CentralCentral PattanaPattana PlcPlc.. ““CPNCPN””
CPNCPN RetailRetail GrowthGrowth PropertyProperty FundFund ““CPNRFCPNRF””
Opportunity Day March 28, 2006 Content
Economic Overview and Marketing Situation
CPN Achievements and Plans
Operation Review
Financial Highlights
CPN Retail Growth Property Fund (CPNRF)
2 Economic Overview & Marketing Situation Economic Overview
Thai economy in Q405 grew by 4.7% Q-o-Q. However, for full year 2005 the economy grew by only 4.5%, a moderate decrease from 6.2% from the previous year.
The decrease was attributed to the slowdown in household spending, lower overall production and a decrease in export.
The contributing factors: - Higher oil price - Higher inflation - Higher interest rate - Reduction in consumer confidence - Other non-macroeconomic factors such as Tsunami, southern unrest, avian influenza, drought and flooding
Note: Source from NESDB 4 Marketing Situation
Retail Market Total supply of retail space in Bangkok rose by approximately 8% to 4.2 million sq.m. at the end of 2005, as compared with 3.9 million sq.m. at year-end 2004 and vacancy at year-end 2005 stood at approximately 5%. Retail rent in Bangkok was broadly stable in Q405, however, 2005 saw approximately 5% growth from 2004. New retail supply in 2006 is expected to be around 300,000 sq.m. Competition in Rajprasong is becoming increasingly intense, due to the growth in supply from the newly opened Paragon mall and the near completion of Centralworld.
Office Market Total supply of office in Bangkok was stable in 2005 with an increase of less than 1% over 2004. Office space in 2005 stood at 7.2 million sq.m. with vacancy rate at year-end of approximately 13.3%. Grade A office rents in the Central Business District (CBD) rose by 23.3% while grade B rents in the same area rose by 19.6%. New office supply in 2006 expected to be around 230,000 sq.m and 160,000 sq.m.in 2007. While take up rate is approximately 300,000 sq.m. each year.
Note: Source from CB Richard Ellis and Jones Lang Lasalle 5 CPN Achievements and Plans Achievements in 2005
Business Growth Strategic Management
Relaunched of Central Town Rattanathibet Implemented Good Corporate Governance Policy Increased occupancy rate of The Offices at Centralworld from 60% in 2004 to 85% in Implemented Key Performance Indicator (KPI) 2005
Setted up Thailand largest property fund, Launched Corporate Culture - 7 Values CPNRF, in which CPN acts as property “THE MOST ADMIRED RETAIL manager and is the largest shareholder. EXPERIENCE DEVELOPER”
Listed as one of the Top 200 “Best Under Re-branded of Central Pattana to CPN A $ Billion” in Forbes Asia Magazine
Achieved market capitalization Y-O-Y growth of 86.7%
Formalized Business Strategies - 4 Retail Formats
7 Business Strategy - 4 Retail Formats
“CPN continuously strives to create innovate formats to suit customers’ needs”
The renowned international The real shopping experience, The “Center of community” The shopping and Definition shopping experience. Trend with complete quality selection. catering to basic lifestyle. entertainment experience with setter & “Best of The Best” Enhance every lifestyle fashion Customizing to service each a holiday spirit and local and entertainment locality novelty
Main shopping district in major Heart of city Suburban area of major cities Holiday destination Location city Satellite city and outskirt of Mid-town of secondary cities CBD
Type A - B+ Type B+ Type C+ and up Type B Customer Innovative idea design Good design meeting point Local architectural design Holiday and festive design
8 Plans in 2006
Business Growth Strategic Management
