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Transcript of QCT - Presentation Slides (New Acquisitions)v9cct.listedcompany.com › ... ›...
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PRESENTATION ON PROPOSED ACQUISITIONS &
PROPOSED PLACEMENT
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Disclaimer
This presentation is for information purposes only and under no circumstances is it to be considered or intended as an offer to sell or a solicitation of an offer to buy the securities referred to herein. The contents of this presentation has been prepared based on information that has been publicly made available via media prints and electronic media, including announcements made via Bursa Malaysia Securities Berhad’s (“Bursa Securities”) website and Bloomberg and has been reorganised to facilitate the understanding by the users of this presentation.
This presentation may contain forward-looking statement that involve assumptions, risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions.
Prediction, projection or forecasts of the economy or economic trends of the markets are not necessarily indicative of the future or likely performance of Quill Capita Trust (QCT). The forecast financial performance of QCT is not guaranteed. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the current view of the manager of QCT, being Quill Capita Management Sdn Bhd (“Manager”), on future events. A potential investor should read the Circular, a copy of which may be obtained, subject to availability, from Aseambankers Malaysia Berhad, HWANGDBS Investment Bank Berhad and Bursa Securities’ website, for details of the forecasts and projections and to consider the assumptions used and make their own assessment of the future performance of QCT before deciding whether to subscribe for or purchase the Units.
The value of the Units and the income derived from them may fall as well as rise. The Units are not obligations of, deposits in, or guaranteed by the Manager. An investment in the Units is subject to investment risks, including the possible loss of the principal amount invested. Investors have no right to request that the Manager redeem or purchase their Units while the Units are listed. It is intended that holders of the Units may only deal in their Units through trading on Bursa Securities. Listing of the Units on Bursa Securities does not guarantee a liquid market for the Units.
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Overview Of QCT
QCT’s Proposals
Management Scorecard
Introducing The New Properties
Effects On QCT Post-Acquisition
Agenda
Overview Of QCT
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QCT In A Nutshell
100% of the Distribution Income (“DI”) for FY2006 – FY2008At least 90% of the DI will be distributed thereafterAt least semi-annual basis
Distribution Policy
RM1.58 (as at 19 July 2007)Unit Price
238,691,000 (before the Proposals) 490,131,000 (“Total Units”) (maximum scenario after the Proposals)
Approved Fund Size
0.31 times (as at 31 December 2006)Gearing
8 January 2007Listing Date
RM 377.13 mil / USD 107.75 mil (as at 19 July 2007)Market Capitalisation
Quill Capita Trust (“QCT”)Issuer
Quill Capita Management Sdn Bhd (“QCM”)Manager
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Ownership of assets (Vested in
Trustee)
Acts on behalf of Unitholders
Property management
services
Trustee’s fees
Rental income & other income
UnitholdersUnitholders
Distributions in the form of dividends
and other distributions
Investment in QCT
Property Manager’s fees
Management services
Manager’s fees
Overview of QCT Structure
Property ManagerKnight Frank (Ooi & Zaharin Sdn Bhd)
Property ManagerKnight Frank (Ooi & Zaharin Sdn Bhd)
Real estate & other permitted
investments
Real estate & other permitted
investments
TrusteeMayban Trustee Berhad
TrusteeMayban Trustee Berhad
REIT Manager QCM
REIT Manager QCM
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0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
Jan'07
Feb'07
Mar'07
Apr'07
May'07
Jun'07
July'07
Uni
t Pric
e (R
M)
QCT’s Unit Price Performance Since IPO
QCT’s Performance To Date
+88.10% Unit price appreciation (based on retail IPO price at RM0.84)Strong performance since IPO
Outperformed KLCI by 53.40% Outperformed KLPRP by 11.27%
QCT
KLPRP
KLCI
As at 19 July 2007
Price : RM 1.58
KLCI : 1376.40
KLPRP : 1170.72
