BECAUSE TOMORROW MATTERS ANNUAL REPORT 20 20 BECAUSE TOMORROW MATTERS Underpinning the breadth of CapitaLand’s activities is our continuous dialogue with our stakeholders which helps to shape our business as we aim to build sustainable communities. We place significance on our conversations and share our story with care and consideration for ANNUAL REPORT 20 all involved. This annual report is part of that process and the motif we 20 have chosen for this year’s report reflects our focus on maintaining communication with our stakeholders with transparency and clarity. IN TIMES OF EXTRAORDINARY CHANGE, WE REMAIN STEADFAST IN OUR COMMITMENT TO SUSTAINABLE RETURNS AND OUTCOMES. LEE CHEE KOON GROUP CEO BECAUSE TOMORROW MATTERS BECAUSE CHANGE IS THE ONLY CONSTANT AGILITY AND ADAPTABILITY ARE ESSENTIAL TO OUR BUSINESS. WE ARE CONSTANTLY ALERT TO THE REALITY OF CHANGE AND READY TO MEET THE CHALLENGES THAT ARISE. WE ALSO KNOW THAT CHANGE CAN OFFER NEW OPPORTUNITIES FOR US TO EMBRACE. BECAUSE THE FUTURE IS NOW AS NEVER BEFORE, THE WORLD IS NOW AT EVERYONE’S FINGER TIPS. THE EVENTS OF 2020 HAVE THRUST THIS REALITY UPON US EVEN MORE STARKLY. CAPITALAND HAS RESPONDED BY KEEPING UP WITH THE TIMES. WE HAVE INVESTED IN THE TECHNOLOGIES REQUIRED IN THIS DIGITAL WORLD AND HAVE SPEARHEADED INITIATIVES TO DELIVER POSITIVE BENEFITS AND OUTCOMES FOR ALL. THIS EFFORT IS ONGOING. BECAUSE WE MEAN BUSINESS WE DO EVERYTHING TO ENSURE WE REMAIN RESILIENT FINANCIALLY. OUR DISCIPLINED AND PRUDENT CAPITAL MANAGEMENT STRATEGY KEEPS OUR BALANCE SHEET ROBUST AND PUTS US IN A STRONG POSITION TO SEIZE STRATEGIC AND BENEFICIAL OPPORTUNITIES AS THEY ARISE. BECAUSE TOMORROW MATTERS... CAPITALAND, AS A RESPONSIBLE GLOBAL COMPANY, BELIEVES THAT WHAT WE DO TODAY WILL IMPACT THE FUTURE. THUS, SUSTAINABILITY IS AT THE CORE OF EVERYTHING WE DO SO WE CAN CREATE VALUE FOR OUR PATRONS, NOT JUST FOR TODAY, BUT FOR GENERATIONS TO COME. WHO WE ARE VISION CapitaLand Limited (CapitaLand) is one of Asia’s largest diversified To be a leading global enterprise that real estate groups. Headquartered and listed in Singapore, it owns enriches people and communities and manages a global portfolio worth about S$132.5 billion as at through high-quality real estate products 31 December 2020. CapitaLand’s portfolio spans across diversified and services. real estate classes which includes commercial, retail; business park, industrial and logistics; integrated development, urban development; as well as lodging and residential. With a presence across more than MISSION 230 cities in over 30 countries, the Group focuses on Singapore and CUSTOMERS China as its core markets, while it continues to expand in markets We create great customer value and such as India, Vietnam, Australia, Europe and the USA. experiences through high-quality products and services. CapitaLand has one of the largest real estate investment management businesses globally. It manages six listed real estate investment PEOPLE trusts (REITs) and business trusts as well as over 20 private funds. We develop high-performing people and teams through rewarding opportunities. CapitaLand launched