Open the 1st phase of Centralworld Plaza Create Brand Perception and Brand Strength by Mid year and continue development of 2nd phase for next year relaunch. Improve Customer Relation Management (CRM) Implement Balanced Score Card Develop 2 new projects; Chaengwattana and Pattaya Beach Implement Economic Value Added (EVA) Look for prime locations to develop new projects both in Thailand and Overseas
Set up Property Fund for Public Offering – Office
9 Operation Review CPN’s Existing Projects : December 31, 2005
Shopping Center Office Building Residential
Salable Occupancy Rate Salable Occupancy Rate Salable Occupancy Rate area area area (sq.m.) Q4/05 Q3/05 Q4/04 (sq.m.) Q4/05 Q3/05 Q4/04 (sq.m.) Q4/05 Q3/05 Q4/04
Lardprao 55,561 100% 99% 99% 18,321 98% 98% 98% - - - -
Ram Indra 13,585 95% 95% 97% ------
Pinklao 56,868 99% 100% 100% 22,553 99% 99% 100% -(1) - - 84%
Pattaya 15,258 100% 100% 100% ------
Rama III 56,783 97% 99% 98% ------
Chiangmai 69,318 97% 96% 94% ------
Bangna 57,705 98% 97% 98% 9,796 99% 97% 90% 1,907 69% 49% 34%
Rama II 97,626 97% 99% 98% ------
Centralworld 126,045 75% 78% 87% 83,368 74% 66% 17% - - - -
Rattanathibet 68,550 97% 94% 98% ------Langsuan Colonnade ------4,466 72% 81% 85%
Total 617,300 93% 94% 95% 134,038 83% 78% 47% 6,373 71% 72% 77%
% Lease : Rent (2) 34% : 66% 1% : 99% 0% : 100%
Note1: Renovation to convert apartment building to office building with salable area 10,730 sq.m.. Sale progress as of February 28, 2006 is approximately 65% 11 Centralworld Renovation & Expansion
Started Date Expected New Salable Area Investment Remark Completed Date Cost
Centralworld Phase I May. 2006 • Expansion Aug. 2003 New Zone (Zone D, E, F) and Zone B, C Sale Progress 70,000 sq.m. 5,000 MB 60%(1) • Renovation Jun. 2004 Phase II Feb. 2007 Zone A & ZEN extension
DD
EE CC FF
AA BB
Note1: As of December 31, 2005 12 Value Enhancements of Existing Projects
Project Development Plan Investment (MB) Time Frame
Pinklao ÎConvert apartment to office (10,400 sq.m.) 70 Completed ÎRenovate facade at the entrance on 1st Under study and 2 floor 80
Ramindra ÎMajor internal and external renovation 220 Under study ÎLeaseback and rearrange tenant mix
Pattaya Festival ÎIncrease more retail space and parking area 500 Under study ÎMay add new anchor
ÎDevelop new fashion zone on 2nd floor Completed Bangna ÎDevelop Playland to retail space on 6th floor 130 Completed ÎBuild sky bridge link to 2nd floor Under study
Rattanathibet ÎDevelop new parking building with additional 200 Dec 2006 retail space
Total 1,200
Company estimates 13 CPN’s Future Projects
Expected Investment Complete Remark Starting Date New Salable Area Cost NEW PROJECTS Date
• Shopping Mall 100,000 sq.m. (Include department store) Chaengwattana Q1/2006 Q3/2008 4,550 MB Design Process • Office building 20,000 sq.m. “Plaza” • Parking area 94,000 sq.m.
Pattaya (New) • Shopping Mall 80,000 sq.m. (Beachfront) Q1/2006 Q2/2008 (Include department store) 3,300 MB Design Process “Plaza” • Parking area 70,000 sq.m.
Tentative Tentative Rama 9 100,000 sq.m. 4,000-4,700 MB Under study “Plaza” Q1/2007 Q1/2010
Chonburi & Tentative Tentative 60,000 sq.m. 1,200-1,500 MB Khonkaen Under study Q2/2008 Q2/2010 (Per project) (Per project) “Town Center”
Company estimates 14 Capital Expenditure Profile
Major capital expenditure will be used to develop 8 shopping centers and renovate 5 existing shopping centers Financing plan for future expansion includes:
Cash flow from operation
Loan – project financing
Property fund Unit : Bt mm Capital Expenditure 2005 2006 2007 2008 2009 2010
Centralworld (100%) 3,300 2,500 700 - - -
Chaengwattana 400 900 1,800 1,100 - -
