Capitamall Trust
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CONSISTENT PERFORMANCE SUSTAINABLE GROWTH CAPITAMALL TRUST REPORT TO UNITHOLDERS VISION MISSION Creating Value To deliver stable distributions Maximising Returns and sustainable total returns Transforming Experiences to Unitholders. CapitaMall Trust’s vision embraces all our stakeholders. We rely on the continued and combined support of our Unitholders, business partners, tenants, shoppers and employees to achieve this vision and, in return, share with them the fruits of our success. TAMPINES MALL JUNCTION 8 FUNAN DIGITALIFE MALL IMM BUILDING PLAZA SINGAPURA BUGIS JUNCTION SEMBAWANG SHOPPING CENTRE JCUBE HOUGANG PLAZA RAFFLES CITY SINGAPORE LOT ONE SHOPPERS’ MALL BUKIT PANJANG PLAZA RIVERVALE MALL THE ATRIUM@ORCHARD CLARKE QUAY CORPORATE PROFILE CapitaMall Trust (CMT) is the first Real Estate Investment CMT also owns approximately 19.62% stake in CapitaRetail Trust (REIT) listed on Singapore Exchange Securities China Trust as at 31 December 2010, the first China shopping Trading Limited (SGX-ST) in July 2002. CMT is also the mall REIT listed on the SGX-ST in December 2006. largest REIT by market capitalisation and asset size in Singapore, with a market capitalisation and asset size of CMT has been assigned an ‘A2’ rating by Moody’s Investors approximately S$6.2 billion and S$8.1 billion respectively Service. The ‘A2’ rating is the highest rating assigned to as at 31 December 2010. a Singapore REIT. CMT is the only REIT constituent of the Straits Times (ST) Index and is also a constituent of CMT owns and invests in quality income-producing assets various key global indices which include the FTSE4Good which are used, or predominantly used, for retail purposes Global Index, FTSE/ASEAN Index, FTSE European Public primarily in Singapore. As at 31 December 2010, CMT’s Real Estate Association (EPRA)/National Association of portfolio comprised a diverse list of over 2,400 leases with Real Estate Investment Trusts (NAREIT) Global Real Estate local and international retailers and achieved an average Index, FTSE ST Index and its sub-indices, Global Property committed occupancy of close to 100.0%. CMT’s portfolio Research (GPR) General Index and its sub-indices, GPR comprises 15 quality retail properties which are strategically 250 Index and its sub-indices, GPR 250 REIT Index and its located in the suburban areas and downtown core of sub-indices, Morgan Stanley Capital International (MSCI) Singapore – Tampines Mall, Junction 8, Funan DigitaLife Singapore Standard, MSCI World Standard Index, Standard Mall, IMM Building, Plaza Singapura, Bugis Junction, and Poors (S&P) BMI Global Index, S&P Global Property Sembawang Shopping Centre, JCube (formerly known and S&P Global REIT Index. as Jurong Entertainment Centre), Hougang Plaza, Raffles City Singapore (40.00% interest), Lot One Shoppers’ Mall, CMT is managed by an external manager, CapitaMall Trust Bukit Panjang Plaza (90 out of 91 strata lots), Rivervale Management Limited, which is a wholly-owned subsidiary Mall, The Atrium@Orchard and Clarke Quay. of CapitaMalls Asia Limited, one of Asia’s largest listed shopping mall developers, owners and managers. CONTENTS 01 Corporate Profile 47 Organisation Structure 92 Shoppers Voices 04 Financial Highlights 48 Board of Directors 96 Portfolio at a Glance 06 Letter to Unitholders 55 Present Directorships 98 Portfolio Summary 12 Year in Brief 59 Trust Management Team 100 Portfolio Details 14 Growth Strategies 61 Property Management Team 130 CapitaRetail China Trust 18 Independent Retail Market Overview 64 Sustainability 133 Financial Statements 24 Singapore REIT Sector 64 Environment 204 Unitholders’ Statistics 25 Operations Review 66 People & Community 206 Interested Person Transactions 30 Marketing & Promotions 69 Corporate Governance 207 Notice of Annual General Meeting 33 Financial Review 83 Investor & Media Relations 210 Mall Directory 39 Risk & Capital Management 85 Unit Price Performance 211 Corporate Information 46 Trust Structure 90 Tenants Voices 212 Glossary CAPITAMALL TRUST Report TO UNITHOLDERS 2010 1 DELIVERING CONSISTENT PERFORMANCE 24/7 MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY SUNDAY Bugis Junction 3 FINANCIAL HIGHLIGHTS PERFORMANCE AT A GLANCE Gross Revenue (S$ million) Net Property Income (S$ million) +5.1% +5.9% +8.2% +10.4% +18.3% +18.5% +30.2% +32.3% 331.7 431.9 510.9 552.7 581.1 217.6 287.8 