First Quarter 2009 Financial Results 27 Apr il 2009 Agenda
Î Financial Highlights
Î PtfliPfPortfolio Performance U Udtpdate – Singapore – Tokyo – Chengdu
Î Growth Strategies – Asset Enhancements – Business Strategy
27 April 2009 Starhill Global REIT 2 Key highlights
1Q 2009 : Income to be distributed up 7.4%
1Q 2009 DPU of 1.87 cents achieved, 6.3% higher than 1Q 2008 Resilient retail master lease structure at Ngee Ann City to be bolstered by expected surge in shopper traffic when Wisma Atria basement linkway to MRT station reopens Weighted average effective interest rate remains low at 2.95% per annum after refinancing of S$35 million of Revolving Credit Facility now due March 2010
27 April 2009 Starhill Global REIT 3 1Q 200 9 financial highlights
DPU of 1. 87 cents exceeded 1Q 2008 by 6. 3%
Period: 1 Jan – 31 Mar 2009 1Q 2009 1Q 2008 % Change
Gross Revenue $34.3 mil $30.4 mil 12.8%
Net Property Income $27.1 mil $23.1 mil 17.2%
Income Available for Distribution $19.1 mil $17.0 mil 12.2%
Income to be Distributed $18.0 mil (1) $16.8 mil 7.4%
DPU 1.87 cents (2) 1.76 cents 6.3%
Note: 1. The income to be distributed is based on 100% of taxable income for the current period. Approximately S$1.1 million of income available for distribution for the first quarter ended 31 March 2009, comprising mainly overseas income, has been retained to satisfy certain legal reserve requirements and for prudency.
2. The computation of DPU is based on number of units entitled to distributions comprising: (a) number of units in issue as at 31 Mar 2009 of 960,803,854 units and (b) units issuable to the Manager as partial satisfaction of management fee (base fee) earned for 1Q 2009 of 2,972,852 units.
27 April 2009 Starhill Global REIT 4 DPU performance
DPU growth
Actual DPU % increase over previous quarter
1Q 2009 (1 Jan – 31 Mar 2009) 1.87 cents 1.1%
FY 2008 (1 Jan – 31 Dec 2008) 7.17 cents
4Q 2008 (1 Oct – 31 Dec 2008) 1.85 cents 3.9%
3Q 2008 (1 Jul – 30 Sep 2008) 1.78 cents 0.0%
2Q 2008 (1 Apr – 30 Jun 2008) 1.78 cents 1.1%
1Q 2008 (1 Jan – 31 Mar 2008) 1.76 cents 4.8%
FY2007 (1 Jan – 31 Dec 2007) 6196.19 cen ts
4Q 2007 (1 Oct – 31 Dec 2007) 1.68 cents 9.1%
3Q 2007 (1 Jul – 30 Sep 2007) 1.54 cents 2.7%
2Q 2007 (1 Apr – 30 Jun 2007) 1. 50 cents 20%2.0%
1Q 2007 (1 Jan – 31 Mar 2007) 1.47 cents n.m.
27 April 2009 Starhill Global REIT 5 1Q 2009 financial results
$’000 1Q09 1Q08 % Change 1Q 2009 gross revenue exceeded Gross Revenue 34,325 30,418 12.8% 1Q 2008 by 12.8% due primarily to higher rates achieved from Less: Property Expenses (7,217) (6,901) 4.6% renewals and new leases in Depreciation (55) (428) (87.1%) Singgpapore, the rent review of the Net Property Income 27,053 23,089 17.2% master lease in Ngee Ann City, as well as higher revenue from the Less: Fair Value Adjustment (1) (179) (46) 289.1% Chengdu property Borrowing Costs (5,893) (4,705) 25.2% Management Fees (2,671) (2,822) (5.4%) Other Trust Expenses ( 834) (1,020) (18.2%)
Net Income Before Tax 17,476 14,496 20.6%
Add: Non -Tax Deductibles (2) 1, 603 2, 515 (36.3%) Notes: 1. Being accretion of tenancy deposit stated at amortised Income Available for Distribution 19,079 17,011 12.2% cost in accordance with Financial Reporting Standard 39. This financial adjustment has no impact on the DPU Income to be Distributed 18,023 16,788 7.4% 2. Includes adding back of management fees payable in units, finance costs, depreciation, sinking fund proviiisions an dtd trus tee fees DPU 1.87 cents 1.76 cents 6.3%
