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ARA ASSET MANAGEMENT LIMITEDARA ASSET MANAGEMENT LIMITED亚腾资产管理有限公司
RESULTS FOR THE QUARTER AND FINANCIAL YEAR ENDED 31 DECEMBER 2013
1 FY2013 Hi hli ht1. FY2013 Highlights
2
Building on established platforms, reaching for new heightsFY2013 – BUSINESS HIGHLIGHTS
Assets under Management as at 31 December 2013Assets under Management as at 31 December 2013
S$ 25.5 billionS$ 2.9 billion year-on-year 13% year-on-year
Achieved on the back of :
• Acquisitions by REITs under management (namely Suntec REIT, Fortune REIT, Cache LogisticsTrust)
• Improved asset performance driven by asset enhancement initiatives resulting in higher propertyvaluations of the REIT portfolios under management
• Deployment of committed capital of ARA Asia Dragon Fund II and ARA China InvestmentPartners, LLC (“CIP”)
• Contribution from new separate account Morningside Investment Partners, LLC (“MIP”), andfrom the additional committed capital obtained for CIP
Hi h l ti f th t i th ARA H F d f ll i it t h t
3
• Higher valuation of the property in the ARA Harmony Fund following its asset enhancementworks
ASSETS UNDER MANAGEMENTS$25.5 billion as at 31 December 2013
25 5S$b S$b
16.9
20.322.6
25.5
18.020.022.024.026.0
18.020.022.024.026.0 REITs - Real Estate
Private RE Funds - Real EstatePrivate RE Funds - CapitalReal Estate Management Services
9.511.7
13.0
16.9
8 010.012.014.016.0
8 010.012.014.016.0
0.6
3.55.4
6.2
0.02.04.06.08.0
0.02.04.06.08.0
Assets Under Management(1)
(S$ billion) Dec 2013 Dec 2012 ChangeNotes:
1. Based on exchange rates as at 31 December 2013
2 Comprises gross property
Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec-13
REITs – Real Estate(2) 18.4 16.2 13.1%
Private Real Estate Funds – Real Estate 5.4 4.7 15.8%
Private Real Estate Funds – Capital(3) 1.3 1.3 (1.6%)
2. Comprises gross property value of REITs managed by subsidiaries & associated companies
3. Excludes capital committed for projects pending completion
4 Revenue base for real estate
4
Real Estate Management Services(4) 0.4 0.4 5.8%
Total 25.5 22.6 12.7%
4. Revenue base for real estate management services fee computation
Forging partnerships - Positioned for accelerated growthFY2013 – BUSINESS HIGHLIGHTS
St t i lli ithStrategic alliance with
The Straits Trading Company Limited
Start of a expanded long-term partnership with well-reputed premier business groups in Asia - The Straits Trading Company Limited and Cheung Kong (Holdings) LimitedCompany Limited and Cheung Kong (Holdings) Limited
Strengthened Sponsorship
Expanded business network in the Asia Pacific region to bolster deal sourcing and• Expanded business network in the Asia-Pacific region to bolster deal sourcing andorigination capabilities
AUM Growth
• Co-investment vehicle to support the future capital needs of the Group’s private fundsdivision
• S$100 million seed capital for new Asia-focused development fund
5
2 Fi i l d T k R d2. Financials and Track Record
6
Strong set of results with double-digit growth in recurrent net profitFY2013 – FINANCIAL HIGHLIGHTS
Financial Highlights FY2013 FY2012Financial Highlights FY2013 FY2012
Recurrent Management Fees (S$’000) 114,003 102,615 11%
Net Profit (S$’000) 81 386 63 580 28%(Exc. Unrealized M-T-M gains/losses) (1) (S$ 000) 81,386 63,580 28%
Recurrent Net Profit (2) (S$’000) 56,100 48,151 17%
Strong quality of earnings achieved on the back of:
• Higher management fees received from the REITs division driven by improved asset performance post asset enhancement initiatives which resulted in higher property valuationspost asset enhancement initiatives which resulted in higher property valuations
