introduction to cdl hospitality trustsinvestor.cdlht.com/newsroom/general_presentationma07.pdf ·...

March 2007

Introduction To CDL Hospitality Trusts

2

• The value of Stapled Securities and the income derived from them may fall as well as rise. Stapled Securities are not obligations of, deposits in, or guaranteed by the H-REIT Manager or M&C Business Trust Management Limited, as trustee of CDL Hospitality Business Trust (the “HBT Trustee-Manager”), or any of their respective affiliates.

• An investment in Stapled Securities is subject to investment risks, including the possible loss of the principal amount invested. Investors have no right to request that the H-REIT Manager and/or the HBT Trustee-Manager redeem or purchase their Stapled Securities while the Stapled Securities are listed. It is intended that holders of the Stapled Securities may only deal in their Stapled Securities through trading on Singapore Exchange Securities Trading Limited (the “SGX-ST”). Listing of the Stapled Securities on the SGX-ST does not guarantee a liquid market for the Stapled Securities.

• This presentation contains certain tables and other statistical analyses (the "Statistical Information") which have been prepared by the H-REIT Manager and the HBT Trustee-Manager. Numerous assumptions were used in preparing the Statistical Information, which may or may not be reflected herein. As such, no assurance can be given as to the Statistical Information’s accuracy, appropriateness or completeness in any particular context, nor as to whether the Statistical Information and/or the assumptions upon which they are based reflect present market conditions or future market performance. The Statistical Information should not be construed as either projections or predictions or as legal, tax, financial or accounting advice.

• This document 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 expected levels of occupancy rate, property rental income, charge out collections, changes in operating expenses (including employee wages, benefits and training costs), governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business.

• 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.

• This document and its contents shall not be disclosed without the prior written permission of the H-REIT Manager or HBT Trustee-Manager.

Disclaimer

3

Table Of Contents

• Highlights

• Background to CDL Hospitality Trusts

• Strengths of CDL Hospitality Trusts

• Structure of CDL Hospitality Trusts

• Results for FY 2006

4

Highlights

5

Highlights (I)

1 CDL-HT was publicly launched on 19 July 2006 as the first REIT in Asia ex Japan with hotel assets

3 Record number of more than 9.7 million visitor arrivals into Singapore for 2006

4 Strong 4th quarter performance with CDL-HT hotels in Singapore- Average occupancy rate of 88%- Average daily rate of $166- RevPAR of $146 up 16.8% from forecast

2 CDL-HT completed its first acquisition on 19 December 2006

6

Highlights (II)

Strong performance in CDL Hospitality Trusts first financial year: - Gross revenues up 14.8% from forecasts- Income available for distribution up 21.8% from forecasts

7

6 For comparison, for period 1 Jan to 31 Dec, hotels year on year growth significant

- Average daily rates up 22.6%- Occupancies up 6.4%- RevPAR up 30.1%

5 Overall robust performance for the period from IPO to 31 December 2006:

- Average occupancy rate of 86%- Average daily rate of $166- RevPAR of $143 up 10.9% from forecast

7

Background to CDL Hospitality Trusts

8

$0.80$0.90$1.00$1.10$1.20$1.30$1.40$1.50$1.60$1.70$1.80$1.90$2.00$2.10

IPO31

-Jul

14-A

ug25

-Aug

7-Sep

20-S

ep3-O

ct16

-Oct

30-O

ct10

-Nov

23-N

ov6-D

ec19

-Dec

4-Jan

17-Ja

n30

-Jan

12-Feb

27-Feb

Strong Post IPO Performance

Background To CDL Hospitality Trusts

• IPO on 19 July 2006

• Listed on SGX Mainboard

• Sponsored by Millennium & Copthorne Hotels plc (listed on LSE)

• First:

– Hotel REIT in Asia ex Japan

– Stapled security comprising a REIT and business trust

– Acquisition within 4 months of listing

Background

Source: Unit price data from Bloomberg(1) At the exchange rate of US$ 1 = S$1.5282

IPO Price = $0.83

(US$0.54)(1)

28 Feb ’07 = S$1.85

(US$1.21)(1)

High (7 Feb ’07) = S$2.00

(US$1.31)(1)

9

Strengths of CDL Hospitality Trusts

10

Strengths Of CDL Hospitality Trusts

Well Positioned Assets22

Favourable Industry Fundamentals in Singapore33

Blue Chip Sponsor11

Growth Through Active Asset Management55

Growth Through Acquisitions55

11

Listed in London Stock Exchange with market capitalisation of ~£1.9 billion as at 28 Feb 2007

