CentralCentral PattanaPattana PlcPlc.. Property Development & Investment Analyst Briefing – 4Q06 and FY2006 13 March 2007 Important Notice The information contained in this presentation is for information purposes only and does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for share in Central Pattana Public Company Limited (“CPN” and shares in CPN, “shares”) in any jurisdiction nor should it or any part of it form the basis of, or be relied upon in any connection with, any contract or commitment whatsoever. This presentation may include information which is forward-looking in nature. 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This presentation and all other information, materials or documents provided in connection therewith, shall not, either in whole or in part, be reproduced, redistributed or made available to any other person, save in strict compliance with all applicable laws. 2 Content Market Update Business Highlights Operations Developments Financial Highlights 3 Market Update Retail Overview Retail in 2006 Expectation for 2007 Retail sales in 2006 experienced lackluster period Although there are still many negative economic & mainly due to decline in consumer purchasing power external factors weighing down the economic recovery, and lower consumer confidence instigated by the high including recent bombings on New Year’s Eve, CPN oil prices and political & economic uncertainties. believes that the recovery in the economy, retail sector Retail sales growth in 2006 rose by 1-2% yoy, much lower and consumer confidence will be stronger in the 2H07. than the 7-9% growth in 2005. This assumption is made on the basis that: Sales of retail operators retreated to single-digit growth Political situation remains steady. after staying double digits since the financial crisis. Oil price remains at current levels. Ministry of Commerce is drafting the new Retail Inflationary and financial pressure has eased. Business Law, limiting the expansion of large-scaled Interest rate continues downward trend. hypermarkets and supermarkets in populated areas. Consumer Confidence improves. Although it may take some time to be effective, the Tourism is anticipated to continually flourished. uncertainty of the policy may depress retail growth in 2007. Government expenditure proceeds in 1Q07. Amendment to Constitution is completed in 4Q07. Election takes place in December 2007. Source : Bank of Thailand and NESDB 5 Bangkok Retail Market Overview Comments Retail Supply Sqm (‘000) Vacancy % Total retail supply in Bangkok has increased by 5.8% 2,500 5.8% approximately 156,000sqm or 3.6% in 9M06 and all of 6.8% 8.4% 2,231 2,250 5.6% this new area came from malls and retail space in office 2,059 buildings. 2,000 1,928 1,927 5.4% 5.4% Mall saleable area increased by 8.4% in 9M06. 1,750 The average vacancy at 3Q06 was 5.8% a slight 5.2% 5.1% increase from 5.4% in 2Q06 due to the nearly completed 1,500 5.0% redevelopment of CentralWorld and also the completion 1,265 1,275 1,289 1,274 1,250 of Exchange tower. 4.8% 1,007 1,007 1,000 4.7% New supply in 2006 mainly came from CPN’s 815 779 4.6% CentralWorld redevelopment project and from Siam 750 Future’s Esplanade project.The only new prime retail 4.4% 500 centre to be completed will be The Crystal (15,000sqm), anticipated to open in 2H07. 250 4.2% Rental rates have generally been stable since 2H05 due 0 4.0% 2003 2004 2005 9M 2006 to the steady supply of new retail leasable area. It is also Superstores Dept. Stores Malls Vacancy expected to remain stead in the short-term and may again rise depending on how quickly the country’s economic New Supply (sqm) 45,000 338,000 156,000 condition improves. Total Supply (sqm) 3,972,000 4,017,000 4,355,000 4,511,000 Source : CBRE and Company’s estimate 6 Bangkok Office Market Overview Comments Office Supply Sqm (‘000) Vacancy % 5,340 Total office supply in the 9M06 increased significantly 5,500 5,243 28.0% 5,000 25.0% 4,740 4,714 by 3.3% or 240,000 sqm to 7.45 million sqm due to the 24.0% 4,500 4,000 opening of 8 office buildings: 20.9% 16.4% 20.0% 3,500 16.1% 3,000 13.5% 16.0% 2,376 2,471 3 offices in CBD (Q House Lumpini, Column Tower and 2,500 10.2% 1,967 2,110 12.0% Exchange Tower). 2,000 1,500 4.8% 8.1% 8.0% 1,000 5 offices in Non CBD (Fenix Tower, Supalai Grand Tower, I 4.0% 500 Tower, Central Place Pinkla, and Rasa Tower II). 0 0.0% 2003 2004 2005 9M 2006 The average vacancy for Grade A in 9M06 increased Grade A Grade B & C Vacancy - A Vacancy - B&C slightly from the end of 2005 due to the new supply. New Supply (sqm) 70,000 25,000 240,000 Grade A increased from 4.8% to 8.1%, meanwhile Grade Total Supply (sqm) 7,115,000 7,185,000 7,210,000 7,450,000 B remained nearly unchanged from 16.4% to 16.1%. Office Rental Rate New supply of only 36,000 sqm (two office buildings) is coming to the market by the end of 1H2007. The only new Bt/sqm + 17.6% + 10.9% Vacancy% + 17.7% 700 660 28.0% grade A building in CBD to be completed will be Athenee + 9.1% + 17.7% 595 + 17.3% 25.0% Tower on Wireless Rd., anticipated to open in 2H07. 600 506 24.0% 500 467 20.0% 431 20.9% 428 Rental rate growth for 2006 is expected to slow 400 365 16.1% 16.0% 311 16.4% somewhat due to the downturn of the economy. However 300 12.0% 13.5% 200 8.1% 8.0% due to limited supply in the next 12 months we expect 10.2% 100 4.0% rental to increase at a moderate pace. 4.8% 0 0.0% 2003 2004 2005 9M 2006 Grade A Grade B Vacancy - A Vacancy - B&C Source : CBRE and Company’s estimate 7 Business Highlights FY2006 Business Highlights Financial and Operation Highlights Leading Position in BMA Retail Space FY2006 total revenue increased by 4.4% YoY CPN 28%28% Excluding non-recurring items in FY2005, operating profit Others and net profit increased by 8.0% and 16.6% YoY, 16% Financial respectively. The Mall Group Siam Piwat 14% Average effective retail rental rates increased 12% YoY. 1% Total leasable area increased 10% YoY mainly on the MBK completion of asset enhancement projects at CentralWorld, 3% Seri Center Future Park Rangsit Central Town Rattanathibet, and Pinklao Tower B. 4% 10% Fashion Island Siam Paragon Occupancy of retail properties declined from 93% in 4Q05 Siam Future Seacon Square Operation 5% 6% 6% 7% to 92% in 4Q06 due to lower occupancy of the newly opened phase at Centralworld. CentralWorld completed its expansion and renovation Shareholder’s Value Creation project and had an opening celebration of its expansion phase in August 2006 and a reopening of its renovation Bt mm 49,241 phase in December 2006. 50,000 Central Town Rattanathibet completed its asset 56.9% enhancement project in December 2006 with a new parking 40,000 building and an additional leasable area of over 11,200 sqm. 86.7% 31,375 30,000 Asset enhancement projects at Central Plaza Ramindra, Development Central Plaza Rama 2 and Central Plaza Ratchada-Rama 3 20,000 16,802 have made much progress. Two green-field projects, Central Plaza Chaengwattana and 10,000 Central Pattaya Beach, have started construction and piling work has been completed. 0 31 Dec 2004 31 Dec 2005 29 Dec 2006 9 OD and HR Strategy Organization Development & HR Management Highlights Completed works in 2006: Organization development: BOD approved the “Strategic Manpower Planning & Sourcing” for business expansion in 2006 – 2010 Established Strategic Planning and Business Policy Office (SPBO) Continued extensive work in BSC, JD and CG to ensure alignment of corporate strategies and business requirement. Business process improvement: Completed revised comprehensive shopping center management manual for GM’s to ensure world class operational standard for all centers. Completed “Admired Quality Awards (AQA)” under the theme Service Excellence. Human resource management: Conducted salary survey and completed competitive salary adjustment. Continued works in 2007: Organization development: implement “Economic Value Added (EVA) ” program and continue extensive work in BSC and CG.