• Higher acquisition, divestment and performance fees
• Contributions from ARA Asia Dragon Fund II and CIP; MIP newly launched in November 2013
• Higher real estate management fees comprising higher leasing commission recognised by APM from the re-making of Suntec City, and contributions from the Asia Property Management (China) Limited group of companies (“APMC Group”) subsequent to its acquisition in August 2012
7
(1) M-T-M refers to “Marked-to-Market”, adjusted for the effects of tax(2) Recurrent Net Profit refers to Net Profit excluding acquisition, divestment and performance fees, finance income and finance
costs, adjusted for the effects of tax
Solid business model delivers growing financial performanceFINANCIAL PERFORMANCE
Financial Highlights FY2013 FY2012 Change
Revenue
Management fees(1) (S$’000) 114,003 102,615 11%
Acquisition, divestment and performance fees(2) (S$’000) 14,671 8,223 78%
Finance income(3) (S$’000) 11,583 21,997 (47%)
Other income (S$’000) 139 695 (80%)
Total Revenue (S$’000) 140,396 133,530 5%
Results from operating activities (S$’000) 84,493 81,641 3%
Share of Profit of Associates (S$’000) 3,913 4,461 (12%)
Net Profit (S$’000) 74,250 72,704 2%
Net Profit (Excluding unrealised M-T-M gains/losses) (4) (S$’000) 81,386 63,580 28%
Recurrent Net Profit(5) (S$’000) 56,100 48,151 17%
AUM (S$ billion) 25.5 22.6 13%
Notes:(1) Recurrent management fees from REITs, private real estate funds and real estate management services(2) Primarily REIT acquisition/divestment fees and project management and consultancy fees(3) Comprises mainly distribution income from financial assets and net gains on fair valuation/disposal of REIT units(4) M-T-M refers to “Marked-to-Market”, adjusted for the effects of tax (5) Recurrent Net Profit refers to Net Profit excluding acquisition, divestment and performance fees, finance income and finance costs, adjusted for the effects of tax 8
BALANCE SHEETAsset-light business model with robust balance sheet
Group Balance Sheet as at 31 December 2013
S$’000 S$’000
Plant and equipment 1,390 Loan and borrowings 141
Subsidiaries Deferred tax liabilities 68Subsidiaries - Deferred tax liabilities 68
Associates 4,657
Financial assets 212,527
Other receivables 6,289
Non-current assets 224,863 Non-current liabilities 209
Financial assets 49,837 Trade and other payables 26,318
Trade and other receivables 33,576 Loan and borrowings 30,329
Cash and cash equivalents 39,060 Derivative liabilities -
Current tax payable 10,083
Current assets 122,473 Current liabilities 66,730
Total liabilities 66,939
Shareholders’ equity 280,397
Total assets 347,336 Total liabilities & shareholders’ equity 347,336
9
REVENUE AND NET PROFIT TRACK RECORDStrong track record of revenue and net profit growth
160S$m
86.3
112.5122.8
133.5 140.4
100
120
140
160 Recurrent management feesAcquisition & performance feesOther income
27.6 31.3
62.170.0
86 3
40
60
80
S$m
0
20
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013
48.3
63.868.2
72.7 74.3
50
60
70
80PATMI
13.4 13.5
34.0 36.7
20
30
40
50
10
0
10
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013
DIVIDENDSRewarding shareholders
S cents
2.17 2.24 2.302.50
2.302.50
2.30
2.70
2.30
2.70
2.30
2.70
2.5
3.0
S cents
1.5
2.0
0 0
0.5
1.0
Sustainable dividend policy
0.01H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13
5.0 Singapore Cents per share annually, barring any unforeseen circumstances
• Interim dividend – 2.3 Singapore Cents per share
• Proposed Final dividend 2 7 Singapore Cents per share
11
• Proposed Final dividend – 2.7 Singapore Cents per share