Blue Chip Sponsor With Global Brand

3 Global Brands 105 hotels in 18 Countries

Ecuador

France

Germany

Korea

Indonesia

Hong Kong

Malaysia

China

Egypt

United States

United Kingdom

New Zealand

Taiwan

UAE

Philippines

Singapore

Thailand

Qatar

12

Strengths Of CDL Hospitality Trusts

Well Positioned Assets22

Favourable Industry Fundamentals in Singapore33

Blue Chip Sponsor11

Growth Through Active Asset Management55

Growth Through Acquisitions55

13

74,587 sq ftN/A5 rooms(4,007 sq ft)

9 rooms(11,380 sq ft)

34 rooms(65,000 sq ft)

13 rooms(20,000 sq ft)Meeting space

17N/A4445# of F&B Outlets

75-year leasehold interest commencing on the Listing Date with the exception of Copthorne King’s Hotel which will be an approximately 61-year leasehold interest expiring on 31 January 2067Title

S$490,187(1)S$7,184 psm(S$667 psf)S$325,806S$462,470S$485,818S$589,433Valuation per

room

S$979.2 mS$35.1 mS$101.0 mS$191.0 mS$267.2 mS$384.9 mValuation

1,055N/A77237287454Car Park Lots1,926N/A310413550653Number of Rooms

TotalOrchard Hotel Shopping Arcade

Copthorne King’s HotelM HotelGrand Copthorne

Waterfront HotelOrchard Hotel

Overview Of Current Portfolio:Singapore

(1) Excluding Orchard Hotel Shopping Arcade(2) CBRE valuation as at 31 December 2006

14

Overview Of Current Portfolio:Singapore And New Zealand

Freehold N/ALeaseholdTitle

S$446,916(2)NZ$248,352 (S$263,749)(2)S$490,187(1)Valuation per room

S$1,064.1 m(1)NZ$113 m(S$120.0 m)(2)S$944.1 m(1)Valuation

2,3814551,926Number of Rooms

TotalNew Zealand AssetSingapore Assets

(1) Excluding Orchard Hotel Shopping Arcade(2) At exchange rate of NS$1 to S$1.062

15

Hotels Strategically Located

Singapore Hotels

CENTRALBUSINESSDISTRICT

ORCHARDROAD

SINGAPORERIVER

INTEGRATEDRESORT SITE

BUSINESS &FINANCIAL CENTRE

SITE

Orchard Hotel &Shopping Arcade

CopthorneKing’s Hotel

Grand CopthorneWaterfront Hotel

M Hotel

New Zealand Hotel

Rendezvous Hotel Auckland

16

Orchard Hotel,Singapore

♦ 653 rooms♦ Located in Orchard Road♦ Newly renovated rooms♦ Significant meeting facilities - large columnless

ballroom for large events♦ Appeals to both corporate and leisure segment

Significant Highlights

♦ Best Accommodation Experience 2005

♦ Executive Chef of the Year 2006

♦ Asian Ethnic Chef of the Year 2005 & 2006

♦ Asian Ethnic Restaurant of the Year 2005

Accolades

17

Grand Copthorne Waterfront,Singapore

♦ 550 rooms – 11 new rooms added on 1 January 2007 to room inventory from conversion of certain areas into hotel rooms

♦ Located between CBD and Orchard Road

♦ Close to proposed BFC and IR

♦ One of the largest conference facilities in Singapore

♦ Well positioned for the MICE market

Significant Highlights

♦ Best Meetings & Conventions Hotel 2006

♦ Winner of Chef RAS 2006 competition

Accolades

18

M Hotel,Singapore

♦ 413 rooms♦ Located in the heart of the financial district♦ Close to proposed BFC and IR♦ Completed refurbishment in 2003 ♦ Strong following of business travellers

Significant Highlights

19

Copthorne King’s Hotel,Singapore

Significant Highlights♦ 310 rooms♦ Located between CBD and Orchard Road♦ Completed refurbishment in 2004♦ Strong corporate segment focus

20

92.5%Occupancy(1)

S$5.99Average rental psf(1)

S$7,184 psm (S$667 psf)

Valuation psm (psf)

75 yearsfrom Listing Date

Lease Term

S$35.1 mValuation

4,886.2 sq mNet Lettable Area

Orchard Hotel Shopping Arcade,Singapore

(1) Occupancies and average rental psf on a committed basis

21

Rendezvous Hotel Auckland,New Zealand

♦ 455 rooms – largest hotel in Auckland by rooms

♦ Freehold♦ Located in the central business district and

next to a major conference centre

Significant Highlights

22

Strengths Of CDL Hospitality Trusts

Well Positioned Assets22

Favourable Industry Fundamentals in Singapore33

Blue Chip Sponsor11

Growth Through Active Asset Management55

Growth Through Acquisitions55

23

Visitor Arrivals In Singapore

8,3288,942

9,748

17,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2004 2005 2006 2015 (F)