Management Scorecard
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Pipeline of commercial properties from Quill’s and CapitaLand’s existing portfolio in Malaysia
Wisma Technip (’07*)New HSBC HQ (’10*)KL Sentral Lot J (’11*)
Future vehicles or property funds created by Quill or CapitaLand in Malaysia
USD 270 mil (approx. RM 1 bn) Malaysia Commercial Development Fund
Third party commercial properties Plaza Mont’KiaraCommercial Lots
Active implementation of acquisition strategies as stated in QCT’s prospectus since listing…
* Projected injection and/or development completion dates
Acquisition Growth
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WismaTechnip & part of Plaza Mont'
KiaraExisting
Properties
Existing Properties
QCT’s portfolio size will increase by circa 79% …
…other potential acquisitions from Quill Group and CapitaLand Group, and third-parties to further grow asset size
Expected Portfolio Size
IPO Date (Jan 2007)
3Q 2007
RM 276 mil
≈ RM 494 mil
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Tapped capital markets for a 7-year, RM 118mil Commercial Paper/ Medium Term Note programme to acquire initial properties in Cyberjaya
An investor has made a commitment to invest in the CP whenever such CP is issued in the future for a period of 5 years from 1 December 2006
Entered into an interest rate swap to lock in borrowing rates for 5 years until Nov 2011
Competitive blended allCompetitive blended all--in borrowing rate of in borrowing rate of 3.995% p.a. for 5 years3.995% p.a. for 5 years
Forecast borrowing costs of 4.65% Forecast borrowing costs of 4.65% -- 5.20% p.a. stated 5.20% p.a. stated in in QCT’sQCT’s IPO prospectusIPO prospectus
compared to
Active Capital Management
QCM was also actively managing its debt funding…
QCT’s Proposals
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Summary Of ProposalsProposed Acquisitions
Acquire two (2) properties, Property I (Wisma Technip) and Property II (Part of Plaza Mont’Kiara) for a total purchase consideration of RM215 mil
Property I is located at the perimeter of the Kuala Lumpur Golden Triangle and Property II is located in Mont’ Kiara
Proposed Placement and Proposed Increase in Fund SizeProposed Placement shall involve an issue of such number of new units not exceeding 251,440,000 units (“New Units”), to be implemented in tranches:-
(i) The 1st tranche of up to 151,440,000 New Units to raise gross proceeds of approximately RM227mil; and
(ii) Subsequent tranche(s) of up to an additional 100,000,000 New Units to raise approximately RM150mil
The fund size of QCT is proposed to be increased from the existing approved fund size of 238,691,000 units to a maximum of 490,131,000 units
Proposed AmendmentThe Deed is proposed to be amended to increase the potential investment opportunities in the Malaysian property market and allow more flexibility in selection of portfolio mix
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Key Benefits Of Proposals To Unitholders
Projected Higher Earnings and Distributions to Unitholders
The Proposed Acquisitions would enhance the distribution per unit (“DPU”) due to yield-accretive nature of the new properties
Asset Size GrowthContinuing investments in quality income-producing commercial properties for sustainable distribution and long-term growth
Income, Geographical and Segmental DiversificationReduction in concentration of assets in one location
Diversifying the tenant base and income stream of QCT’s total portfolio
The amendment to the Deed will allow more flexibility in the selection of QCT’s portfolio mix to achieve optimal returns for unitholders
Reduction in Gearing RatioEnhance QCT’s ability to raise new capital to finance future acquisitions
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The Proposed Acquisitions of Wisma Technip and Part of Plaza Mont’ Kiara will be satisfied entirely in cash from the Proposed Placement (net of estimated related expenses)
The Proposed Placement to raise a total gross proceeds of up to RM377.20 mil is for the purpose of financing the Proposed Acquisitions and to defray other related expenses
Utilisation Of Proceeds
377.20Total
150.00Pare Down Future Borrowings
5.40Capex & Working Capital
6.80Other Acquisition Expenses
215.0Purchase of Properties
RM milProposed Utilisation of Proceeds
RM 227.20 mil
(1st tranche)
RM 150.00 mil
(subsequent tranche(s) )