DIVIDENDSGrowing total dividends over time
S$m
33.5
38.440.5
42.3
35
40
45
S$m
25.727.9
20
25
30
5
10
15
1-for-5 b i
1-for-10 b i
1-for-10 bon s iss e
-FY2008 FY2009 FY2010 FY2011 FY2012 FY2013
Dividend growth over time
• Issued bonus shares while maintaining the constant dividend of 5.0 Singapore Cents per share
bonus issue bonus issue bonus issue
12
• Estimated total dividends to be paid for FY2013 of S$42.3 million
3 B i d l3. Business model
13
FUNDS & SERVICESDiversified funds management platforms and complementary services
Listing Venue SGX-ST & SEHK SGX-ST SEHK Bursa SGX-ST SEHK
Listing Year 2003 2004 2005 2006 2009 2011
Focus Suburban retail Prime office & retail Office & industrial/ office Commercial Logistics properties in Commercial
REITs
Private Real
Focus Suburban retail properties in Hong Kong
Prime office & retail properties in
Singapore and Australia
Office & industrial/ office properties in Hong Kong
Commercial properties in
Malaysia
Logistics properties in the Asia Pacific region
Commercial properties in
China
Property Value(1) HK$29,338m S$8,364m HK$8,434m RM1,277m S$1,035m RMB 36,718m
ADF ADF II CIP MIPPrivate Real Estate Funds
Description Flagship strategic and opportunistic private
real estate fund investing in Singapore
2nd strategic and opportunistic private real estate fund investing in Singapore Hong Kong
Single-asset private real estate fund which owns the Suntec Singapore
Int’l Convention &
Core-plus private real estate fund investing in high quality
office and commercial properties in key cities in China
Value-add private real estate fund investing in high quality office and
commercial properties in
ARA Harmony FundADF
ARA Asia Dragon Fund
ADF IIARA Asia
Dragon Fund II
CIPARA China
Investment Partners
MIPARA MorningsideInvestment Partners
investing in Singapore, Hong Kong, China, Malaysia and other
emerging economies in Asia
Singapore, Hong Kong, China, Malaysia and
other emerging economies in Asia
Int l Convention & Exhibition Centre
properties in key cities in China, including Hong Kong
commercial properties in Singapore, Hong Kong
and Malaysia
Fund Size US$1.1b US$441m S$630m US$830m(2) US$240m
Real Estate Mgmt Svcs
(Committed Capital) (Committed Capital) (Gross Asset Value) (Committed Capital) (Committed Capital)
(1) Property values as of last publicly-announced valuation(2) Including additional capital commitments of US$330 million in July 2013 14
Description Property managementservices provider
Operations, sales and marketing services provider & consultant for convention, exhibition, meeting and event facilities
BUSINESS SEGMENTSDelivering value to shareholders
ARA ASSET MANAGEMENT LIMITED
BusinessSegments
REITs Private Real Estate Funds
Real Estate Management
Services
Corporate Finance Advisory Services
Revenue -Recurrent(Primary Basis)
g
Portfolio Management Fees(Committed Capital / Gross Property Value)
Base Fees(Gross Property Value)
Property Management Fees(Property Gross Revenue)
Services
Performance / Variable Fees(Net Property Income)
Convention & Exhibition Service Fees(Gross Revenue)
Revenue -One-off(Primary Basis)
Performance Fees(IRR above Hurdle)
Acquisition / Divestment Fees(Gross Property Value)
Advisory Fees(Purchase Value)
Consultancy Fees(Project Value)
Return on Seed Capital
15
3 St t3. Strategy
16
ARA GROUP INVESTMENT OFFICEDriving the Group’s expansion
Capital RaisingRaising
ARA GroupARA GroupInvestment
Office
Deal Sourcing & Origination
Product Development
17
2014 GROUP STRATEGY AND KEY INITIATIVESMaintain focus and build on successes
J i t
Build RelationshipsDevelop Products
