Creating The Places Where People Love to Shop Hektar Real Estate Investment Trust (Hektar REIT) is Malaysia s first retail-focused REIT. Hektar REIT s

Transcription

1 Creating The Places Where People Love To Shop Hektar Real Estate Investment Trust ANNUAL REPORT 2009

2 Creating The Places Where People Love to Shop Hektar Real Estate Investment Trust (Hektar REIT) is Malaysia s first retail-focused REIT. Hektar REIT s principal objective is to provide its Unitholders with a defensible income distribution and to enhance the long-term value of the fund. Hektar REIT invests in income-producing real estate primarily used for retail purposes. Hektar REIT s portfolio currently consists of quality shopping centres situated in Subang Jaya, Melaka and Muar with a combined value of RM720 million as of 31 December Hektar REIT was listed on the Main Market of Bursa Malaysia Securities Berhad on 4 December 2006 and has outperformed its forecast in its first three years of listing. The REIT s cornerstone investor is Frasers Centrepoint Trust, part of the Fraser & Neave Group, headquartered in Singapore. Hektar REIT is managed by Hektar Asset Management Sdn.Bhd., a part of the Hektar Group. The Hektar Group was formed with a vision to develop world-class shopping centres for Malaysian consumers, based on international best practices.

3 Contents Contents Highlights 2-5 Strategy 5 Editorial Letter to Unitholders 6-27 Portfolio Performance Corporate Social Responsibility 39 Shopper & Retailer Testimonials Organisation Corporate Organisation 42 Corporate Directory 43 The Board of Directors The Management Team 47 Investor Communications 48 Corporate Review & Disclosure Manager s Report Corporate Governance Statement by the Manager 56 Statutory Declaration 57 Report of the Trustee s Report 58 Independent Auditors Report 59 Financials Balance Sheet 60 Income Statement Statement of Changes in Net Asset Value 63 Cash Flow Statement Notes to the Financial Statements Analysis of Unitholders Glossary 83-84

4 I Hektar REIT I Annual Report 2009 Highlights Hektar REIT recorded another solid year in 2009, maintaining a positive track record since listing Performance At A Glance Gross Revenue In RM million Net Property Income In RM million +4.3% % % +0.6% FY2007 FY2008 FY2009 FY2007 FY2008 FY2009 Dividend Per Unit In Sen (Annualised) Earnings Per Unit In Sen (Annualised) % +1.0% % +1.4% FY2007 FY2008 FY2009 FY2007 FY2008 FY2009 Assets In RM million Net Asset Value In Sen, Per Unit 1, % +5.3% % +0.8% FY2007 FY2008 FY2009 FY2007 FY2008 FY2009

5 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I Highlights (Cont d) Financial Highlights FY2009 dividend per unit (DPU) reached sen, up 1.4% in a challenging environment Financial Year Ended 31 December FY 2009 FY 2008 FY months 12 months 13 months RM 000 RM 000 RM 000 Gross Revenue 87,712 84,092 78,331 Direct Cost & Property Expenses (34,688) (31,377) (29,052) Net Property Income (NPI) 53,024 52,715 49,279 Net Income - Realised 36,737 36,238 36,682 Net Income Per Unit - Realised (sen) Annualised Net Income Per Unit - Realised (sen) Income Distribution 32,960 32,640 34,272 Distribution Per Unit (DPU) (sen) Annualised DPU (sen) Balance Sheet As at 31 December FY 2009 FY 2008 FY 2007 RM 000 RM 000 Change Total Assets 777, , ,797 Total Liabilities 370, , ,408 Total Borrowings 334, , ,000 Gearing Ratio 43.0% 40.8% 31.3% Net Assets 406, , ,389 No. of Units in Circulation (Units) 320, , ,001 NAV per Unit FY 2007 represents a 13-month period from Hektar REIT s listing on 4 December 2006 to 31 December 2007.

6 I Hektar REIT I Annual Report 2009 Highlights (Cont d) Hektar REIT provides a high-yield investment vehicle for investors with no refinancing required in 2010 Dividend Distributions FY2009 Dividend Yield Comparative Yields Interim 1st Quarter DPU (31 Mar) 2.40 sen Interim 2nd Quarter DPU (30 Jun) 2.40 sen Interim 3rd Quarter DPU (30 Sep) 2.40 sen Final 4th Quarter DPU (31 Dec) 3.10 sen Total DPU sen DPU Yield* 9.2 % * Based on DPU of sen and the closing unit price of RM1.12 for FY % 9.2% 8% 6% 4% 2% 0% 4.3% 2.2% 4.5% Hektar REIT 10- year Bond (MGS) 12- year Fixed Deposit EPF Dividend Yield Unit Price Statistics FY2009 High RM1.12 Low RM0.77 Opening Price (1 January 2009) RM0.77 Closing Price (31 December 2009) RM1.12 Change In Price +45.5% Unit Price Performance FY2009 RM % 0.80 Debt Structure As at 31 December Jan Mar Jun Sep Dec Debt Expiry Profile As at 31 December 2009 Al-Murabahah / Overdraft Fixed Term Loan, Annual Floating Rate (rate resets in December and April for Tranches 1 & 2, respectively) Total Debt RM334 million Weighted Cost of Debt 3.28% Gearing Ratio % Interest Cover Gearing ratio calculated by total long term liabilities over Gross Asset Value (GAV). RM million FY 2010 FY 2011 FY 2012 FY 2013

7 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I Portfolio Highlights Hektar REIT s portfolio remains resilient Highlights (Cont d) Net Lettable Area 1.1 million sq ft Market Catchment million residents Occupancy 95.8% Visitor Traffic 22.3 million Market Valuation RM720 million Number of Tenancies Data current as at 31 December NLA Tenants only 2 MIRP Surveys (2007-8) Strategy Hektar REIT remains focused on acquiring retail properties throughout Malaysia and optimising property yields FOCUS Neighbourhood-class and regional-class shopping centres throughout Malaysia with the objective of providing Malaysian consumers with retail environments based on international best practices PORTFOLIO OPTIMISATION Providing Sustainable Returns and Income Defensibility for Hektar REIT via: Active Leasing refreshing and aligning the tenancy mix to the needs of the target shoppers Advertising & Promotion aggressive marketing to retain consumer interest and visitor traffic Value Creation Initiatives improvements including asset enhancement and refurbishment designed to improve long-term yields YIELD-ACCRETIVE ACQUISITIONS Enhancing the Long-Term Value and Growth of Hektar REIT via Yield-Accretive Acquisitions of: Stabilised Properties assets with sustainable cash flow, requiring selective optimisation Turnaround Properties assets with good fundamentals which are underserving their current market, requiring capital injection and intensive value creation initiatives to turn around the property, increasing yields in the medium to long term Greenfield & Redevelopment Projects pipeline projects undertaken by the related companies of Hektar REIT CAPITAL MANAGEMENT Optimising the capital structure to fund acquisitions and asset enhancements through a combination of debt and equity within a flexible framework providing a low cost of capital

8 I Hektar REIT I Annual Report 2009 Letter to Unitholders Year in review We set out to create a REIT with a business model that delivers in good times and bad times and to date, our track record remains intact. In 2009, we managed to deliver what we set out to achieve: growth in a difficult year. Our performance validates our management execution, the resilience in our portfolio and the stability of our business model. Model perniagaan kami bermatlamat untuk memberi pulangan positif yang stabil kepada pelabur setiap tahun; di dalam iklim ekonomi yang baik, mahupun buruk. Setakat ini, rekod kami kekal positif. Pada tahun 2009, kami telah berjaya mencapai apa yang dirancang, iaitu pertumbuhan positif dalam tahun yang sukar. Prestasi Hektar telah membuktikan keberkesanan strategi pengurusan, kemampanan portfolio dan kestabilan model perniagaan kami. 我們的目標是建立一套無論在經濟景氣與否之際, 都能給投資者帶來良好的回酬的房地產信託基金經營模式 在 2009 年間, 我們成功達成目標 : 就是在經濟困難時期仍然取得成長 我們的業績表現證明了我們的管理方式有效 我們的投資組合耐力堅實及我們經營模式的穩健妥當

9 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I Letter to Unitholders (Cont d) Year in review Dear Valued Unitholder of Hektar REIT, RETROSPECTIVE One year ago, I wrote to you about the challenges ahead, facing what was then the most significant global financial crisis since the Great Depression of the 1930s. I emphasised Hektar s focus on market fundamentals, belief in our business model and management execution. Looking back, we can see that 2009 was a year of stark contrasts starting off the year with the global economy reeling from the financial crisis to witnessing a revival in the capital markets by year end. Despite economic uncertainties and significant volatility, Hektar REIT posted a positive performance. We set out to create a REIT with a business model that delivers in good times and bad times and to date, our track record remains intact. Since the IPO in December 2006, Hektar REIT has provided positive growth in revenue, realised net income, net asset value and importantly for investors, dividends. Through the global financial crisis, Malaysia s economy was also impacted. The GDP registered a decline of 3.3% for 2009 (Malaysian Institute of Economic Research forecast). However, the impact varied from region to region; while trade-related and specifically merchandise exports suffered significant declines, the overall impact on the financial sector and various segments of the service economy in Malaysia was relatively muted. In fact, retail sales performance in our various markets in Selangor, Melaka and Northern Johor showed positive growth in many areas. In 2009, we managed to deliver what we set out to achieve: growth in a difficult year. Our performance validates our management execution, the resilience in our portfolio and the stability of our business model. Furthermore, our unit price recovered significantly over the year as the capital markets validated our efforts. We remain grateful for our unitholders support. Moving into 2010, the global economic outlook continues to remain uncertain. Macroeconomic uncertainty aside, we are confident of delivering sustainable results in Hektar REIT. In the rest of this letter, we will share our thoughts on the business, outlook and our strategies. FINANCIAL PERFORMANCE For the financial year ended 31 December 2009 (FY2009), Hektar REIT delivered a dividend per unit (DPU) of 10.3 sen. This is approximately 10.9% higher than the forecast provided in the initial public offering (IPO) prospectus dated 15 November It is also 1% higher than the financial year 2008 s (FY2008) DPU of 10.2 sen. Revenue reached RM87.7 million, up 4.3% from FY2008 while Net Property Income (NPI) reached RM53.0 million, up 0.6% from FY2008. Overall, Hektar REIT s Net Income reached approximately RM37.1 million, which is 38% lower than FY2008 s Net Income of RM60.4 million. This is attributed to the lower unrealised gain of RM400,519 from Fair Valuation Adjustment of Investment Properties in FY2009 compared to RM24.1 million in FY2008. Fair Valuation Adjustment Fair Value Adjustment is a non-cash item and part of the Financial Reporting Standards (FRS). It is used to adjust the valuation of Hektar REIT s property portfolio on an annual basis. Valuations are conducted by independent valuers whose reports are made on an objective basis to determine the market price of a property at that time. The smaller gain in FY2009 compared to FY2008 can be expected as the properties mature. Asset managers must constantly look for ways to enhance or refurbish properties to improve their income-generating potential and ultimately increase their property value. For FY2009 s valuation increase, it reflects that Hektar REIT s portfolio overall held up its value during the year, which is a positive result since other industry observers were concerned about asset devaluations for investment properties. Measure of Core Earnings: Realised Net Income To determine the real operating performance, that is the cash-related performance for FY2009, we used the net income (realised) measure. As you may note from above, the Fair Value Adjustment can increase or decrease the net income of the REIT significantly, but as it is a non-cash item, it does not tell a true picture of the operating performance of the REIT. The net income (realised) measure excludes the Fair Value Adjustment and reflects the cash-based performance, hence the term, realised. For FY2009, Hektar REIT s net income (realised) reached RM36.7 million. In terms of net income (realised) per unit, or earnings per unit (EPU), FY2009 reached sen versus sen in FY2008, an increase of 1.4%. Net Asset Value Net Asset Value (NAV) of Hektar REIT increased to RM1.27, up from RM1.26 in FY2008, an increase of 1%. Since the IPO, Hektar REIT s NAV has increased by 23.3%, representing a steady increase every year Overall, we are quite pleased with the financial results of Hektar REIT in FY2009. Initially, we had some reservations for the year, owing to the economic uncertainties and other factors: electricity tariffs which increased by 26% in July 2008 saw our utilities bill increase by over RM1.5 million in 2009 over our budget forecasts. This was more than offset by the increase in revenue, resulting from the positive performance of our portfolio, which we will elaborate in the portfolio section later. Another benefit to Hektar REIT in FY2009 was favourable financing.

10 I Hektar REIT I Annual Report 2009 Letter to Unitholders (Cont d) Year in review Financing While the causes of the global financial crisis will be analysed for years to come, the financial commandment remains the same: do not borrow short to invest long. Hektar REIT s debt is secured by way of an Al-Murabahah Overdraft in 2 tranches; the first tranche of RM184 million expires in 2011 while the second tranche of RM150 million expires in The financing cost is structured on an annual basis with resets in December and April for both tranches one and two, respectively. Hektar REIT benefited from the loosening of monetary policy by Bank Negara Malaysia in FY2009. With the Overnight Policy Rate at 2.0% for much of 2009, Hektar REIT s interest expense for FY2009 was lower than budgeted. On a weighted average cost basis, the total debt of RM334 million is 3.28% as at end of December Dividend Payout When we review our FY2009 numbers, we see that revenue, realised net income and NAV were all positive and we were happy to reward our unitholders with an increase in dividends. The DPU declared for FY2009 is 10.3 sen, 1% higher than FY2008 and representing a payout ratio of approximately 90% of realised net income. As in the past, we do not normally pay out all our net income (realised), reserving funds for various activities designed to further improve the REIT s potential performance. These activities include the acquisition of sold lots (approximately 6% by area of Subang Parade & Mahkota Parade are sold lots) and asset enhancements of the property. More details of these asset enhancements are described in the Portfolio Update section. Positive Market Response In the last year, we are pleased that the capital market responded appropriately, factoring optimism for Hektar REIT s prospects in FY2009 and beyond. Favourable coverage from investment and research houses also provided a boost to Hektar REIT s public profile, particularly from OSK Research, AmResearch and Standard & Poor s. OSK Research rewarded us in their annual OSK Jewels 2009 by selecting Hektar REIT as one of the Top 5 companies in their Top Malaysian Small Cap Companies Book, released in March In addition, throughout the year, Hektar REIT also presented and participated in various conferences organised by CIMB Private Banking, Asia Business Forum, LexisNexis, IR Magazine (in Singapore) and seminars at the Malaysian Investor Relations Association, Institute of Public Relations Malaysia and National University of Singapore s Department of Real Estate. For the year, Hektar REIT s unit price closed at RM1.12, an increase of 45.5%. PORTFOLIO UPDATE Hektar REIT has assembled a quality portfolio of neighbourhood-focused shopping centres which are strategically located in mass market areas. With more than 1 million sq ft of net lettable area (NLA) under management, we use a variety of strategies and tactics including turnover rent, step-up rent and asset enhancement initiatives to deliver sustainable income growth. Geographical Diversity The geographical diversity of our property locations benefits the REIT by reducing cyclical fluctuations in each respective market. For example, we expected the second half of 2009 to be quite challenging for our results, in part due to the current weakness in the Melaka market and the refurbishment impact (which started in July 2009) on leasing in Mahkota Parade. Fortunately, strong growth in our other markets, particularly in Subang Jaya offset the decline. The portfolio locations in Subang Jaya, Selangor, Melaka and Muar, Johor represent a diversified geographical spread for Hektar REIT. Above all, our extensive footprint throughout Malaysia allows us to capture and understand the sentiment in the respective local markets. Steady Occupancy Overall occupancy in Hektar REIT was 95.8%, same as in FY2008. For the first time, Subang Parade was 100% occupied for the entire year. Changes in occupancy occurred in Wetex Parade, which saw an increase in occupancy to 90.1% and Mahkota Parade, whose occupancy decreased to 93.6% due to the refurbishment. Visitor Traffic Traffic in the portfolio hit 21.3 million visits in Subang Parade recorded a slight increase of 1.8% with approximately 7.8 million visits throughout the year, while Wetex Parade recorded 5.6 million visits which are significant when compared to Subang Parade, considering that it is less than half the size in terms of NLA. Mahkota Parade recorded a decrease of 5.3% in visits to 7.9 million, in part due to impact of the refurbishment, which since July 2009 has also included large areas of the covered and open car park. In total, Hektar REIT properties receive over 58,000 visits a day. The retailer tenancy base continues to contribute a diversified revenue base for Hektar REIT. Over 300 retail tenancies exist in Hektar REIT s portfolio, of which the largest tenant, Parkson contributes about 11% of Hektar REIT s monthly rental income; after Parkson, the next biggest tenant, The Store contributes approximately

11 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I Letter to Unitholders (Cont d) Year in review 3% of monthly rental income. In summary, over 85% of the monthly rental income is contributed by retailers of a national or international brand, with the remaining income coming from single-tenant stores. This tenant mix ensures a relatively resilient revenue base with a tolerable level of default risk. For FY2009, Hektar REIT collected RM1.35 million in turnover rent from tenants versus RM1.67 million in FY2008. The main contributing segment is the health and beauty retailers. Do note that we do not budget for turnover rent in our forecasts. Retailers as Partners Rental reversions for Hektar REIT turned negative in FY2009 with a total of 99 new or renewed tenancies at an average 5% decrease in rental rates. However, the decline was not uniform as the bulk of the decrease was attributed to Mahkota Parade with an average rental decrease of 13%. In comparison, Subang Parade s rental reversions were flat while Wetex Parade s rental reversions achieved an average 8% increase. The beauty of our business model is that turnover rent and step-up rent may make up for initial rental rate decreases over time. For example, when we examined the retailer sales for certain tenants in Mahkota Parade and recognised that their occupancy cost was high, we agreed to a lower base rental rate to allow them to continue trading in Mahkota Parade. However, for at least 9 out of 10 tenants in Mahkota Parade, we still retained a turnover rent provision with the tenant providing us monthly sales reports and agreeing to pay the turnover rent percentage if it exceeded the base rent. So while we have reduced the base rent for the next three years, we have also lowered the threshold for paying turnover rent. The reduced base rent will impact the top-line once the tenancy is active. However, the potential for turnover rent increases if the tenant s sales improve. In this scenario, say following Mahkota Parade s complete refurbishment in April 2010, shopper traffic may increase and we can expect the tenants sales to improve and thus the likelihood of turnover rent being paid in the future. It is in this approach that we see our retailers as business partners; willing to reduce base rents (tenant s costs) in difficult times and sharing in the turnover rent (increased profits) when the times are booming. While we may continue to see some negative rental reversions in the year ahead, we are also maintaining the potential upside of turnover rent, should economic prospects improve in the future. Mahkota Parade s Refurbishment: Maintaining Market Leadership Mahkota Parade s revitalisation remains on track. Since its opening in 1994, it has set the standard as the top shopping centre in the Melaka market. Last year, facing competition from new and upcoming developments, we felt it was time to give it a refurbishment. The revitalisation will ensure Mahkota Parade remains the leading shopping centre in Melaka in the years to come. Our approach to the refurbishment is to minimise the impact to the business of Mahkota Parade. It will be business as usual the shopping centre remains open while the refurbishment will take place after trading hours, usually between 10pm to 7am. As a result, we structured the refurbishment in 3 phases over a 9 month period. We commenced with the refurbishment in July 2009 with a target date for completion in April With a budget of RM30.4 million, the refurbishment will cover a wide area. Work will include new flooring, re-painting of the walls, new ceiling, improved lighting as well as repair of the rooftop and other areas. New amenities will be created or improved, including new lifts, directory and signage system, security system and a new Guest Services Desk. The car park will be increased from 955 bays to over 1,000 car park bays, which will have the effect of increasing traffic capacity for Mahkota Parade. The overall effect will be a brighter, cleaner look and a more comfortable experience for shoppers. We are experienced at engineering the refurbishment with minimal disruption to business. We had accomplished a similar feat at Subang Parade in 2006 with the result of a brand new look to the centre. At that time, we also conducted the refurbishment at night while keeping the centre open during the day. The track record from that project resulted in no business loss claims from tenants, no injuries to staff and above all, delivery within budget. The same experience and team are currently at work in Mahkota Parade s refurbishment. A communications programme with a focus on safety coupled with shopper promotional campaigns are designed to keep shoppers engaged during the refurbishment. To date, phases 1 and 2 of the refurbishment have been completed with the last phase due for completion in April It is good to note, that despite the refurbishment work in the latter part of 2009, Mahkota Parade was still awarded the Melaka Tourism Award 2008/2009 for Best Shopping Centre by Kerajaan Negeri Melaka. For all those data-hungry readers out there, please turn to the Portfolio Performance section following this letter for more statistics on our property operations. REVISITING OUR STRATEGY Hektar REIT remains the sole retail-focused REIT in Malaysia. We continue to innovate and improve retail environments to ensure it is conducive to our retailers and shoppers.