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Existing Portfolio
Introducing The Enlarged Portfolio Of QCT
Quill Building 2 - HSBC
NLA : 184,453 sq. ft.Value : RM 109.0 mil
Quill Building 1 – DHL 1
NLA : 92,284 sq. ft.Value : RM 53.1 mil
Quill Building 3 - BMW
NLA : 117,198 sq. ft.Value : RM 60.2 mil
Quill Building 4 – DHL 2
NLA : 99,183 sq. ft.Value : RM 57.7 mil
Wisma Technip Part of Plaza Mont’ Kiara
NLA : 73,408 sq. ftCar Park Bays : 1,499Value : RM 91 mil
Net LettableArea Will
Increase by62%*
*Excluding car park areaNLA : 233,021 sq. ftCar Park Bays : 308Value : RM125 mil
Note: The values indicated above are based on the appraisal made by the appointed independent valuers for the respective buildings
Introducing The New Properties
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Wisma Technip
308 :Car Park Bays
:
:
:
:
::
:
:
:
RM125 milAppraised Value
A 12-storey office building with a mezzanine floor and three split level basement car park situated at 241, Jalan Tun Razak, 50450 Kuala Lumpur
Description
14 years Approximate age of building
100%Occupancy Rate
5 + 2 years (Technip), commencing from 1 January 2007
Lease Period
i) Technip Geoproduction (M) Sdn Bhd(“Technip”) (occupying 98.2% of the total NLA)
ii) Others (occupying1.8% of total NLA)
Tenant
RM125 milAcquisition Price
Term In PerpetuityTenure
233,021 sq. ft.Net LettableArea (“NLA”)
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Wisma Technip - Competitive Strengths
Strategic
Location
Well-located at the fringe of Kuala Lumpur City Centre
Good accessibility and convenient public transportation
Surrounded by ample facilities and amenities
Kuala Lumpur’s prime office rentals are expected to continue experiencing upward pressure in the near to medium term as a result of tight supply, since no new office buildings are scheduled to come on stream until 2008
High Occupancy
100% occupancy rate, higher than average occupancy rate of Grade A office space within Kuala Lumpur Central Area seconday area of approximately 87.1% as at 1Q07
Source: Property Market Report On The Office Sector in Klang Valley by C H Williams Talhar & Wong
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KLCCKLCC
Wisma Technip – City Centre Location
Wisma Technip is located at the fringe of the Kuala Lumpur City Centre area, close to Petronas Twin Tower
Wisma Technip
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5
2
0
1
2
3
4
5
6
7
8
Technip
(Yea
rs)
1st Term 2nd Term
The length of lease for the 1st term for other
tenants ranges between 2 to 3 years
Technip98.2%
Others1.8%
\
Wisma Technip – Tenancy Analysis
Technip is occupying 98.2% of the total net lettable area of Wisma
Technip
Length of Lease Terms By Tenants
Breakdown By Net Lettable Area
Details Of The Tenants
Net LettableArea (sq. ft.)
Nature of BusinessTenant
4,180 + Roof TopRetail and telecommunication business
Others
228,841Provision of engineering and management services, procurement of equipment and construction of plant for companies in the oil and gas industry
Technip
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Term In Perpetuity:Tenure
1,499:Car Park Bays
:
::
:
:
:
:
:
RM91 milAppraised Value
Commercial units & car park lots located at Plaza Mont’ Kiara
Description
8 yearsApproximate age of building
100% (under Master Lease)Occupancy Rate
7 Years (to be entered into upon completion of acquisition)
Lease PeriodSunrise BerhadTenant
RM 90 milAcquisition Price
73,408 sq. ft.Net LettableArea
Part of Plaza Mont’ Kiara
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Part of Plaza Mont’ Kiara- Competitive Strengths
Strategic
Location
Within the residential enclave of Mont’ Kiara / Sri Hartamas & surrounded by other residential / commercial centres ie. Damansara Heights, Bukit Tunku, Bangsar and Damansara / Petaling Jaya
Accessible via major highways ie. Sprint Highway, North South Expressway (NSE), North Klang Valley Expressway (NKVE), Jalan Duta and Lebuhraya DamansaraPuchong (LDP)
Expatriate / local populations
Integrated Development
Integrated development components of retail, office and car park development
Diverse Tenant Base
Diverse and complementary tenant mix
Good tenant mix especially in the food and beverage sector
McDonalds, Starbucks, 7-Eleven, Indochine, Secret Recipe, Thai, Korean and Japanese Restaurant, Sunrise Sales Office, Alliance Bank, etc.