Pattaya (New) 300 1,000 1,200 700 - - Rama 9 150 600 500 1,000 1,500 900
Chonburi and Khonkaen - - - 500 1,200 1,200
Existing Projects (Includes Rattanathibet) 1,000 1,200 1,100 500 500 500
3 New Projects(1) 600 1,200 2,200 3,000 2,600 Total 5,750 7,000 6,500 6,000 6,200 5,200
Company estimates Note1: Tentative development projects 15 Sq.m.Future Average Salable Area and Occupancy Rate
1,200,000 Salable Area & Occupancy-Shopping Center 99% Salable area (Sq.m.) Occupancy rate (%) 1,000,000 97% 97% 97% 800,000 96% 96%95% 95% 95% 95% 94% 93% 94% 600,000 93% 1,010,549 791,549 791,54991% 400,000 687,299 687,299 598,587 617,299 591,007 89% 518,894 200,000 87% 281,623 0 85% 2001 2002 2003 2004 2005 2006 F 2007 F 2008 F 2009 F 2010 F
Salable area (Sq.m.) 2001 2002 2003 2004 2005 2006 F 2007 F 2008 F 2009 F 2010 F Shopping Center 281,623 518,894 598,587 591,007 617,299 687,299 687,299 791,549 791,549 1,010,549 Office Building 49,833 49,833 49,833 134,099 134,038 144,768 144,768 164,768 164,768 164,768 Residential 16,825 16,825 16,336 16,336 6,373 6,373 6,373 6,373 6,373 6,373 Total 348,281 585,552 664,756 741,442 757,710 838,440 838,440 962,690 962,690 1,181,690
Note: Salable area includes Rama 2 and Rama 3 shopping centers 16 Financial Highlights Consolidated Performance
Bt mm 9,783 10,000
8,000 6,899 6,190 6,298 6,000 5,540 4,877
4,000 3,106 3,295 3,413 2,754 2,399 1,916 2,187 2,000 1,197 1,348 1,446
- 2003 2004 2005 2005 Adj. Total Revenue (1) EBITDA Operating Profit Net Profit
2003 2004 2005 2005 Adj. *Adjusted items in 2005 (unit : Bt mm) Net profit 3,295 % Revenue Growth 44% 12% 58% 11% Adjusted 1.Gain from CPNRF (2,885) 2.Impairment provision 407 % Same Store Growth (2) 12% 9% 10% 10% 3.Tax of 1.&2. 743 4. Minority interest of 2. (114) % Net Profit Growth 26% 13% 144% 7% Net profit before adjusted 1,446
Note1: Total Revenue = Rental & Service Income + Food & Beverage Income + Interest Income + Other Income Note2: Same store growth 2005 compare with 2004 excludes revenue from Rama2 & Rama3 in Q4 and The Offices at Centralworld 18 Same store growth 2004 compare with 2003 excludes revenue from Rattanathibet Summary of Revenues and Operating Expenses
Revenues Cost of Goods Sold
Bt m m 10.9% 10.9% 4,000 11.9% 3,501 3,501 Bt mm 3,156 9,784 2,819 323 323 10,000 3,000 294 256
9,000 2,000 58.0% 3,177 3,177 11.1% 2,563 2,862 8,000 3,307 1,000 6,899 11.8% 7,000 6,190 0 422 2003 2004 2005 2005 Adj. 5,540 55 55 324 420 420 6,000 32 Cost of Rental & Service Cost of Food & Beverage 325 387 34 5,000 342 Selling and Administration Expenses
4,000
Bt m m 3,000 6,002 6,002 5,448 2,000 4,840 66.2% 1,403 18.0% 2,000 1,500 5.1% 996 844 1,000 1,000 803
500 0 2003 2004 2005 2005 Adj. 0 Rental & Serv ice Food & Beverage Interes t Inc ome Other Income 2003 2004 2005 2005 Adj.
Note: Adjusted means excluding one time transaction such as gain from CPNRF and loss provision for land 19 Strong Growth in Earnings and Margins
Gross Profit Operating Profit
Bt m m Bt m m 4,000 5,000 4,877 9.1% 9.1% 123.0% 70% 70% 13.4% 2,921 2,921 4,000 9.7% 3,000 2,678 2,362 14.2% 50% 3,000 2,399 2,187 50% 2,000 1,916 49.9% 45.9% 45.6% 45.5% 45.5% 2,000 30% 30% 1,000 34.6% 35.3% 34.8% 1,000
0 10% 0 10% 2003 2004 2005 2005 Adj. 2003 2004 2005 2005 Adj.
Gross Profit Gross Profit Margin Operating Profit Operating Profit Margin
EBITDA(1) Net Profit
Bt m m Bt m m 8,000 4,000 64.4% 70% 3,295 70% 6,000 3,000 144.4% 49.7% 50.2% 6,298 49.5% 9.9% 7.3% 50% 102.7% 50% 12.6% 4,000 12.8% 3,413 2,000 3,106 2,754 1,446 1,197 1,348 30% 2,000 30% 1,000 33.7%
21.6% 21.8% 21.0% 0 10% 0 10% 2003 2004 2005 2005 Adj. 2003 2004 2005 2005 Adj.
