverage, wouldn't that be EPS dilutive? And in two to three years, how confident are you that your ROE would actually improve after

the deleveraging? Yeah, it's a good question and one that I think we will be very focused on. So it's, as I mentioned, it is reasonable to acknowledge that we have made a very sizable acquisition. As a result of that, we've had to increase our gearing as part of that acquisition. I think it's worth mentioning that we put a lot of thought into the capital structure of the acquisition. We will get, I'm sure, lots of questions around could you have not issued more shares, could you have not issued less shares, and so on and so forth. So we have factored all of this into account, and we believe that this capital structure,

which involves $3 billion of debt, $3 billion of shares, is a well-balanced one and allows us the ability to deliver, but at the same time does not constrict us in terms of continuing to grow the business going forward. Okay, so that's very, very important. Will we make another $6 billion acquisition in the next 12 months? I doubt it. But at the same time, we are very focused that this must not hamstring us, must not tie our hands in our ability to continue to grow the business. I also talked a lot about the trajectory of the both businesses pre-combination. Both of us are on sort of high single double digit trajectories in ROE terms.

So we are not subsidizing the acquisition of ASB. ASB is not helping us out either on this metric. We think by dovetailing the two who are on similar trajectories and you allow the synergies, the revenue synergies that we believe will take place, this gives us an excellent shot of maintaining that ROE trajectory whilst we deliver. I hope that answers your question. Good morning. This is Louis from Credit Suisse here. A few questions. I think firstly, I think Andrew, I just want you to mention to C&G, so I just wanted to to quantify some of these revenue and cost synergies targets that you might have over

the next two years. In terms of cost synergies, I think Andrew alluded to earlier, the whole pro forma was done without taking into consideration any cost synergies because what we are really looking at its combining with a Sanderson Bridge, looking at the complementary skill sets, portfolio capabilities. So that's why we did not factor that as a consideration for this particular transaction. If you look at their business, a large part of it is in the business space related. In terms of customer

synergies for people that look for office space, whether it's in the office or in business park there are tremendous synergies to be to be read especially from the if you look at it from the corporate customers point of view for customers they are looking for growth especially in Asia in India in China in Vietnam Singapore be in the business park space be in the office space I believe the the two companies would offer much more interesting option to many of the corporate tenants. Thank you. Another question which is somewhat related to the proposed spin-off at some point. I think you already have quite a sizeable lodging business. So what other kind of

yardstick should we look at before you consider it a good time for you to undertake this spin-off and at the same time you have quite a number of various listed REITs. So given the much larger and large group now, how should we think about the scale of the REITs? Could we see some restructuring there so that they may become a more efficient off-take vehicle for your group? All good questions. Lodging, I mentioned earlier, is an interesting exciting growth platform. If you look at it, today it's 100,000 units or just shy of that. If you compare against the big players around the world, I mean they are in the range of

between 500,000 to a million keys. So there's a lot more work to be done to reach that global scale and to build that level of a global competitiveness. So that's something that the team definitely needs to work on. In terms of REITs, yes, we have a lot more REITs, a lot more possibilities with regards to how we will rationalize, if any, is something that we will look at on an ongoing basis. I think the immediate question that will probably come to most of your mind would be between the Escort Residence Trust and the Ascenders Hospitality Trust where obviously there are

overlapping mandates. Of course, this is something that we will review and we will look at options that will make sense, the best sense to the shareholders. Thank you. Wilson. Hi, good morning. It's Wilson from Morgan Stanley. I'll just follow up on that. So So in the near term, how would you look to manage the potential conflict of interest across the hospitality mandates within the read space? You say you look at your review server options, what kind of options would be, who come under that review. Secondly, would be on your ROE and cost of equity. So there's this target to maintain that the ROE will be above the cost of equity.

And with this acquisition and the change in capital structure, change in earnings mix, how do you see your cost of equity changing? I think the cost of equity question. So yeah, cost of equity will go up primarily as a mathematical output of higher leverage. So I think we will have to manage that very carefully. It does allow us to be more circumspect in the next 12 to 18 months as we consider new inorganic opportunities. But it doesn't change the focus that we have in terms of driving towards a double digit return on equity. I think that will still allow us to comfortably meet whatever cost of equity increase that

we may temporarily have to deal with as a result of the increased gearing. With regards to the hospitality rates, I mean there are various options available. One of course, I mean I'm just talking about the range of options. could merge, you could go to the shareholders to deconflict the mandate, you could sell off the platform. I mean, these are all range of possibilities that we will review, but I don't think we are at this stage to announce or to look at because at the end of the day, any decision that we were to come to must make sense for the business, must make sense for the shareholders.