Singapore’s first REIT in 2002 and today, its stable of REITs and business trusts comprises CapitaLand Integrated INVESTORS Commercial Trust, Ascendas Real Estate Investment Trust, Ascott We deliver sustainable shareholder Residence Trust, CapitaLand China Trust, Ascendas India Trust and returns and build a strong global network CapitaLand Malaysia Mall Trust. of capital partners. CapitaLand places sustainability at the core of what it does. As a COMMUNITIES responsible real estate company, CapitaLand contributes to the We care for and contribute to the environmental and social well-being of the communities where it economic, environmental and social operates, as it delivers long-term economic value to its stakeholders. development of communities. CONTENTS 10 16 OUR GLOBAL PRESENCE MESSAGE TO 12 SHAREHOLDERS FY 2020 KEY HIGHLIGHTS 14 5-YEAR FINANCIAL SUMMARY 15 GROUP BUSINESS STRUCTURE 27 22 OUR BOARD OF DIRECTORS OUR STAKEHOLDERS 34 OUR LEADERSHIP CORE VALUES WINNING MINDSET ENTERPRISING RESPECT INTEGRITY Be passionate in pursing Be innovative & agile Be humble & show Be ethical & trustworthy excellence appreciation to one Dare to be different & Do the right thing another Persevere & overcome challenge the status quo for the company difficulties Be inclusive, collaborative Continue to learn & grow Care for our communities & break down silos Be bold, courageous & & environment resilient Embrace diversity as a global organisation 41 114 OUR AWARDS & ACCOLADES ENTERPRISE RISK MANAGEMENT 44 46 118 AN OVERVIEW OF SUSTAINABILITY PROPERTY PORTFOLIO CAPITALAND'S 2030 SUSTAINABILITY MASTER PLAN 52 141 FINANCIAL PERFORMANCE REVIEW FINANCIAL STATEMENTS 57 296 TREASURY HIGHLIGHTS ADDITIONAL INFORMATION 60 299 OPERATIONAL HIGHLIGHTS SHAREHOLDING STATISTICS 76 302 CORPORATE GOVERNANCE ADDITIONAL INFORMATION DIRECTORS SEEKING REELECTION 10 CAPITALAND LIMITED • ANNUAL REPORT 2020 OUR GLOBAL PRESENCE Netherlands Germany United Kingdom Belgium Ireland France Spain United States of America S$132.5 OVER MORE THAN BILLION REAL ESTATE ASSETS 30 230 UNDER MANAGEMENT COUNTRIES CITIES 11 BECAUSE TOMORROW MATTERS AUM1: S$132.5 BILLION BY GEOGRAPHY (%) Kazakhstan China2 41 Georgia Singapore 33 Other Developed Markets3 15 Other Emerging Markets4 11 Turkey Saudi Bahrain Arabia Qatar United Arab Emirates Oman India China Myanmar South Laos Korea BY ASSET CLASS (%) Thailand Japan Vietnam Malaysia Cambodia Singapore Indonesia Philippines Australia Fiji Retail 27 Lodging5 27 Office 22 New Zealand Business Park, Industrial & 16 Logistics6 Residential, Commercial Strata & 8 Urban Development 1 Refers to the total value of real estate managed by CapitaLand Group entities stated at 100% of property carrying value as of 31 December 2020. 2 Includes Hong Kong. 3 Excludes Singapore and Hong Kong. 4 Excludes China. 5 Includes multifamily and hotels. 