S$1.68 billion¹ S-REIT IPO of Mapletree Greater China Commercial Trust (“MGCCT”) set to be Singapore’s largest ever S-REIT IPO

MGCCT Offers a Distribution Yield of 5.6% in Projection Year 2013/2014², growing by 8.6% to 6.1% in Projection Year 2014/2015³

First S-REIT with Management Fee Structure based on Distribution Income and DPU Growth

Offering of 776,636,000 units⁴, priced at the top end of the offering price range at S$0.93 per Unit

Strong support from 11 cornerstone investors investing S$886.7 million, comprising 55% of total gross IPO proceeds excluding the Sponsor’s stake

MGCCT is MIPL’s fourth REIT to be listed on the SGX-ST

SINGAPORE – Mapletree Investments Pte Ltd (“MIPL” or the “Sponsor”) [丰树产业私人有限公司] is pleased to announce that its wholly-owned subsidiary Mapletree Greater China Commercial Trust Management Ltd. [丰树大中华商业信托管理有限公司], the manager of Mapletree Greater China Commercial Trust [丰树大中华商业信托] (the “REIT Manager”) has launched an initial public offering (“IPO” or the “Offering”) at an offering price (the “Offering Price”) of S$0.93 per Unit. As a result of the interest received from institutional investors during the bookbuilding process, the Units have been priced at the top end of the offering price range. The final prospectus dated 27 February 2013 (the “Prospectus”) has been registered by the MAS today, in connection with its proposed listing on Singapore Exchange Securities Trading Limited (the “SGX-ST”).

Raising gross proceeds of approximately S$1.68 billion, MGCCT will be the largest real estate investment trust (“REIT”) IPO ever in Singapore, making it a milestone listing on the SGX-ST. It is also the first-ever REIT with commercial properties in both China and Hong Kong, presenting investors with the unique opportunity to participate in the favourable growth dynamics of Greater China. The initial portfolio comprises two best-in-class commercial properties in Hong Kong and Beijing. MIPL has an established track record in listing and managing REITs, and will hold a 32% stake in MGCCT post-listing (assuming the Over-Allotment Option is fully exercised).

Best-in-Class Commercial Properties

Attractive Distribution Growth Delivered Organically

MGCCT offers investors a distribution yield of 5.6% in Projection Year 2013/2014, growing by 8.6% to 6.1% in Projection Year 2014/2015. This distribution growth is driven by strong organic rental reversions, supported by strong market dynamics in Hong Kong and Beijing.

Management Fees Aligned with Investors’ interest

MGCCT will be the first S-REIT with its management fee structure based on distributable income and distribution per unit (“DPU”) growth, rather than assets under management and net property income. The REIT Manager’s base fee will be 10% of distributable income and its performance fee will be 25% of DPU growth⁶, multiplied by the weighted average number of Units in issue for such financial year. The REIT Manager has also adopted an acquisition fee of 0.75% for acquisitions from related parties instead of the market norm of 1.0%.

Ms Chow added, “With this performance-based fee structure, the REIT Manager is incentivised to grow distribution income and DPU. Pegging performance fees to DPU growth essentially aligns us with the interests of our investors.”

Led by Ms Chow, the management team of the REIT Manager comprises personnel assembled from within the MIPL Group, with extensive experience in real estate management, finance and fund management. Ms Chow has accumulated 20 years of regional real estate experience including property management, marketing and investment.

Stable, Resilient Portfolio with Growth Potential

Festival Walk’s excellent location and retail positioning have allowed it to achieve 100% occupancy since 2000. The property enjoys shopper traffic of approximately 38 million visitors annually with annual retail sales turnover of HK$4.8 billion in 2012. Additionally, with a direct rail connection to the Shenzhen border, Festival Walk’s retail sales are further boosted by incoming mainland China tourists.

Gateway Plaza enjoys 98.3% occupancy as at 30 November 2012, and is located in an area that is well sought after by both multinational corporations and PRC domestic enterprises. Against Beijing’s tight office market supply and low vacancy rate, Gateway Plaza will provide significant growth to MGCCT as its average passing rentals revert to market level rents.