Just a few questions from you. First of all, on integration, what do you think would be a likely timeframe in terms of integrating the two companies together, having a firm strategy as to what the combined group would like to do? And also, in terms of unlocking values, what do you see in the near term? And over the longer run, there's a small 4% dilution to NAV. How quickly do you think that can be realized through your unlocking of

values? Integration committee will be formed quite immediately. We'll start to look at integration issues from business, from HR, organization, IT systems, finance systems. The range of work could take a while, but at least on the people and organizations side, I mean, we should be ready to finalize before the completion. In terms of the business integration and systems integration, of course, it could take a while longer depending on how we review the state of readiness between the two companies. With regards to the on the question with regards to NAV dilution,

yes I think there's a slight NAV dilution if you were to issue shares at below NAV. I mean that's a given. We look at the acquisition, the value of what we are paying for. The assets are really acquired at book, whether it's an investment property or even the assets or the land that's undergoing development. We believe that there's a lot of value to be unlocked as long as we stay disciplined in terms of the development, in terms of the recycling. We should be able to unlock value and drive the earnings and NAV growth. I think Joy, we'd love to give you a number, we'd love to give you a timeline, but I have

to leave you with the complementarity of the business. And I hope that was clear. If you look at the core market overlap, the ability to fold SUD into China and Singapore quickly, the complementarity of the commercial platform, I think all of these things are low-hanging fruit that we can seize on quite quickly and figure out where these revenue synergies lie. And then on top of that, you've got the fund management platform, which is additive on day one and gives us more options, as you can see, about new REIT and private equity product, which we have already identified are key cross-drivers for us. So on these three things alone, I think we can – there's enough for us to get excited

about and being able to say that we can get you your ROE and NAV growth in relatively short order. And then of course there's all the second order effects. And just to clarify, the book value is as of March book or the latest book, or they did a reval. The book value, is it March 18 book or is it reval book? The book value is March 18. Yes. And could you share with us how much goodwill you will be recording on your dimension? The goodwill will change, obviously with the final number. So if you look at the book value as of March 18 and the $6 billion consideration, it's

roughly about $800 million as it stands currently. And just last question for me. For your, for all the funds mandate, is there a change of control clause in any of the incentives funds? What do you mean by change of control? So in case of change of fund manager, would there be a false redemption? Oh, no, no, there's none of it. Thank you. A friend from the media, on the left. Joyce from Bloomberg. Hi, Chikun, you mentioned the possibilities of new funds and REITs.

Can we ask what, maybe where they'll come from? And we had understood that as Anderson Bridge was looking to do a US REIT, is that still on track or how do you think about that? I mean new funds and REITs are ongoing business activities that the CapitalN is pursuing as well. We should, I mean, actively be looking at and we hope that we will be able to announce some good news quite soon. Once you put the two entities together, I mentioned about the different markets and different asset classes. I think that creates a lot more optionality for us to even create more funds and REITs.

And specifically with regards to the question on the U.S. REIT portfolio, at this point in time, the deal is not completed, so senders, Simbri, I mean, they are reviewing that, and that's something that, you know, they should review and see if it makes sense, whether it makes sense to the business, whether it makes sense to the shareholder at this particular point in time. Yeah. Can I ask how this deal came to this point?

Is that capital N approached as an assing bridge or is that domestic looking for putting good combination together? How was it given birth? A deal of this size, of course, takes time to cook. Even under the time under Mingyun's leadership, we were always looking at options to how to strategically reposition the company for the future. Obviously we look at many, many options, both organic and inorganic opportunities. of course including a sender's same bridge as a possibility.