12 10 I Hektar REIT I Annual Report 2009 Letter to Unitholders (Cont d) Year in review The retail REIT is unique compared to REITs in other property sectors, in that we must focus on two sets of customers tenants and their shoppers. Our business model is focused on treating our customers, the retailers and tenants that contribute to our top-line revenue as business partners. We also need to look further and take care of our customers customers the shoppers. The shopping experience is thus derived from a mix of contributions the retailers, offering exciting products and services to the shopper and the landlord / manager, providing the ambience and environment conducive for shoppers to play, shop, rest and relax. These are the elements of the formula needed to ensure that the overall property performs well. We believe the key driver for our performance is the quality of our management execution. A quality portfolio with poor management will deteriorate over time. Hektar REIT possesses a quality portfolio and to maintain its quality, we need quality management execution. Our management approach is driven from the ground-up, while our objectives are driven by a top-down strategic approach, more of which I will share below. Hektar is blessed with a team that contributes in both areas. Managing From The Ground We spend a lot of time managing by walking around. We are constantly looking at ways to improve the retail tenant mix, in line with the growth of our markets and to suit the constantly changing tastes of our consumers. To accomplish this, we spend a lot of time in the centres, observing customers, talking and listening to tenants. They offer us many insights during our many interactions. Bill Gates, Chairman of Microsoft, once stated that your most unhappy customers are your greatest source of learning. Accordingly, we invest in market research, such as door-to-door household interviews in our target markets and focus groups, to gain insights from residents and particularly from shoppers who no longer visit their neighbourhood mall. As you can see, this process cannot be managed from behind a desk, but by walking around. I often remain impressed with our management team s broad understanding of retail concepts, consumer behaviour, leasing trends, property management and other disciplines. I constantly encourage our managers to achieve objectives by thinking out of the box. Collectively, we discuss our ideas and work together to customize strategies and tactics for each centre. Through our leasing and promotional activities, we can sometimes achieve very interesting results. Read on below. Leasing is Our Competitive Advantage One of the biggest strengths of Hektar REIT is the resources and relationships with retailers. We have more than 300 retailer tenancies within our portfolio and access to a few hundred more retailers, both in Malaysia and internationally. Many of these retailers have first-hand experience working with us in our properties. They appreciate our efforts and contributions and know that we understand the retail business. This is a source of competitive advantage for us, particularly when we enter new markets or seek to improve existing ones (i.e. remixing the tenant mix). The track record provides retailers with confidence that by entering a Hektar property, they can expect a level of service to ensure their viability. This can translate into a rental premium for a Hektar property. Perhaps just as importantly, we work with retailers to devise new and exciting concepts. Innovation in Retail The product of our innovation and thinking-out-of-thebox can be seen in the introduction of new retail concepts in our properties, including the Chillout Restaurant and Bar in Subang Parade and Elephant Bean cafe in Wetex Parade. Chillout offers a fusion of western and eastern cuisines, within an open-air concept. It opens until 1am in the morning, offering a late-night spot for our customers in Subang Jaya. Housed in an unused external area outside Parkson, Chillout represents the innovation that we strive to achieve working with entrepreneurs to create unique retail concepts while at the same time, utilising unproductive areas to boost property yields and the overall appeal of the property. Subang Parade now offers a full variety of lifestyle options starting from Celebrity Fitness opening at 6am, Uncle Lim s breakfast offering at 8am and winding down with Chillout until 1am. In Wetex Parade, we also contemplated a re-think of the entrance statement retailer by placing a coffee chain in the front. The typical international coffee chains were considered, but we ultimately decided to partner with a local champion, a group which had already been running a successful outlet offering premium local coffee beans. The result was the first Elephant Bean, Muar s very own coffee chain and now co-front anchor for Wetex Parade. By partnering with local retailers, we hope to discover new and exciting retail concepts which we could export to other markets in the future. The cultivation of new retail brands in this manner will boost Hektar s competitive advantage in the long run. Advertising & Promotion is Our Killer Application Advertising and promotion (A&P) is regarded as the killer application for running a successful shopping centre. In information technology parlance, the killer application is often used to describe a piece of software which is exceptionally useful, innovative and ultimately very successful. For example, the spreadsheet application Excel was considered a killer application for the Personal Computer (PC) and ultimately boosted PC usage and sales. In that sense, we believe A&P is

13 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I 11 Letter to Unitholders (Cont d) Year in review essential to maintain the shopping centre s continued appeal and fuel demand for the rest of the centre s offerings. A&P encompasses the marketing activities designed to attract shoppers and motivate them to return. The activities can be very wide ranging from exhibitions, demonstrations to concerts. We typically design and plan our campaigns over a course of 12 months and feature various events to take advantage of the local festivities, for example during peak periods such as the festive seasons or school holidays. Typical and popular campaigns include The Festival of Magic, Battle of the Bands and Shop For Your School. In 2009, Hektar REIT s portfolio recorded over 21.3 million shopper visits. On average, Hektar malls receive over 58,000 visits from shoppers every day. For us, that represents 58,000 opportunities a day to appeal to shoppers. At Hektar, we take our A&P very seriously. A number of our campaigns are designed to boost retailer sales. A successful programme is Shop For Your School, which we have been running in all of our shopping centres. Essentially, the campaign is focused on schools surrounding the shopping centre. It commences with a fixed time period during which students (and their families) may shop at their local Parade and nominate their respective schools at the guest services counter by showing their receipt(s). It is essentially a contest in which the schools with the highest nominated amount spent by their students and their families, win the top prizes. The prizes are sometimes sponsored by retailers and are usually designed to benefit the school, for example, new PCs for the computer lab. Shop For Your School essentially has what we call, a win-winwin approach; it benefits the retailers by improving sales, it benefits Hektar REIT by reaching out to shoppers and their families (and incentivising them to shop at their neighbourhood mall) and it benefits the community schools. Corporate Social Responsibility Hektar REIT s shopping centres have traditionally been involved in promoting activities designed to assist community and social causes. Shop For Your School, as described above, has the elements of a good A&P campaign while benefiting the community at the same time. Beneficiaries of Hektar REIT s promotions have included diverse associations such as the Calvary Care Home, Sek Kia Eenh Cancer Fund, Rumah Jalinan Kasih, Pertubuhan Kebajikan Anak-anak Yatim Islam Muar and others in the respective communities in Subang Jaya, Melaka and Muar. Unique campaigns are offered from time to time, such as We Ate For Charity which featured a durian eating festival at Subang Parade, involving 120 volunteers, 4 tonnes of durians and a total of RM33,000 raised for the Children s Wish Society. Last year, our A&P campaign focusing on community issues won an award at the 2009 Asia Shopping Centre Awards by the International Council of Shopping Centers. Featured at Mahkota Parade in partnership with Malaysian Volunteers Fire and Rescue Association, the Fired Up About Safety programme attracted over 280 children and RM14,000 in sponsorship to increase awareness about fire safety. We are very pleased to receive this recognition to reflect our continuing drive to develop innovative A&P programmes. Strategy From The Top While we may invest a lot of effort and resources on the ground, we do take the time to view the bigger picture from the top. Our larger strategy is driven by the context of retail development, the outlook of the capital markets and the performance of REITs in Malaysia. We remain positive in our outlook for retail development in Malaysia as a source of growth for Hektar REIT. There are essentially four ways for Hektar REIT to grow:- 1. Continuous Improvement of existing properties; 2. Development of new assets (greenfield); 3. Re-Development of existing properties; and 4. Acquiring assets with underpriced rents. Continuous Improvement This is emphasised by our current business model and it involves a comprehensive methodology aimed at improving the operating and financial performance of the properties (refer to Managing From The Ground ). Development & Re-Development The private companies of the Hektar group are prioritising the re-development project of Subang Parade s expansion in Subang Jaya. A re-development project differs from a greenfield project in that while a greenfield project is usually in a completely new area, the re-development typically contains or leverages an existing market. Subang Parade has been recording close to full occupancy for the past 3 years and as such, we have noted distinct opportunities and areas for new retail concepts. The proposed expansion is sited on a 2-acre parcel of land situated right next to Subang Parade. The private companies of the Hektar group are finalizing a joint-venture with an established player to develop a mixed-development project. The retail portion will merge seamlessly with Subang Parade and take advantage of retail opportunities currently absent in the existing Subang Parade. We hope to finalise this project and announce the preliminary specifications soon.

14 12 I Hektar REIT I Annual Report 2009 Letter to Unitholders (Cont d) Year in review Acquiring Assets The fourth way of growth for Hektar is through acquiring assets with underpriced rents. Put simply, these are shopping centres with the potential to be yield-accretive to Hektar REIT s current portfolio. The Muar acquisition of Wetex Parade and Classic Hotel is an example of this type of acquisition; Wetex Parade is one of the only purpose-built department store anchored shopping centre in Muar. Significantly, there are opportunities in Wetex Parade to improve the tenant mix and introduce new retail concepts, national and international chains into the centre. Consequently, the rental reversions for Wetex Parade have been positive in the last year (+8% in 2009). At 90.1% occupancy as at end of 2009, Wetex Parade still has headroom for top-line revenue growth. Acquisitions Update We continue to source for potential acquisition deals. Last year, we undertook a few due diligence exercises on several potential malls for injection into Hektar REIT. Some looked promising but two reasons prevented us from making any acquisitions in Firstly, the price offered was too high, often exceeding the valuation done by our independent valuers. While the global financial crisis resulted in distressed valuations in developed markets, Malaysia s property sector was relatively insulated. Part of the reason was due to the relatively well-capitalised banking sector in Malaysia compared to their overseas counterparts. Furthermore, when Bank Negara reduced the Overnight Policy Rate to support economic activity, many banks could afford to pass on the lower rates to their customers. Subsequently, there were no major bankruptcies by either financial or non-financial corporations in Malaysia and as a result, assets of a distressed nature were not widely available. The second reason which inhibited our acquisition prospects, was the ability to finance the acquisition by secondary equity raisings. The capital markets in Malaysia, while eventually recovering towards the second half of 2009, were not conducive enough particularly for REITs to raise capital cost-effectively. Hektar REIT s nominal yield throughout most of 2009 hovered above 9%, which makes it nominally expensive to raise secondary equity to acquire new properties. Assuming available debt financing from banks below 4% and a 50% debt to equity ratio for financing an acquisition, the blended cost of capital on a simple nominal basis is around 6.5%. Not a difficult threshold from which to acquire fresh properties, but with Hektar REIT still trading below NAV, an equity issuance at a discount may still be dilutive to unitholders. As we have stated before, any acquisition for Hektar REIT needs to be yield-accretive. As at the end of 2009, Hektar REIT was trading at a 13% discount to NAV and while not an unreasonable discount, we will observe carefully for fairer pricing before committing to any acquisition. We continue to source and look for new acquisitions across Malaysia. Our criteria have not changed: we like purpose-built shopping centres with anchors preferably starting from 150,000 sq ft of NLA and up. Located in established or emerging neighbourhoods with identifiable market segments, we are comfortable with developments already in existence or under construction. Fully leased or vacant, we will look at all properties and more importantly, examine where we can add further value with our leasing and asset enhancement capabilities. Finally, since we believe in control of the tenant mix to ensure a comfortable shopping experience, we tend to shy away from shopping centre properties with more than 10% sold lots. This is to ensure that we can apply our experience and business practices to every property we own and to make each shopping centre the leading mall in their respective market. Owners, developers and asset managers, feel free to contact us if you have prospective opportunities for our review. We welcome the opportunity to work with you. CHALLENGES & OUTLOOK We remain cautious on the outlook of the world economy, particularly on the potential impact on Malaysia and ultimately, the domestic consumer economy. The immediate challenges concern our portfolio s market exposure to a cautious retail environment. In Melaka, the priority is to finish the refurbishment by April 2010; to continue the tenant mix improvement process and re-launch the advertising and promotion campaigns for Mahkota Parade. We have examined the retail sales record of our key tenants and have concluded the need to focus more on smarter campaigns to promote tenant sales. We have already crafted detailed plans which include more aggressive marketing tactics, issuance of vouchers and retailer-oriented activities to drive tenants sales. The comprehensive response of refurbishment and targeted marketing campaigns are expected to sustain shopper goodwill and generate interest in Mahkota Parade despite rising competition in the greater Melaka market. The re-launch of Mahkota Parade is expected to take place from the 2nd quarter of 2010 onwards. For Subang Parade, while the neighbourhood-focused strategy has proven resilient during the economic uncertainty of 2009, we will remain vigilant to protect market share and consumer interest. New developments and competition in the Subang Jaya market may have a short term negative impact to Subang Parade. However, we can relate the similar experience to Mahkota Parade in 2008 when new competitors opened up nearby. Fortunately, as the market stabilised, the long-term potential improved as the entire area surrounding Mahkota Parade was promoted as a shopping precinct. We are expecting a similar path for Subang Parade;

15 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I 13 Letter to Unitholders (Cont d) Year in review over time as new entrants stabilise in the market, the area will be promoted as a shopping precinct, perhaps along similar lines as the Bukit Bintang of Subang Jaya. In the meantime, we will continue to innovate and improve the leadership position of Subang Parade in the area. In the Muar market, we expect to continue our work on Wetex Parade in terms of tenant remixing and various enhancements. Top on our list is the proposed refurbishment to improve Wetex Parade s amenities and ambience and cement its status as Muar s leading shopping centre. The plans are in the works and we hope to announce the project soon. We continue to monitor the capital markets and their continuing recovery. With improving prospects for fundraising and with our cornerstone investor, Frasers Centrepoint Trust still in solid support, we remain optimistic this year of finding the right match of the right property at the right price at the right time. Focus, Focus, Focus Hektar has a focused formula. The REIT owns well-located properties with a strong focus on their respective markets, the business model is focused on the retailers and the shoppers and our management remains focused on our REIT s business objectives. If I could break down the formula of the relationships of our stakeholders, it looks like this: Happy shoppers à positive retailer sales à happy retailers à positive rental income growth à positive REIT performance à happy unitholders. Our shoppers will remember our malls, in turn, our retailers will respect our efforts and our unitholders will be rewarded with results. Our singular objective remains the same making Hektar REIT the preferred landlord and retail manager of choice. Our vision remains Creating The Places Where People Love To Shop. ACKNOWLEDGMENTS On behalf of the Board of Directors of Hektar Asset Management, I sincerely wish to acknowledge our people for their continued and dedicated attention to their work. Looking back last year, I remain impressed and proud of the people at Hektar. Their hard work throughout the year has ensured that Hektar REIT posted another positive year despite the uncertainties of Hektar remains committed to our goals of providing a defensible, safe investment to unitholders. While my maxim last year was to think positive, my message this year is to stay focused. DATO JAAFAR BIN ABDUL HAMID Chairman & Chief Executive Officer February 2010