6 Includes data centres. OPERATIONS TOTAL HOME UNITS CAPITASTAR CONSTRUCTED MEMBERSHIPS (SINCE 2000) >14 >114,000 million NO OF SERVICED NO OF SERVICED RESIDENCE UNITS RESIDENCE UNITS SIGNED OPENED >14,200 >3,900 RETAIL OFFICE BUSINESS PARK LEASES TENANTS TENANTS ~14,600 ~1,760 ~3,140 FY 2020 KEY HIGHLIGHTS FINANCIALS TOTAL EARNINGS BEFORE ASSETS INTEREST & TAX S$84.4 S$231.5 billion million OPERATING PATMI DIVIDEND PER SHARE S$769.9 million 9 cents NET DEBT GROSS TO EQUITY DIVESTMENT VALUE 0.68 S$3.04 billion 14 CAPITALAND LIMITED • ANNUAL REPORT 2020 5-YEAR FINANCIAL SUMMARY 2016 20171 2018 2019 2020 (A) INCOME STATEMENT (S$ MILLION) Revenue 5,252.3 4,618.2 5,602.4 6,234.8 6,532.6 Earnings before interest and tax (EBIT) 2,359.5 3,302.2 4,145.0 5,067.6 231.5 Profit/(Loss) attributable to shareholders (PATMI/(Net loss)) 1,190.3 1,569.6 1,762.5 2,135.9 (1,574.3) Operating PATMI 865.3 927.2 872.2 1,057.2 769.9 (B) BALANCE SHEET (S$ MILLION) Investment properties 18,998.4 36,479.4 39,446.0 48,731.9 47,872.9 Development properties for sale and stocks 4,837.1 3,977.0 5,128.6 7,725.1 6,778.2 Associates and joint ventures 12,617.3 10,205.4 10,179.6 12,996.2 12,527.8 Cash and cash equivalents 4,792.6 6,105.3 5,059.8 6,167.6 9,175.4 Other assets 4,495.4 4,772.1 4,833.6 6,725.1 8,015.6 Total assets 45,740.8 61,539.2 64,647.6 82,345.9 84,369.9 Equity attributable to owners of the Company 17,604.8 18,412.9 18,952.7 23,359.5 22,306.1 Total borrowings 14,852.4 21,694.9 23,633.9 31,411.1 35,158.4 Non-controlling interests and other liabilities 13,283.6 21,431.4 22,061.0 27,575.3 26,905.4 Total equities and liabilities 45,740.8 61,539.2 64,647.6 82,345.9 84,369.9 (C) FINANCIAL RATIOS Earnings per share (cents) 28.0 37.0 42.1 46.4 (31.0) Net tangible assets per share (S$) 4.05 4.20 4.40 4.44 4.09 Return on equity² (%) 6.6 8.6 9.3 10.0 (7.0) Return on total assets (%) 4.4 5.4 5.6 5.8 (0.8) Debt equity ratio (net of cash) (times) 0.41 0.49 0.56 0.63 0.68 Net debt/Total assets (net of cash) (times) 0.25 0.28 0.31 0.33 0.35 Interest cover (times) 6.5 8.6 8.3 7.6 0.7 Interest service (times) 10.3 6.7 4.4 4.3 3.3 Dividend Ordinary dividend per share (cents) 10.0 12.0 12.0 12.0 9.0 Dividend cover (times) 2.8 3.1 3.5 3.9 NM NM: Not meaningful Notes 1 Comparatives for 2017 have been restated to take into account the retrospective adjustments relating to SFRS(I) 15 Revenue for Contracts with Customers. 2 Return on equity was computed based on PATMI/(Net loss) (after distribution to perpetual securities) over average equity attributable to owners of the Company. 15 BECAUSE TOMORROW MATTERS GROUP BUSINESS STRUCTURE FUND DEVELOPMENT LODGING MANAGEMENT GROUP CAPITALAND CAPITALAND CAPITALAND CAPITALAND CAPITALAND CENTRE SINGAPORE & CHINA INDIA FINANCIAL LODGING OF INTERNATIONAL EXCELLENCE Residential Business Park, Managers of Customer Serviced Residential & Urban Industrial & 6 REITs & Services & Residence Development Logistics Business Trusts Solutions Managers of Commercial Commercial over 20 Private Hotel Sustainability & Retail & Retail Funds Business Park, Business Park, Digital & Industrial & Industrial & Technology Logistics Logistics 16 CAPITALAND LIMITED • ANNUAL REPORT 2020 MESSAGE TO SHAREHOLDERS Dear Shareholders It has been slightly more than a year Our financial position remains strong; since COVID-19 set off a global our gearing stood at 0.68x at year- health pandemic which changed end.