Master Lease Arrangement
Leased to Sunrise for 7 years (to be entered into upon completion of the acquisition)
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KL City Centre
Mont’Kiara
Future Future One Mont Kiara One Mont Kiara
Mixed DevelopmentMixed Development
Mont’ Kiara – Established Residential Suburb
Mont Kiara is an established local and expatriate residential suburb well connected to other parts of Kuala Lumpur
Effects On QCT Post - Acquisition
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Cyberjaya, Selangor
100%
Cyberjaya, Selangor
62%Mont Kiara,
Kuala Lumpur
9%
Kuala Lumpur City
Centre29%
Geographical Diversification By NLA
QCT’s portfolio will have an increased exposure to prime locations in Kuala Lumpur
Existing Properties Post-Acquisition
*
Note: * Exclude car park area
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Wisma Technip29%
Quill Building 223%
Quill Building 315%
Quill Building 412%
Quill Building 112%
Part of Plaza Mont' Kiara
9%
Quill Building 237%
Quill Building 324%
Quill Building 420%
Quill Building 119%
Increase in total
assets by78%
Total Asset Value : RM291.037 mn
Total Property Investment Value: RM276.00 mn
Total Asset Value : RM518.611 mn
Total Property Investment Value: RM493.65 mn
Diversfying Type Of Properties
Existing Properties Post-Acquisition
- DHL 1
- DHL 2
- HSBC
- DHL 1
- BMW
- DHL 2
- BMW
- HSBC
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Technip28.60%
DHL23.90%
HSBC23.10%
Sunrise*9.20%
BMW4.40%
QCSB4.00%
TRW Automotive3.40%
ACS1.60%
Panasonic1.30%
Others0.50%
DHL38.80%
HSBC37.40%
BMW7.10%
Quill Construction Sdn Bhd (QCSB)6.40%
TRW Automotive5.50%
Affiliated Computer Services (ACS)2.70%
Panasonic2.10%
A Well Balanced Tenants Mix
None of QCT’s tenants is occupying more than 30% of the total net lettable area of the enlarged portfolio.
Existing Tenants After Proposed Acquisitions
Total NLA : 493,118 sq. ft. Total NLA : 799,547 sq. ft.*
*Excluding Part of Plaza Mont’ Kiara’s car park area
*
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Profit Forecast and Projections
Income Before Taxation
The full impact on income will kick-in in FY2008 onwards with approximately 89% growth
14,321 14,484
27,029
14,675 15,288
28,413
18,248
14,32114,322
-
5,000
10,000
15,000
20,000
25,000
30,000
As disclosed in the Prospectus of QCTdated 11 December 2006
Before the Proposed Acquisitions After the Proposed Acquisitions
2007 2008 2009
+27.4%
+88.7%
+93.6%RM ‘000
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6.506.336.23
6.00
7.79
7.26
6.93
6.07
7.637.28
6.40
5.00
5.50
6.00
6.50
7.00
7.50
8.00
Before Proposed Acquisitions After Proposed Acquisitions (assumingissue price of RM1.50)
After Proposed Acquisitions (assumingissue price of RM1.70)
After Proposed Acquisitions (assumingissue price of RM2.10)
2007 2008 2009
Enhanced DPU and YieldsForecast DPU (in sen) Before and After Proposed Acquisitions (different scenario)
+3.8%
+14.2%
+13.8%
+5.5%
+19.6%
+19.2%
+8.3%
+28.3%
+28.0%
Forecast DPU (in sen) After Proposed Acquisitions
sen
2007 2008 2009 2007 2008 20091.50 151,440 6.00 6.07 6.40 6.23 6.93 7.281.60 141,975 6.00 6.07 6.40 6.28 7.10 7.461.70 133,624 6.00 6.07 6.40 6.33 7.26 7.631.80 126,200 6.00 6.07 6.40 6.38 7.41 7.791.90 119,558 6.00 6.07 6.40 6.42 7.54 7.932.00 113,580 6.00 6.07 6.40 6.47 7.67 8.072.10 108,171 6.00 6.07 6.40 6.50 7.79 8.19
Issue Price Per Unit
(RM)
No. of New Units Issued
‘000
Before the Proposed Placement After the Proposed Placement
Forecast / Projected DPU for the years ending 31 December
8.19
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560,710410,710187,701186,001Net Asset Value
668,611518,611291,037290,516Total Assets Value
490,131390,131238,691232,501No. of Units in Issue
----Undistributed Income
560,710410,710187,701186,001Unitholders’ Capital
**After Proposed Placement Scenario II
*After Proposed Placement Scenario I
^Adjusted Audited as at 31 Dec
2006
Audited as at 31
Dec 2006
All figures are in RM’000
Enhanced NAV
Scenario I – assumes the issuance of 151,440,000 New Units pursuant to the Proposed Placement to raise gross proceeds of RM 227.16 mil to finance the Proposed Acquisitions, capital expenditure, working capital and related expenses.