27 April 2009 MacquarieStarhill GlobalMEAG REITPrime REIT 6 1Q 2009 financial results
Revenue Net Property Income
$’000 1Q 2009 1Q 2008 % Change $’000 1Q 2009 1Q 2008 % Change
Wisma Atria Wisma Atria Retail (1) 11,455 11,552 (0.8%) Retail 9,277 8,564 8.3% Office (1) (2) 2,575 2,107 22.2% Office 2,004 1,536 30.5%
Ngee Ann City Ngee Ann City Retail (1) (2) 9,940 8,362 18.9% Retail 8,399 6,580 27.6% Office (1) (2) 3,553 2,772 28.2% Office 2,575 2,018 27.6%
Japan portfolio (3) 2,646 2,253 17.4% Japan portfolio (3) 2,221 2,012 10.4% Chengdu (4) 4,156 3,372 23.3% Chengdu (4) 2,577 2,379 8.3%
Total 34,325 30,418 12.8% Total 27,053 23,089 17.2%
Notes: 1. Net of government property tax rebates to be passed on to tenants 2. Renewal of leases at higher market rates and rent reviews 3. Mainly due to strengthening of Yen 4. Higher sales at Chengdu property and strengthening of RMB
27 April 2009 MacquarieStarhill Global MEAG REIT Prime REIT 7 Trading yield
Attractive trading yield compared to other investment instruments
18 16.66% 16.53 16
14 12.16%12.16 12 16.11% 14.16% 10
8
6
4 2.50%2.50 2.03%2.03 1.42% 2 1.42 0.55%0550.55 - Starhill Global Average S-Reit CPF Ordinary 10-Year Spore 5-Year Spore Bank Fixed (3) (4) (4) REIT FY2009 yield (2) Acount Govt Bond Govt Bond Deposit Rate (12 yield (1) Month) (5) Notes: 1. Base d on Star hill Gl o ba l REIT’s c los ing pr ice o f $0. 455 per un it as a t 31 Mar 2009 an d ac tua l annua lise d dis tr ibu tion for 1Q 2009 2. As at 31 Mar 2009 (Source: Bloomberg) 3. Based on interest paid on Central Provident Fund (CPF) ordinary account in Mar 2009 (Source: CPF website) 4. As at Mar 2009 (Source: Singapore Government Securities website) 5. As at 9 Apr 2009 (Source: DBS website) 27 April 2009 8 Unit price performance
1.40 70,000 Liquidity statistics 1.20 60,000 Last 3 months average 1.2 mil daily trading volume (units) 1.00 50,000 Trading Volume ('
Estimated free float 74.0% 0.80 40,000
Market cap (31 Mar 09)1 $437 mil
0.60 30,000 0 nit Price nit Price (SGD) 00s) U
0.40 20,000
0.20 10,000
0000.00 0 Jul-06 Jul-07 Jul-08 Jan-06 Jan-07 Jan-08 Jan-09 Mar-06 Mar-07 Mar-08 Mar-09 Nov-05 Sep-06 Nov-06 Sep-07 Nov-07 Sep-08 Nov-08 May-06 May-07 May-08 Volume ('000s) Unit Price 200-day mvng avg Source: Bloomberg
Note: 1. By reference to Starhill Global REIT’s closing price of $0.455 as at 31 Mar 2009
27 April 2009 Starhill Global REIT 9 Distribution timetable
Distribution Period 1 January to 31 March 2009
Distribution Amount 1.87 cents per unit
Distribution Timetable
Notice of Books Closure Date 27 April 2009
Last Day of Trading on “Cum” Basis 30 April 2009, 5.00 pm
Ex-Date 4 May 2009, 9.00 am
Books Closure Date 6 May 2009, 5.00 pm
Distribution Payment Date 29 May 2009
27 April 2009 Starhill Global REIT 10 Debt profile
As at 31 Mar 2009 $’000
Term loan (CMBS equivalent) 380,000
Term loan (Secured) 190,000
Revolving Credit Facilities 46,000
Japan Bond 47,920
Chinese Loan 6,219
Total Debt 670,139
Fixed Rate Debt (up to Sept 2010) 1 89.4%
Gearing Ratio 2 31.1%
Interest Cover 4.9x
Weighted Average Effective Interest Rate 1 2.95% p.a.