So among many other options this was being reviewed and we came to a willing buyer, willing seller kind of outcome at the end of the day. It's a complex deal. So that's why it took some time. Another question, are you getting the rights of the brand name of Asenders? So the REITs will remain the Asenders name? Yes, we will take over the name of Asenders and Singbridge and we want to continue to keep the branding.

especially if the branding is strong in certain market or asset classes. We think that's the best way to run and to organize the combined entity. Hi morning, Jukka Derek from DBS. I'm just wondering whether you look at ASB, right? Are you willing, what if the company decide to go and do a big deal in the next six months? Will your price for the company change? I'm just assuming Ascente's Singapore is also growing, the AUM, they're buying logistics portfolio globally. Say for example, let's say in the next six months, they do buy something big. Is it big in the price video or will your

price change? I think now until then, I mean we if they're gonna do any major acquisitions and if you are going to be the rightful owner, I think that's something that we need to sit down and discuss and it's too premature because at at this point in time, what they are planning for, at this point, they will go according to the budget as they have planned. And if there's anything that we need to do, any of the adjustments, we will do it as per every ordinary cost of a transaction. Okay, I would like to take a couple of questions from our viewers online. So this is from Lee Wilyat from the BNP Paribas.

He asked, how would this acquisition help capital land perform in a much more difficult economic environment for the next few years? This particular transaction is strategic, it's complementary. In fact, it adds a diversified income stream from different asset classes across different geography. And I would say that post this transaction, it actually makes capital end into a more global, more diversified, more balanced in terms of our portfolio, both in geographical terms and both in asset class terms. So in my own sense it will

actually make us more resilient in terms of cash flow and earnings. Okay one more question, this is from Wi-Fi UBS, he asks given the synergies have not been clearly identified what is the rationale of acquiring ascenders at this point of time versus later? Just to clarify, I mean there are obvious synergies we have articulated, whether it's from the asset class point of view, markets, fund management. The point that we wanted to clarify is that we did not compute the returns on the cost savings perspective. We are not expecting to derive cost savings as a result of this particular transaction. It may happen, it

will be a bonus if it happens, but the entire financial pro forma that we have run to make this new work was not the premise on cost savings. Hi, you come from CLSA. Is there any changes to your targets besides the new gearing target that you mentioned? So ROE as well as capital recycling, is there any to that previously sort of soft target that you mentioned. Secondly, on the point of being a very diversified company, I think with this new entity, it's a nightmare to model.

Yes, so many asset classes and across geographies that, how would you streamline into different business segment going forward? So that's to make us easier to understand. On the targets, post this transaction, we are confident that we should be able to still deliver returns above our costs of equity and still work towards a double digit ROE on a sustainable basis. That's our level of confidence, especially given all the complimentary skill sets and asset classes that I believe would add to the portfolio. I attempted earlier to explain, you know, with regards to the potential question of

complexity by saying that if you take a step back to look at capital and really there are three income drivers. One is on the development side of the business, the second side is on the fund management and the third side is on lodging. So even if you look at the different asset classes, whether it is in logistics, whether it's business part, whether it is in multi-family or so and so forth, at the end of the day, all the different asset classes in the different geography is really to help to drive the fund management business. So different asset classes and different geography mainly give us the optionality.

So in terms of helping to construct the model, definitely we'll get Grace and Andrew to work more closely with the analysts, I mean to make life at least easier in the modeling aspect. Prateek. Hi, Prateek from HSBC. I have a couple of questions. The first one is, I know you shared some color on the DM-EM split by assets under management. Could you give us some perspective from an EBITDA sort of standpoint. The second one is on the payment for the funds management

and the property management business, I think you mentioned it's 15 to 16 times. Can I just clarify, is that on net income or at the EBIT or EBITDA level? And lastly, on the gearing that's going to .72 times on net debt to equity, can you give us some sense assuming all the other transactions that are in fourth quarter, what would that number have been on a pro forma basis? And what the impact of this transaction solely is? Sorry, I'm going to have to ask you to repeat some of them. The second answer to your second question is it's on a net income basis. Okay, net income.

What was the third question again? Third question is really, if you were to strip off the fourth quarter 2018 transactions that you had done like Pearl Bank, the US multifamily home, etc., if you were to strip those off, what would have been the gearing increase? It went from 0.51 to 0.72 times, but it's got those transactions in there. Yeah, I'll come back to you on that pro forma number. In terms of the EBITDA mix EM and DM, it's a bit early for us to be able to share that with you. So, I ask you to bear with us. Most of the information here is on an AUM level because the companies are organized differently,

right? There are some that are consolidated, some that are not consolidated. So by trying to give you an EBITDA number, we may actually muddle the water even further. So what we decided to do at this point in time is to focus at the AUM level, and by the time the circular comes out, we will be able to give you more color. But it's a very relevant question. But just to clarify, Andrew, I mean, the current number from what I recall was about 50-50. Would it significantly push up the DM, EBITDA component after this? I don't want to comment, because I honestly don't have a good sense.