EBIT DA EBITDA Margin Ne t Pr ofit Net Profit Margin
Note: Adjusted means excluding one time transaction such as gain from CPNRF and loss provision for land Note1: Includes long term lease revenue which is non-cash item 20 Strong Returns
ROA ROE ROCE
30% 30% 30% % % %
25% 25% 25%
20% 29.4% 20% 20%
21.1% 15% 15% 15%
9.9% 15.8% 15.9% 10% 15.4% 10% 10% 11.8% 11.7% 11.2%
5.1% 5.0% 5% 4.7% 5% 5%
0% 2003 2004 2005 2005 Adj. 0%2003 2004 2005 2005 Adj. 0%2003 2004 2005 2005 Adj.
Note: Adjusted means excluding one time transaction such as gain from CPNRF and loss provision for land 21 Leverage Ratio
Debt to Equity Loan Details
Company Policy : Net Debt/Equity < 1:1 TRIS Rating of “A” in February 2005 Bt m m 11,789 12,000 11,041 ST-Loan 9,653 140% ST-B/E 10.8% ST-Bonds 10,000 7,995 8,743 120% 2.0% 7,956 1.1% 8,000 100% 86% 6,140 80% 6,000 72% 60% 4,000 2,279 2,100 42% 40% 2,000 LT-Loan 20% 31.9% 0 0% LT-Bonds 2003 2004 2005 54.2% Cash Debt Equity Net Debt/Equity Total loans = Bt 11,041mm Fixed Vs. Floating Mix
Bt m m 11,041 Weighted average interest rate for FY 2005 - 4.8% 12,000 6.9% 9,611 8,565 Fixed Floating 9,000 44.5% 6,543 41.2% 6,000 4,720 93.1% 42.6% 47.5% 2,398 1,551 925 298 3,000 55.5% 58.8% 57.4% 52.5% 70.8% 73.1% 79.7% 88.7% 0 29.2% 26.9% 20.3% 11.3% 2005 2006 2007 2008 2009 2010 2011 2012 2013 Fixed Rate : 4.8% 4.9% 4.9% 5.1% 5.4% 5.7% 5.7% 5.8% 5.5% Float Rate :MLR-0.5% MLR-1.09% MLR-1.14% MLR-1.22% MLR-1.24% MLR-1.35% MLR-1. 58% MLR-1.86% MLR-3.02%
22 Share Price & Dividend Payment
Capital increase of Bt1,000 mil (100mil shares) by rights issue at par 10Baht/share in December 2002 Par split from 10 baht/share to 5baht/share in January 2003 Par split from 5 baht/share to 1baht/share in May 2004
Dividend : Share : 2003 2004 2005 Par Value (Baht) 1.00 Par Value (Baht) 5.00 1.00 1.00 Stock Price (Baht) as of 24/03/2006 17.70 Dividend Per Share (Baht) 1.10 0.25 0.40 * Earning Per Share (Baht) 1.56 Dividend Payout Ratio 40% 40% 26%** P/E 11.35 Note : Dividend Policy is paid annually not less than 40% of net profit. P/BV 3.44 : Dividend Yield ~ 2.0% - 2.5% in last 3 years. Market Cap (Million Baht) 38,565.04 : * Will be pass to approve in AGM on April 28 , 2006 . Capital Shares (Shares) 2,178,816,000 : ** 40 % of profit excluded extra gain + 18 % of gain from setup CPNRF.