Starhill Global REIT corporate rating3 Baa2
Notes: 1. Includes interest rate derivatives and Japanese loan 2. Based on deposited property as defined in the Trust Deed 3. Reaffirmed by Moody’s Investors Service in Oct 2008
27 April 2009 Starhill Global REIT 11 Debt profile
No significant debt maturing until S eptember 2010
Debt maturity profile S$ million 700 Weighted Average Effective Interest 617 Rate is 2.95% p.a. 600
500 89.4% of borrowings is fixed (including derivatives) until 400 September 2010
300 S$35m of RCF refinanced. Final 200 maturity extended to March 2010
100 49 1 1 1 1 - ‐ ‐‐‐‐ 2009 2010 2011 2012 2013 2014 Term loan (CMBS equivalent) RCF (secured) Term loan (secured) RCF (unsecured) Japan bond Chinese loan
27 April 2009 Starhill Global REIT 12 Balance sheet
As at 31 Mar 2009 $’000 NAV statistics
Non Current Assets 2,114,367 NAV Per Unit (as at 31 Mar 2009) (1) $1.43 Current Assets 40,840 Adjusted NAV Per Unit (1) $1. 41 Total Assets 2,155,207 (net of distribution) Current Liabilities (109,602) Last traded price as at 31 Mar 09 $0.455 Non Current Liabilities (665,877)
Total Liabilities (775,479) Unit Price Premium/(Discount) To: NAV Per Unit (68.2%) Net Assets 1,379,728 Adjusted NAV Per Unit (67.7%) Unitholders’ Funds 1,379,728
Units (’000) 963,777
Notes: 1. The number of units used for comppp,,p()utation of NAV per unit is 963,776,706. This comprises: (a) number of units in issue as at 31 Mar 2009 of 960,,,803,854 units; and (b) units to be issued to the Manager as partial satisfaction of management fee (base fee) earned for 1Q 2009 of 2,972,852 units.
27 April 2009 Starhill Global REIT 13 Agenda
Î Financial Highlights
Î Portfolio Performance Update – Singapore – Tokyo – Chengdu
Î Growth Strategies – Asset Enhancements – Business Strategy
14
27 April 2009 Starhill Global REIT Portfolio
Portfolio summary
Diversifffied portfolio comprising Singapore, Japanese and Chinese assets
Gross Revenue by Retail and Office Gross Revenue by Property Gross Revenue by Country (1Q 09) (1Q 09) (1Q 09)
Renhe Spring Zong Bei Property Office 12% China 18% NAC 12% 39% Japan 8%
WA 41% Retail Singapore 82% 80% Japanese Properties 8%
27 April 2009 Starhill Global REIT 15 Portfolio
Portfolio lease expiry
Weighted average lease term of264f 2.64 and 2.5 3 years (by NLA and gross rent respectively )
Portfolio Lease Expiry (as at 31 March 2009)1 50% Office Retail By NLA By Gross Rent 42.5% sq ft WA NAC WA NAC Japan Total 40% 37.5%
2009 39,902 28,761 24,585 7,804 2,614 103,667 30% 23.6% 24.0% 21,797 62,054 37,494 2,928 4,010 128,284 22.1% 2010 19.6% 20% 15.8% 14.9% 2011 16,254 48,597 59,563 17,201 2,782 144,397
10% Beyond 2011 2,680 - 2,583 225,969 47,185 278,417
Total 80,633 139,413 124,225 253,901 56,591 654,764 0% FY2009 FY2010 FY20112Beyond Beyond 2011 Notes: 1. Portfolio lease expiry profile does not include Chengdu Property which operates as a department store with many short-term concessionaire li3leases running 3-12 month s 2. Toshin contributes to 34.5% and 29.9% of portfolio lease expiry by NLA and Gross Rent respectively
27 April 2009 Starhill Global REIT 16 Portfolio
Portfolio lease expiry profile by year
17 6 out o f 1891 leases expire by 2011, accounting for 62.5 % o f gross rental income
1 Year Office Leases Retail Leases Gross Rental Income per month
2 No. of Weighted No. of Weighted Office Retail % of Total leases average rent psf leases average rent psf S$’000 S$’000
2009 24 7.90 29 27.40 540 959 14.9%
2010 24 9.60 45 35.40 806 1,573 23.6%
2011 16 10.50 38 21.80 681 1,736 24.0% Total 64 9.30 112 26.80 2,077 4,268 62.5%
1. Excludes leases in Chengdu property as it operates as a department store comprising many concessionaries with short leases running 3-12 months 2. As a percentage of total gross rental income for the month of March 2009
27 April 2009 Starhill Global REIT 17 Portfolio
Portfolio top 10 tenants
T10ttTop 10 tenants con tibtd441%fthtflitributed 44.1% of the portfolio gross rent