I mean, if you look at what ascenders brings and where they are, I think you can sort form of view that the exposure to the DM is substantial. And again, they don't consolidate AIT, they don't consolidate AIT. So that's going to make EBITDA level calculations a bit trickier. So please bear with us. But I think directionally, I think we're quite comfortable that this balance between EM and DM will be retained. Got it. Okay, thanks. The gearing pro forma on just the acquisition is 0.68. Can we pass the mic to our colleague in the front middle section, who is Anita from the Business Times.

Actually looking for a little bit more color on the deal. How long did it take for you to talk and for this to come to fruition? And also curious, was there any single party that started the ball rolling? That's my first question. And my second one is, does the deal have any overlaps that you would much rather not have to deal with but have to take because it all came in a package? Thank you. So, as in, on the first deal, essentially how long did it take? You see this more like a dating process? It's like you're trying to find a girlfriend or somebody to marry does take time.

And there must be a willingness of a person both sides before marriage of this nature could take place and obviously because it's marriage the courtship generally takes much longer than I would say in a normal singer type of transaction. So in short the whole discussion has been going on for definitely more than six months. And if you ask me, in terms of areas where I would rather not have, I actually am very impressed with the entire portfolio of the Ascenders same bridge, the quality of the

assets, the quality of the team and the strategy that they have worked out in terms of their growth. view is that the business, the team and the whole portfolio will be additive to CapitalN and which will make us stronger, more diversified and really give us that optionality that CapitalN is looking for. Hi, this is Donald from Merrill. A couple of questions. So Chico, just to be clear, is there any assets under ASP that you will consider as a non-call? Would this all be considered call to capital N. If there's any non-call, which are the ones? And are we looking at divesting

going forward? This is the first question. Second is on the more details on the strategies for the REITs under senders. So in particular, A REIT, is there any change, assuming that this deal goes through, is there any change in strategy that you envision for A REIT, especially with the asset class, the geography going forward, or maybe as we see it now, status quo. There's a second question. Third is very quickly how would the resultant reporting line be? Where would a report where would senders be reported into for capital land and a park under which segment? Thanks. Are you speaking from a person perspective personnel perspective or from an organizational

perspective? Okay so from an organizational perspective you can see from that chart that we had on Gracie and we can flip that up. Yeah this guy. So, we've organized industrials, logistics, and business parks. So, this is the traditional ASB business. We'll be a separate BU from day one. But what we believe is, again, something that we can fold into fairly quickly. You see the SUD business under Singapore International and China. So, because that business is very China-centric, We think that that can fold under the CLC from day one quite quickly. The other area that I talked about was the commercial side

of things. So, again, we'll have to see and discuss with our ascenders colleagues when we form the integration committee. What is the best way we can put the commercial portfolio? Where should we put that into to maximize the ability to realize these synergies? So, it's still a work in progress, obviously. But from an organization standpoint, we hope this gives you a bit more color around where it will sit. Day one. In regards to the other two questions, the first one on non-call assets, I don't at this point in time see that there are any assets that we would target. There may be certain markets that we would together as a combined entity look at whether

given the new and larger focus and markets and asset classes that we have, whether we have enough capital to really build those markets to deploy capital in a meaningful way. So that would be my response to your first question. On eREIT, eREIT is done well. It's the largest because we're in Singapore trading at a significant premium to NAV. I believe that this particular read give us a lot of options to consider even doing much more aggressively in terms of setting up funds to support subsequent, you know, the subsequent

bulking up of our A-read. So my own view is A-read has a tremendous potential. potential. I'm gonna take two more questions from our online viewers from Arun Kapoor, Ariana Management. What is your long-term plan in India? Does the current size of a Sanders India meet your Indian ambition for the future? Capital and was tried to invest in India for some time. I mean to be fair I mean, in terms of what we have done, because compared to what Assembraj has done, Assembraj has chosen a good asset class have done well, vertically integrated.

We like India because of the tremendous size of the market. I think there are tremendous opportunities for us to deepen our capital and to grow in this particular space. We have not made a decision in terms of how much capital to allocate to each of the markets at this point in time, but my own sense is India offers a lot more opportunities for growth. Okay, another question from Mr. David Phan from LaSalle. He asks, based on a comment that appealers will be development, fund management and lodging, will most IPs be going to fund management rather than own on balance sheet?

