Company Guide CapitaLand Commercial Trust Version 7 | Bloomberg: CCT SP | Reuters: CACT.SI Refer to important disclosures at the end of this report

DBS Group Research . Equity 19 Jan 2017

BUY Ang bao from CapitaGreen Last Traded Price ( 18 Jan 2017): S$1.57 (STI : 3,000.22) Timely acquisition of CapitaGreen. Despite the expected decline Price Target 12-mth: S$1.69 (8% upside and 5.9% yield) in the office market, we believe the timely acquisition of the remaining 60% in CapitaGreen not only helps to offset (Prev S$1.70) potential negative rental reversions and lower occupancies for the rest of CapitaLand Commercial Trust (CCT)’s portfolio but Potential Catalyst: Sale of Wilkie Edge above book value will allow CCT to deliver 2% growth in DPU this year (excluding Where we differ: Above consensus due to boost from the acquisition of the impact from redevelopment of Golden Shoe and potential the remaining 60% interest in CapitaGreen sale of Wilkie Edge). The boost is already visible by the 10% y-o- Analyst y increase in 4Q16 DPU. Mervin SONG CFA +65 6682 3715 [email protected] Derek TAN +65 6682 3716 [email protected] Trading at a discount to physical office transactions. Investors have been concerned over the value of CCT’s portfolio which we believe is unwarranted. CCT’s Singapore Grade A office What’s New portfolio trades at an implied value of c.S$2,000 per square foot • 4Q16 DPU was 10% y-o-y higher, slightly above (psf) compared to recent sales of between S$2,700-S$3,500 psf. expectations While CCT’s Grade A portfolio is unlikely to trade higher to • Growth will continue to be driven by recent c.S$2,700 given the older profile of some of its properties, we acquisition of remaining 60% stake in CapitaGreen believe the current strength of the physical market and 999-year • Disposal of Wilkie Edge above book value, and leasehold status of some of its buildings, warrants CCT to trade redevelopment of Golden Shoe are next catalysts close to its book value of S$1.73 per unit or an implied valuation of S$2,100 psf. The next catalyst would be the sale of Wilkie Edge above book value. Price Relative

S$ Relative Index 2.1 215 2.0 Upside from redevelopment of Golden Shoe. CCT intends to 1.9 195 1.8 175 redevelop its Golden Shoe Car Park property. Subject to 1.7 155 1.6 1.5 135 obtaining the necessary approvals, CCT plans to build a 1.4 115 1.3 commercial building with c.1m square feet (sqft) of space in 95 1.2 1.1 75 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 terms of gross floor area (GFA), equivalent to c.20% uplift in

CapitaLand Commercial Trust (LHS) Relative STI (RHS) attributable net lettable area (NLA). Upon completion in 2021, the property will enhance CCT’s NAV and earnings. Forecasts and Valuation FY Dec (S$m) 2015A 2016A 2017F 2018F Valuation: Gross Revenue 273 299 350 343 Post the incorporation of the latest least expiry profile and Net Property Inc 213 231 274 268 expiring rental data, we trimmed our DCF-based TP slightly to Total Return 307 261 259 256 S$1.69 from S$1.70. Distribution Inc 254 269 280 283 EPU (S cts) 8.17 7.89 8.59 8.22 EPU Gth (%) (35) (3) 9 (4) Key Risks to Our View: DPU (S cts) 8.62 9.08 9.29 9.10 A key risk to our view is new office supply causing spot rents to DPU Gth (%) 2 5 2 (2) fall below S$7 psf, which is likely to lead to lower-than-expected NAV per shr (S cts) 177 178 176 175 asking rents and rental income. PE (X) 19.2 19.8 18.2 19.0 Distribution Yield (%) 5.5 5.8 5.9 5.8 At A Glance P/NAV (x) 0.9 0.9 0.9 0.9 Issued Capital (m shrs) 2,963 Aggregate Leverage (%) 30.0 37.5 37.5 37.5 Mkt. Cap (S$m/US$m) 4,638 / 3,244 ROAE (%) 4.6 4.4 4.8 4.7 Major Shareholders (%) Capitaland Limited 31.1 Blackrock 6.6 Distn. Inc Chng (%): 0 (2) CBRE Group Inc 4.9 Consensus DPU (Scts): 9.10 9.20 Free Float (%) 57.4 OtherBrokerRecs: B: 13 S: 4 H: 7 3m Avg. Daily Val (US$m) 10.8 Source of all data on this page: Company, DBS Bank, Bloomberg ICB Industry : Real Estate / Real Estate Investment Trust Finance L.P.