Leased Area % of Portfolio % of Portfolio Tenant Name Property Lease Expiry (sq ft) Gross Rent 1 NLA Toshin Development Co Ltd NAC 225,969 Jun 2013 26.3% 29.9% Ebisu For t Sep 2012, Nakameguro Dec 2015, Future Revolution K.K. 2 39,505 5.1% 5.2% Harajyuku Secondo Dec 2015 Roppongi Terzo Jan 2016 Sep 09, Oct 09, Bread Talk Group WA 27,104 2.4% 3.6% Sep 2011 Nike Singapore Pte Ltd WA 8,288 Nov 2011 2.2% 1.1%
Zegna Trading (Shanghai) Co. Ltd3 Renhe Spring Zongbei 1,550 Mar 2009 1.5% 0.2% May 09, Aug 2010, Aspial-Lee Hwa (S) Pte Ltd WA 3,778 1.4% 0.5% Sep 2011, Oct 2011 Mar 2010 , Jun 2010, RSH (Singapore) Pte Ltd WA 4,061 1.4% 0.5% Oct 2010 May 2010, Jun 2010, Wing Tai Retail Pte Ltd WA 4,908 1.3% 0.7% Oct 2010, Nov 2010 FJ Benjamin Lifestyle Pte Ltd WA 7,847 Nov 2011 1.2% 1.0% Fashion Retail Pte Ltd WA 3,832 Sep 2009 1.2% 0.5% Notes: 1. For the month of March 2009 2. Future Revolution KK is the fixed rent master tenant for these four properties 3. Zegna Trading (Shanghai) Co. Ltd operates as a concessionaire at the Renhe Spring Zongbei Property and pays a percentage of GTO. Renewal negotiations are in progress 27 April 2009 Starhill Global REIT 18 Portfolio
Rental reversions: Office rent contribution expected to be steady in 2009
Incremental contributions expected from renewal of office units in 2009
Portfolio Office Lease Expiry and Average Gross Passing Rents Sq ft S$ psf pm Î The average passing rent of leases 100,000 11. 00 12 10.50 expiring in 2009 accounting for 68, 664 sq ft 90,000 9.60 10 of office NLA is still below market rents 80,000 7.90 70,000 8 60,000 Î Positive rental reversion of 111.5% for 50, 000 6 office lease renewal in 1Q 2009 despite 40,000 4 challenging market conditions 30,000
20,000 2 10,000 68, 664 83, 852 64, 851 2, 680 - - 2009 2010 2011 Beyond 2011
Expiring Office Leases (by NLA)
Gross passing rents of expiring leases (S$ psf pm)
Note: Average monthly gross rent rounded to nearest ten cents
27 April 2009 Starhill Global REIT 19 Portfolio
Retail Passing Rents
Wisma Atria’s average passing rents are above market average
Average Passing Rents of Wisma Atria and Ngee Ann City Vs. Prime Orchard Road Rents S$ psf pm ÎNgee Ann City’s average retail rents are lower given 40 36.40 36.53 36.53 the master lease with Toshin that accounts for 89% 34.50 35 33.00 of retail NLA at Ngee Ann City 30.63 29.24 30 28.16 27.91 28.11
25
20 Footnotes: 15 12.24 13.51 1. 2005 average rents computed from September - December 2005 10.96 2. CBRE’s quoted figures are for prime Orchard Road space which is 10. 85 10.86 10 de fine d as “spec ia lty ” s hop un its o f 500-1, 000 sq ft on l evel with heaviest traffic 5
- 2005₁ 2006 2007 2008 2009
Wisma Atria Retail Ngee Ann City Retail CBRE
27 April 2009 Starhill Global REIT 20 Portfolio
Occupancy costs
Average retail occupancy costs
Average retail occupancy costs Î The higher occupancy cost at Wisma Atria is attributed to the higher proportion of fashion 30% 30% tenants given the centre ’s positioning as a female- 25% centric mall
20% 16% 17% Î Renhe Spring Zongbei Property operates as a
10% hig h-end depar tmen t s tore with in terna tiona l luxury labels such as Prada, Hugo Boss, Chopard, Montblanc and Vertu which typically enjoy lower 0% 2008 Year-to-Date 2009 occupancy costs Wisma Atria Renhe Spring Zongbei Notes: 1. Year-to-date 2009 occupancy costs for Wisma Atria and Renhe Spring Zongbei is for the period Jan-Mar 2009 2. Year-to-date 2009 occupancy costs for Wisma Atria has increased primarily due to lower tenants’ sales 3. Average retail occupancy costs for Ngee Ann City and the Japanese properties are not available due to master lessee arrangements
27 April 2009 Starhill Global REIT 21 Wisma Atria
Wisma Atria Property - Overview
Î Weiggghted average lease term of 1.5 y(y)years (by NLA) Rent Structure of Retail Leases (by NLA) – Retail: 1.76 years; Office: 1.05 years Î High committed occupancy (95.1% by NLA) Dec 2005 Mar 09 100% – Retail: 98.6%; Office: 90.5% 81% 80% Î Increasing proportion of retail leases structured as base 66% rent plus % GTO 60% – Base rent plus % GTO from 33% (Dec 05) to 81% 40% 33% (Mar 09) 19% – Higher of base rent or % GTO from 66% (Dec 05) to 20%