341.1 376.8 399.1 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Market Capitalisation (S$ million) Distributable Income (S$ million) +8.5% +4.6% +115.9% +18.3% +26.6% +12.9% +24.7% -53.9% 4,543.8 5,751.9 2,650.3 5,722.7 6,209.3 169.4 211.2 238.4 282.0 294.8 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 4 CAPITAMALL TRUST Report TO UNITHOLDERS 2010 2006 2007 2008 2009 2010 TRUST & ITS GROUP2 GROUP2 GROUP2 GROUP2 INVESTEES1 Selected Statement of Total Return and Distribution Data Gross Rental Income (S$ million) 307.3 399.2 473.6 513.7 539.2 Car Park Income (S$ million) 8.9 12.0 13.7 14.3 15.5 Other Income (S$ million) 15.5 20.7 23.6 24.7 26.4 Gross Revenue (S$ million) 331.7 431.9 510.9 552.7 581.1 Net Property Income (S$ million) 217.6 287.8 341.1 376.8 399.1 Distributable Income (S$ million) 169.4 211.2 238.4 282.0 294.8 Selected Balance Sheet Data Total Assets (S$ million) 4,811.3 5,957.3 7,509.0 7,423.03 8,125.9 Total Borrowings4 (S$ million) 1,695.2 2,052.2 3,216.4 2,243.0 2,916.9 Net Asset Value Per Unit5 (S$) 1.87 2.21 2.41 1.54 1.53 Unitholders’ Funds (S$ million) 2,975.8 3,721.8 4,079.6 4,969.6 4,939.4 Market Capitalisation6 (S$ million) 4,543.8 5,751.9 2,650.3 5,722.7 6,209.3 Portfolio Property Valuation (S$ million) 4,575.1 5,777.9 7,174.0 6,920.5 7,271.5 Key Financial Indicators Earnings Per Unit7 (cents) 29.17 38.52 33.70 (2.23)8 8.49 Distribution Per Unit (cents) 11.69 13.34 14.29 8.859 9.249 Borrowings to Total Assets (Gearing) 35.2% 34.5% 42.8% 30.2% 35.9% Interest Coverage (times) 5.0 4.2 3.4 3.6 3.6 Management Expense Ratio10 0.9% 0.7% 0.7% 0.7% 0.7% Unencumbered assets as % of Total Assets 4.9% 3.0% 4.5% 20.0% 36.3% Net Debt / EBITDA11 (times) 8.0 6.8 10.2 6.6 6.8 Average Term to Maturity (years) 2.6 2.8 2.012 1.712 2.612 Average cost of debt 3.3% 3.5% 3.4% 3.5% 3.7% After Restatement for the Effect of Rights Issue13 Net Asset Value Per Unit5 (S$) 1.35 1.54 1.65 1.54 1.53 Earnings Per Unit7 (cents) 23.71 31.32 27.40 (2.23)8 8.49 Distribution Per Unit (cents) 5.72 6.83 7.52 8.85 9.24 1. As at 31 December 2006, the Trust and its investees include proportionate consolidation of the 40.00% interest in Raffles City Singapore (RCS), through the RCS Trust, the special purpose vehicle that holds RCS, and equity accounting of its associate, CapitaRetail Singapore Limited (CRSL). 2. As at 31 December 2007, 31 December 2008, 31 December 2009 and 31 December 2010, CMT Group includes the proportionate consolidation of the 40.00% interest in RCS, through the RCS Trust, consolidation of 100.00% interest in CRSL (with effect from 1 June 2007) and CMT MTN Pte. Ltd. (CMT MTN) (with effect from 13 April 2007) and equity accounting of its associate, CapitaRetail China Trust (CRCT) (with effect from 1 April 2007). 3. The decrease in total assets as at 31 December 2009 is mainly due to the revaluation deficit on investment properties, offset by the increase in cash and cash equivalent mainly from the balance of net proceeds of the underwritten renounceable 9-for-10 rights issue (Rights Issue). 4. Excludes unamortised transaction costs. As at 31 December 2010, the total borrowings include S$550.0 million in principal amount of the S$650.0 million 1.0% convertible bonds due 2013 (Outstanding Convertible Bonds) (as at 31 December 2008 and 2009 : S$650.0 million). The final redemption price upon maturity on 2 July 2013 is equal to 109.31% of the principal amount. The Outstanding Convertible Bonds may be redeemed in whole or in part, at the option of the bondholders on 2 July 2011 at 105.43% of the principal amount. Total borrowings as at 31 December 2010 also include US$500.0 million fixed rate notes issued under the US$2.0 billion unsecured Euro-Medium Term Note Programme of CMT MTN which were swapped to S$699.5 million at a fixed interest rate of 3.794% per annum in April 2010. 5. Excludes outstanding distributable income as at end of each period. 6. Based on the closing unit price of S$2.91 on 29 December 2006, S$3.46 on 31 December 2007, S$1.59 on 31 December 2008, S$1.80 on 31 December 2009 and S$1.95 on 31 December 2010. 7. With the introduction of Financial Reporting Standards (FRS) 40: Investment Property with effect from 1 January 2007, Earnings Per Unit (EPU) are computed based on total return for the period after tax. Prior to this, EPU were computed based on net income after tax. Comparative EPU have been restated to be consistent with the presentation. 8.