Vision Mission
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Vision Creating Value Maximising Returns VIBRANT SHOPPING Transforming Experiences CapitaMall Trust’s vision embraces all our stakeholders. We rely on the continued and combined support of our Unitholders, SAFE RETURNS business partners, tenants, shoppers and employees to achieve this vision and, in return, share with them the fruits of CapitaMall Trust our success. Report to Unitholders 2011 Mission To deliver stable distributions and sustainable total returns to Unitholders. Contents 01 Corporate Profile Safety in Track Record 04 Financial Highlights 06 Letter to Unitholders 14 Year in Brief 16 Operations Review 24 Financial Review 30 Risk & Capital Management 35 Unit Price Performance Safety in Retail 40 Growth Strategies 42 Independent Retail Market Overview 48 Singapore REIT Sector 49 Marketing & Promotions Safety in Expertise 54 Trust Structure 55 Organisation Structure 56 Board of Directors 63 Present Directorships 67 Trust Management Team 69 Property Management Team Safety in Relationships 72 Sustainability 72 Environment 75 People & Community 78 Corporate Governance 92 Investor & Media Relations Singapore's First 94 Meeting Our Tenants 96 Meeting Our Shoppers and Largest REIT Safety in Portfolio 100 Portfolio at a Glance 102 Portfolio Summary 104 Portfolio Details 136 Development Property 138 CapitaRetail China Trust Safety in Numbers 141 Financial Statements 212 Unitholders’ Statistics 214 Interested Person Transactions Others 215 Notice of Annual General Meeting 218 Mall Directory 219 Corporate Information 220 Glossary Corporate Profile CapitaMall Trust (CMT) is the first Real Estate Investment Trust (REIT) listed on Singapore Exchange Securities Trading Limited (SGX-ST) in July 2002. CMT is also the largest REIT by market capitalisation and asset size in Singapore, with a market capitalisation and asset size of approximately S$5.7 billion and S$9.2 billion respectively as at 31 December 2011. CMT owns and invests in quality income-producing CMT also owns 122.7 million units in CapitaRetail China assets which are used, or predominantly used, for retail Trust, the first China shopping mall REIT listed on SGX-ST purposes primarily in Singapore. As at 31 December in December 2006. 2011, CMT’s portfolio comprised a diverse list of close to 2,500 leases with local and international retailers and CMT has been assigned an ‘A2’ rating by Moody’s Investors achieved an average committed occupancy of 94.8%1. Service. The ‘A2’ rating is the highest rating assigned to a CMT’s portfolio comprises 16 quality retail properties Singapore REIT. which are strategically located in the suburban areas and downtown core of Singapore. CMT is managed by an external manager, CapitaMall Trust Management Limited, which is a wholly-owned subsidiary of In May 2011, CMT took a 30.00% stake in a joint venture CapitaMalls Asia Limited, one of Asia’s largest listed shopping to develop a prime site at Jurong Gateway, marking its first mall developers, owners and managers. foray into greenfield developments. 1. Lower occupancy rate was due to ongoing asset enhancement works at Iluma and The Atrium@Orchard. CAPITAMALL TRUST 1 REPORT TO UNITHOLDERS 2011 2 CAPITAMALL TRUST REPORT TO UNITHOLDERS 2011 Safety in Track Record Consistently delivering stable and sustainable distributions to Unitholders through time and economic cycles since 2002 CAPITAMALL TRUST 3 REPORT TO UNITHOLDERS 2011 Financial Highlights Performance At A Glance Gross Revenue Net Property Income (S$ million) (S$ million) 431.9 510.9 552.7 581.1 630.6 287.8 341.1 376.8 399.1 418.2 +4.8% +8.5% +5.9% +5.1% +10.4% +8.2% +18.5% +18.3% 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 Distributable Income Total Assets (S$ million) (S$ million) 211.2 238.4 282.0 294.8 301.6 5,957.3 7,509.0 7,423.0 8,125.9 9,172.2 +4.6% +2.3% +12.9% +18.3% -1.1% +9.5% +12.9% +26.0% 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 4 CAPITAMALL TRUST REPORT TO UNITHOLDERS 2011 GROUP1 2007 2008 2009 2010 2011 Selected Statement of Total Return and Distribution Data Gross Rental Income (S$ million) 399.2 473.6 513.7 539.2 582.7 Car Park Income (S$ million) 12.0 13.7 14.3 15.5 17.6 Other Income (S$ million) 20.7 23.6 24.7 26.4 30.3 Gross Revenue (S$ million) 431.9 