19% (Mar 09) 0% Higher of Base Rent or % GTO Base Rent plus % GTO
Lease Expiry Schedule (by NLA) as at 31 Mar 2009 Committed Occupancy Rates
Retail Office 60% Retail Office 100% 98.6% 49.5% 47.9% 95.3% 95.6% 90.5% 50% 95% 95% 86.0% 84.7% 90% 83.2% 40% 85% 30.2% 80% 30% 27.0% 75% 19.8% 20.2% 20% 70% 65% 10% 60% 3.3% 2.1% 55% 0% 50% FY2009 FY2010 FY2011 Beyond 2011 30 Jun 08 30 Sep 08 31‐Dec‐08 31‐Mar‐09 27 April 2009 Starhill Global REIT 22 Wisma Atria
Wisma Atria Property - Overview
Wisma At ri a R et ail E xpi ri ng L eases Wisma Atria Office Expiring Leases and their Average Passing Rents and their Average Passing Rents
WA Retail Lease Expiry & Average Gross Rent WA Office Lease Expiry and Average Gross Passing Rents Sq ft SftSq ft S$ psf pm S$ psf pm 50,000 50,000 14 45 45,000 12.80 45,000 39.10 12.00 40,000 40 12 40,000 11.00 35,000 35,000 35 30,000 10 30,000 33.30 30 25,000 25,000 23.70 24.30 8.70 8 25 20,000 20,000 15,000 6 15,000 20 10,000 10, 000 4 15 2,680 5,000 2,583 5,000 24,585 37,494 59,563 39,902 21,797 16,254 0 10 - 2 2009 2010 2011 Beyond 2011 2009 2010 2011 Beyond 2011
Expiring Office Leases (by NLA) Expiring retail leases (by NLA) Gross passing rents of expiring leases (S$ psf pm) Gross passing rents of expiring leases (S$ psf pm)
27 April 2009 Starhill Global REIT 23 Wisma Atria
Wisma Atria Property – Traffic and centre sales
Quality of shopper traffic and sales to improve with reopening of basement MRT linkway expected in 2Q 2009
Wisma Atria Traffic Count at Primary Entrances Wisma Atria Property Retail Sales Turnover Million S$ 252.5 Year 2007 Year 2008 Year 2009 26Million
24 2.0 22 2007 Sales Turnover 1.5 20 18 2008 Sales 1.0 16 Turnover
14 0.5 2009 Sales 12 Turnover 0.0 10 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2007 Sales TurnOver 2008 Sales TurnOver 2009 Sales TurnOver
Î Overall footfall to Wisma Atria is exppp(y)pected to increase from 15.8 million p.a. (2008 full year traffic) to close to pre-MRT linkway closure levels of about 25 million p.a. when the new basement and level 2 linkways to Orchard MRT open in June 2009 Î A knock-on effect on centre sales is expected
27 April 2009 Starhill Global REIT 24 Wisma Atria
Wisma Atria Property - Diversified tenant base
WA Retail Trade Mix – by % NLA WA Office Trade Mix – by % NLA (as at 31 Mar 2009) (as at 31 Mar 2009)
Shoes & Services Accessories Travel/Leisure Aerospace 3.7% 8.4% 1.0% Trading 10.3% Jewellery & 8.9% Watches 6.6% Real Estate & Consultancy / Property Services Services 13.2% General 8.2% Government Trade Fashion related 2.1% 48.7% 3.0% Investments 3.0% Jewellery & F&B Petroleum 28.7% Watches Related 4.9% 27.9% Health & Others Beauty 10.0% Medical 1.7% 9.5%
27 April 2009 25 Ngee Ann City
Ngee Ann City Property - Overview
Lease Expiry Schedule (by NLA) as at 31 Mar 2009 Î Weighted average lease term of 3.0 years (by NLA) – Retail: 3.89 years; Office 1.32 years 100% Retail Office 89.0% 90% 80% Î Close to full committed occupancy (99.3% by NLA) 70% – Retail: 99.6%; Office 98.8% 60% 50% 44. 5% 40% 34.9% Î Increasing proportion of Level 5 retail leases structured as base rent plus % GTO from 0% (Dec 05) to 83% (Mar 30% 20.6% 20% 09) and step-up rents from 0% (Dec 05) to 72% (Mar 09) 6.8% 10% 3.1% 1.2% 0.0% 0% FY2009 FY2010 FY2011 Beyond 2011
Committed Occupancy Rates
Retail Office
99.6%98.2% 99.6% 99.6% 98.8%99.6% 98.8% 100% 98.2%
90%
80%
70%
60%
50% 30 Jun 08 30 Sep 08 31-Dec-08 31-Mar-09 27 April 2009 Starhill Global REIT 26 Ngee Ann City
Ngee Ann City Property - Overview
NACitRtilEiiLNgee Ann City Retail Expiring Leases Ngee Ann City Office Expiring Leases and their Passing Average Rents and their Passing Average Rents
Sq SftSq ft S$ psf S$ psf ft 60,000 16.60 250,000 16.60 17 14
50,000 16 12 200,000 15 40,000 10 150,000 9.70 14.30 14 30,000 13.10 8.80 8 13 100,000 20,000 6.70 6 12 50,000 10,000 4 11 28,761 62,054 48,597 7,804 2,928 17,201 225,969 - 2 0 10 2009 2010 2011 2009 2010 2011 Beyond 2011 Expiring Office Leases (by NLA)