16 14 I Hektar REIT I Annual Report 2009 Perutusan Pengerusi Ulasan Tahun Kepada Pemegang Unit yang dihargai, TINJAUAN 2009 Setahun yang lalu, saya telah membayangi kepada anda cabaran-cabaran yang bakal di hadapi pada tahun 2009, di mana dunia dilanda krisis ekonomi terburuk sejak Zaman Kemelesetan Ekonomi ( Great Depression ) 1930an. Saya telah menekankan fokus Hektar terhadap asas pasaran, keyakinan terhadap model perniagaan kami dan perlaksanaan strategi pengurusan. Bila ditinjau kembali, 2009 adalah tahun yang tidak seimbang ia bermula dengan gelombang krisis ekonomi dunia dan berakhir dengan pemulihan peringkat awal pasaran modal. Di dalam keadaan ekonomi yang bergolak dan tidak menentu, Hektar tetap membuahkan prestasi yang positif. Semasa Hektar REIT disenaraikan di Bursa Malaysia pada Disember 2006, model perniagaan kami bermatlamat untuk memberi pulangan positif yang stabil kepada pelabur setiap tahun; Di dalam iklim ekonomi yang baik, mahupun buruk. Setakat ini, rekod kami kekal positif. Sejak penyenaraian, Hektar REIT telah menunjukkan pertumbuhan positif di dalam pendapatannya, untung bersih di realisasi, nilai aset bersih dan yang paling penting buat pelabur, dividen. Prestasi ini dapat dicapai walaupun ekonomi Malaysia terjejas ekoran dari krisis kewangan dunia. Keluaran Kasar Dalaman Malaysia menunjukkan penurunan sebanyak 3.3% pada tahun (sumber : Institut Penyelidikan Ekonomi Malaysia). Namun, kesannya berbeza mengikut negeri dan daerah; Kesan keseluruhan sektor kewangan dan industri perkhidmatan tidak begitu ketara dibandingkan dengan industri dagangan dan eksport yang mengalami kesan negatif yang agak serius. Pada hakikatnya, prestasi jualan kebanyakan peruncit yang berniaga di Selangor, Melaka dan Johor utara menunjukkan pertumbuhan positif. Pada tahun 2009, kami telah berjaya mencapai apa yang dirancang, iaitu pertumbuhan positif dalam tahun yang sukar. Prestasi Hektar telah membuktikan keberkesanan strategi pengurusan, kemampanan portfolio dan kestabilan model perniagaan kami. Tambahan pula, kami percaya bahawa pemulihan harga pasaran Hektar REIT di Bursa Malaysia dibanding tahun sebelumnya adalah bukti sokongan pasaran modal terhadap usaha-usaha kami. Sehubungan dengan ini, kami ingin berterima kasih kepada anda dan pemegang-pemegang unit yang lain di atas kepercayaan dan sokongan yang diberi. Arah tuju ekonomi dunia masih belum boleh diramal. Jika kita ketepikan ketidaktentuan ekonomi makro, kami yakin Hektar REIT akan terus mencapai prestasi yang lestari. Selepas ini, kami akan berkongsi dengan anda wawasan perniagaan, tinjuan masa depan dan strategi kami. PRESTASI KEWANGAN Bagi tahun berakhir 31 Disember 2009 (FY2009), Hektar REIT telah mengisytiharkan dividen seunit (DPU) sebanyak 10.3 sen. DPU ini 10.9% lebih tinggi dari unjuran yang diberi di dalam prospektus yang diterbitkan pada 15 November DPU pada tahun 2009 juga 1% lebih tinggi dari tahun kewangan 2008 (FY2008), iaitu 10.2 sen. Pada FY2009, Hektar telah menjana perolehan sebanyak RM87.7 juta, naik 4.3% dari FY2008, sementara keuntungan hartanah bersih (NPI) mencapai RM53 juta, naik 0.6% dari FY2008. Secara keseluruhan, untung bersih mencecah RM37.2 juta, turun 38% dari FY2008, iaitu RM60.4 juta. Ini adalah disebabkan oleh untung tidak di realisasi yang lebih rendah, iaitu RM400 ribu berbanding dengan RM24.1 juta pada tahun FY2008. Ini berlaku ekoran dari pelarasan nilai hartanah pelaburan mengikut pasaran. Keuntungan dari pelarasan nilai hartanah mengikut pasaran bukanlah satu sumber perolehan tunai. Ia adalah sebahagian dari Laporan Kewangan Piawai Antarabangsa (IFRS). Piawai ini digunakan untuk melaras nilai hartanah Hektar mengikut pasaran setiap tahun. Penilaian ini dibuat oleh penilai bebas yang menilai hartanah mengikut harga pasaran. Keuntungan kecil pada FY2009 berbanding FY2008 telah dijangka kerana hartanah-hartanah Hektar REIT telahpun mencapai usia matang. Justeru itu, setiap pengurus aset harus sentiasa mencari jalan untuk mempertingkatkan dan menaik taraf hartanah masing-masing untuk memastikan potensi meningkatkan pendapatan sentiasa ada. Ini secara tidak langsung akan menaikkan nilai hartanah. Bagi FY2009, walaupun untung tidak di realisasi rendah, ia mencerminkan kestabilan portfolio hartanah Hektar secara keseluruhan kerana pemerhati-pemerhati industri telah meramalkan penurunan nilai hartanahhartanah pelaburan pada tahun Bagi menentukan prestasi operasi yang sebenar 2009, perhatian harus diberi kepada perolehan tunai, iaitu untung bersih di realisasi. Sepertimana yang dinyata di atas, pelarasan nilai hartanah mengikut pasaran akan menambah atau menurunkan untung bersih secara mendadak. Akan tetapi, disebabkan ia bukan merupakan perolehan tunai, ia tidak menggambarkan prestasi operasi sebenar Hektar REIT. Untung bersih di realisasi tidak memfaktorkan pelarasan nilai hartanah mengikut pasaran. Bagi FY2009, untung bersih di realisasi mencecah RM36.7 juta, ataupun sen seunit. Prestasi FY % lebih tinggi dari FY2008, iaitu sen. Nilai aset bersih ( NAV ) Hektar REIT menokok sebanyak RM1.27 seunit, naik 1% dari RM1.26 seunit pada FY2009. Sejak ia disenaraikan, NAV telah menokok sebanyak 23.3%.

17 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I 15 Perutusan Pengerusi (Sambungan) Ulasan Tahun Secara keseluruhan, kami berpuas hati dengan keputusan kewangan Hektar REIT. Pada awal tahun 2009, terdapat sedikit keraguan tentang prestasi kami. Ia berikutan krisis ekonomi dan faktor-faktor lain seperti kenaikan tarif elektrik sebanyak 26% pada bulan Julai 2008, yang mengakibatkan kenaikan kos operasi sebanyak RM1.5 juta dari apa yang disasar. Akan tetapi, kenaikan kos operasi ini telah diimbangi oleh peningkatan pendapatan, yang membuahkan prestasi positif kepada portfolio kami. Ini akan dihuraikan dengan lebih lanjut di seksyen portfolio nanti. Selain itu, kos pembiayaan yang lebih murah juga telah memanfaatkan Hektar REIT. Pembiayaan Walaupun sebab-sebab krisis kewangan dunia akan terus dikupas dan dianalisa pada tahun-tahun akan datang, rukun pembiayaan tetap sama; Jangan ambil pinjaman jangka pendek untuk membiayai projek jangka panjang. Pinjaman Hektar adalah melalui Overdraf Al-Murabahah, diberi dalam 2 ansuran. Ansuran pinjaman pertama berjumlah RM184 juta akan tamat tempoh pada tahun 2011 manakala ansuran pinjaman kedua berjumlah RM150 juta akan tamat tempoh pada tahun Kos pembiayaan distruktur di mana kadar pinjaman ditetapkan setiap tahun. Bagi ansuran pertama, kadar pinjaman ditetapkan pada bulan Disember manakala kadar pinjaman bagi ansuran kedua ditetapkan pada bulan April. Kelonggaran dasar kewangan Bank Negara Malaysia telah memanfaatkan Hektar REIT. Kadar Dasar Semalaman yang diturunkan kepada 2% sepanjang FY2009 telah mengurangkan kos pembiayaan Hektar REIT, iaitu jauh lebih rendah dari apa yang disasarkan. Kos purata berat pinjaman sebanyak RM334 juta ialah 3.28% pada akhir Disember Bayaran Dividen Setelah meneliti prestasi kewangan FY2009, kami dapati bahawa perolehan, untung bersih di realisasi dan NAV semuanya positif. Oleh itu, kami membuat keputusan untuk memberi ganjaran kepada pemegangpemegang unit Hektar REIT dengan menambah kadar dividen seunit ( DPU ). DPU yang diisytihar ialah 10.3 sen, 1% lebih tinggi dari FY2008, dan merupakan nisbah bayaran sebanyak 90% dari untung bersih di realisasi. Seperti tahun-tahun yang lepas, kami tidak membayar kesemua untung di realisasi kerana kami ingin menyimpan sebahagian kecilnya untuk pelbagai aktiviti yang bertujuan untuk meningkatkan lagi prestasi Hektar REIT. Aktiviti-aktiviti ini termasuk membeli lotlot yang dimiliki individu (lebih kurang 6% dari keluasan Subang Parade dan Mahkota Parade dimiliki oleh individu) serta peningkatan dan penaiktarafan aset. Ini akan dihuraikan dengan lebih lanjut di seksyen seterusnya. Tindak Balas Pasaran Pada tahun lepas, kami berpuas hati apabila pasaran modal telah memberi tindakbalas wajar, dengan memfaktorkan optimisma dalam prospek Hektar REIT FY2009 dan tahun-tahun seterusnya. Liputan yang menggalakkan telah diterima daripada badanbadan penyelidikan dan pelaburan, terutamanya OSK Reseach, AmResearch dan Standard & Poor s telah menaikkan profil Hektar. Dalam acara tahunannya, iaitu OSK Jewels 2009, OSK Research telah memilih Hektar sebagai salah satu daripada 5 syarikat teratas dalam bukunya, Syarikat-syarikat Bermodal Kecil Teratas yang dilancarkan pada bulan Mac Tambahan pula, sepanjang tahun 2009, Hektar telah membentangkan dan menyertai pelbagai persidangan anjuran CIMB Private Banking, Asia Business Forum, LexisNexis, IR Magazine (di Singapura) dan seminarseminar di Malaysian Investor Relations Association, Institute of Public Relations Malaysia dan Jabatan Hartanah di National University of Singapore. Pada akhir tahun 2009, harga pasaran Hektar REIT di Bursa Malaysia ditutup pada RM1.12, penambahan sebanyak 45.5%. LAPORAN PORTFOLIO TERKINI Hektar REIT telah menggabung portfolio hartanah berkualiti yang menumpu kepada pusat-pusat membeli-belah bercirikan kejiranan, yang terletak di kawasan pasaran yang besar dan strategik. Dengan lebih dari sejuta ruang sewaan bersih ( NLA ) di bawah pengurusan, kami telah melaksanakan pelbagai strategi dan taktik termasuk sewaan berdasarkan perolehan, sewaan berperingkat dan inisiatif peningkatan aset untuk memberi pertumbuhan pulangan lestari. Lokasi berlainan hartanah-hartanah telah memanfaatkan Hektar REIT dengan meratakan ketidaktentuan setiap tempat. Contohnya, kami menjangka prestasi separuh kedua FY2009 akan menjadi lebih mencabar disebabkan oleh kelemahan pasaran Melaka dan juga kesan projek penaiktarafan ke atas sewaan di Mahkota Parade. Akan tetapi, pertumbuhan kuat di Subang Parade telah mengimbangi penurunan di Mahkota Parade. Lokasi hartanah-hartanah di Subang Jaya (Selangor), Melaka dan Muar (Johor) mewakili keluasan dan kepelbagaian Hektar REIT. Keluasan dan kepelbagaian ini telah membolehkan Hektar memahami citarasa pasaranpasaran tempatan tersebut. Penginapan peruncit keseluruhan Hektar REIT kekal pada 95.8%, sama seperti FY2008. Buat julungjulung kalinya, penginapan peruncit di Subang Parade melonjak kepada 100% sepanjang tahun Perubahan penginapan peruncit juga berlaku di Wetex Parade, di mana penginapan peruncit naik kepada 90.1%, manakala penginapan di Mahkota Parade turun kepada 93.6% ekoran dari projek penaikan taraf.

18 16 I Hektar REIT I Annual Report 2009 Perutusan Pengerusi (Sambungan) Ulasan Tahun Bilangan trafik pengunjung mencecah 21.3 juta pada tahun Subang Parade mencatat kenaikan kecil sebanyak 1.8% kepada 7.8 juta kunjungan sepanjang tahun, sementara Wetex Parade mencatat 5.6 juta kunjungan, satu angka yang baik kerana saiznya kurang dari separuh saiz Subang Parade dari segi NLA. Mahkota Parade pula mencatat penurunan sebanyak 5.3% kepada 7.9 juta, sebahagian besarnya disebabkan oleh projek penaikan taraf yang bermula pada bulan Julai Projek penaikan taraf ini merangkumi ruang yang luas, termasuk tempat letak kereta bawah tanah dan luar bangunan. Secara purata, hartanah Hektar menerima 58,000 kunjungan sehari. Penyewa-penyewa tunjang terus menyumbang pendapatan kepada Hektar REIT dari pelbagai sumber. Portfolio Hektar mengandungi lebih dari 300 penyewa, di mana penyewa utamanya Parkson, menyumbang sebanyak 11% dari perolehan sewaan bulanan. Selepas Parkson, The Store menyumbang sebanyak 3% dari perolehan sewaan bulanan. Secara ringkas, lebih 85% dari perolehan sewaan bulanan disumbang oleh penyewa-penyewa berjenama terkenal tempatan dan antarabangsa dan selebihnya dari peniaga tunggal kecil. Campuran penyewa ini memastikan kemampanan asas pendapatan dan mengurangkan risiko penghutang ingkar. Bagi FY2009, Hektar REIT mengutip RM1.35 juta sewaan berdasarkan perolehan berbanding RM1.67 juta pada FY2008. Penyumbang utama perolehan ini ialah penyewa-penyewa dari kategori kesihatan & kecantikan. Untuk pengetahuan anda, kami tidak mensasar sewaan berdasarkan perolehan di dalam unjuran kami. Peruncit sebagai Rakan Niaga Pembaharuan kadar sewaan bagi Hektar REIT bertukar menjadi negatif pada tahun FY2009, di mana sewaan 99 peruncit adalah baru atau diperbaharui. Purata penurunan kadar sewa ialah sebanyak 5%. Akan tetapi, penurunan ini tidak seragam kerana sebahagian besar dari penurunan ini berpunca dari Mahkota Parade dengan purata penurunan kadar sewa sebanyak 13%. Dibandingkan dengan Mahkota Parade, pembaharuan kadar sewaan di Subang Parade mendatar sementara Wetex Parade pula naik dengan kadar purata sebanyak 8%. Kelebihan model perniagaan kami ialah sewaan berdasarkan perolehan dan sewaan berperingkat. Jenis sewaan-sewaan ini mampu menampung penurunan kadar sewa dalam jangka masa panjang. Contohnya, apabila kos penginapan penyewa di Mahkota Parade naik, kami akan menurunkan kadar sewa asas bagi membantu mereka untuk terus berurus niaga di Mahkota Parade. Walau bagaimanapun, peruntukan sewaan berdasarkan perolehan kekal di dalam perjanjian penyewaan. Apabila perniagaan penyewa tersebut pulih setelah penaikan taraf Mahkota Parade siap, pendapatan yang kurang daripada sewa asas dapat ditampung semula oleh sewaan berdasarkan perolehan. Penaikan taraf Mahkota Parade Setakat ini, projek penaikan taraf Mahkota Parade mengikut jadual. Sejak ia dibuka pada tahun 1994, Mahkota Parade telah dikenali sebagai pusat membelibelah terunggul di Melaka. Tahun lalu, kami telah membuat keputusan untuk menaiktaraf Mahkota Parade untuk menghadapi saingan sengit dari pusatpusat membeli-belah baru yang berdekatan. Projek ini dijangka akan mencergaskan semula Mahkota Parade agar ia kekal sebagai pusat membeli-belah terulung di Melaka. Pendekatan utama kami terhadap projek penaikan taraf ini ialah mengurangkan kesan negatif kepada perniagaan harian penyewa-penyewa. Sepanjang projek penaikan taraf ini, perniagaan akan berjalan seperti biasa kerana kerja-kerja hanya dibuat pada waktu antara 10 malam hingga 7 pagi. Projek in dibahagikan kepada 3 fasa dan akan berlangsung selama 9 bulan,bermula pada bulan Julai 2009 dan dijangka siap pada bulan April Dengan peruntukan sebanyak RM30.4 juta, projek penaikan taraf ini merangkumi hampir keseluruhan kawasan Mahkota Parade. Kerja-kerja termasuk memasang lantai baru, mengecat semula dinding, menambahkan keterangan lampu dan membaiki bumbung. Kemudahan-kemudahan baru akan disediakan manakala kemudahan-kemudahan lama akan dinaik taraf. Ini termasuk lif baru, papan panduan, papan tanda, sistem keselamatan dan kaunter perkhidmatan pengunjung. Ruang letak kereta akan ditambah dari 955 kepada 1,000, sekaligus menambahkan keupayaan trafik di Mahkota Parade. Kesan keseluruhan ialah sebuah pusat membeli-belah yang kelihatan lebih terang, lebih bersih dan lebih selesa buat pengunjung. Kami sudah berpengalaman dalam mengendalikan kegiatan menaiktaraf yang tidak mengganggu perniagaan harian penyewa ekoran dari projek penaiktarafan Subang Parade pada tahun Pada masa itu, kerja-kerja turut dijalankan pada waktu malam bagi membolehkan perniagaan penyewa berjalan seperti biasa di siang hari. Rekod prestasi projek ini membanggakan kerana tiada tuntutan ganti-rugi perniagaan daripada penyewa, tiada rekod kecederaan pekerja dan paling utama, kos projek tersebut tidak melebihi peruntukan asal. Program perhubungan dengan pengunjung telah dikeluarkan dan disebarkan. Program ini menumpu kepada aspek keselamatan dan keselesaan pengunjung, serta kempen promosi di Mahkota Parade. Setakat ini, fasa 1 & 2 telahpun siap and fasa terakhir iaitu fasa 3, dijangka siap pada