Platform for Robust Growth

Ms Chow added, “Investors today are looking for yield plus growth. Organically, the two properties have embedded rental structures from a strong and diversified tenancy base to grow over the next few years. To complement this, we will be carrying out active asset management and asset enhancement initiatives to further extract value from the two properties. Lastly, we will pursue strategic acquisition growth to maintain an attractive yield plus growth profile for MGCCT.”

MGCCT’s investment mandate will include markets in Hong Kong, first tier cities in China (Beijing, Shanghai, Guangzhou and Shenzhen) and key second tier cities (Chengdu, Chongqing, Foshan, Hangzhou, Nanjing, Suzhou, Tianjin, Wuhan and Xi’an).

Key Property Details

Offering Information

The Offering of 776,636,000 Units, subject to an Over-Allotment Option⁸, consists of:

(i) an international placement of 511,279,000 Units to investors, including institutional and other investors in Singapore (the “Placement Tranche”); and

(ii) an offering of 265,357,000 Units to the public in Singapore (the “Public Offer”), of which 50,304,000 Units are reserved for subscription by the directors, management, employees and business associates of the Sponsor and its subsidiaries.

MGCCT will be supported by its Sponsor, which will subscribe for an aggregate of 931,597,999 Units at the Offering Price. MIPL is expected to retain an approximately 32% stake in MGCCT post-listing⁹.

MGCCT has also secured S$886.7 million worth of commitments from 11 cornerstone investors including CBRE Clarion, Norges Bank Investment Management, Henderson, Newton Investment Management and AIA. Together, these investors have subscribed to a total of 953,475,000 Units (the “Cornerstone Units”) concurrently with, but separate from the Offering.

The Public Offer will open at 9.00 a.m. on Thursday, 28 February 2013 and close at 12.00 noon on Tuesday, 5 March 2013. The Units are expected to commence trading on the SGX-ST at 2.00 pm on Thursday, 7 March 2013.

Use of Proceeds

The REIT Manager intends to raise gross proceeds of S$1.68 billion from the Offering and the Cornerstone Units.

The REIT Manager also intends to draw down from its unsecured term loan facility (the “Facility”) an amount of HK$12,150 million (approximately S$1,935 million) on the listing date.

The total cash proceeds raised from the Offering and the Cornerstone Units, as well as the amount drawn down from the Facility will be used towards the following:

payment to the respective vendors of the purchase price payable in relation to the acquisition of the properties;

payment of transaction costs incurred in relation to the Offering and the Facility; and working capital.

Joint Global Coordinators, Underwriters and Issue Managers

Citigroup Global Markets Singapore Pte. Ltd., DBS Bank Ltd., Goldman Sachs (Singapore) Pte. and The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch are the Joint Global Coordinators, Underwriters and Issue Managers for the Offering.

Prospectus

Copies of the Prospectus, the application forms and envelopes may be obtained upon request, during office hours, subject to availability, from any branch of Citibank, DBS Bank (including POSB), The Hongkong and Shanghai Banking Corporation and at the main office of Goldman Sachs from 28 February to 5 March 2013. Copies of the Prospectus and the application forms, subject to availability, are also available at MGCCT’s booths at One Raffles Place from 28 February to 1 March 2013, as well as Mapletree Business City (Open Plaza) and HarbourFront Centre (Level Two) from 28 February to 5 March 2013.

The Prospectus is also available on the SGX-ST website: http://www.sgx.com. Anyone wishing to subscribe for the Units will need to make an application in the manner set out and subject to the terms and conditions set out in Appendix I of the Prospectus.

IPO Fact Sheet

Offer size:         776,636,000 Units, subject to an Over-Allotment Option , of which:

i) 511,279,000 Units will be offered to investors, including institutional and other investors in Singapore by the way of an international placement; and,

ii) 265,357,000 Units will be offered to the public in Singapore, out of which 50,304,000 Units will, in turn, be reserved for subscription by the directors, management, employees and business associates of the Sponsor and its subsidiaries.
 