Expiring retail leases (by NLA) Gross passing rents of expiring leases (S$ psf pm)
Gross passing rents of expiring leases (S$ psf pm)
27 April 2009 Starhill Global REIT 27 Ngee Ann City
Ngee Ann City - Diversified tenant base
NAC Trade mix – by % NLA NAC Office Trade Mix – by % NLA (as at 31 Mar 2009) (as at 31 Mar 2009)
Aerospace Travel/Leisure Banking and General 3.6% Services Real Estate 5.4% Financial Trade 1.9% & Property Services 0.4% Beauty & Services 7.4% Wellness 69%6.9% Beau ty / 8.8% Petroleum Health Related 4.5% 2.2%
Others 16.6% Consultancy / Services 28.2% Toshin 89.0% Jewellery & Watches Fashion 11.0% Retail 14.2%
27 April 2009 Starhill Global REIT 28 Japan Properties
Japan Properties - Overview
Î Weighted average lease term by NLA is 4.5 years Î Full occupancy except for the Daikanyama property Î Four of the seven properties (69% by NLA) have fixed rent master leases expiring between 2012 and 2015 – provides stability of cashflow over an extended period
Lease Structure (by NLA) Occupancy rates
Committed occupancy rates as at 31 March 2009
100% 100% 100% 100% 100% 100% Pass-through 100% Leases Medium Term 95% 31% Master Lease 88% 34% 90% 85% 80% 75% 70% 65% Long Term 60% Master Lease 55% 35% 50% Î Long term master leases expire late 2015 rajyuku rajyuku n-yama isu Fort meguro Terzo Holon L Primo econdo oppongi oppongi -- aa aa bb S RR RR H Î Me dium term mas ter lease exp ires in Sep 2012 E Daik Î Pass-through leases typically have 3 year terms Naka
27 April 2009 Starhill Global REIT 29 Japan Properties
Japan Properties - Overview
Pro-active management of Japanese assets
Area occupied by Future Revolution and Î The issue of Future Revolution’s former parent 3rd party end tenants undergoing civil rehabilitation has been lifted as 100% of the company has been divested to a non- Future Revolution related party, Hexagon Capital Partners 29% Î Efforts are ongoing to reduce the amount of lettable area occupied directly by Future Revolution 3rd party end‐tenants 71% Î Savills Japan K.K. has been appointed as the asset manager of Ebisu Fort, replacing Future Revolution. Savills will also assume the role of asset manager for the rest of the Japan portfolio on 1 June 2009 Future Revolution is the master tenant and property manager of Starhill Global REIT’s seven Japanese properties Î The Manager is also working to replace the property manager for the Japan portfolio, with the aim to further drive performance at these assets
27 April 2009 Starhill Global REIT 30 Renhe Spring Zongbei
Renhe Spring Zongbei - Overview
Quality high-growth asset in CCChengdu, China
Î Full occupancy as at end March 2009 Î Renhe Spring Zongbei property is still showing resilience to weak global economic conditions Î 1Q 2009 sales was 14. 6% higher than 1Q 2008 Î Chinese government announced a RMB 4 trillion economic stimulus package to be spent over 2009 and 2010
Sales (RMB'000) Renhe Spring Zongbei Weekly Sales Performance including VAT 25,000
20,000
15,000
10,000
5,000
0 Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51
2007 2008 2009 27 April 2009 Starhill Global REIT 31 Agenda
Î Financial Highlights
Î Portfolio Performance Update – Singapore – Tokyo
Î Growth Strategies – Asset Enhancements – Business Strategy
27 April 2009 Starhill Global REIT 32 Ngee Ann City: Positioning strengthened by new tenants and upgraded stores
Louis Vuitton expanding into a duplex unit by 2Q 2009 adding to the list of new and upgraded stores by Toshin
27 April 2009 Starhill Global REIT 33 Ngee Ann City: Successful reconfiguration and branding of Level 5
The Fifth - a level above shopping
The National Library space on Level 5 has been reconfigured and rebranded to complement the Ngee Ann City shopping experience
27 April 2009 Starhill Global REIT 34 Wisma Atria: Continuing tenant remix to enhance positioning
New stores in 2008
