CMT – DB

DB Access Asia Conference 2010 Highlights

Improving operating environment; positive outlook. The operating environment for retail has improved amid the strong economic recovery, translating to a 0.9% YoY rise in shopper traffic and 5% increase in gross turnover. Rental renewal rates in 1Q rose 6.2% over preceding rents (vs 3.4% in 4Q09 and 2.3% in 3Q09). More trade categories are doing better, with 9 out of 18 trade categories reporting a YoY rise in gross turnover compared to just 4 in 2009. Mgmt expects CMT to benefit further from the growing trend in tourist arrivals.

Focus on capital management. CMT has been proactive in capital mgmt and is looking to extend and stagger its debt maturity. It has already addressed debt refinancing for 2010 partially through the recent issue of 5-year and 7-year MTNs (S$200m). In April it issued US$500m 5-year MTNs which will fully meet the balance of 2010 refinancing requirements and the acquisition of Clarke Quay. Pro-forma gearing of 34.7% remains conservative.

AEI and acquisition growth engine reignited. Ongoing AEIs are on track with 70% of new NLA in B1 & B2 Raffles City already committed ahead of its completion end this year. For JEC, construction contract has been awarded below initial budget on track for completion in early 2012. CMT is also constructing a new 2-storey F&B annex block in Junction 8 (3,500sf) and will reconfigure some retail units in Tampines Mall, expected to be completed by end this year. The acquisition of Clarke Quay has also been approved, allowing CMT to leverage on the rising trend in discretionary spending with % of revenue from discretionary spending rising from 20.9% t0 25.1%. Gross revenue locked in for FY10 has exceeded 88% of FY09’s.