19 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I 17 Perutusan Pengerusi (Sambungan) Ulasan Tahun bulan April Untuk pengetahuan anda, di sebalik kesibukan projek penaikan taraf ini, Mahkota Parade masih berjaya dinobatkan oleh Kerajaan Negeri Melaka sebagai pusat membeli-belah terbaik di negeri itu bagi tahun 2008/2009. Kepada pembaca yang berminat untuk mengetahui maklumat-maklumat Hektar REIT dengan lebih mendalam lagi, sila rujuk kepada seksyen Prestasi Portfolio. MENGKAJI SEMULA STRATEGI KAMI Hektar REIT masih kekal sebagai satu-satunya REIT di Malaysia yang menumpu hanya kepada sektor pusat membeli-belah. Kami sentiasa berusaha memperbaiki dan memperkenalkan sesuatu yang baru kepada pengunjung-pengunjung dan penyewa-penyewa kami. REIT yang menumpu kepada pusat membeli-belah adalah unik berbanding dengan REIT yang menumpu kepada sektor hartanah yang lain. Ini adalah kerana kami memberi perhatian kepada dua pelanggan penyewa dan pengunjung. Model perniagaan kami menganggap penyewa-penyewa kami sebagai rakan niaga. Selain itu, kami juga perlu memberi perhatian kepada pelanggan penyewa-penyewa kami, iaitu pengunjung-pengunjung ke pusat membeli-belah. Pengalaman membeli-belah yang indah datangnya dari adunan pelbagai faktor - iaitu menawarkan penyewa/ peruncit yang relevan, keluaran atau perkhidmatan yang menarik, menyediakan suasana yang selesa dan sesuai untuk membeli-belah, beriadah, beristirehat dan bersantai. Unsur-unsur ini merupakan formula yang perlu ada untuk menjayakan sesebuah pusat membelibelah. Kami percaya pendorong utama prestasi menyerlah kami ialah pengurusan yang padu. Hartanah yang baik dengan pengurusan lemah akan merosot juga akhirnya di Malaysia, terdapat banyak bukti yang menunjukkan kemerosotan pusat-pusat membeli-belah yang pada satu masa begitu hebat, ekoran dari pengurusan yang lemah. Hektar memiliki hartanah-hartanah yang berkualiti tinggi, dan untuk mengekalkan kualiti ini, kami memerlukan pengurusan yang sentiasa berkualiti. Pendekatan kami terhadap pengurusan dipacu dari peringkat operasi, sementara objektif utama kami adalah berdasarkan pendekatan top-down, di mana pengurusan peringkat atas akan membimbing dan mendorong pekerja-pekerja peringkat pertengahan dan bawahan. Kami akan berkongsi pendekatan ini di seksyen selanjutnya. Hektar bertuah kerana mempunyai kumpulan pengurusan yang baik; dari peringkat teratas hingga ke bawah. Mengurus dari Peringkat Operasi Pengurus-pengurus kami meluangkan banyak masa dengan berjalan mengelilingi pusat-pusat membelibelah kami. Kami sentiasa mencari jalan untuk memperbaiki campuran penyewa, yang sejajar dengan pertumbuhan pasaran dan bersesuaian dengan citarasa terbaru pengunjung-pengunjung. Bagi mencapai matlamat ini, kami menghabiskan banyak masa memerhati tindak-tanduk pengunjung-pengunjung di samping berbicara dan berbincang dengan penyewapenyewa. Aktiviti-aktiviti ini banyak memberikan ilham kepada kami. Bill Gates, Pengerusi Microsoft pernah mengatakan bahawa maklum balas pelanggan yang tidak berpuas hati adalah sumber pengajaran terbaik. Justeru itu, kami banyak melabur di dalam penyelidikan pasaran, seperti menemuramah dari rumah-ke-rumah dan mewujudkan kumpulan fokus, di mana persertapesertanya adalah mereka yang sudah berhenti mengunjungi pusat-pusat membeli-belah berhampiran dengan rumah mereka. Proses ini tidak boleh dilakukan di pejabat, tetapi dengan berjalan dan bertemu dengan penyewa-penyewa dan pengunjung-pengunjung. Saya kerapkali kagum dengan pemahaman luas pasukan pengurusan Hektar tentang konsep peruncitan, tingkah laku pengguna, arah aliran penyewaan dan pengurusan hartanah. Di dalam usaha mereka mencapai objektif masing-masing, saya sentiasa menggalakkan pengurus-pengurus saya agar mempunyai fikiran terbuka dan tidak dihadkan oleh pemikiran konvensional. Bersama-sama, kami akan sentiasa berbincang dan berkerjasama di dalam membentuk strategi dan taktik yang bersesuaian bagi setiap hartanah kami. Kadangkala, kami telah mendapat hasil yang menarik melalui aktiviti-aktiviti promosi dan penyewaan kami. Sila baca seterusnya. Penyewaan adalah Kelebihan Dayasaing Kami Salah satu kekuatan Hektar ialah hubungannya dengan penyewa-penyewa. Kami ada lebih dari 300 penyewa runcit dalam portfolio dan kami mengenali ratusan lagi penyewa-penyewa runcit di Malaysia dan juga di luar negara. Ini adalah sumber besar kami. Kebanyakan penyewa tersebut mempunyai pengalaman berurusan dengan Hektar di pusat-pusat membeli-belahnya. Mereka menghargai usaha dan sumbangan kami di dalam membantu perniagaan mereka. Mereka juga tahu pemahaman mendalam kami mengenai perniagaan peruncitan. Ini adalah kelebihan dayasaing kami, terutamanya apabila kami memasuki pasaran baru atau berusaha memperbaiki pasaran sedia ada (iaitu dengan menukar campuran penyewa). Rekod prestasi kami memberi keyakinan kepada penyewapenyewa runcit. Mereka tahu sekiranya mereka menyewa di hartanah Hektar, mereka akan mendapat tahap perkhidmatan yang membolehkan mereka berjaya di dalam perniagaan mereka. Ini pula akan menghasilkan kadar sewaan yang premium di hartanah

20 18 I Hektar REIT I Annual Report 2009 Perutusan Pengerusi (Sambungan) Ulasan Tahun Hektar. Kami juga berkerjasama dengan penyewapenyewa runcit kami untuk mereka-bentuk konsep yang baru dan menarik. Hasil usaha-usaha kami boleh dilihat dengan konsepkonsep peruncitan baru yang diperkenalkan di pusatpusat membeli-belah milikan Hektar. Contohnya restoran Chill Out di Subang Parade dan kafe Elephant Bean di Wetex Parade. Chill Out merupakan restoran yang menyediakan makanan yang mengadunkan masakan timur dan barat. Konsep restoran terbuka ini membolehkan pengunjung-pengunjung beristirehat hingga ke 1 pagi. Bertempat di ruang yang tidak pernah digunakan di luar Parkson, Chill Out ialah salah satu konsep baru yang diperkenalkan oleh Hektar dengan kerjasama usahawan tempatan. Konsep ini menggunakan ruang yang tidak produktif dan sekaligus menambahkan pulangan Hektar REIT, disamping menambah daya tarikan keseluruhan Subang Parade. Buat masa ini, Subang Parade menawarkan pelbagai pilihan cara-hidup, bermula dengan Celebrity Fitness, yang dibuka pada pukul 6 pagi, Uncle Lim s yang menawarkan sarapan pagi pada pukul 8 pagi dan berakhir dengan Chill Out yang beroperasi hingga 1 pagi. Di Wetex Parade pula, kami memperkenalkan konsep kafe di pintu masuk pusat membeli-belah ini. Pada mulanya, kami ingin meletakkan rantaian kedai kopi antarabangsa, tapi akhirnya kami membuat keputusan untuk berurus niaga dengan peruncit tempatan, iaitu Elephant Bean, pembekal kopi tempatan di Muar. Kami merancang untuk mengeksport konsep ini ke pasaran lain pada masa akan datang. Pemupukan jenama runcitan baru akan menguatkan lagi kelebihan dayasaing Hektar dalam jangka masa panjang. Pengiklanan dan Promosi adalah Senjata Maut Kami Pengiklanan dan promosi (A&P ) dianggap senjata maut di dalam menentukan kejayaan sesebuah pusat membeli-belah. Dalam istilah teknologi maklumat, senjata maut digunakan untuk menjelaskan perisian yang sering diguna-pakai, inovatif dan laris. Contohnya, perisian Excel oleh Microsoft dianggap sebagai senjata maut untuk komputer peribadi kerana ia melariskan penggunaan dan jualannya. Berdasarkan konsep yang sama, kami percaya A&P sangat penting di dalam mengekalkan tarikan sesebuah pusat membelibelah yang juga akan merangsang permintaan produk dan perkhidmatan di pusat-pusat tersebut. A&P merangkumi aktiviti-aktiviti pemasaran yang direka untuk menarik pengunjung-pengunjung dan menggalakkan mereka untuk kembali. Aktiviti-aktiviti terdiri daripada pameran, demonstrasi produk dan juga konsert. Kami juga mereka dan merancang kempen sepanjang tahun yang menyajikan pelbagai acara, terutamanya semasa musim perayaan atau cuti sekolah. Kempen-kempen yang popular termasuk pertunjukan silap mata, pertandingan kugiran dan program membeli-belah untuk sekolah anda. Pada tahun 2009, portfolio Hektar mencatat kunjungan seramai 21.3 juta orang. Secara purata, pusat membeli-belah milikan Hektar menerima kunjungan seramai 58,000 sehari. Bagi kami, ini melambangkan 58,000 peluang untuk menarik pengunjung-pengunjung. Di Hektar, kami amat serius mengenai aktivitiaktiviti A&P. Sebilangan kempen telah direka untuk meningkatkan jualan penyewa-penyewa runcit kami. Satu program yang berkesan ialah Membeli-belah untuk Sekolah Anda, yang diadakan di ketiga-tiga pusat membeli-belah Hektar. Secara ringkas, kempen ini bertumpu kepada sekolah-sekolah di sekitar pusat membeli-belah tersebut. Kempen bermula dan berakhir pada masa yang ditetapkan dan sepanjang kempen ini, pelajar-pelajar dan keluarga mereka boleh membelibelah di Parade tempatan mereka dan mencalonkan sekolah masing-masing di kaunter perkhidmatan pengunjung dengan memberi resit pembelian mereka. Pada asasnya, ia adalah satu pertandingan di mana sekolah yang paling banyak dicalonkan (berdasarkan jumlah resit yang diberi) akan menang. Hadiahhadiah yang diberikan ditaja oleh penyewa-penyewa runcit dan dipilih untuk memanfaatkan sekolah, seperti komputer untuk makmal komputer. Program ini bukan saja memanfaatkan penyewa-penyewa runcit dengan meningkatkan jualan, ia juga memanfaatkan Hektar dengan bertambahnya pengunjung-pengunjung (yang akan berbelanja di pusat membeli-belah yang dimilikinya) dan akhirnya ia juga memanfaatkan sekolah-sekolah di persekitarannya. Hasilnya, ketigatiga pihak akan meraih kemenangan. Tanggungjawab Kemasyarakatan Korporat Pusat-pusat membeli-belah milikan Hektar secara tradisinya memang terlibat dalam aktiviti-aktiviti kemasyarakatan. Membeli-belah untuk Sekolah Anda, seperti yang dihuraikan di atas, mempunyai unsur-unsur A&P yang baik dan pada masa yang sama, memanfaatkan masyarakat. Pihak-pihak yang mendapat manfaat dari promosi Hektar terdiri dari pelbagai persatuan seperti Calvary Care Home, Sek Kia Enh Cancer Fund, Rumah Jalinan Kasih dan Pertubuhan Kebajikan Anak-Anak Yatim Islam Muar. Kempen-kempen unik dilancarkan dari masa ke semasa, seperti Makan untuk Amal. Ia merupakan pesta makan durian di Subang Parade, yang melibatkan 120 sukarelawan, 4 tan durian dan berjaya meraih sebanyak RM33,000 untuk Children s Wish Society. Tahun lepas, A&P kami yang menumpu kepada isu masyarakat telah memenangi sebuah anugerah di Asia Shopping Centre Awards 2009 anjuran International Council of Shopping Centres. Kempen di Mahkota Parade, di mana Hektar berkerjasama dengan Persatuan Sukarelawan Bomba, telah menarik seramai 280 kanak-kanak dan meraih sebanyak RM14,000

21 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I 19 Perutusan Pengerusi (Sambungan) Ulasan Tahun dalam bentuk tajaan. Kempen ini bertujuan untuk meningkatkan kesedaran tentang keselamatan dalam kebakaran. Pengiktirafan ini mencerminkan usaha berterusan kami di dalam membangunkan program A&P yang terbaik. Strategi Pihak Pengurusan Atasan Selain dari usaha-usaha yang gigih di tahap operasi, pihak pengurusan atasan juga mengambil masa untuk meneliti gambaran utama. Strategi utama kami didorong oleh pembangunan peruncitan, tinjauan masa depan pasaran modal dan prestasi REIT-REIT di Malaysia. Kami masih positif dengan prospek pembangunan peruncitan di Malaysia sebagai sumber pertumbuhan Hektar REIT. Pertumbuhan Hektar REIT boleh dicapai melalui 4 kaedah: 1. Perbaikan berterusan 2. Membangunkan hartanah baru (konsep tanah hijau ) 3. Membangunkan semula hartanah sedia ada 4. Membeli hartanah yang menawarkan sewa yang rendah Kaedah pertama, Perbaikan Berterusan telahpun ditekankan oleh model perniagaan kami dan seperti yang diterangkan dengan panjang lebar sebelum ini, melibatkan kaedah yang menyeluruh, bertujuan untuk memperbaiki prestasi operasi dan kewangan. Pada masa ini syarikat persendirian Hektar memberi keutamaan kepada projek penambahan ruang di Subang Parade. Selama tiga tahun, Subang Parade telah mencatat kadar penginapan penuh, dan kami percaya terdapat peluang untuk menambah ruang sewaan bagi memenuhi kehendak peruncitan berkonsep baru. Penambahan ruang Subang Parade akan dibuat di atas tanah berukuran 2 ekar yang bersebelahan dengannya. Buat masa ini, syarikat persendirian Hektar sedang memuktamadkan satu perjanjian usahasama dengan sebuah syarikat pemaju yang berpengalaman untuk membangunkan satu projek campuran. Bahagian pusat membeli-belah projek ini akan bergabung dengan Subang Parade secara tidak kelim. Ruang tambahan Subang Parade ini akan diisi dengan penyewa-penyewa runcit yang menawarkan produk dan perkhidmatan yang masih belum ada buat masa ini. Kami menjangka akan memuktamadkan projek ini dan membuat pengumuman mengenai pelan persediaan tidak lama lagi. Kaedah keempat ialah melalui pembelian pusat membeli-belah yang menawarkan sewa yang rendah. Secara ringkas, pusat-pusat membeli-belah ini mempunyai potensi untuk meningkatkan kadar pulangan portfolio Hektar REIT. Pembelian Wetex Parade dan Classic Hotel di Muar ialah contoh kaedah ini. Seperti yang dijelaskan pada laporan tahunan setahun yang lalu, Wetex Parade merupakan satusatunya pusat membeli-belah yang ditunjangi gedung serbaneka di Muar. Lebih penting lagi, terdapat peluang untuk memperbaiki campuran penyewa dengan memperkenalkan konsep runcitan terbaru, serta memasukkan rantaian peruncit berjenama antarabangsa dan tempatan. Hasilnya, kadar sewaan Wetex Parade telah naik sebanyak 8% pada tahun Dengan kadar penginapan sebanyak 90.1% pada akhir tahun 2009, masih banyak lagi ruang untuk meningkatkan perolehan di Wetex Parade. Pembelian Terkini Kami sentiasa berusaha mencari pusat-pusat membelibelah yang berpotensi untuk dibeli. Tahun lepas, kami telah menjalankan kajian menyeluruh terhadap beberapa pusat membeli-belah yang berpotensi untuk disuntik ke dalam portfolio Hektar REIT. Sesetengahnya menunjukkan potensi tetapi terdapat dua sebab yang telah menghalang kami dari membuat pembelian pada tahun Sebab pertama adalah harga tawaran penjual yang terlalu tinggi, lazimnya lebih dari penilaian yang dibuat oleh penilai bebas kami. Walaupun krisis ekonomi dunia telah memberi tekanan kepada pemilik-pemilik hartanah di negara-negara maju untuk mengurangkan nilai hartanah mereka, ia didapati tidak berlaku di Malaysia. Ini secara tidak langsung disebabkan oleh sektor perbankan yang kukuh di Malaysia. Dibandingkan dengan sektor perbankan di negara-negara maju, bankbank di Malaysia mempunyai modal ekuiti yang lebih tinggi. Apabila Bank Negara mengurangkan Kadar Dasar Semalaman untuk merangsang aktiviti ekonomi, banyak bank di Malaysia mampu berkongsi penjimatan kadar pembiayaan rendah ini dengan penggunapengguna. Hasilnya, tidak banyak kes muflis yang diisytihar oleh syarikat-syarikat kewangan dan bukan kewangan. Keadaan ini pula mengurangkan aset-aset terdesak di pasaran. Sebab kedua yang menghalang Hektar dari membeli aset baru ialah ketidaksesuaian masa untuk membiaya pembelian baru melalui pasaran modal sekunder. Pasaran modal di Malaysia, walaupun terdapat tandatanda pulih di separuh kedua 2009, masih belum bersedia, terutamanya untuk membiaya REIT secara efisyen. Kadar pulangan nominal Hektar berkisar sebanyak 9%, satu kadar yang tinggi untuk meraih ekuiti sekunder bagi tujuan pembelian aset baru. Dengan kadar pembiayaan bank kurang dari 4%, dan di andaikan nisbah hutang-ke-ekuiti sebanyak 50% untuk membuat pembelian aset baru, kos modal yang