Scenario II – assumes the issuance of an additional 100,000,000 New Units pursuant to the Proposed Placement to raise gross proceeds of RM 150.00 mil which will be utilised to pare down future borrowings.
Notes :^ Incorporates the completed events of i) listing of QCT and after deducting estimated expenses; ii) income distribution on 28 Feb ’07; iii) payment of deposit on 8 Jun ’07 to Sunrise in respect of the Proposed Acquisition of Part of Plaza Mont’ Kiara
* Assuming an issue of up to 251,440,000 New Units and after deducting estimated expenses in relation to the Proposals of RM 4.15 mil.**Assuming the issuance of an additional 100,000,000 New Units after the Proposed Acquisitions to raise proceeds to pare down future borrowings.
NAV per unit (RM)
0.8 0.79
1.05
1.14
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
Audited as at 31Dec '06
Adjusted Auditedas at 31 Dec '06
After ProposedPlacementScenario I
After ProposedPlacementScenario II
Between +31% and +43%
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%Direct%Direct
5.71%^27,986,0005.71%13,629,000Quill Estates Sdn Bhd
11.79%^57,786,00011.79%28,142,000Quill Properties Sdn Bhd
12.50%^61,268,00012.50%29,837,000Quill Land Sdn Bhd
30.00%147,040,00030.00%71,608,000HSBC Nominees (Asing) Sdn BhdExempt an for the Hong Kong and Shanghai Banking Corporation Limited (HBFS-B CLT 500), nominee for CCT
After the Proposed Placement* DirectAs at 29 June 2007Substantial Unitholders
QCT’s Substantial Unitholders
Notes :
*Assuming up to 30% of the new units pursuant to the proposed placement are placed out to CCT and the Quill Group respectively.
^ Rounded up or down to the nearest thousand units and assuming that the New Units are placed out to the Quill Group based on the existing unitholdings of the respective companies in QCT
The proforma effects of the completion of the placement exercise on the direct and indirect unitholdings of the substantial unitholders is as follows:
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Scenario I – assumes the issuance of 151,440,000 New Units pursuant to the Proposed Placement to raise gross proceeds of RM 227.16 mil to finance the Proposed Acquisitions, capital expenditure, working capital and related expenses.
Scenario II – assumes the issuance of an additional 100,000,000 New Units pursuant to the Proposed Placement to raise gross proceeds of RM150.00 mil which will be utilised to pare down future borrowings.
Note : *Assuming the issuance of an additional 100,000,000 New Units after the Proposed Acquisitions to raise proceeds to pare down future borrowings.
0.31 0.31
0.170.13
0.0
0.1
0.2
0.3
0.4
0.5
Audited as at 31 Dec'06
Adjusted Audited as at31 Dec '06
After ProposedPlacement Scenario I
After ProposedPlacement Scenario II
(Tim
es)(x
)
Debt FinancingActive Debt Management
*
Existing Debt Rating(Expiry : 30 November 2013) : -
The CP and MTN are currently rated by Malaysian Rating Corporation Berhad (“MARC”) as follows :
• Class A Notes: RM87 million –MARC-1/AAA
• Class B Notes: RM16 million –MARC-1/AA
• Class C Notes: RM15 million –MARC-1/A
Discount RateEach CP carries a floating discount rate equivalent to KLIBOR + 0.25% p.a.
Committed InvestorsContinued investment in the CP for a period of 5 years from 1 December 2006, conditional upon such CP being rated as MARC – 1/AA and above
Post placement exercise, QCT’s gearing ratio will decrease from 0.31x to 0.13x leaving ample of
room for gearing up for future acquisitons
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Summary
The journey of QCT so far…
Enhance unitholders’ value
88% price appreciation since IPO over a 7-month period
Expected increase of approximately 14.2% to 28.3% in DPU for FY08
Aggressively building up pipeline and portfolio
Diversifying portfolio mix and geographical concentration
Investing in strategically located properties
Enhancing DPU to investors
Actively managing capital of QCT
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Thank You