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Company Guide

CapitaLand Commercial Trust

WHAT’S NEW Scores with CapitaGreen

10% y-o-y growth in 4Q16 DPU Stable gearing ahead of potential sale of Wilkie Edge  4Q16 DPU came in 2.37 Scts, up 10.1% y-o-y, taking  Gearing was stable q-o-q, coming in at 37.8% albeit FY16 DPU to 9.08 Scts which was slightly above our higher than the 29.5% in 4Q15 due to the acquisition 8.98 Scts estimate but in line with consensus estimate of the remaining 60% interest in CapitaGreen. of 9.1 Scts. As expected, the strong 4Q16 results was  Nevertheless, gearing could potentially drop to around due to the acquisition of the remaining 60% interest 36% after the proposed sale of Wilkie Edge. The in CapitaGreen. indicative selling price is speculated to be S$293m  4Q16 DPU was also 6.7% higher than CCT’s own (valuation stands at S$201m) in recent press reports. projections at the time of the acquisition of the  CCT’s average cost of debt ticked up marginally to remaining 60% in CapitaGreen, mainly due to lower 2.6% from 2.5% at end 3Q15 with 80% of CCT’s property tax, utilities and one-off reversal of marketing borrowings on fixed rates. commission at CapitaGreen of S$1.8m.  With the value of CCT’s properties relatively stable (flat  Excluding CapitaGreen, underlying portfolio to up 1% with the exception of 3% decline at Bugis performance was stable, with 4Q16 net property Village, no change in cap rates) from 30 June 16 income (NPI) up 0.2% y-o-y, underpinned by healthy valuations, NAV per unit (excluding distributable portfolio occupancy of 97.1% (4Q15: 97.1%, 3Q16: income) came in at S$1.73. 97.4%) No further updates on redevelopment of Golden Shoe Headwinds to rental reversions ahead with some mitigating  With the government yet to provide the relevant factors approvals (i.e. rezoning from transport to commercial)  On account of core Grade A office market rents and differential premium yet to be determined, CCT declining 2.2% q-o-q to S$9.10 psf (as per CBRE did not provide further updates on the redevelopment estimates), CCT reported negative rental reversions in of its Golden Shoe Car Park property. 4Q16 as signing rents were below expiring rents. This  As a reminder, CCT intends to develop a commercial was despite average signing rents (between S$8.15- property with approximately 1m sqft of commercial 13.00 psf) being above the respective sub-markets GFA which comprises an office tower of up to 280 that CCT’s buildings are located in (S$8.10-$9.70 psf) metres. A new food centre owned by the government Please see the table overleaf for more details. is expected to replace the existing food centre and  This resulted in average rents for CCT’s portfolio adjoin the new office tower. falling q-o-q for the first time since June 2012 to  Subject to government approvals, the redevelopment S$9.20 (S$9.22 in 3Q16, S$8.90 in 4Q15). will commence in 2H17 with completion in 2021. The  Moving into 2017, while CCT only has 7% of office property will close from 31 July 2017. leases (by gross rental income) that have yet to be  We anticipate funding for the project will come from renewed, of which 2% are in advanced negotiations, the proposed sale of Wilkie Edge as well as the we anticipate CCT will face negative rental reversions potential sale of and/or a JV with average expiring leases this year at S$10.95 psf, structure with its sponsor, CapitaLand Group. which is above current Grade A spot rents of S$9.10 psf. Pressure on rents may also continue into 2018, Potential short term catalyst from sale of Wilkie Edge given average expiring rents that year are S$11.09  Short term, CCT has a share price catalyst in the form psf. For FY18, 17% of leases are up for renewal. of the sale of Wilkie Edge. Initial bids for the property  To account for this risk, we have on average are expected to be submitted on 19 January. If CCT is incorporated 5-15% decline in signing rents over the able to sell Wilkie Edge at a significant premium to its next couple of years. current book value of S$201m, we anticipate this will  Partially mitigating the decline in rents is the fact that give confidence over the valuation of CCT’s properties CCT’s buildings are relatively new or have undergone and help to narrow the share price discount to CCT’s recent asset enhancement initiatives (AEI). This allows NAV per unit of S$1.73. CCT to benefit from the “flight to quality” trend (tenants moving to better quality buildings). In Tweaks to FY17-18F DPU addition, despite the uncertain macro backdrop, some  After incorporating the latest lease expiry profile and of CCT’s tenants are still looking to expand and take expiring rents on a per property basis, we trimmed our up new space. FY17-18F DPU by 0.2-1.5%.