22 20 I Hektar REIT I Annual Report 2009 Perutusan Pengerusi (Sambungan) Ulasan Tahun bercampur ialah lebih kurang 6.5%. Nilai ambang ini tidaklah susah untuk dicapai untuk membuat pembelian, tetapi disebabkan harga pasaran Hektar REIT di Bursa Malaysia kurang dari Nilai Aset Bersih, sebarang terbitan ekuiti pada harga diskaun akan mencairkan nilai Hektar REIT kepada pemegangpemegang unit. Seperti yang kami nyatakan sebelum ini, apa-apa pembelian aset baru mestilah memberi kadar pulangan yang lebih tinggi, bukan sebaliknya. Pada akhir 2009, harga pasaran Hektar REIT di Bursa Malaysia adalah 13% kurang dari Nilai Aset Bersih. Walaupun diskaun harga ini dianggap tidak melampau, kami akan terus memerhati harga pasaran ini dan hanya akan membuat pembelian aset baru sekiranya harga pasaran meningkat ke tahap yang lebih berpatutan. Kami akan terus mencari aset-aset baru di seluruh Malaysia untuk dibeli. Kriteria kami tidak berubah. Sebaik-baiknya, pusat membeli-belah tersebut harus ditunjangi gedung serbaneka dan berukuran dari 150,000 kaki persegi ke atas. Ia harus bertempat di kawasan perumahan yang padat dan matang dan mempunyai segmen pasaran yang mudah dikenali. Kami sedia menimbang pusat-pusat membeli-belah yang sudah beroperasi atau sedang dibina, disewa penuh atau kosong. Yang paling penting, kami akan meneliti sama ada kami mampu mempertingkatkan nilai hartanah tersebut dengan strategi penyewaan dan peningkatan aset kami. Akhirnya, disebabkan dasar kami ialah mengawal penuh campuran penyewa bagi memastikan keselesaan membeli-belah pengunjung, kami tidak akan membeli pusat membeli-belah yang mempunyai pemilik-pemilik lot individu lebih dari 10% dari jumlah keluasan. Seperti yang diterangkan sebelum ini, kami akan menggunakan pengalaman dan amalan perniagaan kami untuk menjadikan semua hartanah yang kami miliki sebagai sebuah pusat membeli-belah terunggul di kawasan masing-masing. Kepada semua pemilik, pemaju dan pengurus aset, sila hubungi kami jika anda mempunyai sebarang aset yang berpotensi untuk dibeli oleh Hektar. Kami mengalu-alukan anda untuk berkerjasama dengan kami. CABARAN DAN TINJAUAN MASA HADAPAN Kami akan terus memantau ekonomi dunia, terutamanya kesan yang bakal dirasai Malaysia dan seterusnya, ekonomi pengguna tempatan. Cabaran terdekat ialah pendedahan pasaran portfolio hartanah kami kepada suasana peruncitan yang lebih berhati-hati. Di Melaka, keutamaan diberi ke atas penyiapan projek penaikan taraf Mahkota Parade pada bulan April Kami juga akan terus memperbaiki campuran penyewa dan melancar semula kempen pengiklanan dan promosi di Mahkota Parade. Kami telah meneliti rekod jualan penyewa-penyewa dan membuat kesimpulan bahawa kami perlu memberi tumpuan kepada kempen yang lebih bijak untuk meningkatkan jualan penyewapenyewa. Kami telah menyiapkan pelan-pelan yang lebih terperinci termasuk taktik pemasaran yang lebih agresif, pengeluaran baucer dan mengadakan aktivitiaktiviti bertemakan produk dan perkhidmatan yang ditawarkan penyewa-penyewa. Sambutan menyeluruh terhadap penaikan taraf dan kempen pemasaran yang lebih runcing dijangka akan mengekalkan minat dan ihsan pengunjung ke atas Mahkota Parade, di tengahtengah saingan sengit di pasaran Melaka. Pelancaran semula Mahkota Parade dijangka akan dibuat pada suku kedua Bagi Subang Parade, walaupun strategi yang menumpu kepada penduduk sekeliling Subang Jaya terbukti mampan, kami akan terus berjaga-jaga untuk melindungi kongsian pasaran dan minat pengguna. Pembangunan dan saingan baru pastinya akan memberi kesan jangka pendek yang negatif kepada Subang Parade. Pengalaman ini agak serupa dengan Mahkota Parade di Melaka pada tahun 2008, semasa pesaing-pesaing memulakan perniagaan mereka. Setelah pasaran stabil, potensi jangka-panjang pulih setelah keseluruhan kawasan tersebut mula dikenali sebagai presint membeli-belah. Kami menjangka Subang Parade akan melalui proses yang sama; Setelah pasaran stabil, kawasan sekeliling Subang Parade akan diwar-warkan sebagai presint membelibelah, sama seperti Bukit Bintang di Kuala Lumpur. Sementara itu, kami akan terus memperkenalkan konsep baru di samping memastikan kedudukan Subang Parade sebagai pusat membeli-belah terunggul di Subang Jaya. Di Wetex Parade, kami akan terus berusaha memperbaiki campuran penyewa dan inisiatif-inisiatif peningkatan yang lain. Paling utama di senarai kami ialah cadangan menaiktaraf kemudahan dan ruang sekeliling Wetex Parade. Kami akan memastikan bahawa Wetex Parade terus terkenal sebagai pusat membeli-belah terkemuka di Muar. Pelan-pelan kami sedang dimuktamadkan dan kami harap akan mengumumkannya tidak lama lagi. Kami akan terus memantau pasaran modal dan pemulihannya. Prospek meraih dana ekuiti telah menjadi bertambah baik dan dengan sokongan utuh pelabur tunjang kami Frasers Centrepoint Trust, kami kekal optimis bahawa kami akan menjumpai hartanah yang sesuai yang menawarkan harga yang sesuai pada masa yang sesuai, di tahun Fokus, Fokus, Fokus Hektar mempunyai satu formula, iaitu fokus yang jelas. Hektar REIT memiliki hartanah berlokasi strategik yang menumpu kepada pasaran masing-masing; model perniagaan yang menumpu kepada penyewapenyewa runcit dan pelanggan-pelanggan mereka; dan pengurusan kami yang terus menumpu kepada matlamat utamanya dan pada masa yang sama, masih

23 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I 21 Perutusan Pengerusi (Sambungan) Ulasan Tahun mengawal dan mengawasi pengurusan di peringkat operasi. Jika formula ini boleh dipecahkan, ia akan dihuraikan seperti di bawah: Pengunjung gembira à jualan penyewa runcit positif à penyewa gembira à pertumbuhan pendapatan sewaan positif à prestasi REIT positif à pemegang saham gembira. Pengunjung-pengunjung kami akan sentiasa mengingati pusat membeli-belah kami, penyewapenyewa kami akan menghormati usaha kami dan pemegang-pemegang unit akan menikmati ganjaran hasil daripada usaha kami. Matlamat kami hanya tetap satu iaitu menjadikan Hektar sebagai tuan rumah pilihan utama penyewa-penyewa. Wawasan kami kekal, iaitu Mewujudkan Suasana Membeli-belah Kegemaran Ramai. berdedikasi di dalam kerjaya mereka. Jika disingkap kembali prestasi tahun lepas, saya sangat kagum dan berbangga dengan bakat-bakat mereka yang bekerja di Hektar. Usaha-usaha gigih mereka sepanjang tahun telah memastikan Hektar REIT terus mencapai prestasi positif di tengah-tengah pergolakan dan ketidaktentuan tahun Hektar tetap komited dengan matlamat kami, iaitu memberi pulangan pelaburan yang selamat dan stabil kepada pemegang-pemegang unit. Jika anda ingat, pegangan saya tahun lepas ialah sentiasa berfikiran positif. Pesanan saya tahun ini pula ialah kekalkan fokus. PENGHARGAAN Bagi pihak Lembaga Pengarah Hektar Asset Management Sdn Bhd, saya ingin mengucapkan terima kasih kepada pekerja-pekerja Hektar kerana terus DATO JAAFAR BIN ABDUL HAMID Pengerusi dan Ketua Pegawai Eksekutif Februari 2010

24 22 I Hektar REIT I Annual Report 2009 單位信託持有者信件年度報告 親愛的賀達房地產投資信託基金單位信託持有 : 回顧 1 年前, 我曾向各位報告當時面對的挑戰 這挑戰是自 1930 年代大蕭條以來最嚴重的全球金融危機 當時我強調, 賀達專注在市場基本面, 我們深信自己的經營模式和管理 現在回頭看, 我們發現 2009 年呈現強烈對比 ; 這一年以被金融危機搞得昏頭轉向掀開序幕, 到了年底時又出現資金市場復甦 儘管經濟不穩定且起伏跌宕, 賀達房地產投資信託基金 (Hektar REIT) 還是取得了正面表現 我們的房地產信託基金經營模式不但能在經濟好時業績表現良好, 經濟不好時表現也不錯, 截至目前, 我們的績效表現仍然優異 自 2006 年 12 月首度公開獻售 (IPO) 以來, 賀達房地產信託基金不但營業額正成長 浄利增長 浄資產值上揚, 對投資者來說, 更重要的是股息也不斷成長 金融危機期間, 大馬經濟也受到了影響 ; 2009 年大馬經濟成長率萎縮了 3.3%( 大馬經濟研究院 ) 不過, 各區域受到的影響不盡相同, 貿易相關, 特別是商品的出口蒙受巨大影響之際, 大馬整體金融業及其它服務業的影響卻相對的小 事實上, 我們在雪蘭莪 馬六甲及北柔佛的零售業績在很多方面都取得了正成長 2009 年間, 我們成功達成目標 : 也就是在經濟困難時期仍然取得成長 我們的業績表現證明了我們的管理有效 我們的投資組合耐力堅實 而且經營模式穩健妥當 再者, 因為資金市場接納了我們的付出, 我們的股价每一年都在增長 我們很感激股東給予我們的支持 全球經濟前景仍然不明 除去宏觀經濟不明不談, 我們深信賀達房地產信託基金將會保持一定的業績表現 接下來, 我們將跟各位分享我們的經營理念 前景分析及經營策略 財務業績表現 截至 2009 年 12 月 31 日 (2009 財政年 ) 的財政年度, 賀達房地產信託基金派發的單位股息為 10.3 仙 (DPU) 相較於 2006 年 11 月 15 日初次公開獻售招股書上的預測, 大約高出 10.9% 這等股息也較 2008 財政年所派發的單位股息 10.2 仙高 1% 營業額達 8770 萬令吉, 比 2008 財政年高 4.3%, 浄房地產收入 (NPI) 達 5300 萬令吉, 比 2008 財政年高 0.6% 整體而言, 賀達浄收入約達 3720 萬令吉, 比 2008 財政年的 6040 萬令吉淨收入低 38% 原因在於 2009 財政年房地產投資合理估值 調整 (Fair Valuation Adjustment of Investment Properties) 的未實現利得 (unrealisedgain) 40 萬 519 令吉, 比 2008 財政年的 2410 萬令吉低 合理估價調整是非現金項, 且是財務報告標準 ( FRS) 之一 這是用來調整賀達的年度房地產投資組合 估值是由獨立估價師以當時房地產市值為客觀標準估算出來的 2009 財政年合理估值調整的未實現利得比 2008 財政年少是可以預期的, 因為房地產會 成熟 (mature) 房地產經理人必須不斷想辦法, 設法強化或翻新房地產以改善提高收入的潛能, 以及最終提升房地產價值 就 2009 財政年估值上掦而言, 這顯示賀達的投資組合整體而言在這一年內成功提升價值, 這是個正面發展, 因為其他業界觀察家很擔心, 投資房地產會貶值 為了確定實質營運表現, 也就是 2009 財政年的現金相關績效表現, 我們用了淨收入 ( 實現 ) 法 誠如各位之前看到的, 合理估值調整會大幅度提升或降低房地產信託的浄收入, 不過, 這是非現金項, 它無法說清楚房地產信託基金的真實營運績效表現 浄收入 ( 實現 ) 法排除合理估值調整, 而且反映現金相關績效表現, 因此, 與名稱上的 實現 吻合 就 2009 財政年而言, 賀達的浄收入 ( 實現 ) 達 3670 萬令吉 就每單位浄收入 ( 實現 ) 或每單位獲利 (EPU) 而言,2009 財政年達 仙, 相比之下,2008 財政年為 仙, 總計上揚了 1.4% 賀達房地產信託基金的浄資產值 (NAV) 上揚至 1.27 令吉, 比 2008 財政年的 令吉高 1% 自首度公開獻售以來, 浄資產值已增加了 23.3% 整體而言, 我們相當滿意賀達房地產信託基金在 2009 財政年的績效表現 剛開始時, 我們對去年有所保留, 因為經濟不太明朗及其它原因 : 2008 年 7 月電費調升 26%, 相較於我們 2009 年電費預算總計增加超過 150 萬令吉, 卻被所增加的收入抵銷了 因此, 我們的投資組合表現正面 ( 稍後我們會在投資組合部份進一步說明這點 ) 2009 財政年間, 另一個對賀達房地產信託基金有利的發展是融資環境 融資 雖然這波全球金融危機的成因可能要花好幾年來分析, 但金融戒律是不變的 : 也就是絕對不要短期借貸長期投資 賀達的借貸是兩批符合回教教義的借貸 ; 總值達 1 億 8400 萬令吉的首批回教借貸將在 2011 年到期, 第二批總值達 1 億 5000 萬令吉的回教借貸則將在 2013 年到期 融資成本以年計, 首批及次批借貸融資成本的重設期分別是 12 月及 4 月 賀達房地產信託基金, 受惠於

25 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I 23 單位信託持有者信件 ( 续 ) 年度報告 2009 財政年國家銀行採納寬鬆的貨幣政策 隔夜政策利率 (Overnight Policy Rate)2009 年間大部份時間都維持在 2.0% 的情況下, 賀達房地產信託基金的 2009 財政年利息支出比預算低 就加權平均成本 (weighted average cost) 而言, 截至 2009 年 12 月,3 億 3400 萬令吉總債務的加權平均成本利息為 3.28% 股息 我們評論 2009 財政年財政報表時發現營業額 實現浄收入及浄資產值都增長, 因此我們也很樂意以較高的股息回饋單位持有人 2009 財政年的每單位股息是 10.3 仙, 比 2008 財政年高 1%, 且浄收入 ( 實現 ) 派發率約達 90% 過去而言, 通常我們不會派發所有浄收入 ( 實現 ), 我們會把這些錢存起來用在他處, 以提升房地產信託基金的潛在表現 用處包括收購已售零售單位 ( 梳邦及皇冠百利廣場已售零售單位的面積約佔 6%), 以及強化這些房地產 爾後各位會看到的投資組合升級部份, 將詳細說明這類資產強化細節 市場反應 去年, 我們感到慶幸的是資金市場反應良好, 帶動賀達房地產信託基金 2009 財政年及未來前景樂觀 投資及研究機構有利於賀達房地產信託基金的報導, 也提升了我們的形象, 特別是橋豐研究 (OSK Research) 大馬研究 (AmResearch) 及標準普爾 (Standard & Poor) 的分析報告 橋豐研究在 2009 年 3 月出版的 大馬最優秀的小型資本公司 (Top Malaysian Small Cap Companies Book), 賀達被選為 OSK Jewels 2009 五強之一 再者, 去年一整年, 賀達也參與了由聯昌私人銀行 (CIMB Private Banking) Asia Business Forum LexisNexis 及 IR Magazine( 新加坡 ) 舉辦的會議, 以及大馬投資人關係協會 (Malaysian Investor Relations Association) 大馬公關協會 (Institute of Public Relations Malaysia) 及國立新加坡大學實業系舉辦的座談會 就去年而言, 賀達房地產信託基金股價以 1.12 令吉為閉市價格, 總計上揚了 45.5% 投資組合更新 賀達房地產信託基金集合了一組高品質投資組合, 我們聚焦在座落於大眾市場策略性地點的購物中心 我們管理的浄可出租面積 (NLA) 超過 100 萬平方呎, 管理策略和技巧則有好幾種, 包括 按營業額訂租金 (turnover rent) 漸增式租金 (Step-up Rent) 及 資產強化獎掖 (asset enhancement initiatives) 以創造持續性的收入成長 透過降低每一個潛在市場的循環性波動, 我們旗下房地產的多元化地點惠及賀達房地產信託基金 舉例而言, 我們原預計 2009 年下半年業績會很有挑戰性, 部份原因是較弱的馬六甲市場及翻新馬六甲皇冠百利廣場 ( 始於 2009 年 7 月 ), 影響馬六甲皇冠百利廣場的租賃市場慶幸的是, 正是梳邦再也強勁成長, 抵銷了馬六甲的下滑 投資組合在梳邦再也 雪蘭莪 馬六甲及柔佛麻坡等的這些地點, 顯示賀達房地產信託基金多元化的投資地理位置 最重要的是, 我們在大馬範圍廣泛的足跡, 讓我們得以了解各地方市場的消費意願 賀達房地產信託基金的總體出租率達 95.8%, 跟 2008 財政年一樣 有史以來頭一遭, 首邦百利廣場去年一整年的出租率高達 100% 威德百利廣場的出租率上揚到了 90.1%, 皇冠百利廣場出租率則因為翻新工程進行中降至 93.6% 2009 年間, 我們旗下購物中心的總人流量達 2130 萬人次 首邦百利廣場去年人流量稍稍上揚了 1.8%, 約達 780 萬人次, 威德百利廣場則錄得 560 萬人次, 相較於首邦百利廣場威德百利廣場的人流量非常驚人, 因為就浄可出租面積而言, 威德百利廣場不及首邦百利廣場的一半 皇冠百利廣場去年人流量下滑了 5.3% 至 790 萬人次, 部份原因是受從 2009 年 7 月開始的翻新工程影響, 其中也包括室內及室外停車場 總體而言, 賀達購物中心每天的人流量超過 5 萬 8000 人次 以零售商為基準的租約, 繼續成為賀達房地產信託基金多元化收入的財源 賀達旗下投資組合中, 零售業者租約超過 300 個, 其中最大承租戶是百盛 (Parkson), 佔了賀達月租收入的 11% 繼百盛第二大承租戶是 The Store, 約佔賀達月租收入的 3% 簡言之, 超過 85% 的月租收入來自國內外零售業者, 其餘收入則來自單一承租戶店 這些良好的承租戶組合, 確保賀達擁有相對堅實的收入來源, 而且違約風險在可容忍的範圍內 就 2009 財政年而言, 賀達房地產信託基金的 按營業額訂租金 達 135 萬令吉,2008 財政年則為 167 萬令吉 這部份主要貢獻者為健康及美容零售業者 請注意, 我們的財政預算案中並沒有列入 按營業額訂租金 零售業者為伙伴 賀達房地產信託基金的租金逆向的基石在 2009 財政年間轉負, 新或更金租約達 99 個, 租金平均下滑 5% 不過, 下滑幅度並不統一, 因為大部份的下滑源自皇冠百利廣場, 這裡的租金平均下滑 13% 相較之下, 首邦百利廣場租金逆向的基石持平, 威德百利廣場租金逆向的基石則取得平均 8% 的漲幅

26 24 I Hektar REIT I Annual Report 2009 單位信託持有者信件 ( 续 ) 年度報告 我們經營模式的特點之一, 就是 按營業額訂租金 及 漸增式租金 長期下來可能會有初期租金下滑的情況 舉例而言, 我們檢查過皇冠百利廣場部份承租戶零售業績 發現他們的承租成本過高時, 我們就會下調基礎租金, 讓他們能繼續在皇冠百利廣場營業 不過, 皇冠百利廣場的 10 個承租戶中, 我們維持 按營業額訂租金 的至少有 9 個, 而且這些承租戶都會提供我們每個月的營業額報告, 以及如果業績超過基礎租金時還答應將 按營業額訂租金 率付租金 所以, 我們調降未來 3 年基礎租金的同時, 也調低了 按營業額訂租金 門檻 調降基礎租金, 將影響最重要的承租戶 不過, 當承租戶業績改善時, 按營業額訂租金 上調潛力也會跟著水漲船高 就這點而言, 皇冠百利廣場於 2010 年 4 月翻新工程完工後, 購物者人流量將會回升, 屆時, 我們可以預期承租戶業績會改善, 因此, 承租戶未來就很有可能 按營業額訂租金 正是這類經營策略, 我們將承租零售業者視為伙伴 ; 時局困難時我們願意調降基礎租金 ( 承租戶成本 ), 經濟轉好時分享 按營業額訂租金 ( 獲利上揚 ) 雖然未來幾年內我們可能還會經歷部份負面租金逆向的基石, 但我們認為未來經濟前景一旦改善, 按營業額訂租金 的潛力也不小 皇冠百利廣場翻新 皇冠百利廣場的翻新工程仍在進行中 自 1994 年開幕以來, 皇冠百利廣場已成馬六甲市場頂尖購物中心指標 去年, 面對新和即將登場的競爭, 我們認為是時候進行翻新工程 翻新計劃將確保皇冠百利廣場, 在未來持續成為馬六甲的領先型購物中心 我們的翻新策略, 是將皇冠百利廣場生意的影響減到最低 購物中心將照常營業, 翻新工作則在一般營業時間後進行, 一般上介於晚上 10 點至早上 7 點 由此, 我們將翻新工作以 9 個月的時間分成 3 個階段進行 我們從 2009 年 7 月開始翻新, 預計 2010 年 4 月完成 翻新工程預算為 3040 萬令吉, 所包含的範圍非常廣泛 工程包括更新地磚 刷新外牆 更新天花板 改進照明設備 以及維修屋頂及其它地方 我們會新加或改善設備, 包括新電梯 方向指標 保全系統 以及 1 個全新來賓服務櫃檯 停車位將從原來的 955 個, 增加至超過 1000 個, 這將帶動皇冠百利廣場的交通流量 整體效果是會讓廣場變得更明亮 更乾淨 購物者會覺得更舒服 我們對翻新工程但不影響生意很有經驗 在 2006 年我們完成了首邦百利廣場類似翻新工程, 成果是這家購物中心煥然一新 當時, 我們的翻 新工程也在夜間進行, 日間照常營業 當時的記錄是, 沒有承租戶申請損失理賠 員工零受傷, 以及更重要的是沒有超支 同樣的經驗及工作人員, 目前正在皇冠百利廣場施工 舉辦的活動專注在安全及優惠消費者, 旨在翻新工程進行時仍與消費者保持接觸 截至目前, 第一及第二階段翻新工程已經完成, 最後階段將在 2010 年 4 月完成 值得注意的是, 儘管翻新工程始於 2009 年下半年, 皇冠百利廣場仍被馬六甲州政府選為 2008/2009 年旅遊獎的 最佳購物中心 如果您很關注資料, 請翻至 投資組合表現 節, 那裡會有更多我們房地產的數據 重回我們的策略 賀達房地產信託基金, 仍然是大馬唯一聚焦在零售廣場的房地產信託基金 我們持續創新及改善零售環節, 以惠及我們的零售業者及購物者 相較於其它房地產信託基金, 零售廣場房地產信託基金非常獨特, 我們必須關心兩大類客戶, 也就是承租戶和他們的購物者 我們的經營模式, 是視我們的客戶, 也就是為我們帶來收入的零售業者和承租戶為生意伙伴 我們也必須照顧我們客戶的客戶 : 購物者 購物體驗源於好幾個因素 : 零售業者提供購物者有吸引力的產品和服務, 以及房東 / 經理人提供一個惠及購物者的環境 讓他們在這裡開心地玩樂 購物及休閒 這些都是確保整體房地產表現的重要元素 我們相信績效表現的最大驅動力, 在於管理品質 高品質投資組合加上低品質管理, 隨著時間的推移肯定會走下坡 ; 在馬來西亞, 就有不少實例顯示, 曾經名噪一時的購物中心, 隨著時間的流逝最後也可能年久失修而荒廢 賀達擁有高品質投資組合, 為了維持這等高品質, 我們需要高品質的管理 我們的管理採下至上策略, 我們的目標則採上至下策略, 我會在爾後跟各位分享更多這方面的細節 賀達很幸運擁有一個這兩方面都兼顧的管理團隊 前線管理 我們在 走動式管理 上花了不少時間 跟我們市場成長一致的是, 我們一直在想辦法改善我們的承租戶組合, 以及滿足變化萬千的消費者胃口 為了達成目標, 我們在購物中心裡花了很多時間觀察客戶, 以及與承租戶溝通, 這讓我們更深入了解客戶及承租戶的需求 微軟主席比爾蓋茲曾說, 最不高興的客戶就是最大的學習對象 由此, 我們投資市場調查, 例如在我們的目標市場裡, 以戶對戶家庭市調, 取得住戶們的意見,

27 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I 25 單位信託持有者信件 ( 续 ) 年度報告 以及特別是那些不再逛鄰近購物中心購物者的意見 誠如您所看到的是, 這一切都無法在辦公桌上完成, 您必須到處走動 老子說 : 千里之行, 始於足下, 這正是我們的管理之道 為了達到我們的目的, 我們每天都 走很多路 我們管理團隊對零售業構想 消費者消費行為 租賃趨勢 房地產管理 以及其它專業事項的了解, 一直給我留下了深刻印象 我一直不斷鼓勵我的經理, 必須跳出框框來想才會達成目標 整體而言, 我們會一起討論想法和工作, 為每一個購物中心量身打造出一套適當的經營策略 透過我們的租賃及推廣活動, 有時我們會有非常有趣的成果, 請續閱 租賃是我們的競爭優勢 賀達的最大能耐之一, 就是與零售業者間的資源和關係 我們的投資組合旗下共有超過 300 個零售承租戶, 而且還能接觸到好幾百個其它零售業者, 包括國內及國外 這是非常有意義的資源 很多這類零售業者, 與賀達有直接的交易經驗 他們都會很感激我們的付出和貢獻, 而且也知道我們很了解零售業 對我們來說, 這是我們的競爭優勢, 特別是當我們打進新市場 或希望改善現有的市場 ( 舉例而言, 重新組合承租戶 ) 時 我們的經營記錄讓零售業者們很有信心, 只要進駐賀達房地產, 他們就可以期待一套能確保生意興隆的高品質服務, 這將轉化成賀達房地產的高租金 或許同等重要的是, 我們與零售業者合作, 以激盪出全新和讓人興奮的的經營構想 我們的創意產品及 跳出框框去構想, 充份反映在賀達推出的全新零售構思上, 包括首邦百利廣場的 Chillout 和吧檯, 以及威德百利廣場的 Elephant Bean Chillout 結合了東西方料理, 室外式的經營一直營業至凌晨 1 點, 為我們在梳邦再也的客戶提供夜間去處 Chillout 座落在百盛戶外一個沒有用上的外部區域, 它代表了賀達一直想要達成的創意 : 也就是與創業家合作, 創造獨特零售業構想的同時, 充份應用沒有生產力的空間, 這樣一來就能帶動房地產租金及房地產的整體魅力 首邦百利廣場如今提供完整的時尚選擇, 從早上 6 點 Celebrity Fitness 開始營業 Uncle Lim 8 點開始提供早餐 最後由 Chillout 營業至凌晨 1 點而結束 至於威德百利廣場, 我們也一直在考慮將廣場大門口處出租給一家咖啡連鎖店 我們曾考慮過典型國際咖啡連鎖店, 不過, 我們最後還是決定與本地 冠軍 合作, 這是一家很成功的優質本土咖啡連鎖集團 這首間 Elephant Bean 是麻坡土生土長的咖啡連鎖店, 如今成了威德百利廣場大門口的重點承租戶之一 透過與當地零售業者合作, 我們希望能激發出新和有趣的零售業經營構思, 以在未來引進其它市場 以這樣的方法培養出全新零售業品牌, 長遠而言將提升賀達的競爭優勢 廣告促銷是我們的 殺手應用程式 成功經營購物中心, 廣告促銷 (A&P) 被視為是 殺手應用程式 資訊科技業詞彙裡, 殺手應用程式 通常用來說明一套特別有用 創意十足 而且終極而言非常成功的軟體 舉例而言, 試算表應用程式 Excel, 就被視為個人電腦 (PC) 的 殺手應用程式, 而且終極而言刺激了個人電腦的使用率和銷售量 就這點而言, 我們相信廣告促銷在維持購物中心吸引力, 以及帶動購物中心需求上非常重要 廣告促銷包含了設計行銷活動來吸引購物者, 以及刺激他再回到百利廣場購物 這些活動範圍很廣, 從展銷 示範一直到音樂會 一般上, 我們都會設計和規劃未來 12 個月的活動以及舉辦好幾項活動, 旨在充份利用每月間的更替優勢 ; 舉例而言, 佳節或學校假期的尖峰時間 典型和很受歡迎的活動包括 The Festival of Magic Battle of the Bands 以及 Shop For Your School 2009 年間, 賀達的投資組合總計錄得 2130 萬人次的購物者人流量 平均而言, 每一天賀達購物中心接待超過 5 萬 8000 人次的購物者 對我們來說, 這代表我們每天有 5 萬 8000 個吸引購物者的商機 我們賀達非常重視廣告促銷 我們的部份活動, 為的是刺激業績 其中很成功的活動是 Shop For Your School, 我們都已在我們所有的購物中心舉辦這活動 基本上, 本活動聚焦在我們購物中心四週的學校 本活動會規劃出一段固定時間, 期間, 學生 ( 和他們的家人 ) 會來到他們家附近的百利廣場購物, 然後到客戶服務櫃台出示收據後就能提名自己的學校 這基本上是個競賽, 擁有學生和家人消費最多的學校將贏得大獎 部份獎品是由零售業者贊助, 而且都是學校所需要的, 例如電腦室裡的電腦 Shop For Your School 基本上具備了我們所謂的 三贏 元素 ; 它因為帶動業績而惠及零售業者 讓我們接觸到購物者和他們的家人 ( 以及鼓勵他們到鄰近購物中心採購 ) 使我們受惠 而且也惠及當地學校 企業社會責任 賀達的購物中心, 一直以來都在推廣協助社區和社會活動 誠如剛才提到的 Shop For Your School, 就具備了很好的廣告促銷活動元素, 與此同時也惠及社會 賀達促銷活動的受惠者包括各種不同的慈善機構, 例如 Calvary Care Home Sek Kia Eenh Cancer Fund Rumah Jalinan Kasih Pertubuhan Kebajikan Anak-anak Yatim Islam Muar 以及其它梳邦再也 馬六甲 以及麻坡社區 我們偶爾也會舉辦特別活動, 例如在首邦百利廣場舉辦的 We Ate For Charity 榴槤

28 26 I Hektar REIT I Annual Report 2009 單位信託持有者信件 ( 续 ) 年度報告 品嚐會, 當時引來了 120 名志工, 總計 4 噸的榴槤, 以及成功為 Children s Wish Society 募得 3 萬 3000 令吉善款 去年, 我們聚焦在社區議題的廣告促銷活動, 讓我們贏得了國際購物中心委員會 (International Council of Shopping Centers) 所頒發的 2009 年亞洲購物中心獎 (2009 Asia Shopping Centre Awards) 在皇冠百利廣場與大馬消拯自願隊 (Malaysian Volunteers Fire and Rescue Association) 合辦的 Fired Up About Safety 活動吸引了超過 280 名兒童 以及 1 萬 4000 令吉的贊助款項以提升民眾的安全用火意識 我們很榮幸得到這份獎勵, 這說明我們將持續開發出創意十足的廣告促銷活動 由上至下的經營策略 當我們在第一線上付出了許多努力和投資了不少資源時, 也從更高更大的視野觀察整個局勢 我們更大的策略由零售業發展 資金市場前景 以及大馬房地產信託基金表現驅動 我們仍然看好大馬零售業發展這是賀達房地產信託基金的成長源 基本上賀達的成長之道有四 : 1. 持續改善現有房地產 2. 開發新資產 ( 新投資 ) 3. 現有房地產再開發 4. 收購租金偏低資產 我們目前的經營模式就強調了第一個方法 持續改善現有房地產, 誠如之前談論的, 其中涉及一套旨在改善房地產營運及財務表現的全面性方法 ( 請參閱 從前線管理起 ) 賀達集團旗下私人公司, 目前正優先處理梳邦再也首邦百利廣場 再開發 的擴建計劃 再開發計劃跟新計劃不同 ; 新計劃通常出現在徹底全新地點, 再開發計劃則典型上包括或利用現有市場 首邦百利廣場過去 3 年來, 都取得了近 100% 的出租率, 因此, 我們發現了新零售構思的獨特商機和地點 首邦百利廣場擴建計劃位於一塊佔地 2 英畝的土地上, 就在首邦百利廣場旁 賀達集團旗下私人公司與一家知名業者的聯營公司洽談已進入尾聲, 我們打算開發一個綜合型房地產發展計劃 本計劃的零售業部份, 將與首邦百利廣場緊密的結合在一起, 而且將充份掌握住目前首邦百利廣場所沒有的零售業商機 我們希望很快的就能定案, 以及宣佈初期規劃 賀達的第四個成長方法, 就是透過收購租金偏低的資產 簡單的說, 這些都是有潛力增加賀達房地產信託基金目前投資組合租金財源的購物中 心 我們在麻坡收購威德百利廣場及威德酒店, 就是這類收購案例 ; 誠如去年報告中提到的, 威德百利廣場是麻坡唯一的特定用途重點購物中心 威德百利廣場很有機會改善承租戶組合, 以及引進全新零售業構思 國內及國際品牌 由此, 去年 (2009) 威德百利廣場租金上漲了 8% 截至 2009 年年底, 威德百利廣場出租率達 90.1%, 這裡的收入還有成長空間 最新收購 我們一直尋找潛在收購對象 去年, 我們曾實質審查了幾個有潛力的購物中心, 考慮注入賀達房地產信託基金 有些看起來不錯, 不過, 有兩個原因不讓我們在 2009 年收購 首先是出價太高, 通常都超過我們獨立估價師的估價 雖然說金融危機造成已開發國家資產價值受壓, 但大馬並沒有出現這現象 原因之一在於大馬銀行業相較海外同業的資本管理來得比較好 結果是, 當國家銀行調降隔夜政策利率以支撐經濟成長時, 很多銀行都有能力相應調降借貸利率 大馬並沒有出現金融或非金融機構倒閉現象, 由此, 價值受壓的資產也就沒那麼多 第二個壓縮了我們收購意願的原因是, 不容易透過次級市場募股融資收購案 大馬資金市場雖然在 2009 年下半年逐步邁向復甦, 但還不足以讓特別是房地產信託基金以效益成本籌資 2009 年的大部份時間, 賀達的名目回酬徘徊在 9% 以上, 這也讓公司在透過次級市場募股融資收購案時名目上變得昂貴 銀行的債務融資低於 4%, 以及假設融資收購資本負債率為 50% 的話, 簡單名目資金的混合成本就約達 6.5% 收購新房地產門檻不算高, 不過, 由於賀達房地產信託基金股價仍低於净資產值, 以折價發股仍然是不受單位持有人歡迎的 誠如我們稍早前提過的, 賀達房地產信託基金的任何收購案, 都必須要能提升回酬 截至 2009 年年底, 賀達股價低於净資產值 13%, 雖然這不算是不合理的折價, 但我們在收購前會小心觀察合理定價 我們仍在全馬各地尋找收購對象 我們的基準沒變 : 我們喜歡特定用途購物中心, 重點承租戶净可出租面積從 15 萬平方呎起跳 地點座落在市場區隔明顯的知名或新興社區, 我們接受已完成或仍在動工中的社區 不管是已完全出租或閒置, 我們都會考慮 ; 更重要的是, 我們會研究能否注入我們的租賃和資產強化專業能力, 以期進一步增值 最後, 由於我們深信我們必須控制承租戶組合以提供一個讓人覺得舒服的購物體驗, 因此不考慮超過 10% 店面已售的購物中心 誠如我們稍早前討論過的, 我們希望能將我們的經驗及經營方法注入我們的所有房地產, 好讓這些購物中心成為各自市場領導者 業者 房地產發展商 以及資產經理人, 如果您有不錯的機會, 都歡迎聯絡我們 我們願意與您共創商機

29 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I 27 單位信託持有者信件 ( 续 ) 年度報告 挑戰與前景 我們仍審慎樂觀面對全球經濟, 特別是大馬可能面對的衝擊, 以及最終的國內消費經濟 擺在眼前的挑戰, 將讓我們的投資組合曝露在謹慎的零售業環境裡 就馬六甲而言, 優先考慮的事項是 010 年 4 月完成翻新工程 繼續改良承租戶組合 以及重新啟動皇冠百利廣場的廣告促銷活動 我們檢閱過主要承租戶的零售業績, 並結論出我們必須更專注在推出更精明的活動以推動承租戶業績 我們已經有了草案, 包括更積極行銷 派發禮券 以及推動以零售業者為導向的活動 雖然馬六甲市場的競爭愈來愈激烈, 翻新工程所引來廣泛的回應, 以及特定目標行銷活動, 預計將持續購物者對皇冠百利廣場的商譽及消費者的利益 我們預計在 2010 年第二季後將再推介皇冠百利廣場 就首邦百利廣場而言, 雖然 2009 年經濟不明朗時專注鄰近社區的經營策略已被證明有效, 但我們還是會很小心的保護市佔率和消費者利益 梳邦再也市場出現的新發展和競爭, 可能會對首邦百利廣場造成短期負面衝擊 我們會引進 2008 年馬六甲經驗, 當時, 馬六甲皇冠百利廣場附近出現新競爭者 慶幸的是, 當市場穩定後, 長期潛力也改善不少, 因為馬六甲皇冠百利廣場四週已被定位為購物天堂 我們預計首邦百利廣場也會出現類似情況 時過境遷, 新加入者在市場裡穩定後, 這地區就會被定位成購物領域, 或許會成為梳邦再也的武吉免登 (Bukit Bintang) 目前而言, 我們會繼續創新, 以及改善首邦百利廣場在這區的領導地位 至於麻坡市場, 預計我們會繼續改善威德百利廣場的承租戶組合, 以及強化其它項目 我們的最優先考量是規劃翻新以改善威德百利廣場的設備及環境, 以及鞏固威德百利廣場在麻坡領先購物中心地位 目前還在規劃中, 我們希望很快就能公佈細節 我們將繼續觀察資金市場和後續發展 籌資前景轉好, 加上重點投資者 Frasers Centrepoint Trust 給予的堅實支持, 我們仍然看好今年內會適時適地的找到適合的房地產收購對象 聚焦 聚焦 再聚焦! 賀達有一套非常專注的經營方程式 賀達房地產信託基金擁有地點優異的房地產, 且非常專注在各自的市場 ; 我們的經營模式是聚焦在零售業者和他們的消費者身上, 我們的管理層則聚焦在我們房地產信託基金更大的目標上, 而且腳踏實地 以下是我們與利益關係者的關係表 : 快樂的購物者 優異的零售業績 快樂的零售業者 租金正成長 房地產信託基金表現正面 快樂的股東 我們的購物者會記得我們的購物中心, 我們的零售業者會尊敬我們的付出, 我們的單位持有人則因好成績而受惠 我們的單一目標依舊, 也就是將賀達經營成首選房東和零售經理人 我們的使命仍然是 創造大家都愛購物的好去處 (Creating The Places Where People Love To Shop) 鳴謝 我謹代表賀達資產管理董事局, 衷心感激所有員工, 謝謝他們忠於職守 回顧去年, 我以賀達員工為傲 儘管 2009 年充滿了不確定性, 但他們辛勤工作確保了賀達房地產信託基金再錄得另一個正面年 賀達仍然致力於為單位持有人提供防禦性及安全的投資 我去年的座右銘是 正面思考, 今年我則希望以 專心一致 與大家共勉 DATO JAAFAR BIN ABDUL HAMID 主席兼首席執行長 2010 年 2 月

30 28 I Hektar REIT I Annual Report 2009 Portfolio Performance PROPERTY PROFILES Hektar REIT s portfolio consists of three well-established destination centres Subang Parade, located in Selangor, Mahkota Parade, located in Bandar Melaka, Melaka and Wetex Parade & Classic Hotel, located in Muar, Johor. Net Lettable Area 1.1 million sq ft Occupancy 95.8% Peninsular Malaysia Market Catchment million residents Visitor Traffic 21.3 million Number of Tenancies Data current as at 31 December NLA Tenants only 2 MIRP Surveys (2007-8) Subang Jaya SELANGOR Melaka MELAKA Muar JOHOR Wetex Parade Subang Parade Mahkota Parade & Classic Hotel State Selangor Melaka Johor Title Freehold Leasehold (2101) Freehold Primary Trade Area 1 833,538 (within 350,000 (within 154,000(within 10km 15-mins drive) 15-mins drive) radius) NLA (Retail) 474,612 sq ft 461,067 sq ft 167,362 sq ft Tenants Occupancy % 93.6% 90.1% Visitor Traffic, FY million 7.9 million 5.6 million Purchase Price (RM) million million million Valuation (RM) million million million Gross Revenue FY2009 (RM) 43.1 million 34.5 million 10.0 million Net Property Income, (NPI) FY2009 (RM) 27.0 million 19.8 million 6.2 million 1 Malaysian Census, MIRP (Independent Research) 2 As at 31 December Diversified Portfolio For the financial year ended 31 December 2009, Subang Parade remained the largest contributor to the portfolio, providing 47.6% of the property valuation, 49.2% of revenue and 51.0% of net property income. Valuation by Property Gross Revenue by Property NPI by Property Mahkota Parade 35.7% Wetex Parade & Classic Hotel 16.7% Wetex Parade 9.0% Classic Hotel 2.4% Mahkota Parade 37.4% Wetex Parade & Classic Hotel 11.6% Mahkota Parade 39.4% Subang Parade 47.6% Subang Parade 49.2% Subang Parade 51.0%

31 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I 29 Portfolio Performance (Cont d) Portfolio Occupancy Overall portfolio occupancy remained at 95.8% as at 31 December Subang Parade s occupancy remained at 100% for the year while Mahkota Parade s occupancy stabilised at 93.6% with the ongoing refurbishment (commenced in July 2009). Wetex Parade s occupancy increased to 90.1% and continues to see selective tenant remixing. As at 31 As at 31 As at 31 As at 31 Property December December December December Subang Parade 100.0% 99.8% 99.9% 98.5% Mahkota Parade 93.6% 96.5% 93.9% 94.9% Wetex Parade 90.1% 83.1% - - Overall* 95.8% 95.8% 96.9% 96.7% * Approximate average, weighted by Net Lettable Area. Visitor Traffic Visitor traffic is measured by Footfall, a computerised video-based traffic monitoring system. Visits to Subang Parade increased by 1.8% in 2009, while Mahkota Parade visits decreased by 5.3%, in part due to the refurbishment exercise which commenced in July Overall, the portfolio received 21.3 million visits in Property No. of Visits No. of Visits No. of Visits No. of Visits Subang Parade 7.76 million 7.62 million 7.84 million 5.92 million % Change in Traffic 1.8% -2.8% 32.6% 4.0% Mahkota Parade 7.88 million 8.32 million 8.82 million 8.64 million % Change in Traffic -5.3% -5.7% 2.1% 7.8% Wetex Parade* 5.63 million 1.96 million Acquired in May 2008 Total 21.3 million 17.9 million 16.6 million 14.5 million * Footfall system for Wetex Parade was installed in September 2008 traffic figures for 2008 are for approximately 4 months only Portfolio Tenancy Mix The portfolio tenancy mix is dominated by department stores and supermarkets, which, led by Parkson and The Store, constitute approximately 35.0% of total portfolio NLA. In terms of rental income, the largest segment remains fashion and footwear, which contributed approximately 29.0% of monthly rental income for December By NLA By Rental Income* 4.5% 10.0% 10.3% 6.9% 1.0%1.3% 15.6% 15.3% 12.0% 7.5% 1.0% 3.0% 7.4% 4.6% 29.0% Fashion & Footwear Fashion & Beverage / Food Court Department Store / Supermarket Gifts / Books / Toys / Specialty Education / Services Leisure & Entertainment, Sport & Fitness 35.0% 15.2% 20.4% Electronics & IT Homewares & Furnishing Others * * Based on monthly rental income for December 2009.

32 30 I Hektar REIT I Annual Report 2009 Portfolio Performance (Cont d) Portfolio Top Ten Tenants The top ten tenants in the portfolio contributed approximately 27.2% of total monthly rental income, providing a diversified revenue base. After the top tenant, Parkson, which contributed approximately 11.1% of monthly rental income, no other tenant contributed more than 3.0% of total monthly rental income. % of Total % of Monthly Tenant Trade Sector NLA (sq ft) NLA Rental Income* 1 Parkson Department Store 254, % 11.1% 2 The Store Department Store 91, % 3.0% 3 Bata Fashion & Footwear 8, % 2.1% 4 McDonald s Food & Beverage 12, % 1.9% 5 The Reject Shop Fashion & Footwear 17, % 1.8% 6 World Of Sports Fashion & Footwear 10, % 1.5% 7 Ampang Superbowl Leisure & Entertainment 36, % 1.5% 8 Kenny Rogers Roasters Food & Beverage 7, % 1.5% 9 K.F.C Food & Beverage 10, % 1.4% 10 Celebrity Fitness Sport & Fitness 34, % 1.4% Top 10 Tenants 483, % 27.2% (By Monthly Rental Income) Other Tenants 619, % 72.8% Total 1,103, % 100.0% * Based on monthly rental income for December NLA = Net Lettable Area Portfolio Rental Reversions For the year ended 31 December 2009, the portfolio recorded 99 new and renewed tenancies, with an overall weighted average rental rate decrease of 5%. Subang Parade s rental reversions were flat for the year, with 10% of the NLA reverting with no rental rate increase. Wetex Parade recorded an overall 8% increase in rental rates, reflecting the efforts of the tenant remixing exercise in the past year. Mahkota Parade accounted for the decrease in rental reversions, recording an average 13% decrease for new or renewed tenants. The negative performance in Mahkota Parade is in part, due to the ongoing refurbishment efforts which commenced in July 2009 and is expected to be completed by April 2010, with a revitalised look for the shopping centre. Full Year 2009 No.of New % of % (12 months) Tenancies / NLA Total Increase / (Decrease) (Ended 31 Dec) Renewals (sq ft) NLA Over Previous Rent Rates Subang Parade 34 47,100 10% 0% Mahkota Parade 41 80,158 17% -13% Wetex Parade 24 18,525 11% 8% Total / Average* ,783 13% -5% *Approximate average, weighted by Net Lettable Area. Figures as of 31 December 2009.

33 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I 31 Portfolio Performance (Cont d) Portfolio Tenancy Expiry Profile For the year 2010, a total of approximately 93 tenancies will expire, representing 23% of NLA and 28% of monthly rental income as at 31 December This is in line with typical tenancy terms of 3 years, as per the current market practice in Malaysia. Portfolio No.of NLA of NLA of Tenancies For Year Ending Tenancies Tenancies Expiring as % of % of Total Monthly 31 December Renewals Expiring (sq ft) Total NLA Rental Income* FY ,873 23% 28% FY ,484 46% 39% FY ,579 25% 24% FY ,975 1% 2% * Based on monthly rental income for December % 40 39% 30 28% 23% 25% 24% FY 2010 FY 2011 FY 2012 FY % 2% By Total NLA By Monthly Income Portfolio Tenancy Provisions As at 31 December 2009, turnover rent provisions were present in approximately 91% of the tenancies in the portfolio, with Subang Parade and Mahkota Parade recording both in excess of 90%. Step-up rent provisions were present in approximately 75% of tenancies within the portfolio. As Wetex Parade was acquired in May 2008, its expiring tenancies are being revised to include Turnover Rent and Step-Up Rent provisions, as appropriate. A turnover rent provision allows for rent calculated as a proportion of annual turnover of the tenant s business. Turnover rent is paid to the REIT if it exceeds the base rent specified in the tenancy agreement on an annual basis. A step-up rent provision is specified in tenancy agreements as a pre-determined increase in rent at defined intervals during a tenancy agreement, typically each year and forms the base rent of any tenancy agreement. Hektar REIT Tenancy Provisions Turnover Rent Hektar REIT Tenancy Provisions Step - Up Rent % 99% 94% 80 75% 80% 79% % 60 62% Portfolio Average Subang Parade Mahkota Parade Wetex Parade 0 Portfolio Average Subang Parade Mahkota Parade Wetex Parade

34 32 I Hektar REIT I Annual Report 2009 Portfolio Performance (Cont d) Subang Parade Subang Parade was the first regional shopping centre in Selangor when it was opened in The centre is located in the heart of Subang Jaya s commercial district, a township which is 25 minutes drive from Kuala Lumpur. Subang Parade s positioning strategy is neighbourhoodfocused, with an emphasis on its primary trade area. This market focus provides the centre with a captive customer base, whose needs are met by a tenant mix offering value and convenience. Subang Parade s recent refurbishment was recognised by the International Council of Shopping Centers (ICSC) with a Silver Award for Development & Design at the recent 2008 ICSC Asia Pacific Awards. Subang Parade remains the leading shopping centre in Subang Jaya. Location No. 5 Jalan SS 16/1, Subang Jaya Petaling Jaya Selangor Title Freehold Primary Trade Area 833,538 within 15-mins drive time Gross Floor Area 1,146,456 sq ft Net Lettable Area 474,612 sq ft Car Park 1,313 Valuation RM343.0 million Tenants* 124 Key Tenants Parkson, HSL, Celebrity Fitness, MPH Occupancy 100.0% Visitor Traffic 7.8 million Year Opened 1988 Year Acquired by REIT 2006 Year Refurbished Data as of 31 December * Only NLA Lots

35 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I 33 Portfolio Performance (Cont d) Subang Parade s Top Ten Tenants % of Total % of Monthly Tenant Trade Sector NLA (sq ft) NLA Rental Income* 1 Parkson Department Store 140, % 13.0% 2 Celebrity Fitness Sport & Fitness 34, % 2.8% 3 Toys R Us Gifts/Books/Toys/Stationery 21, % 2.3% 4 Digital One Electronics & IT 21, % 2.2% 5 Bata Fashion & Footwear 4, % 2.2% 6 Kenny Rogers Roasters Food & Beverage 3, % 1.9% 7 World of Sports Fashion & Footwear 5, % 1.9% 8 TGI Friday s Food & Beverage 5, % 1.7% 9 The Reject Shop Fashion & Footwear 9, % 1.7% 10 Voir Fashion & Footwear 4, % 1.7% Top 10 Tenants 251, % 31.5% (By Monthly Rental Income) Other Tenants 223, % 68.5% Total 474, % 100.0% * Based on monthly rental income for December Subang Parade s Tenancy Mix By NLA By Rental Income* Fashion & Footwear 5.7% 9.4% 0.2% 10.0% 2.2% 14.8% 16.3% 12.6% 7.9% 1.9% 7.4% 4.2% 0.5% 28.3% Fashion & Beverage / Food Court Department Store / Supermarket Gifts / Books / Toys / Specialty Education / Services Leisure & Entertainment, Sport & Fitness 11.8% 29.6% 13.8% 23.3% Electronics & IT Homewares & Furnishing Others * Based on monthly rental income for December Subang Parade s Expiry Profile Subang Parade NLA of Tenancies NLA of Tenancies For Year Ending No. of Tenancies Expiring Expiring as % of % of Total Monthly 31 December Expiring (sq ft) Total NLA Rental Income* FY ,817 28% 26% FY ,949 31% 30% FY ,927 41% 29% FY ,935 1% 3% * Based on monthly rental income for December % 30 28% 26% 31% 30% 29% FY 2010 FY 2011 FY 2012 FY % 3% By Total NLA By Monthly Rental Income

36 34 I Hektar REIT I Annual Report 2009 Portfolio Performance (Cont d) Mahkota Parade Mahkota Parade was the first regional shopping centre located in the commercial and tourist centre situated in the heart of Melaka town. Mahkota Parade is positioned as the premier shopping centre for the Melaka region. The centre serves as the one-stop destination centre, featuring a wide array of dining, fashion and entertainment offerings. The centre continues to serve as a key venue for major community events and exhibitions. Mahkota Parade is undergoing a full refurbishment, which commenced in July 2009 and is expected to be completed by April The revitalised shopping centre will improve the overall shopping ambience for customers. The refurbishment is part of Hektar s continuing efforts to invest in the Melaka market and retain Mahkota Parade s status as the leading shopping centre in the state. Location No. 1 Jalan Merdeka Bandar Melaka Melaka Title Leasehold (Until 2101) Primary Trade Area 350,000 within 15-mins drive time Gross Floor Area 1,008,669 sq ft Net Lettable Area 461,067 sq ft Car Park 1,000** Valuation RM257.0 million Tenants 109* Key Tenants Parkson, Ampang Superbowl, Giant Occupancy 93.6% Visitor Traffic 7.9 million Year Opened 1994 Year Acquired by REIT 2006 Year Refurbished Due to Complete in April 2010 Data as of 31 December * Only NLA Lots ** Car park currently under refurbishment

37 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I 35 Portfolio Performance (Cont d) Mahkota Parade s Top Ten Tenants % of Total % of Monthly Tenant Trade Sector NLA (sq ft) NLA Rental Income* 1 Parkson Department Store 113, % 11.6% 2 Ampang Superbowl Leisure & Entertainment 36, % 3.7% 3 KFC Food & Beverage 5, % 2.7% 4 The Reject Shop Fashion & Footwear 8, % 2.4% 5 McDonald s Food & Beverage 5, % 2.2% 6 Bata Fashion & Footwear 2, % 2.2% 7 F.O.S Fashion & Footwear 5, % 1.7% 8 Subzero Jeans Fashion & Footwear 2, % 1.5% 9 Sibaraku Food & Beverage 9, % 1.5% 10 World of Sports Fashion & Footwear 5, % 1.4% Top 10 Tenants 195, % 31.0% (By Monthly Rental Income) Other Tenants 265, % 69.0% Total 461, % 100.0% * Based on monthly rental income for December Mahkota Parade s Tenancy Mix By NLA By Rental Income* 15.0% 4.7% 0.1% 17.2% 9.3 % 4.3% 0.3% 3.9% 4.6% 8.7 % 30.3% Fashion & Footwear Fashion & Beverage / Food Court Department Store / Supermarket Gifts / Books / Toys / Specialty 7.7% 17.3% 31.9% * Based on monthly rental income for December % 13.8 % 20.2% Education / Services Leisure & Entertainment, Sport & Fitness Electronics & IT Homewares & Furnishing Others Mahkota Parade s Expiry Profile Mahkota Parade NLA of Tenancies NLA of Tenancies For Year Ending No. of Tenancies Expiring Expiring as % of % of Total Monthly 31 December Expiring (sq ft) Total NLA Rental Income* FY ,328 25% 34% FY ,677 57% 47% FY ,015 11% 14% FY ,040 0% 0% * Based on monthly rental income for December % 50 47% 40 34% 30 25% % 14% 0 FY 2010 FY 2011 FY 2012 FY % 0% By Total NLA By Monthly Rental Income

38 36 I Hektar REIT I Annual Report 2009 Portfolio Performance (Cont d) Wetex Parade & Classic Hotel Wetex Parade and Classic Hotel is an integrated retail development located within the commercial district of Muar, Johor. Wetex Parade is the leading departmentstore anchored shopping centre in town and serves as the premier retail destination for the Muar area. Classic Hotel, which is partially situated on top of Wetex Parade is one of the leading hotels in Muar and is fully managed by Wetex Realty Sdn Bhd, which has been operating the hotel over the past decade. Hektar REIT has secured a 10-year net lease with the operator as part of the terms of the acquisition in May Wetex Parade is undergoing selective tenant remixing as part of Hektar s efforts to continuously improve the centre offerings to maintain Wetex Parade as the leading shopping centre in Muar. Location 69 Jalan Ali, Off Jalan Sulaiman Muar, Johor Title Freehold Primary Trade Area 154,000 within 10km radius Gross Floor Area 281,590 sq ft Net Lettable Area 167,362 sq ft Car Park 177 Valuation RM120.0 million Tenants 82* Key Tenants The Store, McDonald s, Watson s Occupancy 90.1% Visitor Traffic 5.6 million Year Opened 1996 Year Acquired by REIT 2008 Year Refurbished Currently in Phases Data as of 31 December * Only NLA Lots

39 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I 37 Portfolio Performance (Cont d) Wetex Parade s Top Ten Tenants % of Total % of Monthly Tenant Trade Sector NLA (sq ft) NLA Rental Income* 1 The Store Department Store 91, % 29.1% 2 Watsons Others 2, % 4.6% 3 Silverho Gifts/Books/Toys/Stationery 3, % 3.1% 4 McDonald s Food & Beverage 2, % 2.8% 5 AD Jeans Fashion & Footwear 2, % 2.5% 6 Tangjongmas Bookstore Gifts/Books/Toys/Stationery 4, % 2.3% 7 Bata Fashion & Footwear 1, % 1.8% 8 Pao Sing Others 1, % 1.7% 9 Fitness Concept Others 1, % 1.6% 10 B.Workshop Fashion Fashion & Footwear 1, % 1.5% Top 10 Tenants 109, % 51.0% (By Monthly Rental Income) Other Tenants 57, % 49.0% Total 167, % 100.0% * Based on monthly rental income for December Wetex Parade s Tenancy Mix By NLA 0.7% 3.2% 4.1% 10.9% 13.7% 19.1% By Rental Income* 1.1% 5.7% 11.0% Fashion & Footwear Fashion & Beverage / Food Court Department Store / Supermarket Gifts / Books / Toys / Specialty 27.0% Education / Services 6.7% Leisure & Entertainment, Sport & Fitness Electronics & IT 31.9% 28.9% 7.2% Homewares & Furnishing * Based on monthly rental income for December Others Wetex Parade s Expiry Profile Wetex Parade No.of NLA of NLA of Tenancies For Year Ending Tenancies Tenancies Expiring as % of % of Total Monthly 31 December Expiring Expiring (sq ft) Total NLA Rental Income* FY ,728 8% 13% FY ,858 62% 51% FY ,637 18% 39% FY % 0% * Based on monthly rental income for December % 50 51% 40 39% % 13% 10 8% 0 0% 0% FY 2010 FY 2011 FY 2012 FY 2013 By Total NLA By Monthly Rental Income