Investor Driven
Joint Ventures / AlliancesOperating Partners
Build Teams
and Expertise
New MarketsNew Capital SourcesSame Focus (Fund
Pan-Asia Capabilities
ProductsMergers & Acquisitions
Expertise (Fund Management)
18
Established regional networkExpanding regional footprint across Asia
Nanjing
Dalian
Shanghai
Beijing
• Establishedregional network
Shenyang
Guangzhou
Hong Kong
Shanghai regional networkspanning 13 citiesin the Asia‐Pacific,including 6 citiesin the China
Singapore
Kuala Lumpur
Malacca
Mainland
• Network extendsacross Singapore,Hong Kong, China,
Klang
Ipoh
g gMalaysia andAustralia
• Staff strength ofapproximately
Sydney
pp y1,021(1) as at 31December 2013
Notes:(1) Inclusive of real estate management services business division and employees in joint-venture entities of the Group and various funds under management
19
MANAGEMENT TEAMExperienced team with a proven track record
G CEOG CEOGroup CEO
John Lim
Group CEO
John Lim
Corporate DivisionsCEO
Private MarketNg Beng Tiong
Property Management Services
CEO REITS
John Lim
CIO Moses Song
Finance & ComplianceCheryl Seow
Senior Director, Group Finance
Ng Beng Tiong
ADF INg Beng Tiong
CEO
ADF II
APM SingaporeAnthony Yip
Deputy Chairman
John Lim
Suntec REITYeo See Kiat
CEO
g
ARA FinancialLow Poh ChooSenior Director
Group Business DevCorporate OfficeNg Beng TiongSenior Director
Group Risk Mgmt & IATang Boon Kang
ADF IIPaul YiCEO
ARA Harmony FundSiew Siew HoonFund Director
APM ChinaMun Hon Pheng
CEO, China
APM MalaysiaChan Lai Hing
G l
Fortune REITAnthony Ang
CEO
Prosperity REITMavis Wong
CEO
Group Business DevPrivate & Public Mkt
Mark ChuDirector
China DeskMun Hon Pheng
Senior Manager
Group HR & Corp DevPauline LimDirector
CIPDerek Lai
Head Portfolio Management
MIP
General Manager
Suntec SingaporeArun Madhok
CEO
CEO
Cache Logistics TrustDaniel Cerf
CEO
A FIRST REIT
Head
Korea DeskAnthony Kang
Head
A t li D kGroup Office Admin
Serene YeoSenior Manager
MIPDavid Kim
CEO
SIPThomas KongFund Director
Suntec InternationalArun Madhok
CEO
AmFIRST REITZuhairy bin Md. Isa
Acting CEO
Hui Xian REITTom Cheung
CEO
Australia DeskLow Poh Choo
Head
Malaysia DeskJune LimHead
20
Summit Development Fund
Thomas KongCEO
CEO
ARA NPS REITAnthony Kang
CEO
Japan / India / GCC DeskLow Poh Choo / Mark Chu
Head
DISCLAIMER
These slides may contain forward‐looking statements that involve risks and uncertainties. Actual future performance, outcomes andresults may differ materially from those expressed in forward‐looking statements as a result of a number of uncertainties, risks andassumptions. Representative examples of these factors include but are not limited to general market and economic conditions,
d f h l h l d l dinterest rate trends, competition from other real estate investors, changes in operating expenses including employee wages andbenefits, changes in government policies, and the continued availability of financing in the amounts and terms necessary to supportfuture business. You are cautioned not to place undue reliance on the forward‐looking statements in these slides, which are based onthe current view of management on future events. Information from external sources in these slides has not been independentlyverified by us nor have the external sources quoted consented to the inclusion of the information.
ContactCheryl SeowSenior Director, Group [email protected]
Marilyn TanSenior Manager, Corporate [email protected]
Global Headquarters:6 Temasek BoulevardSuntec Tower Four, #16‐02Singapore 038986
[email protected] [email protected]
Singapore 038986
Tel: (65) 6835 9232Fax: (65) 6835 9672
Website: www.ara‐asia.com
21