It's typically the strategy or the investment approach for capital land. Whether it's held in private equity funds or through JV structures or through the REITs, that's always been the way in which we look at the investment properties. Sometimes depending on cycle, we may invest, wait for the cycle before we enjoy the rental upside before we recycle. And that means that we may put more of our balance sheet to work. But as much as possible, we want to make use of that bridge in terms of our private equity funds platform to hold many of these assets. I think, yes, our colleague on the left.

Thank you. Radna from Reuters. So with this deal, you're in REITs across several sectors. So I just wanted to get your general view on the Singapore reed sector, which segments are you particularly optimistic about, which ones not so much? We like all of them. It's helpful to remind ourselves why reeds are useful and why they play a major role in capital markets. They are very, through the cycle, creatures. They are very resilient. They give a lot of recurring income.

In this type of environment, these types of attributes become particularly attractive to investors. So what I think we offer is we have the full platform, right? We have the full suite of sectors, and investors can then decide if they prefer retail, for example, right now, then they can, we've got three retail REITs that they can invest in. They like the office sector, we've got an office suite, and so on and so forth. So what I think is absolutely critical, though, is you have to have reads that are off-scale. You have to have reads that demonstrate the ability to grow DPU over time for unit holders.

And once you're able to do that, then your unit holders will stay with you through the cycle because they trust that management knows what they're doing. They can recycle. They can undertake AEI at the right times. And these are all very, very important for read unit holders. So we believe that the capital land stable of REITs, including the ASB stable, which also have demonstrated very, very good track records, will become very, very compelling for REIT unit holders, regardless of the sector that you're particularly interested in. I hope that answers your question. We have time for two more questions. Michael? Hi, it's Michael from UBS. Asunder Sing Bridge has covered several ongoing projects at the moment.

Just give us a sense of the KPAC's needs, their KPAC's needs, say over the next 12 months or maybe 24 months. Thank you. We haven't shared this number. It is what I can tell you is that they're committed to capex for the business. the platform as a whole, has been factored into my calculations for the deleveraging that will have to account for whatever capex we need to set aside for both capital land and ASB. So I think at the right time we can share that with you, but perhaps to give you comfort that the deleveraging plan again fully accounts for this.

Sorry, it can't be more specific. I'll take the last question from Tan-shun. Hi, this is Tan-shun from CLSA. I have one question on CCT specifically. Will the US, the Korea office, US office and suburban office fit into CCT's current mandate and also is that part of your deleveraging plan as well? I don't think we should speak on behalf of the CCT management on the board but it is definitely a possible portfolio that the CCT's management and the board could look at. Actually we have

time for one last question. Bloomberg. Just as your major shareholder, how is Dromanto was too massive in driving this deal also? And second question, I mean Chikun you've been in their role for four months and this is your first mega deal. I mean can we get a sense of your vision for this enlarged group and how much further you want to grow the company? In terms of the negotiation with the domestic, I mean even though they are major shareholder, we have to negotiate this deal on what we think make commercial sense because we are a listed entity with

responsibility to our other shareholders. So that's why the negotiations, I mean, yeah I would say not easy, but I think we reach an outcome that the management feel that it It is good for the business, good for the people, and I think we have to position CapitalN in terms of its transformation and journey. CapitalN of the future, I mean, Andrew used a short form of saying CapitalN 3.0. Well, we, I mean, the first, there's a CapitalN 1.0, 2.0, 3.0. If you, a good way of saying it's 1.0, maybe it's a regionalization. really Singapore from Singapore move out to become China and parts of Southeast Asia.

2.0, there's a lot of consolidation, there's a lot of strengthening of our backhand and laying the foundation for future growth. And 3.0, I would say is a global ambition, one that's really going to build asset classes, capital into a range of different asset classes, different markets to give us that optionality to truly become a global real estate player. And I think that's a very good concluding remark for this briefing. Thank you all for taking time to be here. And I also want to say a few words to our online viewers. We have a very strong turnout today. And I'm sure many of those who tune in are our investors.

I just wanna mention that once the circular is out, we will be going on our road show. Please feel free to reach out to the IRR team if you have any questions, and we will hope to meet you sometime before the EGM. Okay, and there is food outside, please feel free to stay around. The senior management will be around for some mingling. Thank you everyone.