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Singapore, 30 July 2021 – CapitaLand Limited (“CapitaLand” or the “Company”) held a virtual dialogue session with shareholders as part of its retail investor outreach for the Proposed Strategic Restructuring and Listing of CapitaLand Investment (the “Proposed Transaction”). Post-Proposed Transaction, CapitaLand’s investment management platforms, as well as its lodging business, will be consolidated into CapitaLand Investment Limited (“CLI”), which will be listed by introduction on the Singapore Exchange (“SGX-ST”); while the real estate development business of CapitaLand will be placed under private ownership, to be fully held by CLA.
More than 150 retail shareholders participated in the live virtual dialogue session on 28 July 2021, which was facilitated by the Securities Investors Association (Singapore) (SIAS). Mr Lee Chee Koon, Group CEO of CapitaLand Group and Mr Andrew Lim, Group CFO of CapitaLand Group started the dialogue by highlighting the key rationale and benefits of the Proposed Transaction before addressing questions posed by Mr Robson Lee, Assistant Honorary Secretary of SIAS, on behalf of CapitaLand retail shareholders.
The following key points were raised at the session:
Rationale for the proposed restructuring
While reiterating the rationale of the proposed restructuring, Mr Lee said: “CapitaLand has consistently traded at a 20% to 25% discount to net asset value (NAV). While this is comparable to other developers in the region, proven real estate investment managers (REIMs) tend to trade at a premium to NAV. With our strong track record in growing fee income for our Fund and Lodging Management businesses, and our disciplined capital recycling, we are confident that CapitaLand’s proposed restructuring will allow CLI shareholders to potentially benefit from the substantial long-term value that we will aim to unlock."
CLI’s competitive advantage as a REIM with leadership in Asia
Mr Lee said: “CapitaLand has built up a strong track record and reputation in Asia, with more than 20 years of experience in our core markets of Singapore, China, India and Vietnam; as well as a rapidly expanding presence in our focus markets of Japan, Korea and Australia. The extensive and experienced boots that we have on the ground gives us the ability to access different investment opportunities, including those that are off market. In the next 10 to 20 years, Asia will continue to be a key engine of growth. CLI’s long standing presence in Asia will give us an edge over non-Asian based REIMs, drawing on our own heritage, history and strengths in Asia. We need to chart our own path, identify our areas of competitiveness, and become an asset manager that is globally competitive with a very strong foundation in Asia.”
"We need to chart our own path, identify our areas of competitiveness, and become an asset manager that is globally competitive with a very strong foundation in Asia."
Asset-light lodging management platform is a good fit for CLI
When asked about the compatibility of the lodging management platform with CLI, Mr Lim explained: “The underlying principle of both platforms is the same – we are managing third-party capital and earning a fee. Therefore, these two capital efficient businesses are complementary, and a good fit for CLI. As our lodging platform continues to emerge from the worst of the pandemic, and scales towards our planned target of 160,000 units under management by FY2023, we expect the business to contribute materially to CLI’s overall earnings on a recurring basis.”
"The underlying principle of both platforms is the same – we are managing third-party capital and earning a fee. Therefore, these two capital efficient businesses are complementary, and a good fit for CLI."
Prudent dividend policy
On CLI’s dividend policy, Mr Lim said: “The management team has made the decision to keep our dividend policy unchanged for now, that is to declare a dividend of at least 30% of our cash PATMI. This is for two reasons. One, to give our current shareholders, and hopefully shareholders of CLI going forward, a familiar reference. Two, we are cognisant that we are emerging from a difficult operating environment caused by the pandemic. We are in a period of recovery, which while positive, remains uncertain. The management team has thus elected to maintain an unchanged dividend policy for CLI in the near term. Assuming the recovery continues, and we return to a more normalised operating environment within the next 12 to 24 months, we will be able to review CLI’s dividend policy, to ensure that it accurately reflects the cash generating nature of a REIM.”
Virtual shareholder meetings
The Proposed Transaction is subject to the approvals of CapitaLand’s Shareholders at the Extraordinary General Meeting (“EGM”) and the Scheme Meeting (collectively, the “Meetings”) to be held by way of electronic means on Tuesday, 10 August 2021. The EGM will start at 2.00 pm, and the Scheme Meeting at 2.15 pm or as soon thereafter following the conclusion of the EGM. The Offeror and its concert parties will abstain from voting at the Meetings.
As a pre-cautionary measure due to the COVID-19 situation in Singapore, Shareholders will not be able to attend the Meetings in person. They may participate in the Meetings by observing and/or listening to the proceedings via the live audio-visual webcast or the live audio-only stream. Shareholders will have the opportunity to ask questions during the live Questions and Answers session at the Meetings. They may also submit questions prior to the Meetings.
Shareholders who wish to register for the EGM and Scheme Meeting and submit questions may continue to do so until 2.15 pm on Saturday, 7 August 2021. Shareholders who wish to vote must complete the proxy forms for the respective meetings and submit them via CapitaLand’s pre-registration website, email or by post1 by 2.00 pm on Saturday, 7 August 2021 (for EGM proxy form) and 2.15 pm on Saturday, 7 August 2021 (for Scheme Meeting proxy form). For details, please read the Notice of EGM and Notice of Scheme Meeting.
Responses to Substantial and Relevant Questions
Ahead of the Meetings, CapitaLand has today issued Responses to Substantial and Relevant Questions received from shareholders to date (“Responses”). The topics covered in the Responses include the Proposed Transaction, odd lots trading and bonds issues. Further Responses to Substantial and Relevant Questions received from shareholders will be issued at a later date.
For the Responses, video recording of the CapitaLand-SIAS virtual dialogue and latest transaction updates, please visit the Proposed Transaction microsite.
1 Submission of e-Proxy Forms via pre-registration website is available for Shareholders who are individuals only while all Shareholders whether individuals or corporates may submit the proxy forms via email or post. Instruments of proxy executed under a power of attorney on behalf of an individual or by executors on behalf of a deceased individual’s estate may only be submitted by email or post.