Offer price:       S$0.93 per Unit

Cornerstone Investors:     AIA, Asdew Acquistions, CBRE Clarion, Columbia Wanger, Henderson, Hwang Investment Management, Morgan Stanley Investment Management Company, Myriad Asset Management, Newton Investment Management, Norges Bank Investment Management and Phileo Capital

Public offer opens:     Thursday, 28 February 2013 at 9.00 am

Public offer closes:     Tuesday, 5 March 2013 at 12.00 noon

Commencement of trading on SGX-ST:     Thursday, 7 March 2013 at 2.00 pm

First distribution:     The first distribution will be for the period from the listing date to 30 September 2013 and will be paid by the Manager on or before 31 December 2013. Subsequent distributions will take place on a semi-annual basis.

¹Assuming that the Over-Allotment Option is  exercised in full.
²Based on the Offering Price of S$0.93 per Unit and the projected distribution per Unit (“DPU”) for the full financial year from 1 April 2013 to 31 March 2014, together with the accompanying assumptions in the Prospectus. Such yield will vary accordingly for investors who purchase Units in the secondary market at a market price different from the Offering Price.
³Based on the Offering Price of S$0.93 per Unit and the projected DPU for the full financial year from 1 April 2014 to 31 March 2015, together with the accompanying assumptions in the Prospectus. Such yield will vary accordingly for investors who purchase Units in the secondary market at a market price different from the Offering Price.
⁴Including 50,304,000 Units reserved for subscription by the directors, management, employees and business associates of the Sponsor and its subsidiaries.
⁵Based on the lower of the two independent appraised values for each property as at 31 December 2012.
⁶Calculated before accounting for the performance fee in each financial year
⁷Number of tenants for Festival Walk excludes The Glacier (which is the ice rink business of Festival Walk) as it is wholly-owned by MGCCT.
⁸Subject to an over allotment option of 79,851,000 units
⁹Assuming the Over-Allotment Option is exercised in full.
¹⁰Subject to an over allotment option of 79,851,000 units

IMPORTANT NOTICE

This press release is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for units in Mapletree Greater China Commercial Trust (“MGCCT”, and units in MGCCT, “Units”). This press release may contain forward-looking statements that involve assumptions, risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from other developments or companies, shifts in the expected levels of occupancy rates, property rental income, charge-out collections, changes in operating expenses, including employee wages, property expenses and governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. The past performance of Mapletree Greater China Commercial Trust Management Ltd., as manager of MGCCT (the “REIT Manager”) is not indicative of the future performance of the REIT Manager.    

Predictions, projections or forecasts of the economy or economic trends of the markets are not necessarily indicative of the future or likely performance of MGCCT. The forecast financial performance of MGCCT is not guaranteed. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the current view of management on future events. A potential investor should read the prospectus in relation to the initial public offering of Units by the REIT Manager (the “Prospectus”), a copy of which may be obtained, subject to availability, from the underwriters appointed for the initial public offering, for details of the forecasts and projections and to consider the assumptions used and make their own assessment of the future performance of MGCCT before deciding whether to subscribe for or purchase the Units. This press release is qualified in its entirety by, and should be read in conjunction with, the full text of the Prospectus. Anyone wishing to subscribe for or purchase the Units will need to make an application in the manner set out in the Prospectus.

The value of the Units and the income derived from them may fall as well as rise. Units are not obligations of, deposits in, or guaranteed by, the REIT Manager, DBS Trustee Limited (as trustee of MGCCT), the Sponsor, the Joint Global Co-ordinators, Underwriters and Issue Managers. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Investors have no right to request that the REIT Manager redeem or purchase their Units while the Units are listed. It is intended that holders of Units may only deal in their Units through trading on Singapore Exchange Securities Trading Limited (the “SGX-ST”). Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units.

The projected yields and yield growth are calculated based on the Offering Price of S$[0.93] per Unit and the accompanying assumptions in the Prospectus. Such yields and yield growth will vary accordingly for investors who purchase Units in the secondary market at a market price different from the Offering Price.

Neither this press release nor any copy or portion of it may be sent or taken, transmitted or distributed, directly or indirectly, into the United States, Japan or Canada, or to any U.S. person (as defined in Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”)). The Units have not been, and will not be, registered under the Securities Act, or the securities laws of any state of the U.S. or other jurisdiction and the Units may not be offered or sold within the U.S. or to, or for the account or benefit of, U.S. persons, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state or local securities laws. This press release is not an offer for sale of securities in the United States.

This press release may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions.