ARA-CWT Trust Management (Cache) Limited

Transcription

1 ARA-CWT Trust Management (Cache) Limited Cache Logistics Trust Manager of THE PROPOSED ACQUISITION OF PRECISE TWO 1. Introduction The board of directors of ARA-CWT Trust Management (Cache) Limited, as manager of Cache Logistics Trust ( Cache, and ARA-CWT Trust Management (Cache) Limited as manager of Cache, the Manager ), wishes to announce that HSBC Institutional Trust Services (Singapore) Limited, in its capacity as trustee of Cache (the Trustee ), has on 6 February 2013 entered into a call option agreement (the Call Option Agreement ) with Precise Development Pte. Ltd. ( PDPL ) in relation to the acquisition of the property known as Precise Two, located at 15 Gul Way, Singapore (the Acquisition ). Pursuant to the terms of the Call Option Agreement, PDPL would be required to enter into a sale and purchase agreement ( Sale and Purchase Agreement ) within 7 days from the time the Trustee exercises the call option. The call option may be exercised only after JTC Corporation ( JTC ) approves the application for assignment, and the JTC approval conditions for the assignment are accepted by the Trustee. On completion of the Acquisition ( Completion ), the Trustee and PDPL will enter into a master lease agreement pursuant to which Precise Two would be leased back to PDPL (the Master Lease Agreement ). The Manager is of the view that the Acquisition is in the ordinary course of Cache s business as the acquisition of Precise Two is within the investment strategy of Cache and does not change the risk profile of Cache. 2. Information on the Property Precise Two, which is located at 15 Gul Way, Singapore , is a new completed three-storey fully ramp-up warehouse with a gross floor area ( GFA ) of approximately 284,381 square feet ( sq ft ) which received its temporary occupation permit on 12 December Precise Two is sited on a land area of 203,272 sq ft with a land lease tenure of 30 years beginning from 1 October Knight Frank Pte Ltd ( Knight Frank ) has been appointed as the independent property valuer by the Manager and the Trustee to value Precise Two. Knight Frank in its market valuation report dated 6 February 2013, stated that the open market value of Precise Two is S$55.15 million (based on a Investment Method, Discounted Cash Flow Analysis, and Comparable Sales Method), and includes the upfront land premium amount of S$6.15 million based on JTC posted land premium rate and adjusted for the duration of the remaining land lease. 1

2 3. Details of the Acquisition and Lease The purchase consideration for the Property is approximately S$55.2 million (the Purchase Consideration ), and was arrived at on a willing-buyer and willing-seller basis and includes the upfront payment of the land premium upon the approval by JTC of the assignment application. The Purchase Consideration is supported by the independent valuation of Precise Two by Knight Frank. The total cost of the acquisition is approximately S$57.3 million comprising the Purchase Consideration, the acquisition fee payable to the Manager (being 1.0% of the Purchase Consideration) and the professional and other fees and expenses in connection with the acquisition. Pursuant to the Master Lease Agreement, PDPL will lease the whole of Precise Two for a term of six years with an option to renew for an additional six years (at such revised rent to be agreed between the parties). On commencement of the lease, PDPL shall provide a security deposit equivalent to 12 months net rent. The initial net property income yield is approximately 8.7%. 4. Rationale for the Acquisition The Manager believes that the key benefits to unitholders of Cache ( Unitholders ) of the Acquisition are that: (i) (ii) (iii) the Acquisition fits the Manager s investment strategy and provides an opportunity for further exposure to the high-growth logistics sector; Cache will increase its market share of ramp-up logistics warehouses in Singapore; Precise Two has certain competitive strengths, being that Precise Two: (a) (b) (c) is strategically located in the Jurong Industrial Precinct; has a high occupancy rate and predictable cash flow as the Master Lease Agreement provides for a contracted lease term of six years with an option to renew for another six years, with locked-in rental escalation every 2 years; and has modern and attractive technical specifications such as heavy floor loading of 50KN/M 2 for the ground floor and 35KN/M 2 for the upper floors, making it particularly attractive to end-users who require warehouse storage space for heavy products and equipment; and (iv) Cache will benefit from the increased portfolio size that will create a stronger platform for further acquisition growth primarily due to better access to both the capital markets and the debt markets. Following Completion, Cache will increase its investment property base by 5.7% to S$1,027.0 million 1. 1 Based on the valuation of the Cache s existing portfolio of properties as at 31 December

3 5. Method of Financing and Financial Effects of the Acquisition The Manager believes that Cache has sufficient financial flexibility and capacity to fund the Acquisition, which is expected to complete in April 2013, subject to approval from the relevant authorities. The Manager will make a further announcement when the call option is exercised and the Sale and Purchase Agreement is entered into with PDPL. The financial effects of the Acquisition will be announced when the call option is exercised. 6. Interests of Directors and Controlling Unitholders Based on the information available to the Manager as at the date of this announcement, none of the directors of the Manager or Controlling Unitholders have an interest, direct or indirect, in the Acquisition. 7. Document for Inspection Copies of the Call Option Agreement (which attaches the form of the Sale and Purchase Agreement) and the market valuation report of Knight Frank are available for inspection during normal business hours, with prior appointment, at the registered office of the Manager at 6 Temasek Boulevard, #16-02 Suntec Tower Four, Singapore at for a period of three months commencing from the date of this Announcement. By Order of the Board ARA-CWT Trust Management (Cache) Limited (as manager of Cache Logistics Trust) (Company registration no H) Daniel Cerf Chief Executive Officer 6 February 2013 For enquiries, please contact ARA-CWT Trust Management (Cache) Limited Judy Tan Investor Relations Manager Tel: judytan@ara.com.hk 3

4 ABOUT CACHE LOGISTICS TRUST ( CACHE ) Cache Logistics Trust is a Real Estate Investment Trust ( REIT ) publicly listed on the Mainboard of Singapore Exchange Securities Trading Limited (the SGX-ST ) on 12 April Cache principally invests in quality income-producing real estate used for logistics purposes, as well as real estate-related assets, in Asia-Pacific. As at 31 December 2012, its portfolio of 12 high quality logistics warehouse properties are strategically located in established logistics clusters in Singapore and China, with a total gross floor area of 4.83 million square feet and a property value of S$971.9 million. Cache is managed by ARA-CWT Trust Management (Cache) Limited. For more information, please visit ABOUT ARA-CWT TRUST MANAGEMENT (CACHE) LIMITED ARA-CWT Trust Management (Cache) Limited is a joint-venture REIT management company between ARA Asset Management Limited ( ARA ) and CWT Limited ( CWT ). ARA, an affiliate of the Cheung Kong group, is a real estate fund management company listed on the SGX-ST. ARA currently manages REITs listed in Singapore, Hong Kong and Malaysia with a diversified portfolio spanning the office, retail, industrial/office and logistics sectors; private funds investing in real estate and real estate-related securities in Asia; and provides real estate management services, including property management services and convention & exhibition services; and corporate finance advisory services. For more information, please visit CWT is a leading provider of integrated logistics solutions for worldwide customers in the commodities, chemical and petrochemical, food & beverage, marine, oil & gas, defence and industrial sectors. CWT designs, engineers and manages unique and effective supply chain solutions leveraging its in-depth domain knowledge, innovative capabilities and global logistics infrastructure. Through its global network, the CWT Group is able to connect customers to 120 ports and over 1,200 destinations seamlessly around the world. Headquartered in Singapore, the CWT Group also engages in coal and base metals supply chain management and provides engineering services for building, facilities and equipment fleet as well as financial services through the asset management of Cache Logistics Trust and brokering services for futures and derivatives trades. The largest logistics service provider listed in Southeast Asia, CWT is traded on the SGX-ST under the stock symbol CWT. For more information, please visit 4

5 Important Notice This document does not constitute an offer, invitation or solicitation of securities in Singapore or any other jurisdiction nor should it or any part of it form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. This document may contain forward-looking statements that involve 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 similar developments, shifts in expected levels of property rental income, changes in operating expenses (including employee wages, benefits and training costs), 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. Investors are cautioned not to place undue reliance on these forward-looking statements, which are based on the current views of management on future events. The value of units in Cache ( Units ) and the income derived from them, if any, may fall or rise. Units are not obligations of, deposits in, or guaranteed by, the Manager or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Investors should note that they will have no right to request the Manager to redeem or purchase their Units for so long as the Units are listed on the SGX-ST. It is intended that holders of Units may only deal in their Units through trading on the SGX-ST. The listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. The past performance of Cache is not necessarily indicative of the future performance of Cache. 5