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Page 2 Company Guide CapitaLand Commercial Trust

 On the back of slightly lower earnings, we have also S$20.4m of tax exempt income that CCT has retained lowered our DCF-based TP to S$1.69 from S$1.70. from MRCB-Quill REIT and capital gains that it generates on the sale of Wilkie Edge, resulting in flat Higher DPU of 2% in FY17F, limited downside if CCT loses DPU over FY17-18. income from Wilkie Edge and Golden Shoe  In 2017, we project CCT to deliver 2% growth in DPU Maintain BUY, revised TP to S$1.69 largely on account of the full year contribution from  With a strong finish to 4Q16, we maintain our BUY 100% ownership of CapitaGreen. This despite the recommendation with a revised TP of S$1.69. expected dilution from the conversion of convertible  We continue to like CCT for (1) the expected boost to bonds later this year. near term earnings from the full year contribution of  However, CCT would lose close to S$18m in NPI on an 100% ownership of CapitaGreen, (2) crystallisation of annualised basis if it receives a sufficiently attractive its book value from the sale of Wilkie Edge, and (3) offer for its Wilkie Studio property, and its obtains upside from the redevelopment of Golden Shoe upon regulatory approval for the redevelopment of Golden completion in 2021. Shoe. The loss in income can be easily offset by

Signing versus expiring rents in 4Q16

Source: CCT, DBS Bank

Quarterly / Interim Income Statement (S$m) FY Dec 4Q2015 3Q2016 4Q2016 % chg yoy % chg qoq

Gross revenue 67.6 74.4 89.7 32.7 20.6 Property expenses (15.3) (17.4) (19.0) 23.5 9.0 Net Property Income 52.3 57.0 70.8 35.4 24.1 Other Operating expenses (4.4) (3.9) (5.2) 18.4 34.1 Other Non Opg (Exp)/Inc (0.3) 1.22 0.99 N/A (19.1) Net Interest (Exp)/Inc (8.5) (11.4) (18.3) (114.8) (60.9) Exceptional Gain/(Loss) 0.0 (13.5) 0.0 N/A N/A Net Income 68.0 51.6 55.6 (18.3) 7.7 Tax (0.1) (0.2) (0.8) 1,334.5 404.2 Minority Interest 0.0 0.0 0.0 N/A N/A Net Income after Tax 68.0 51.4 54.7 (19.5) 6.4 Total Return 0.0 0.0 0.0 nm nm Non-tax deductible Items 0.0 0.0 0.0 nm nm Net Inc available for Dist. 64.1 68.3 70.8 10.4 3.7

Ratio (%) Net Prop Inc Margin 77.3 76.6 78.9 Dist. Payout Ratio 100.0 100.0 100.0 Source of all data: Company, DBS Bank

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Page 3 Company Guide

CapitaLand Commercial Trust

Net Property Income and Margins (%)

CRITICAL DATA POINTS TO WATCH

Earnings Drivers: Staggered weighted lease expiry profile to help mitigate negative rental reversions. We have factored in lower occupancies and negative reversions at Capital Tower, , and One George Street for FY17 and FY18. CCT’s defensive weighted average lease expiry (WALE) of 6.6 years (by net lettable area (NLA)) should also help ensure that the negative impact from an anticipated decline in rents over the next two years will be gradual rather than immediate. Thus, CCT offers investors some measure of earnings stability and Net Property Income and Margins (%) certainty amid record office completions over the next two years.

