Presentation on theme: "Private & Confidential 1 AREIF Business Plan 2008 - Key Assumptions ItemInvestment Approval (IM)Operating BudgetRemarks Residential Sales NLA for sales19,216sqm25,248."— Presentation transcript:
Private & Confidential 1 AREIF Business Plan 2008 - Key Assumptions ItemInvestment Approval (IM)Operating BudgetRemarks Residential Sales NLA for sales19,216sqm25,248 sqmMore offered for sale to improve IRR Average sales priceTHB85,000 psmTHB99,000 psm Sales rateY1 : 67%(12,811 sqm) Y2 : 33% (6,405 sqm) 2007 : 35% (8,735 sqm) 2008 : 65% (16,513 sqm) (Jan 8%, Feb – Mar 15% pm, Apr – May 5% pm, Jun 10%, Jul – Sep 7% pm) Sale of Phase 1 (195 units/20,734 sqm) launched in Aug 07. Launch delayed due to weak market conditions which necessitate improved show units, more pre- launched preparations and commencement of common property upgrading. Residential Leasing NLA for lease12.811 sqm6,771 sqmMore to be offered for sale in 2008 CommencementMth 9Early 2009 OccupancyY1 : 100% for the 3 mths Y2 onwards 90% Year 2009 onwards 90%Units for lease will be renovated in the last phase of construction, hence leasing will begin in 2009. This is to ensure all resources are focused on units for sale for early transfer and no conflict arises between our leasing program and investor buyers. Rental RateTHB650 psm per mthTHB600 psm per mthWeaker economic conditions in Thailand has affected the leasing market. Renovation Costs Total costsTHB382mn Additional funds for common area upgrades will be from development fund collected from new buyers. Marketing & Sales Total costsY1 : 3.7% of gross sales value 3.1% of gross sales value Banking Financing TimingUpon acquisitionOct 2007Delay caused by uncertainty in economic and political conditions in Thailand which have affected banks lending. AmountTHB1.2bn Interest8%7.25% Repayment44% of sales proceeds60% of sales proceedsTighter repayment conditions. ASSET MANAGEMENT – SATHORN GARDEN Sathorn Garden ABP Key Assumptions Weak market conditions have affected sales but we have been able to manage margins and cost
Private & Confidential 2 AREIF Business Plan 2008 - Key Assumptions ASSET MANAGEMENT – THONGLOR Thonglor ABP Key Assumptions Retail component will open in 2008 while construction of the serviced apartments and condominiums will complete in 2009 ItemInvestment Approval (IM)Operating BudgetRemarks Residential Sales Sales priceTHB95 000 psmTHB105 600 psm Sales rateY1 : 50% (9654 sqm) Y2 : 50% (9654 sqm) 2007 : 12.5% (2412 sqm) 2008 : 77.7% (15040 sqm) (Jan – Feb 4%, Mar 20%, Apr – May 10%, Jun 6%, Jul 3.5%, Aug 3.3%, Sep 5.3%, Oct – Dec 3% Pre-launch sales from Nov 07 Sales launch in Mar 08 Residential Leasing NLA for lease5824 sqm5623 sqmReduced NLA due to provision for better street level access to basement level, better circulation and serviced apartment entrance lobby at ground level CommencementY2Feb 08 OccupancyY2 : 50% Y3 on 85% 2008 : 90% Rental RateTHB1110 psm per mthTHB1134 psm per mth Serviced Apartment Leasing Leasing CommencementY22009 Development Costs Total costsTHB1480mn Marketing & Sales Total costsY1 : 2.1% of gross sales value2008 : 3.3% of gross sales value Banking Financing TimingUpon acquisitionNov 07 AmountTHB1.46bnTHB1.77bn Interest8%6.87% Advisory feesNil2% upfront Repayment44% of sales proceeds beginning in Y2 60% of sales proceeds commencing in Aug 08
Private & Confidential 3 AREIF Gotenyama House Key Assumptions Business Plan 2008 Key Assumptions ASSET MANAGEMENT - GOTENYAMA Expect higher rental rates but net income will be affected by many lease expiries
Private & Confidential 4 AREIF Approved IRR (before fees)15.08% Current estimated IRR (before fees)15.08% Total approved investmentUS$30.375 million -Loan -Equity Nil US$30.375 million Equity drawn-down @ 30 Sep 2007US$30.375 million Distributions receivedUS$471,852 received on 19 January 2007 Planned divestmentNo later than 31 st December 2008 Investment Overview ASSET MANAGEMENT – KL PAVILION Asset strategy for underlying assets To sell the two residential towers to maximize prices in the retail and investor markets. Key Asset Management Objectives for 2008 One residential tower fully sold. To complete the sale of second tower in 2008.
Private & Confidential 5 AREIF Business Plan 2008 Key Assumptions ASSET MANAGEMENT - CROSS TOWER Cross Tower ABP Key Assumptions Expect to outperform investment approval ItemsInvestment ApprovalOperating BudgetRemarks Operating Assumptions GFA for lease41,662 sq m41,267 Part of GFA used as Mgt Office & Common Area Occupancy94%96% Average Rental RateRMB 4.90 psm pdRMB 5.41 psm pd Expense Ratio24%21% N.O.I Margin76%79% EBITDA Margin48%54% Leasing Commission2 months1.5 months Asset Enhancement Asset Enhancement CostUSD 3 mil Bank Financing TimingUpon AcquisitionBy end Oct 2007 Amount(off-shore)USD 86 mil Interest6.82%6.59% Amount(on-shore)USD 4 mil Interest6.84%7.30% PBOC rate was revised upwards recently sqm
Private & Confidential 6 AREIF Item Investment Approval (IM) Operating Budget Remarks Office Leasing NLA for lease104,158 sqft Monthly Rental Rates HK$30/sqftHK$29.25/sqftLatest achieved face rent Rental Growth5% Expense Inflation2%3.25% Due to higher expected cost inflation in HK Capex (% of OR)1%2% Higher capex to upgrade the common areas Exit Yield4.4%4.2%Per latest valuers report Exit Year2011 ASSET MANAGEMENT - 88 GLOUCESTER Business Plan 2008 Key Assumptions 88 Gloucester ABP Key Assumptions Expect to achieve returns in line with investment approval
Private & Confidential 7 AREIF Business Plan 2008 Key Assumptions ASSET MANAGEMENT - AVATAR MALL Item 2008 Rent (per mth per gross py)185,000 Rental Growth (%)0% Overall Occupancy (%)30% CPI (%)3% Property/Facility Management Fee (per mth per gross py)11,460 Utilities (per mth per gross py)10,600 Property Taxes (per mth per gross py)7,685 Repair and Maintenance (per mth per gross py)1,500 Marketing Expense 3% of Total Rental Income Fund Management Expenses (per mth per gross py)1,745 Audit Fees (per mth per gross py)1,000 Legal Fees (per mth per gross py)1,000 Valuation Fees (per mth per gross py)500