Thou

sand

s

Visitor Arrivals (Full year)

Strong Growth In Visitor Arrivals In Singapore – Historical And Projected

Source: STB

+7.4%

+9.0%

CAGR = +6.4%

24

Significant Growth From Many Of The Top 10 Visitor Arrival Countries

Breakdown Of Visitor Arrivals To Singapore For 2006

Indonesia, 1,921,455

China, 1,036,957

Australia, 691,547

India, 658,655

Malaysia, 634,116

Japan, 594,198

United Kingdom,

488,078

South Korea, 454,666

USA, 399,712

Phillippines, 385,960

Others, 2,482,863

'05 To '06 Year On Year Growth In Top 10 Visitor Arrival

Countries For Singapore

20.6%

7.6%

24.8%

4.5%

1.0%

9.7%

12.9%

11.5%

20.9%

5.9%

0.0% 10.0% 20.0% 30.0%

Philippines

USA

South Korea

United Kingdom

Japan

Malaysia

India

Australia

China

Indonesia20%

11%

7%

7%7%6%

5%

5%

4%

4%

25%

Source: Singapore Tourism Board

25

Minimal Hotel Room Supply Expected In 2007 And 2008

Waterfall Chart - Current and Expected Hotel Room Supply in Singapore

3,030

1,885 38,136

30,476712

2,137

25,000

27,000

29,000

31,000

33,000

35,000

37,000

39,000

'06 '07 '08 '09 '10 Total '10

Tota

l Dai

ly R

oom

Inve

ntor

y

Source: CBRE Report dated 23 February 2007

’06 to ’10 CAGR = +5.8%

26

Potential To Grow Average Room Rates In Singapore

Low Relative Room Rates

27

Steady Growth In International Arrivals To New Zealand

Source : New Zealand Ministry of Tourism

NZ International Tourist Arrivals

0500

1,0001,5002,0002,500

3,0003,500

1999

2000

2001

2002

2003

2004

2005

2006

f

2007

f

2008

f

2009

f

2010

f

2011

f

2012

f

Arr

ival

s (,0

00)

2005 – 2012 CAGR = 4.0%• Total visitor nights expected to grow

at an average rage of 4.9% p.a., rising to 59.8 mil in 2012

• Growth underpinned by increasing exposure of New Zealand in high profile and successful films like Lord of the Rings, King Kong and Chronicles of Narnia

• New Zealand increasingly showcased as a land of natural beauty and adventure

Favourable Sentiment For NZ

28

Strengths Of CDL Hospitality Trusts

Well Positioned Assets22

Favourable Industry Fundamentals in Singapore33

Blue Chip Sponsor11

Growth Through Active Asset Management55

Growth Through Acquisitions55

29

Acquisitions Opportunities From Multiple Sources

• Owns / operates 101 hotels globally(1)

• Right of First Refusal(2)

– Future sales of Singapore hotels owned by M&C

– Offers of Singapore hotels made to M&C

• Potential growing acquisition pipeline as M&C seeks to expand its presence globally with greenfield hotel developments

• Global network of hospitality relationships

• Hotel chains seeking to free up capital to focus on management fee income

• Independent, single hotel owners lacking scale and looking to exit hotel investment

• Private equity looking to exit investments

• Independent hotel owners looking for sale and leaseback arrangements

• Turnaround opportunities

M&C Third party

(1) Excluding 4 hotels in Singapore(2) For 5 years from listing date

30

Copthorne Orchid Is Subject To A Right Of First Refusal

♦ 440 rooms

♦ 3 F&B outlets

♦ Located in tranquil surroundings near Botanic Gardens and Orchard Road

Significant Highlights

31

CDL-HT Target Markets

Specific Countries of Interest

▪ Singapore ▪ New Zealand ▪ Australia ▪ Vietnam ▪ Hong Kong ▪ Thailand▪ China ▪ India ▪ Japan ▪ Maldives ▪ Malaysia ▪ UAE

Singapore

Australia

New Zealand

VietnamThailand

ChinaIndia

Malaysia

Middle East

Maldives

Hong Kong

Singapore

Australia

New Zealand

VietnamThailand

ChinaIndia

Malaysia

UAE

Maldives

Hong Kong

Japan

32

Strengths Of CDL Hospitality Trusts

Well Positioned Assets22

Favourable Industry Fundamentals in Singapore33

Blue Chip Sponsor11

Growth Through Active Asset Management55

Growth Through Acquisitions55

33

Evolution of Market Mix

14.4 20.1 22.5 27.1

29.040.4

50.4

67.1

0102030405060708090

100

2003 2004 2005 2006

Hot

els

Roo

ms

Rev

enue

(S$

m)

Leisure/Others Corporate

`

Continuing Shift To Higher Yielding Corporate Segment(1)

66.8%

33.2%

66.7%

33.3%

69.1%

30.9%

71.2%

28.8%

(1) “Corporate segments” is as defined in the IPO Prospectus dated 10 July 06

43.4

60.5

72.9

94.2

34

Asset Enhancement Opportunities Being Considered

Grand CopthorneWaterfront

Orchard HotelShopping Arcade

5th and 6th Floors -

currently bareEntire building

Areas Under Consideration For Asset Enhancement

35

Strengths Of CDL Hospitality Trusts

Well Positioned Assets22

Favourable Industry Fundamentals in Singapore33

Blue Chip Sponsor11

Growth Through Active Asset Management55

Growth Through Acquisitions55

36

Structure of CDL Hospitality Trusts

37

Holdings of H-REIT and HBT as Stapled Securities

CDL Hospitality Trusts Structure

Sponsor Investors

Master Lessees

Hotel Manager

DBS Trustee

M&C REIT Management Limited

(H-REIT Manager)

M&C Business Trust Management Limited

(HBT Trustee Manager)H-REIT (owns hotels)

HBT(1)

H-REIT HBT

≈39.2% ≈60.8%

Distributions

Stapling Deed

Lease of Hotels

Operates and manages the Hotels under hotel management agreements

Lease of Hotels

RentActs on behalf of the holders of H-REIT Units

Management services

Management services and acts on behalf of the holders of the HBT Units

Operates and manages the Hotels under hotel management agreements

(1) Dormant as at 28 February 2007(2) To be appointed by HBT when HBT steps in as master lessee in the event no other master lessee can be found

For simplicity, the diagram does not include Orchard Hotel Shopping Arcade. Orchard Hotel Shopping Arcade tenants will pay rent to H-REIT directly and H-REIT Manager will manage Orchard Hotel Shopping Arcade directly

Hotel Manager(2) Note: Dormant

38

Lease Structures

Favourable Lease

Structure in Singapore(1)

• Total rent to H-REIT from Auckland Hotel:• Base rent + Variable rent• Base rent escalates at 2.75% per annum• For first year, total rent = NS$8.9 Mn (S$9.2 Mn)(2)(3)

• Total Rent secured by Vendor for first 3 years

High Degree of Stability

from Auckland

Lease

• Hotels:• 20% of Hotel's revenue + 20% of Hotel’s gross operating profit subject to a Fixed Rent floor of $26.4M• Term of 20 years with 20 year option

• Orchard Hotel Shopping Arcade:• H-REIT receives rents direct from tenants

(1) Based on IPO prospectus dated 10 Jul 2006 and announcement of acquisition dated 30 Oct 06 (2) At exchange rate of NZ$NZ to S$1.03 as at 27 October 2006(3) Based on announcement of acquisition dated 30 Oct ’06

39

Results for FY 2006

40

Strong Performance Over Same Period Pro-Forma YTD ’05

Gross Revenue and NPI - Same Period Year on Year Comparision

20,688

28,189

18,866

25,889

0

5,000

10,000

15,000

20,000

25,000

30,000

Pro-forma - 19 Jul to31 Dec '05

Actual - IPO to 31 Dec'06

Gross Revenue NPI

Distributable Income - Same Period Year on Year Comparision

13,211

20,304

0

5,000

10,000

15,000

20,000

25,000

Pro-forma 19 Jul to31 Dec '05

Actual - IPO to 31Dec '06

Distributable income

Gross Rev = +36.3%NPI = +37.2%

+53.7%

S$’000 S$’000

41

Strong Performance Over Forecast By CDL-HT

Gross Revenue and NPI Performance For Q4 '06

13,609

16,929

12,501

15,559

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Forecast Q4 '06 Actual Q4 '06

Gross Revenue NPI

Gross Revenue and NPI Performance (IPO to 31 Dec '06)

