Staying Focused and Resilient Mapletree Commercial Trust Annual Report 2014/15 Contents 02 Financial Highlights 04 Letter to Unitholders 08 Year in Review 10 Portfolio Overview 28 Financial Review 32 Operations Review 36 Unit Price Performance 38 Singapore Office andetail R Market Overview 50 Trust Structure 51 Organisation Structure 52 Strategy 54 Board of Directors 58 Management Team and Property Management Team 62 Sustainability Report 66 Investor Relations 68 Risk Management 71 Corporate Governance 81 Financial Statements 128 Statistics of Unitholdings 130 Interested Person Transactions 131 Notice of Annual General Meeting Proxy Form IBC Corporate Directory On the cover “Flower Tree” - A 6-metre tall spherical bouquet of colourful flowers at the VivoCity Promenade. Mapletree Anson Corporate Overview Mapletree Commercial Trust (“MCT”) is a Singapore-focused real estate investment trust (“REIT”) that invests on a long-term basis, directly or indirectly, in a diversified portfolio of income-producing real estate used primarily for office and/or retail purposes, whether wholly or partially, as well as real estate-related assets. MCT was listed on the Singapore Exchange Securities Trading Limited on 27 April 2011 and is the third REIT sponsored by Mapletree Investments Pte Ltd (the “Sponsor”), a leading Asia- focused real estate company based in Singapore. As at 31 March 2015, MCT’s portfolio comprises four properties, namely: • VivoCity, Singapore’s largest mall located in the HarbourFront Precinct; • Bank of America Merrill Lynch HarbourFront (“MLHF”), a premium office building located in the HarbourFront Precinct; • PSA Building (“PSAB”), an established integrated development in the Alexandra Precinct with a 40-storey office block and a three-storey retail centre, Alexandra Retail Centre (“ARC”); and • Mapletree Anson, a 19-storey premium office building located in Singapore’s Central Business District. The portfolio has a total Net Lettable Area of 2.1 million square feet and is valued at S$4,199 million1 in aggregate as at 31 March 2015. MCT is managed by Mapletree Commercial Trust Management Ltd. (the “Manager”), a wholly owned subsidiary of Mapletree Investments Pte Ltd. The Manager aims to provide Unitholders of MCT with an attractive rate of return on their investment through regular and relatively stable distributions and to achieve long-term growth in Distribution per Unit (“DPU”) and Net Asset Value (“NAV”) per Unit, with an appropriate capital structure for MCT. 1 Based on the appraised values by CBRE Pte. Ltd. and Knight Frank Pte. Ltd. as disclosed in MCT’s announcement dated 22 April 2015. 02 Mapletree Commercial Trust Financial Highlights Gross Revenue Net Property Income S$282.5m S$211.7m FY14/154 FY14/154 +5.7% 14.1% +8.4% 16.8% Year-on-year CAGR5 Year-on-year CAGR5 (S$m) (S$m) 282.5 211.7 267.2 195.3 219.5 156.0 177.3 124.0 FY11/121 FY12/132 FY13/143 FY14/154 FY11/121 FY12/132 FY13/143 FY14/154 Distributable Income Distribution per Unit (DPU) S$168.3m 8.0 cents FY14/154 FY14/154 +10.0% 17.0% +8.5% 12.3% Year-on-year CAGR5 Year-on-year CAGR5 (S$m) (cents) 168.3 8.00 153.0 7.372 6.487 123.5 5.271 98.2 FY11/121 FY12/132 FY13/143 FY14/154 FY11/121 FY12/132 FY13/143 FY14/154 1 FY11/12 – For the period from Listing Date of 27 April 2011 to 31 March 2012. 2 FY12/13 – For the period from 1 April 2012 to 31 March 2013. 3 FY13/14 – For the period from 1 April 2013 to 31 March 2014. 4 FY14/15 – For the period from 1 April 2014 to 31 March 2015. 5 Compounded Annual Growth Rate - from FY11/12 (restated) to FY14/15. FY11/12 (restated) figures are restated from the period from Listing Date to 31 March 2012 to the full period from 1 April 2011 to 31 March 2012, for a comparable basis in terms of CAGR calculation. Annual Report 2014/15 03 Distributable Income and DPU Track Record FY11/12 FY12/13 FY13/14 FY14/15 5.271 Singapore cents 6.487 Singapore cents 7.372 Singapore cents 8.00 Singapore cents 2.08 2.00 1.953 1.95 1.97 1.865 1.801 1.737 1.753 43.8 1.667 42.1 41.4 40.7 41.0 1.554 1.537 1.546 38.7 37.3 1.428 36.3 34.7 1.333 31.2 29.0 28.7 28.9 26.6 0.956 24.8 17.8 Q11 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY11/12 FY12/13 FY13/14 FY14/15 Distributable Income (S$m) DPU (Singapore cents) 1 Q1 FY11/12 – For the period from Listing Date of 27 April 2011 to 30 June 2011. Delivered healthy returns on investment to Unitholders 112.6% 81.8% 30.8% Total returns from IPO to Capital Appreciation Total Distributions end of FY14/15 (based on IPO Price of S$0.88 and (based on total distributions paid out Unit Price of S$1.60 at close of trading of 27.13 Singapore cents, including DPU on 31 March 2015) paid for 4Q FY14/15) 04 Mapletree Commercial Trust Letter to Unitholders Amy Ng Tsang Yam Pui Executive Director and Chairman and Chief Executive Officer Non-Executive Director Annual Report 2014/15 05 Dear Unitholders, We are pleased to report that Mapletree Commercial Trust (“MCT”) registered a fourth consecutive year of good results. For the financial year ended 31 March 2015 (“FY14/15”), we surpassed last year’s performance, achieving a record S$211.7 million in Net Property Income (“NPI”) and delivering a Distribution per Unit (“DPU”) of 8.0 cents. Our financial results reflected the robust performance of Our financial results the properties and our proactive approach to capital management. reflected the robust performance of the With total cumulative distribution of 27.13 Singapore cents, Unitholders would have enjoyed total properties and our returns of about 113%1 since listing on 27 April 2011 or more than double the original investment. proactive approach to capital management. Buoyed by the strong operating performances at VivoCity and PSAB, MCT’s portfolio recorded a 4.1% increase in valuation from S$4,034 million a year ago to S$4,199 million (as at 31 March 2015). Net asset value per unit grew correspondingly by 6.9% to S$1.24 per unit (as at 31 March 2015). Focused Execution In FY14/15, the higher gross revenue continued to be driven by robust performance at VivoCity and consistent contribution from the office properties. VivoCity maintained its strong performance with revenue and NPI growth of 6.9% and 10.5% respectively for the year. As we executed our leasing strategy for expiring leases, including active As we executed our tenant and brand mix management, we also focused on creating 15,000 square feet of retail space at leasing strategy for Basement 1 which was part of our Asset Enhancement Initiative (“AEI”). expiring leases, including active tenant and brand The AEI entailed the creation of higher yielding space at Basement 1 by decanting lower yield mix management, space and back-of-house areas. The car park lots removed at Basement 1 were replaced at we also focused on creating 15,000 square Basement 2 and the multi-storey car park, hence there was no reduction in parking spaces as a feet of retail space at result of the AEI. We are also glad to report that the new retail space at Basement 1 has been fully Basement 1 which leased (as of 31 March 2015) to tenants in the fashion, beauty and lifestyle trades which include was part of our Asset two first-to-market retailers in Singapore – American Eagle Outfitters and Weekends. Tenants have Enhancement Initiative. progressively started trading from mid-April 2015. We continued to capitalise on VivoCity’s unique features and scale which allow us to organise large-scale events to create distinctive experiences for our shoppers. In February 2015, we hosted the Singapore Armed Forces’ (“SAF”) SAF50@Vivo event where we jointly celebrated SAF’s 50th Year Anniversary and SG502 with our shoppers. The Army, Navy and Air Force came together at VivoCity to showcase a wide array of military assets, display of exhibits on the SAF and stories of our defence pioneers. Shoppers were able to get on board the Navy’s largest warship, the Landing Ship Tank RSS Endurance (berthed at the waterfront promenade), and even experience the Fast Craft Utility by taking a ride on it out to sea. Active engagement with tenants has also been one of our key priorities. We continued to conduct the monthly Service Excellence Workshops, our in-house program in place since July 2010, which provides training on customer service delivery and building customer loyalty. During the year, we also devoted more resources in identifying and organising activities that would more directly and effectively drive tenant sales. While Singapore saw a general slowdown in retail spending3 last year, tenant sales at VivoCity remained resilient for FY14/15. VivoCity set yet another new sales record of about S$909 million despite some trading downtime due to the AEI works. The mall also garnered several awards during the year, including The Best Family-Friendly Mall and one of the Top 3 Shopping Centres (City) at the AsiaOne People’s Choice 2014, and Winner for Outstanding Efforts in Advertising and Promotions at the Singapore Retailer’s Association Shopping Centre Awards 2014. We sincerely thank our shoppers for their unwavering support and loyal patronage of the mall.