27 April 2009 Starhill Global REIT 35 Wisma Atria: Integration with ION Orchard on track
Seamless connectivity with Orchard MRT station and ION Orchard from June 2009
New level 2 connection
New escalators from Orchard MRT
WISMA ATRIA ION ORCHARD New escalators will lead directly from OhdMRTttiithbOrchard MRT station in the basemen ttt to ground level directly opposite the new entrance at Wisma Atria’s west side
Æ Wisma Atria’s level 2 traffic expected to increase significantly
ORCHARD ROAD
27 April 2009 Starhill Global REIT 36 Wisma Atria: Re-opening of basement MRT linkway access in-progress
Seamless connectivity with Orchard MRT station and ION Orchard from June 2009
Re-opening of basement connection
MRT Commuter traffic flow
The re-opening of Wisma Atria’s basement linkway to Orch ar d MRT st ati on will resu lt in a resurgence o f shopper traffic, making the basement floor once again one of the busiest shopping corridors in Orchard Road
27 April 2009 Starhill Global REIT 37 Wisma Atria: Creating lettable retail area at Basement and Level 1
Remova lfNEl of New Esca lttlators to unl lkock val lbllttbluable lettable area wh en b asement tMRTlik MRT linkway re-opens
Î Removal of escalators Basement floor between basement and Level 1 near GAP after re - To Orchard MRT Station opening of the MRT linkway Î Escalators will be redundant after re- openifMRTliking of MRT linkway allowing creation of additional lettable area Financial Impact of Asset Enhancement Î Works to commence after (Estimates only) the Great Singapore Sale Annual Rental Income 566 Annual Expenses (assume 20% expense and complete by October 113 margin) 2009 Incremental Annual NPI 453 Capital value of initiative 8,800 (assume 5.15% cap rate) Less Capital Expenditure (740) Increase in capital value 8,060 (net of investment cost) Return on investment pa (%) 61%
27 April 2009 Starhill Global REIT Growth contributors
Growth contributors for these two years
Rental Reversions
Ngee Ann City – Toshin rent increased by 19.75% from 8 Jun 2008 for 3 yrs
Wisma Atria – Re-opening of MRT linkway – expected in June 2009
Asset Enhancements
Ngee Ann City – Level 5 reconfiguration – from Jun 2008
Wisma Atria – Rent increase from new Nike lease – from Dec 2008
Wisma Atria – New lettable area at B1 and L1 – from Oct 2009
Wisma Atria – Ground level integration with ION Orchard
2009 2010
27 April 2009 Starhill Global REIT 39 Resilient in current economic climate
Starhill Global REIT is well positioned to ride challenging economic conditions
Î Premium assets / resilient leases – Toshin master lease rent in Ngee Ann City (29.9% of portfolio NLA) increased 19.75% in June 2008; lease does not allow downward revision; next rent review in 2011; lease exppyiry in 2013, with o ption to renew for a further 12 years – Occupancy levels for office and retail space remain healthy – Even distribution of lease expiry of Singapore portfolio mitigates any potential downward revision in rents: • Remaining Singapore office leases expiring in 2009 (68,664 sq ft) represent 28.6 % of total office NLA • Remaining Singapore retail leases expiring in 2009 (32,389 sq ft) represent only 8.5% of total Singapore retail NLA – Seamless connectivity between Ngee Ann City, Wisma Atria, the upcoming neighbouring mall and Orchard MRT station will boost shopper traffic and form most compelling retail block on Orchard Road – Robust sales performance from department store in Chengdu, China (NPI up 8.3% over 1Q 2008)
Î Healthy debt profile – Low gearing of 31.1% – No significant refinancing due until September 2010 – Average weighted average interest rate of 2.95% p.a. – 89.4% of borrowings fixed (including derivatives) until September 2010
27 April 2009 Starhill Global REIT 40 Synergies with YTL Corp
YTL Corp as sponsor offers synergies
Î Extensive track record and expertise in developing and managing retail real estate in Asia Î Source of potential pipeline acquisition opportunities Î Potential synergy with Starhill REIT in Malaysia Î Established relationships with international luxury retail principals including the watch , fashion and jewellery industries Î Wide network and relationships with banks
27 April 2009 Starhill Global REIT 41 Business strategy
Defensive strategies to see Starhill Global REIT through global economic downturn
Î Maintain strong financial position and low gearing Î Manage tenancies to ensure sustainability of distributions
Strategies to build a global REIT platform through Starhill brand
Î Attractive an d accr etiv e acqui siti on opport uniti es ari sin g fr om curr ent econ omi c downt urn Î Focus for acquisitions continues to be retail and commercial properties Î Build on the Starhill brand by sourcing for potential retail management and commercial property fund management contracts
27 April 2009 Starhill Global REIT 42 References used in this presentation
1Q, 2Q, 3Q, 4Q means the periods between 1 January to 31 March; 1 April to 30 June; 1 July to 30 September; and 1 October to 31 December respectively CMBS means Commercial Mortgage Backed Securities DPU means distribution per unit FY means financial year for the period from 1 January to 31 December GTO means gross turnover IPO means initial public offering (Starhill Global REIT was listed on the SGX-ST on 20 September 2005)
NLA means net lettable area NPI means net property income pm means per month psf means per square foot
WA and NAC mean the Wisma Atria Property (74.23% of the total share value of Wisma Atria) and the Ngee Ann City Property (27.23% of the total share value of Ngee Ann City respectively).
All values are expressed in Singapore currency unless otherwise stated
27 April 2009 Starhill Global REIT 43 Disc la imer
This presentation has been prepared by YTL Pacific Star REIT Management Limited (the “Manager”), solely in its capacity as Manager of Starhill Global Real Estate Investment Trust (“Starhill Global REIT”). A press release has been made by the Manager and posted on SGXNET on 27 April 2009 (the “Announcements”). This presentation is qualified in its entirety by, and should be read in conjunction with the Announcement posted on SGXNET. Terms not defined in this document adopt the same meanings in the Announcements.
The information contained in this presentation has been compiled from sources believed to be reliable. Whilst every effort has been made to ensure the accuracy of this presentation, no warranty is given or implied. This presentation has been prepared without taking into account the personal objectives, financial situation or needs of any particular party. It is for information only and does not contain investment advice or constitute an invitation or offer to acquire, purchase or subscribe for Starhill Global REIT units (“Units”). Potential investors should consult their own financial and/or other professional advisers.
This document may contain forward-looking statements that involve 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.
Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments, shifts in expected levels of property rental income, changes in operating expenses (including employee wages, benefits and training costs), property expenses and governmental and public policy changes. Investors are cautioned not to place undue reliance on these forward-looking statements, which are based on the Manager’s view of future events.
The past performance of Starhill Global REIT is not necessarily indicative of the future performance of Starhill Global REIT. The value of 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 or any of its affiliates. An investment in 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 their Units while the Units are listed. It is intended that unitholders of Starhill Global REIT may only deal in their Units through trading on the SGX-ST. Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units.
27 April 2009 Starhill Global REIT 44 27Investor, April 2009 Analyst and Media Contact: Ms Mok Lai Siong Tel : +65 6835 8633 Email : [email protected]