Circular to Unitholders - Suntec REIT

Under the Deed of Income Support, the Vendor has undertaken, starting from Completion, to pay
to Suntec REIT quarterly instalments for 54 months up to an aggregate amount of S$103.48
million (inclusive of GST). The Vendor’s commitment under the Deed of Income Support is
guaranteed by the Guarantor. Both CBRE and Knight Frank have taken into account these
payments under the Deed of Income Support in their valuation of the Property.
4. FINANCIAL INFORMATION RELATING TO THE ACQUISITION
4.1 Certain Financial Information Relating to the Acquisition
The following table presents, in summary, certain selected financial information in relation to the
Acquisition, assuming that the Acquisition is completed on 1 October 2007 and one-third of the
income from One Raffles Quay accrues to Suntec REIT through ORQPL and Comina from 1
October 2007:
ORQ Interest
Forecast Year
(financial year ending 30 September 2008)
Net Property Income (1) (S$ million) 39.6
Net Property Income Yield (2) (%) 4.2
Notes:
(1) Includes dividend income, interest income and rental income support (net of all taxes) that Suntec REIT will derive
from its one-third interest in ORQPL.
See Appendix C of this Circular for the major assumptions made calculating the forecast Net Property Income of
One Raffles Quay.
(2) Net Property Income yield for One Raffles Quay is calculated as Suntec REIT’s one-third share of Net Property
Income from One Raffles Quay over the Agreed Consideration of approximately S$941.5 million.
The detailed Profit Forecast in relation to the Acquisition and the assumptions for the forecast
information included in the table above are set out in Appendix C of this Circular.
4.2 Pro Forma Financial Effects of the Acquisition
The pro forma financial effects of the Acquisition on the DPU and NAV per Unit presented below
are strictly for illustrative purposes and were prepared based on the audited financial statements
of Suntec REIT for the financial year ended 30 September 2006 (the “Audited Financial
Statements”) as well as the unaudited monthly management accounts of ORQPL for the
financial period from 1 October 2005 to 30 September 2006.
In preparing the pro forma financial effects below, the following assumptions were made:
(i)
(ii)
(iii)
The income support for the period from 1 October 2005 to 30 September 2006 is assumed
to be an equivalent amount of the income support for the period from 1 October 2007 to 30
September 2008 of S$27.7 million (see paragraph 3.7 above);
The Convertible Bonds are issued with an aggregate principal amount of S$450 million at
a Conversion Price of S$2.51 (the mid-point in the illustrative conversion price range of
S$2.33 to S$2.79 21 ) for each Conversion Unit (purely for illustrative purposes only);
One Raffles Quay is held jointly with K-REIT Asia 22 and Freyland, with one-third of the
income from One Raffles Quay accruing to Suntec REIT through Comina; and
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22
The illustrative conversion price of S$2.33 is based on a 25% premium over an illustrative price of S$1.86 per Unit, (being
the last closing price on the Latest Practicable Date). The illustrative conversion price of S$2.79 is based on a 50% premium
over an illustrative price of S$1.86 per Unit, (being the last closing price on the Latest Practicable Date).
On 30 July 2007, K-REIT Asia announced that it will acquire a one-third interest in One Raffles Quay through the acquisition
of one-third of the issued share capital of ORQPL from Boulevard.
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