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41 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I 39 Corporate Social Responsibility Hektar Asset Management is committed to manage its business responsibly in the interests of its unitholders, customers and stakeholders. Hektar strives to pursue sustainable business practices which positively impact the business, community and the environment. Hektar REIT s portfolio is situated in three markets throughout Malaysia: Subang Jaya in Selangor, Bandar Melaka in Melaka and Muar in Johor. The shopping centres catchment addresses over 1.3 million residents within its primary trade area (living within 15 minutes drive time or within a 10km radius). In 2009, the portfolio received over 21.3 million visits, averaging over 58,000 a day. In total, more than 2,500 employees (full and part-time) work at the various outlets in Hektar REIT s properties. The shopping centres are thus a focal point of the community in that they touch the lives of many people who come to work, shop, dine, rest or relax with friends and families. Appropriately, the tagline for Hektar s malls is Its Our Place! Hektar REIT s shopping centres are not just centres of activities, but centres of communities. The centres focus on the specific interests of the community. Throughout 2009, each centre s management team collaborated with various government agencies, grassroot organisations and schools to organise civic events. Various charitable efforts, educational and social activities were held at the centres during the year. At each Hektar centre, contributions may take various forms, such as event sponsorship, provision of exhibition space, employee time and promotional efforts. One of Hektar s annual programmes includes Shop For Your School (SFYS), which has been expanded to all three shopping centres. SFYS focuses on schools surrounding the shopping centre and includes a contest campaign that invites students and their families to shop at their local Parade and nominate their respective schools at the guest services counter. The schools with the highest nominated sales receipts win a variety of prizes, most of which are sponsored by retailers in the shopping centres. Since 2006, over RM500,000 in sponsored prizes have been awarded to schools in Subang Jaya, Melaka and Muar. Other beneficiaries of Hektar REIT s promotions include diverse associations such as the Calvary Care Home, Sek Kia Eenh Cancer Fund, Rumah Jalinan Kasih, Pertubuhan Kebajikan Anak-anak Yatim Islam Muar and others in the respective communities in Subang Jaya, Melaka and Muar. Last year, our advertising and promotional campaigns focused on community issues won an award at the 2009 Asia Shopping Centre Awards by the International Council of Shopping Centers. The award was conferred on Mahkota Parade in partnership with Malaysian Volunteers Fire and Rescue Association. The Fired Up About Safety programme attracted over 280 children and RM14,000 in sponsorship to increase awareness about fire safety. In Subang Parade, we promoted a unique campaign called We Ate For Charity which featured a durian eating festival at Subang Parade, involving 120 volunteers, 4 tonnes of durians and a total of RM33,000 raised for the Children s Wish Society. Shop For Your School Winners - July 2009 Silver Award at Asia Shopping Centre Awards 2009 Fired Up About Safety Programme at Mahkota Parade

42 40 I Hektar REIT I Annual Report 2009 Shopper Testimonials My family always chooses Wetex Parade as our place for shopping as it provides us with a variety of goods and services that fulfill our needs. It is where we find leisure and pleasure. Seri Saerah Bt Mahpal & Family I love Wetex Parade as I ve been coming here since young and I can get everything I want here. It is complemented by the impressive decorations according to the various festive seasons that create the ambience and excitement of the season. Ong Chwee Hsia & Friend We love Mahkota Parade because there are so many choices of food and other offerings to choose from. The atmosphere is clean and pleasant and makes our shopping experience very comfortable. Shopping here is also very rewarding as there s lots of good gift redemptions when I shop and activities for my kids to participate in. Mohd Faisal Md Isa & Family Subang Parade offers a peaceful shopping experience where you can also find enjoyable dining places. It is a very convenient shopping mall with ample parking and easy access to the commuter station. Rohana Yahya & Friends My husband and I regard Mahkota Parade as one of our favourite, regular and convenient shopping destinations as it is located in the part of town we like to hang out. Besides, we are able to shop for most of the things we need and have a meal there as well. It is quiet and clean and I can get all the necessities at Subang Parade. The decor is nice and it is convenient for us to come here. Simon Tan & Family Chee Feay Fang & Family Over the past decade or so, my family and I have been loyal patrons of Mahkota Parade. Among the many reasons that contribute towards this, is its unique central location within the heart of Melaka town. The years since the opening of the Parade has seen many other shopping complexes emerge in the state. However, we find ourselves still favouring Mahkota Parade over any other. Mahkota Parade suffices to meet all our family s needs. As a young adult, I together with my friends will opt for a fashionable, up-todate and trendy shopping environment. Most of the outlets at Mahkota Parade have the latest fashion tastes. Mahkota Parade has it all under one roof from the formal clothing to the casual preferences of young adults and teenagers! Subhanat Hawa Bt Mohd Asallam & Friend Selvakumar Subramaniam & Family

43 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I 41 Retailer Testimonials Guardian is proud to be associated with Hektar due to the responsiveness of their management team and their ability to adapt to future trends. Loi Liang Tok, COO, Guardian Pharmacy [Guardian at Mahkota Parade] Hektar has been an outstanding partner to work with - always providing best of class service in managing the shopping mall. A big thank you to Hektar s management team for their dedication in making Subang Parade a shopping destination of choice for many living in Subang Jaya and surrounding areas. Toh Peng Khoon, COO, Parkson Corporation Sdn Bhd [Parkson at Subang Parade] We are truly honoured to be given the opportunity to open our first outlet at the main entrance of Wetex Parade. The management has been very remarkable in lending their full support and responding quickly to our needs. Activities lined up during festive seasons successfully increased traffic flow and thus increase our sales. We look forward to another year of successful partnership with Hektar. Jocelyn Chua, Manager, Yankee Café Sdn Bhd [Elephant Bean at Wetex Parade] Rightway Electronic has been a tenant in Wetex Parade for the past 6 years. Ever since Hektar took control, we saw an increase in traffic flow and sales. The management team is very supportive and has always been prompt to take action. The opening of Sony Centre at Wetex Parade would not have been such a success without the management s support. We are proud to be part of Wetex Parade. Doh Kuan Chiang, Manager, Rightway Electronic Enterprise [Sony Centre at Wetex Parade] It s been a great honour and pleasure to be associated with the Hektar management with their great team supporting us for these past few years. The mall has made great moves by doing some refurbishment in order to enhance their outlook and we are looking forward to work more closely together in the near future. Richard Goh Kim Wah, Retail Manager, MPH Bookstores Sdn Bhd [MPH at Mahkota Parade] The layout of Subang Parade, range of stores and concessions provide great shopping opportunities which gives confidence on the ability to drive regular shopper traffic. Regular customers play an important role in our business growth, especially in the trade of optical and eyewear. Yeoh Teong Sun, General Manager, Pro Eyes Optics [Pro Eyes Studio at Subang Parade] Caring Pharmacy is proud to be part of Subang Parade and we enjoy a good working relationship with the management team. They have always been professional in their approach and have been sensitive towards the needs of tenants as well as the patrons. All these positive attributes have definitely brought improvements to the retail environment of the mall and we have benefitted from the higher traffic flow to the mall. A job well done to the management team. Phillip Gooi, Director, Caring Pharmacy [Caring Pharmacy at Subang Parade] We are delighted to be one of the tenants of Wetex Parade. We appreciate the kind support and assistance from the management and marketing team. We are confident that there will be more exciting activities and events to bring additional flair and flavour in attracting customers both near and far to the shopping mall in the near future. Lim Mee Ling, Executive Director, Healthy World Lifestyle Sdn Bhd [Ogawa at Wetex Parade]

44 42 I Hektar REIT I Annual Report 2009 Corporate Organisation Unitholders Unitholders Investment in REIT Dividends and other distributions REIT Manager REIT Manager Hektar Asset Hektar Asset Management Management Sdn Bhd Sdn Bhd Management services Management fees HEKTAR HEKTAR R R E E I T I T Acts on behalf of Unitholders Trustee fees Trustee Trustee AmTrustee AmTrustee Bhd Bhd Ownership of assets Net Property Income Portfolio Portfolio Property management fees Property management services Property Manager Property Manager Izrin & Tan Properties Izrin & Tan Properties Sdn Bhd Sdn Bhd

45 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I 43 Corporate Directory MANAGER Hektar Asset Management Sdn Bhd (Company No T) Manager s Principal Place of Business Block C-0-5, Plaza Damas No. 60, Jalan Sri Hartamas 1 Sri Hartamas Kuala Lumpur Tel : Fax : Web : Manager s Registered Office Unit 419, Block A Kelana Business Centre No. 97, Jalan SS 7/2 Kelana Jaya Petaling Jaya Selangor BOARD OF DIRECTORS OF THE MANAGER Dato Jaafar Bin Abdul Hamid Chairman and Chief Executive Officer Zalila Binti Mohd Toon Executive Director and Chief Financial Officer Lim Ee Seng Non-Executive Director Christopher Tang Kok Kai Non-Executive Director Shahril Kassim Non-Executive Director Dato Syed Md Amin Aljeffri Independent Non-Executive Director Dato Robert Lim Git Hooi Independent Non-Executive Director Philip Eng Heng Nee Independent Non-Executive Director Jack Lam Juck Ngai Alternate Director to Christopher Tang JOINT COMPANY SECRETARIES OF THE MANAGER Muhammad Hafidz Bin Nuruddin (MAICSA ) Lim Seck Wah (MAICSA ) TRUSTEE AmTrustee Berhad (Company No V) (a member of AmInvestment Group Berhad) 17th Floor, Bangunan AmBank Group 55, Jalan Raja Chulan Kuala Lumpur PROPERTY MANAGER Izrin & Tan Properties Sdn Bhd (Company No K) 1-1, Jalan 5/76B Desa Pandan Kuala Lumpur PRINCIPAL BANKER OF THE FUND Malayan Banking Berhad (Company No K) Menara Maybank 100, Jalan Tun Perak Kuala Lumpur AUDITOR (EXTERNAL) SJ Grant Thornton (AF : 0737) Level 11, Faber Imperial Court Jalan Sultan Ismail P.O. Box Kuala Lumpur AUDITOR (INTERNAL) KPMG Business Advisory Sdn Bhd Level 10, KPMG Tower 8 First Avenue, Bandar Utama Petaling Jaya Selangor TAX AGENT SJ Grant Thornton (AF : 0737) Level 11, Faber Imperial Court Jalan Sultan Ismail P.O. Box Kuala Lumpur REGISTRAR Mega Corporate Services Sdn Bhd (Company No H) Level 15-2, Faber Imperial Court Jalan Sultan Ismail P.O. Box Kuala Lumpur STOCK EXCHANGE LISTING BURSA MALAYSIA SECURITIES BERHAD MAIN MARKET Short Name: HEKTAR Stock Code: 5121

46 44 I Hektar REIT I Annual Report 2009 The Board of Directors Dato Jaafar bin Abdul Hamid Chairman and Chief Executive Officer Dato Jaafar is the founder and principal shareholder of the Hektar Group of companies and provides leadership for the overall strategic direction of the group. Previously, he was the Managing Director of United Engineers Malaysia Berhad ( UEM ), a public-listed corporation listed on the Main Board of Bursa Malaysia Securities Berhad. During his tenure at the helm of the UEM group of companies, he was responsible for undertaking numerous privatisation projects including the North-South Expressway (Plus), the Malaysia- Singapore Second Crossing (Linkedua), Integrated Schedule Waste Management (Kualiti Alam) and the National Sports Complex. After his UEM stint, he assumed the chairmanship of an international engineering and construction group, Costain Group PLC until 2000 and was involved in its re-listing exercise on the London Stock Exchange. He holds a Bachelor of Science (Hons) in Engineering Production from the University of Birmingham, United Kingdom. Zalila binti Mohd Toon Executive Director & Chief Financial Officer Zalila is responsible for the financial matters of Hektar REIT and the overall financial performance. She was instrumental in listing Hektar REIT. Her current portfolio in Hektar Asset Management includes Strategy, Finance, Legal, Investor Relations and Corporate Affairs. Prior to joining the Hektar Group in 2004, she was with the UEM Group for 23 years, out of which 20 years was with the Cement Industries of Malaysia Berhad. Her primary achievements include spearheading various programmes which include the issuance of private debt securities and the acquisition of Negri Sembilan Cement Industries Sdn Bhd. Subsequently, she was also involved in the reverse take-over exercise of Park May Berhad before leaving for a brief stint at UEM Environment Sdn Bhd, a holding company of Kualiti Alam Sdn Bhd. Zalila holds a Master of Business Administration (Finance) from the University of Nottingham. She is also a member of the Malaysian Institute of Corporate Governance. Lim Ee Seng Non-Executive Director Ee Seng, PBM, is the Group Chief Executive Officer and a director of Frasers Centrepoint Limited ( FCL ), part of the Fraser and Neave Group headquartered in Singapore. He is also Chairman of Frasers Property (China) Limited, listed on the Hong Kong Stock Exchange. He joined FCL in October 2004 as its Chief Executive Officer and is responsible for the management and performance of the FCL group of companies entire portfolio of real estate business both in Singapore and overseas. Ee Seng has more than 30 years of experience in the real estate industry. From 1996 to 2004, he was the Managing Director of MCL Land Limited. From 1989 to 1996, he was the General Manager of the property division of First Capital Corporation Ltd. Ee Seng holds a Masters degree in Project Management and a Bachelors degree in Civil Engineering from the National University of Singapore. His other appointments include: a Board member of the Building & Construction Authority of Singapore (from 2005 to 2009), a council member of the Singapore Chinese Chamber of Commerce & Industry (from 2000 to 2004), the current 2nd Vice President of the Real Estate Development Association of Singapore and a Fellow of the Institute of Directors, Singapore.

47 Highlights I Editorial I Organisation I Corporate Review & Disclosure I Financials I 45 The Board of Directors (Cont d) Christopher Tang Kok Kai Non-Executive Director Christopher is the Chief Executive Officer of Frasers Centrepoint Commercial, the FCL division which is responsible for commercial property investment, development and management, fund and asset management. Christopher has over 20 years of experience in asset management, investment management, marketing and operations in the real estate and manufacturing industries. Prior to joining the Fraser & Neave Group in 2001, he held senior positions with DBS Bank, DBS Land and British Petroleum. He is also a director of Frasers Centrepoint Asset Management (Commercial) Ltd, the manager of Frasers Commercial Trust. Christopher holds a Masters in Business Administration and a Bachelor of Science Degree from the National University of Singapore. Shahril bin Kassim Non-Executive Director Shahril has had over twenty years of experience with IBM Malaysia and Mesiniaga Bhd in various capacities such as sales, marketing, management and executive education for the government sector. During the course of his career, he has also been involved in organising, designing and facilitating executive strategy development for organizations to align their business strategy with Information and Communication Technology ( ICT ). He left IBM in 1999 and was a consultant to HeiTech Padu Berhad, a local ICT solutions provider until He holds a degree in Electronics Engineering from Salford University, United Kingdom. Dato Syed Amin Aljeffri Independent Non-Executive Director Dato Syed s extensive work experience includes stints with Esso in Malaysia and the United States of America, Touche Ross Canada and his own public accounting and consulting practices, AljeffriDean. He also sits on the board of LBI Capital Berhad, Seloga Holdings Berhad, Golden Horse Palace Berhad, RAM Holdings Berhad, Asas Serba Sdn Bhd, and several other private limited companies. He is an Economics graduate from the University of Malaya, a Chartered Accountant with the Malaysian Institute of Accountants and the Canadian Institute of Chartered Accountants, a Certified Public Accountant with the Malaysian Institute of Certified Public Accountants and the Institute of Certified Public Accountants of Singapore, a Fellow Certified Practising Accountant with Certified Practising Accountant Australia, a Fellow Chartered Certified Accountants with the Association of Chartered Certified Accountants UK, a Certified Financial Planner with the Financial Planning Association of Malaysia and a Fellow of the Malaysian Institute of Taxation. He is a member of the Board of the Islamic Science University of Malaysia, owned by the Malaysian Government. He is currently the President of the Kuala Lumpur Malay Chamber of Commerce and formerly the Chairman of the ASEAN Business Advisory Council. He is also a Council Member of the Malaysia- China Business Council and the East Asia Business Council. Formerly, he is with the Board of the Small and Medium Industries Development Corporation ( SMIDEC ). He is the Malaysian Honorary Council for the Federal Democratic Republic of Ethiopia. He was formerly the Secretary General of the ASEAN Chamber of Commerce and Industry.

48 46 I Hektar REIT I Annual Report 2009 The Board of Directors (Cont d) Dato Robert Lim Git Hooi Independent Non-Executive Director Dato Lim was previously a partner in Ernst & Young and is also an Independent Non-Executive Director of Gopeng Berhad, YNH Property Berhad and Seloga Holdings Berhad, all of which are listed on Bursa Malaysia Securities Berhad. He also holds directorship in several other private limited companies. He is a member of the Malaysian Institute of Certified Public Accountants and the Malaysian Institute of Accountants. Philip Eng Heng Nee Independent Non-Executive Director Philip Eng was appointed Independent Chairman of Frasers Centrepoint Asset Management Ltd in April 2009 and have been a Board member since April He is Non-Executive Chairman of mdr Limited and Deputy Chairman of MCL Land Limited. He is Director of several local and regional companies. Philip is also Singapore s Ambassador to Greece and High Commissioner to Cyprus. He spent 23 years with the Jardine Cycle & Carriage Group before retiring in February 2005 as Group Managing Director. Philip graduated from the University of New South Wales with a Bachelor of Commerce in Accountancy and is an Associate Member of the Institute of Chartered Accountants in Australia. Jack Lam Juck Ngai Alternate Director to Christopher Tang Kok Kai Jack Lam is the Deputy Chief Executive Officer and Head, Investment of Frasers Centrepoint Asset Management Ltd, which manages Frasers Centrepoint Trust listed in Singapore. Prior to joining Frasers Centrepoint, he was with CapitaLand Limited from 2001 to Jack has over 15 years of experience in the Singapore and regional property markets, spanning a variety of roles in investment, asset management, advisory and research. He has also been involved in REIT management since the industry s inception in Singapore in Jack holds a Master of Business Administration in Finance (with Distinction) from the University of Leeds, UK, and a Bachelor Degree in Engineering (Civil) from the National University of Singapore.