510.9 552.7 581.1 630.6 Net Property Income (S$ million) 287.8 341.1 376.8 399.1 418.2 Distributable Income (S$ million) 211.2 238.4 282.0 294.8 301.6 Selected Balance Sheet Data Total Assets (S$ million) 5,957.3 7,509.0 7,423.02 8,125.9 9,172.2 Total Borrowings3 (S$ million) 2,052.2 3,216.4 2,243.04 2,916.9 3,483.8 Net Asset Value Per Unit5 (S$) 2.21 2.41 1.54 1.53 1.56 Unitholders' Funds (S$ million) 3,721.8 4,079.6 4,969.6 4,939.4 5,246.06 Market Capitalisation7 (S$ million) 5,751.9 2,650.3 5,722.7 6,209.3 5,658.3 Portfolio Property Valuation (S$ million) 5,777.9 7,174.0 6,920.5 7,271.5 7,849.2 Key Financial Indicators Earnings Per Unit8 (cents) 38.52 33.70 (2.23)9 8.49 11.98 Distribution Per Unit (cents) 13.34 14.29 8.8510 9.2410 9.3710 Gearing 34.5% 42.8% 30.2% 35.9% 38.4% Interest Coverage (times) 4.2 3.4 3.6 3.6 3.3 Management Expense Ratio11 0.7% 0.7% 0.7% 0.7% 0.8% Unencumbered Assets as % of Total Assets 3.0% 4.5% 20.0% 36.3% 37.9% Net Debt / EBITDA12 (times) 6.8 10.2 6.6 6.8 7.4 Average Term to Maturity (years) 2.8 2.013 1.713 2.613 2.714 Average Cost of Debt 3.5% 3.4% 3.5% 3.7% 3.5% After Restatement for the Effect of Rights Issue15 Net Asset Value Per Unit5 (S$) 1.54 1.65 1.54 1.53 1.56 Earnings Per Unit8 (cents) 31.32 27.40 (2.23)9 8.49 11.98 Distribution Per Unit (cents) 6.83 7.52 8.85 9.24 9.37 1. As at 31 December 2007, 31 December 2008, 31 December 2009, 31 December 2010 and 31 December 2011, CMT Group includes the proportionate consolidation of the 40.00% interest in Raffles City Singapore (RCS), through RCS Trust, consolidation of 100.00% interest in CapitaRetail Singapore Limited (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. As at 31 December 2011, CMT Group also includes the proportionate consolidation of 30.00% interest in Infinity Mall Trust and Infinity Office Trust (collectively, Infinity Trusts). 2. 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 equivalents mainly from the balance of net proceeds from the 1,502,358,923 units issued under the underwritten renounceable 9-for-10 rights issue (Rights Issue) in April 2009. 3. Excludes unamortised premium and transaction costs. 4. Lower due to repayment of loans with the proceeds from the Rights Issue in 2009. 5. Excludes outstanding distributable income as at end of each period. 6. On 10 November 2011, 139,665,000 new units in CMT (Units) were issued via a private placement exercise for the purposes of capital expenditure, asset enhancement initiatives and general and corporate working capital. 7. Based on the closing unit price of S$3.46 on 31 December 2007, S$1.59 on 31 December 2008, S$1.80 on 31 December 2009, S$1.95 on 31 December 2010 and S$1.70 on 30 December 2011. 8. 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. 9. The negative EPU of 2.23 cents as at 31 December 2009 is mainly due to the revaluation deficit on investment properties. 10. 2009, 2010 and 2011 Distribution Per Unit (DPU) are lower than prior years due to the increase in Units from the Rights Issue. If the effect of the Rights Issue is removed, the DPU for 2009, 2010 and 2011 are higher compared to the restated DPUs for prior years. 11. Refers to the expenses of CMT Group, excluding property expenses and interest expense but including performance component of CapitaMall Trust Management Limited’s management fees, expressed as a percentage of weighted average net assets. 12. Net Debt comprises gross debt less temporary cash intended for acquisition and refinancing and EBITDA refers to earnings before interest, tax, depreciation and amortisation. 13. Assuming bondholders of the 2013 Convertible Bonds exercise put option in July 2011. 14. Assuming bondholders of the 2013 Convertible Bonds hold to maturity on 2 July 2013. 15. The figures have been restated for the effect of the Rights Issue. CAPITAMALL TRUST 5 REPORT TO UNITHOLDERS 2011 Letter to Unitholders The global economy started year 2011 in recovery mode and on a promising note. However, as the year progressed, hopes for a strong recovery dimmed, with a long shadow cast by heightened sovereign debt risks in the Eurozone and anaemic economic growth in the United States. The Singapore economy slowed down in tandem with the rest of the world, recording a GDP growth of 4.9%1 in 2011, markedly down from the sterling 14.8% growth in 2010.