23 CPN Retail Growth Property Fund CPNRF Fund Structure
Name CPN Retail Growth Property Fund (“CPNRF”) Property Manager Central Pattana PCL Fund Manager TMB Asset Management Co. Ltd. Trustee Citi Bank, Bangkok Registrar TMB Asset Management Co. Ltd. Assets Central Plaza Rama II, Central Plaza Rama III Type Property Fund Type I (Indefinite Life) Total Fund Size THB 10,915 million Fund Registered Date 11 August 2005 Fund Investing Date 15 August 2005 for Central Plaza Rama II 16 August 2005 for Central Plaza Rama III Fund Listed Date 23 August 2005 Secondary Market Stock Exchange of Thailand (“SET”)
25 CPNRF Fund Structure
Land Owner
Lease of land: 90-2-9.3 Rai (Principle Leasing Contract)
Central Pattana Central Pattana Plc. Central Pattana Rama II Co., Ltd Rama III Co., Ltd Owner of land and building
(1) Property Manager Sublease of land: Lease of building (2) Undertaking: Lease of land and building 53-2-39.4 Rai and parking CP2 and CP3 30 + 30 + 30 years 20 years 20 years to performance
CPN Retail Growth Property Fund (CPNRF)
26 Details of Fund’s Asset
Central Plaza Central Plaza Rama II Rama III Gross Area 251,182 169,740 Net Leasble Area 91,528 38,745 Occupancy Rate (28 Feb 06) 97.00% 96.93%
27 CPNRF Performance
Projection % of Total Actual % of Total As at 31 Dec 05 Income As at 31 Dec 05 Income Investment Income Rental and service income 423,896,053 428,048,317 Interest income 3,086,842 8,306,597 Total Income 426,982,895 100% 436,354,914 100% Expenses Property related expenses 117,027,632 27.41% 110,998,839 25.44% Management fee and other management 8,443,421 expenses 1.98% 7,905,296 1.81% Amortisation of deferred expenses 18,248,684 4.27% 19,027,746 4.36% Total Expenses 143,719,737 33.66% 137,931,881 31.61% Net Investment Income 283,263,158 66.34% 298,423,033 68.39%
28 Dividend Payment
XD date: 28 February 2006
Payment date: 6 March 2006
Dividend paid 318 Baht million, 0.2908 Bath/Unit
Annualized yield (based on 10 Bath) approximately 7.47%
29 Details of Fund Actual Expenses (%)
Costs of Property rental, S&A management exp., and other fee, 14.20% exp., 11.24%
Amortise. of Mgt fee and deferred exp., other exp., 4.36% 1.81%
Note: % expense of total income as of December 31, 2005. 30 CPNRF Balance Sheet
Audited as of ASSETS Dec. 31, 2005 Cash 419,053,389 Account Receivable 12,337,910 Investment 11,067,000,000 Other Assets 11,250,063 Total Assets 11,662,981,996
LIABILITIES Account Payable 21,323,226 Deposits 399,999,218 Other liabilities 74,455,128 Total Liabilities 495,777,572 NET ASSETS 11,167,204,424
NET ASSETS Capital received from unit holders 10,915,000,000 Retained earnings 252,204,424 Net asset value (Baht 10.2313 per unit based on 1,091,500,000 units outstanding at the end of the period) 11,167,204,424
31 Asset Appraisal
The fund manager has hired CBRE (CB Richard Ellis) to perform 2005 Year End valuation.
The fund manager considers that the assumptions being used in the valuation are reasonable and truly reflect the fund’s investment value. That valuation will be used in calculating the fund’s Net Asset Value (NAV) from December 31, 2005 onwards, until the next revaluation.
Investment Investemnt Cost CBRE Revaluation Rama 2 6,093,836,583 5,958,000,000 (135,836,583) Rama 3 4,659,382,026 4,749,000,000 89,617,974 Total 10,753,218,609 10,707,000,000 (46,218,609) per unit (0.0423)
32 Central Rama III Development Plan
Build new entrance bridge due to Bangkok Project (Satupradit Flyover) in front of the mall
Relocate existing bridge to improve mall entrance traffic flow has been completed by March 2006
33 CPNRF Trading History
Reviewed Audited 31 Aug 05 30 Sep 05 31 Oct 05 30 Nov 05 30 Dec 05 31 Jan 06 28 Feb 06 Closing Price 11.00 11.50 10.90 10.70 10.60 11.00 10.90 Average Volume 274 64.70 69.50 24.30 31.87 22.84 18.82 (million Unit) Average Value 3,014 744 757 260 338 251 205 (Baht million) Net Asset Value 10,950 11,024 11,093 11,162 11,167 11,236 11,305 (Baht million) NAV / Unit 10.03 10.0997 10.1626 10.2266 10.2313 10.2946 10.0675*
Trading Premium 9.67% 13.86% 7.26% 4.63% 3.60% 6.85% 8.27% (Mkt price/NAV)
* Dividend payable = Bt 318 Million Dividend / unit = 0.2908
34