24,555

28,189

22,555

25,889

0

5,000

10,000

15,000

20,000

25,000

30,000

Forecast - IPO to 31Dec '06

Actual - IPO to 31Dec '06

Gross Revenue NPI

Gross Rev = +24.4%NPI = +24.5%

Gross Rev = +14.8%NPI = +14.8%

S$’000 S$’000

42

Income Available For Distribution: Significant Increase Over Forecasts

Income Available For Distribution Per Stapled Security For Period From IPO to 31 Dec '06

2.382.89

5.23

6.35

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

Forecast to 31 Dec '06 Actual to 31 Dec '06

Income available for distribution Annualized distributable income

+21.4%S¢

43

Performance Driven By Strong Q4:Forecast vs. Actual

ARR: Forecast vs. Actual Q4 '06

$155

$166

$145$150$155$160$165$170

Forecast Q4 Actual Q4

Occupancy: Forecast vs. Actual Q4 '06

82%

88%

78%80%82%84%86%88%90%

Forecast Q4 Actual Q4

RevPAR: Forecast vs. Actual Q4 '06

$125

$146

$110

$115

$120

$125

$130

$135

$140

$145

$150

Forecast Q4 Actual Q4

+7.1%

+600 bp (7.3%)

+16.8%

S$

S$

44

Overall H2 Performance Strong:Forecast vs. Actual

ARR: Forecast vs. Actual H2 '06

$155

$166

$145$150$155$160$165$170

Forecast H2 Actual H2

Occupancy: Forecast vs. Actual H2 '06

83%

86%

81%82%83%84%85%86%87%

Forecast H2 Actual H2

RevPAR: Forecast vs. Actual H2 '06

$129

$143

$120

$125

$130

$135

$140

$145

Forecast H2 Actual H2

+7.1%

+300 bp (3.6%)

+10.9%

S$

S$

45

Indicative Full Year On Year Comparison

ARR: Full Year on Year Comparison

$133

$163

$100$120$140$160$180

'05 Full Year '06 Full Year

Occupancy: Full Year on Year Comparison

78%

83%

74%76%78%80%82%84%

'05 Full Year '06 Full Year

RevPAR: Full Year on Year Comparison

$103

$134

$70

$80

$90

$100

$110

$120

$130

$140

'05 Full Year '06 Full Year

+22.6%

+500 bp (6.4%)

+30.1%

S$

S$

46

Breakdown of Performance

47

Breakdown Of Gross Rental Revenues By Property

Orchard Hotel

Grand CopthorneWaterfront

Hotel M HotelCopthorne

King’s

Orchard Hotel

Shopping Arcade

Rendez-vous Hotel

Gross rental revenue (Actual for

YTD 31 Dec ‘06)

Gross rental revenue (Pro-forma for YTD 31 Dec ‘05)

% difference

S$7.3 m S$5.3 m S$4.1 m S$2.4 m S$1.6 m -

31.7% 51.7% 33.0% 35.6% - 2.1% -

S$9.6 m S$8.1 m S$5.4 m S$3.3 m S$1.5 m S$.3 m

48

CDL-HT Revenue Streams More Diversified

Breakdown between Fixed and Variable Rent for 2006

12,007 12,007

12,54816,182

0

5,000

10,000

15,000

20,000

25,000

30,000

Forecast (19 Jul to31 Dec)

Actual (12 Jun to 31Dec)

Fixed Rent Variable Rent

Breakdown of Gross Revenue By Property (S$,000) for 2006

Orchard Hotel

Shopping Arcade, 1,529

Copthorne King's Hotel,

3,262

Rendezvous Hotel

Auckland, 260

Orchard Hotel, 9,607

Grand Copthorne Waterfront

Hotel, 8,094

M Hotel, 5,437

24,55528,189

48.9%

51.1%

42.6%

57.4%12%

5%

19%

29%

34%

1%

S$’000

49

CDL-HT Assets Have Been Re-Valued Upwards

Valuation of H-REIT Properties

120 12035 3586 101

162 191

234267

330

385

0

200

400

600

800

1,000

1,200

Purchase Price 31 Dec 2006 Valuation

Mill

ions

Orchard

Grand Copthorne Waterfront

M

Copthorne King's

Orchard Hotel Shopping Arcade

Rendezvous

16.6%

Increase In Valuation

14.1%

18.3%

17.3%

1.8%

0.0%

13.8%TOTAL

34.2%

24.2%

16.7%

8.9%

12.4%3.6%

35.0%

24.3%

17.4%

9.2%

10.9%3.2%

Source: CBRE valuation reports. Rendezvous Hotel converted to S$ at the rate of NZ$1 = S$1.0628Note: % represent % of total valuation of properties(1) As at 31 December 2007

966.5

1,099.4

Gearing = 34.7%(1)

S$

Thank You