Defensive portfolio with >70% of office leases expiring in FY19 and beyond, coinciding with the period when Singapore faces no new office supply. CCT has maintained a defensive leasing strategy amid stiff competition for larger tenants by locking in longer-term leases for most of its top 10 tenants. With proactive forward renewals, more than 70% of office leases now expire in FY19 and beyond. This fortuitously coincides with the period when the Singapore office market should be on an upturn as the supply of new office buildings drops from FY18 onwards. Distribution Paid / Net Operating CF

CapitaGreen contribution to weather CCT through tough times. CCT’s near-term earnings will be driven by the acquisition of the 60% remaining interest in CapitaGreen. We believe the increased contribution from CapitaGreen will not only help offset potential negative rental reversions at CCT’s other properties but also contribute to 4% DPU CAGR over the next couple of years (excluding any loss of income from redevelopment of Golden Shoe). Beyond the boost from the higher equity interest in CapitaGreen (40% previously to

100%), CCT should benefit from the higher underlying earnings at CapitaGreen as tenants progressively move into the building Interest Cover (x) and rent-free periods start to expire.

Medium term upside from redevelopment of Golden Shoe Car Park. CCT announced the redevelopment of its Golden Shoe Car Park property. Subject to obtaining the necessary government approvals, the property will be developed into one with c.1m sqft of commercial GFA and comprise an office tower of up to 280 metres high. Upon completion in 2021, the property will provide a medium term uplift to earnings, and CCT’s current NAV per unit of S$1.73.

Source: Company, DBS Bank

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Page 4 Company Guide CapitaLand Commercial Trust

Aggregate Leverage (%) Balance Sheet: Increase in gearing post acquisition of CapitaGreen. Post the acquisition of the remaining 60% interest in CapitaGreen, its gearing has risen to c.38% from c.30% previously. While this is higher than CCT’s average gearing over the last few years, we believe this remains manageable, as it is below the 45% gearing cap imposed by MAS and provides some buffer in the event of any decline in the value of CCT’s portfolio.

Share Price Drivers: Crystallisation of value from sale of Wilkie Edge. CCT has announced its intention to sell its 100% interest in Wilkie Edge to help fund the development of Golden Shoe. Should it ROE (%) achieve the selling price of $293m as speculated by recent press reports and which is also above Wilkie Studio’s latest valuation of S$201m, we believe it will indicate to investors the robustness of CCT’s NAV and help close the current 10% discount to book.

Key Risks: Risk of higher vacancies and negative rental reversions for FY16. In FY17-18, c.24% of CCT’s office leases will be due for expiry, the majority of which stems from One George Street, Six Battery Road, CapitaGreen and Raffles City, where expiring Distribution Yield (%) rents are close to or higher than market rents. As the Manager has prioritised tenant retention, there is a possibility of negative rental reversions, which would impede earnings growth.

Competition from other landlords. Between 2016 and 2018, c.5.3m sqft of office (NLA) will be completed within the downtown core area, translating to a 15% increase in existing stock. Due to weaker net absorption rates of <1m sqft in recent years, CCT could face higher competition for large tenants from landlords of newer buildings, which have large floor plates of 30-40k sqft. PB Band (x)

Pressure on rents from shadow space. We see some downsizing activity from banks and financial institutions, and shadow space (particularly in the Marina Bay area) could put some pressure on rents for CCT’s portfolio, which is located primarily in the /Tanjong Pagar areas.

Company Background CapitaCommercial Trust (CCT) is a real investment trust investing exclusively in commercial properties in Singapore.

Source: Company, DBS Bank

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Page 5 Company Guide

CapitaLand Commercial Trust

Income Statement (S$m) FY Dec 2014A 2015A 2016A 2017F 2018F

Gross revenue 263 273 299 350 343

Property expenses (57.4) (60.5) (67.3) (76.2) (74.5) Net Property Income 205 213 231 274 268 Other Operating expenses (16.2) (17.6) (17.6) (25.1) (24.8) Other Non Opg (Exp)/Inc (3.5) (0.5) 3.59 0.0 0.0 Net Interest (Exp)/Inc (32.7) (32.1) (46.2) (75.9) (74.6) Exceptional Gain/(Loss) (2.5) (18.9) (22.1) 0.0 0.0

Net Income 368 241 235 260 256 Tax 0.0 (0.1) (1.2) (0.9) (0.8) Minority Interest 0.0 0.0 0.0 0.0 0.0 Preference Dividend 0.0 0.0 0.0 0.0 0.0 Net Income After Tax 368 241 234 259 256 Total Return 449 307 261 259 256

Non-tax deductible Items (200) (52.8) 8.41 21.0 27.5 Net Inc available for Dist. 249 254 269 280 283

Growth & Ratio Revenue Gth (%) 4.4 4.0 9.3 17.2 (2.1) N Property Inc Gth (%) 4.1 3.7 8.7 18.4 (2.1) Net Inc Gth (%) 40.9 (34.5) (3.0) 10.7 (1.2) Earnings growth will be Dist. Payout Ratio (%) 100.0 100.0 100.0 100.0 100.0 driven by increased Net Prop Inc Margins (%) 78.2 77.9 77.5 78.2 78.3 contribution from Net Income Margins (%) 140.0 88.1 78.2 73.9 74.6 CapitaGreen, which should offset income loss from Dist to revenue (%) 94.9 93.1 90.1 79.9 82.6 Managers & Trustee’s fees 6.2 6.4 5.9 7.2 7.2 lower occupancies and negative rental reversions at ROAE (%) 7.3 4.6 4.4 4.8 4.7 existing office assets such ROA (%) 5.8 3.7 3.2 3.2 3.2 as Capital Tower, 6 Battery

ROCE (%) 3.0 3.0 2.9 3.1 3.0 Road and One George Int. Cover (x) 5.8 6.1 4.6 3.3 3.3 Street Source: Company, DBS Bank

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Page 6 Company Guide CapitaLand Commercial Trust

Quarterly / Interim Income Statement (S$m) FY Dec 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016

Gross revenue 67.6 66.9 67.6 74.4 89.7

Property expenses (15.3) (14.8) (16.1) (17.4) (19.0)

Net Property Income 52.3 52.0 51.5 57.0 70.8 Other Operating expenses (4.4) (4.2) (4.5) (3.9) (5.2) Other Non Opg (Exp)/Inc (0.3) 1.66 0.0 1.22 0.99 Net Interest (Exp)/Inc (8.5) (8.1) (8.3) (11.4) (18.3) Exceptional Gain/(Loss) 0.0 0.0 0.0 (13.5) 0.0 Net Income 68.0 61.9 74.3 51.6 55.6

Tax (0.1) (0.2) 0.0 (0.2) (0.8) Minority Interest 0.0 0.0 0.0 0.0 0.0 Net Income after Tax 68.0 61.7 74.3 51.4 54.7 Total Return 0.0 0.0 0.0 0.0 0.0 Non-tax deductible Items 0.0 0.0 0.0 0.0 0.0 Net Inc available for Dist. 64.1 64.8 65.1 68.3 70.8 Growth & Ratio Revenue Gth (%) (1) (1) 1 10 21 N Property Inc Gth (%) (1) 0 (1) 11 24 Net Inc Gth (%) 20 (9) 20 (31) 6 Net Prop Inc Margin (%) 77.3 77.8 76.1 76.6 78.9 Dist. Payout Ratio (%) 100.0 100.0 100.0 100.0 100.0

Balance Sheet (S$m) FY Dec 2014A 2015A 2016A 2017F 2018F

Investment Properties 4,882 4,962 6,591 6,595 6,599 Other LT Assets 1,499 1,504 1,259 1,259 1,259 Cash & ST Invts 101 81.2 160 211 207 Inventory 0.0 0.0 0.0 0.0 0.0 Debtors 38.3 45.3 41.9 21.7 21.2 Other Current Assets 0.0 0.0 0.0 0.0 0.0 Total Assets 6,521 6,593 8,051 8,087 8,086

ST Debt 270 0.0 173 173 173 Creditor 47.4 37.3 52.8 81.1 79.4 Other Current Liab 11.4 8.68 9.92 9.28 9.26 LT Debt 970 1,255 2,457 2,290 2,298 Other LT Liabilities 68.6 57.6 79.3 79.3 79.3 Unit holders’ funds 5,153 5,234 5,279 5,454 5,447 Minority Interests 0.0 0.0 0.0 0.0 0.0 Total Funds & Liabilities 6,521 6,593 8,051 8,087 8,086

Non-Cash Wkg. Capital (20.5) (0.7) (20.8) (68.7) (67.5) Net Cash/(Debt) (1,139) (1,174) (2,471) (2,252) (2,265) Increase due to the Ratio acquisition of the remaining Current Ratio (x) 0.4 2.8 0.9 0.9 0.9 60% interest in CapitaGreen Quick Ratio (x) 0.4 2.8 0.9 0.9 0.9 Aggregate Leverage (%) 30.4 30.0 37.5 37.5 37.5 Z-Score (X) 2.2 2.2 1.2 1.3 1.3

Source: Company, DBS Bank

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Page 7 Company Guide

CapitaLand Commercial Trust

Cash Flow Statement (S$m) FY Dec 2014A 2015A 2016A 2017F 2018F

Pre-Tax Income 368 241 235 260 256

Dep. & Amort. 3.51 3.51 3.51 3.51 3.51

Tax Paid 0.0 0.0 (0.1) (1.5) (0.9) Associates &JV Inc/(Loss) (217) (97.3) (85.7) (86.8) (87.8) Chg in Wkg.Cap. (4.6) (19.8) 18.7 48.6 (1.2) Other Operating CF 39.3 69.5 31.9 21.0 20.7 Net Operating CF 189 197 203 244 191 Net Invt in Properties (29.8) (21.3) (374) (8.0) (8.0)

Other Invts (net) 0.0 0.0 0.0 0.0 0.0 Invts in Assoc. & JV (397) 0.0 0.0 0.0 0.0 Div from Assoc. & JVs 86.1 85.0 115 86.8 87.8 Acquisition of 60% Other Investing CF 392 0.0 0.0 0.0 0.0 stake in CapitaGreen Net Investing CF 51.7 63.7 (259) 78.8 79.8 Distribution Paid (243) (252) (257) (280) (283)

Chg in Gross Debt 50.3 5.00 464 8.00 8.00 New units issued 0.0 0.0 0.0 0.0 0.0 Other Financing CF (30.7) (33.4) (71.5) 0.0 0.0 Net Financing CF (223) (280) 135 (272) (275) Currency Adjustments 0.0 0.0 0.0 0.0 0.0 Chg in Cash 17.0 (19.9) 78.8 51.4 (4.6)

Operating CFPS (S cts) 6.63 7.35 6.22 6.50 6.17 Free CFPS (S cts) 5.45 5.95 (5.8) 7.85 5.87 Source: Company, DBS Bank

Target Price & Ratings History

1.72 S$ 12-mth Date of Closing S.No. Target Rating Report Price 1.62 Price 6 4 1: 20 J an 16 1.33 1.45 BUY 2: 15 Apr 16 1.43 1.53 BUY 5 1.52 3: 24 May 16 1.39 1.61 BUY 7 4: 21 Jul 16 1.56 1.70 BUY 2 5: 05 Sep 16 1.59 1.70 BUY 1.42 6: 19 Oct 16 1.58 1.70 BUY 7: 09 Nov 16 1.56 1.70 BUY

3 1.32 1

1.22 Jan-16 May-16 Sep-16 Jan-17

Note : Share price and Target price are adjusted for corporate actions.

Source: DBS Bank Analyst: Mervin SONG CFA Derek TAN

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Page 8 Company Guide CapitaLand Commercial Trust

DBS Bank recommendations are based an Absolute Total Return* Rating system, defined as follows: STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) BUY (>15% total return over the next 12 months for small caps, >10% for large caps) HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps) FULLY VALUED (negative total return i.e. > -10% over the next 12 months) SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame) Share price appreciation + dividends

Completed Date: 19 Jan 2017 08:07:11 (SGT) Dissemination Date: 19 Jan 2017 08:18:42 (SGT)

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CapitaLand Commercial Trust

DBS Vickers Securities (USA) Inc ("DBSVUSA")"), a U.S.-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage in market-making.

ANALYST CERTIFICATION The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in the report. The DBS Group has procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of research reports. As of 19 Jan 2017, the analyst(s) and his/her spouse and/or relatives who are financially dependent on the analyst(s), do not hold interests in the securities recommended in this report (“interest” includes direct or indirect ownership of securities). The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment banking function of the DBS Group and procedures are in place to ensure that confidential information held by either the research or investment banking function is handled appropriately.

COMPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates have a proprietary position in CapitaLand Commercial Trust recommended in this report as of 30 Dec 2016. 2. DBS Bank Ltd does not market make in equity securities of the issuer(s) or company(ies) mentioned in this Research Report. Compensation for investment banking services: 3. DBS Bank Ltd, DBSVS, their subsidiaries and/or other affiliates of DBSVUSA have received compensation, within the past 12 months for investment banking services from CapitaLand Commercial Trust as of 30 Dec 2016. 4. DBS Bank Ltd, DBSVS, their subsidiaries and/or other affiliates of DBSVUSA have managed or co-managed a public offering of securities for CapitaLand Commercial Trust in the past 12 months, as of 30 Dec 2016. 5. DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively. Disclosure of previous investment recommendation produced: 6. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates may have published other investment recommendations in respect of the same securities / instruments recommended in this research report during the preceding 12 months. Please contact the primary analyst listed in the first page of this report to view previous investment recommendations published by DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates in the preceding 12 months.

RESTRICTIONS ON DISTRIBUTION General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

Australia This report is being distributed in Australia by DBS Bank Ltd. (“DBS”) or DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”), both of which are exempted from the requirement to hold an Australian Financial Services Licence under the Corporation Act 2001 (“CA”) in respect of financial services provided to the recipients. Both DBS and DBSVS are regulated by the Monetary Authority of Singapore under the laws of Singapore, which differ from Australian laws. Distribution of this report is intended only for “wholesale investors” within the meaning of the CA.

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Page 10 Company Guide CapitaLand Commercial Trust

Hong Kong This report is being distributed in Hong Kong by or on behalf of, and is attributable to DBS Vickers (Hong Kong) Limited which is licensed and regulated by the Hong Kong Securities and Futures Commission and/or by DBS Bank (Hong Kong) Limited which is regulated by the Hong Kong Monetary Authority and the Securities and Futures Commission. Where this publication relates to a research report, unless otherwise stated in the research report(s), DBS Bank (Hong Kong) Limited is not the issuer of the research report(s). This publication including any research report(s) is/are distributed on the express understanding that, whilst the information contained within is believed to be reliable, the information has not been independently verified by DBS Bank (Hong Kong) Limited. This report is intended for distribution in Hong Kong only to professional investors (as defined in the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and any rules promulgated thereunder.)

For any query regarding the materials herein, please contact Paul Yong (CE. No. ASE988) at [email protected].

Indonesia This report is being distributed in Indonesia by PT DBS Vickers Sekuritas Indonesia.

Malaysia This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR"). Recipients of this report, received from ADBSR are to contact the undersigned at 603-2604 3333 in respect of any matters arising from or in connection with this report. In addition to the General Disclosure/Disclaimer found at the preceding page, recipients of this report are advised that ADBSR (the preparer of this report), its holding company Alliance Investment Bank Berhad, their respective connected and associated corporations, affiliates, their directors, officers, employees, agents and parties related or associated with any of them may have positions in, and may effect transactions in the securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory and other services for the subject companies. They may also have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and other services from the subject companies.

Wong Ming Tek, Executive Director, ADBSR

Singapore This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No. 198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from, or in connection with the report.

Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd. Research reports distributed are only intended for institutional clients only and no other person may act upon it.

United Kingdom This report is produced by DBS Bank Ltd which is regulated by the Monetary Authority of Singapore.

This report is disseminated in the United Kingdom by DBS Vickers Securities (UK) Ltd, ("DBSVUK"). DBSVUK is authorised and regulated by the Financial Conduct Authority in the United Kingdom.

In respect of the United Kingdom, this report is solely intended for the clients of DBSVUK, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVUK. This communication is directed at persons having professional experience in matters relating to investments. Any investment activity following from this communication will only be engaged in with such persons. Persons who do not have professional experience in matters relating to investments should not rely on this communication.

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CapitaLand Commercial Trust

Dubai This research report is being distributed in The Dubai International Financial Centre (“DIFC”) by DBS Bank Ltd., (DIFC Branch) having its office at PO Box 506538, 3rd Floor, Building 3, East Wing, Gate Precinct, Dubai International Financial Centre (DIFC), Dubai, United Arab Emirates. DBS Bank Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority. This research report is intended only for professional clients (as defined in the DFSA rulebook) and no other person may act upon it.

United States This report was prepared by DBS Bank Ltd. DBSVUSA did not participate in its preparation. The research analyst(s) named on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate.

Other jurisdictions In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.

DBS Bank Ltd 12 Marina Boulevard, Marina Bay Financial Centre Tower 3 Singapore 018982 Tel. 65-6878 8888 e-mail: [email protected] Company Regn. No. 196800306E

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