Prospectus Dated 5 November 2002 Ascendas Real Estate Investment Trust Ascendas Real Estate Investment Trust (a unit trust constituted on 9 October 2002 under the laws of the Republic of Singapore) OFFER FOR SUBSCRIPTION BY Ascendas-MGM Funds Management Limited (a joint venture between Ascendas Investment Pte Ltd and Macquarie Goodman Industrial Management Pty Ltd) 272,500,000 Units (as defined below) Offering Price Range: S$0.83 to S$0.88 per Unit (subject to the Volume Discount (as defined below)) Ascendas-MGM Funds Management Limited, as manager (the Manager ) of the Ascendas Real Estate Investment Trust ( A-REIT ), is making an offering (the Offering ) of 272,500,000 units representing undivided interests in A-REIT ( Units ) for subscription at the Offering Price (as defined below) subject to the Volume Discount (if applicable). The Offering consists of (i) an international placement to investors, including institutional and other investors in Singapore (the Placement Tranche ); and (ii) an offering to the public in Singapore (the Public Offer ), including 1.6 million Units reserved for subscription by the directors of JTC Corporation and the directors and employees of the Ascendas Group (as defined herein) as well as the MGM Group (as defined herein). The minimum size of the Public Offer will be 20.0 million Units. It is currently expected that the issue price of the Units (the Offering Price ) will be between S$0.83 and S$0.88 for each Unit. Investors who successfully subscribe for an aggregate of (i) at least 20.0 million Units but less than 35.0 million Units; or (ii) at least 35.0 million Units, in a single application, as principal, will receive a discount of 1.0% and 1.5%, respectively, to the Offering Price (the Volume Discount ). The Offering is fully underwritten by J.P. Morgan (S.E.A.) Limited ( JPMorgan ), Salomon Smith Barney Singapore Pte Ltd ( Salomon Smith Barney ) and The Development Bank of Singapore Ltd ( DBS Bank and, together with JPMorgan and Salomon Smith Barney, the Underwriters ) at the Offering Price. Separate from the Offering, Ascendas Land (Singapore) Pte Ltd and Macquarie Goodman Industrial Management Pty Limited (together, the Sponsors ) have entered into subscription agreements with the Manager to subscribe for an aggregate of 192,500,000 Units at the Offering Price, subject to the Manager, the Underwriters and certain other persons entering into the Underwriting Agreement in connection with the Offering (the Underwriting Agreement ) and the Underwriting Agreement not having been terminated pursuant to the terms thereof on or prior to the close of the Offering. Under its subscription agreement with the Manager, Macquarie Goodman Industrial Management Pty Limited has nominated its wholly owned subsidiary incorporated in Singapore, MGM Singapore Pte. Ltd., to hold the Units to be subscribed by it. Also separate from the Offering, the Cornerstone Investors (as defined herein) have entered into subscription agreements with the Manager to subscribe for an aggregate of 80,000,000 Units (the Cornerstone Units ), subject to the Manager, the Underwriters and certain other persons entering into the Underwriting Agreement and the Underwriting Agreement not having been terminated pursuant to the terms thereof on or prior to the close of the Offering, at a price per Unit equivalent to the Offering Price less a discount of 1.0%. The Cornerstone Investors have been granted these discounts as each of them has agreed to subscribe for 20.0 million Units. A-REIT was, on 9 October 2002, declared an authorised unit trust scheme under the Trustees Act, Chapter 337 of Singapore, thus qualifying as an investment permitted to be made by trustees and certain other persons with similar investment powers in Singapore. Investors who are members of the Central Provident Fund ( CPF ) in Singapore may use their CPF Ordinary Account savings to subscribe for Units as an investment included under the CPF Investment Scheme Ordinary Account. CPF members are allowed to invest up to 35% of the Investible Savings (as defined herein) in their CPF Ordinary Accounts to subscribe for Units. Prior to the Offering, there has been no market for the Units. The offer of Units under this Prospectus will be by way of an initial public offering in Singapore. Application has been made to Singapore Exchange Securities Trading Limited ( SGX-ST ) for permission to list on the Main Board of the SGX-ST all the Units in A-REIT and all the Units which will be issued to the Manager from time to time in part payment of the Manager s management fees. Such permission will be granted when A-REIT has been admitted to the Official List of the SGX-ST (the Listing Date ). Acceptance of applications for Units pursuant to the Public Offer will be conditional upon issue of the Units and upon permission being granted to list the Units. In the event that such permission is not granted, application monies will be returned in full, at each investor's own risk, without interest or any share of revenue or other benefit arising therefrom, and without any right or claim against A-REIT, the Manager, the Underwriters or the Trustee (as defined herein). A-REIT has received a letter of eligibility from the SGX-ST for the listing and quotation of the Units on the Main Board of the SGX-ST. A-REIT s eligibility to list on the Main Board of the SGX-ST does not indicate the merits of the offering, A-REIT, the Manager or the Units. The SGX-ST assumes no responsibility for the correctness of any statements or opinions made or reports contained in this Prospectus. Admission to the Official List of the SGX- ST is not to be taken as an indication of the merits of the Offering, A-REIT, the Manager or the Units. The collective investment scheme offered in this Prospectus is an authorised scheme under the Securities and Futures Act 2001 (Act 42 of 2001). A copy of this Prospectus has been lodged with, and registered by, the Monetary Authority of Singapore (the MAS ). The MAS assumes no responsibility for the contents of this Prospectus. Registration of this Prospectus by the MAS does not imply that the Securities and Futures Act 2001 (Act 42 of 2001) or any other legal or regulatory requirements have been complied with. The MAS has not, in any way, considered the investment merits of the collective investment scheme. The date of registration of this Prospectus with the MAS is 5 November 2002. This Prospectus will expire on 4 November 2003 (12 months after the date of the registration). See Risk Factors on page 36 for a discussion of certain factors to be considered in connection with an investment in the Units. None of the Manager, Bermuda Trust (Singapore) Limited (the Trustee ), the Sponsors or the Underwriters guarantees the performance of A-REIT, the repayment of capital or the payment of a particular return on the Units. Investors applying for Units by way of Application Forms or Electronic Applications (both as referred to in Appendix IV of this Prospectus, Terms, Conditions and Procedures for Application and Acceptance for the Units in Singapore) will pay the maximum subscription price for each Unit (S$0.88 per Unit) on application, subject to a refund of the full amount or, as the case may be, the balance of the applications monies (in each case without interest or any share of revenue or other benefit arising therefrom), where (i) an application is rejected or accepted in part only, or (ii) if the Offering does not proceed for any reason, or (iii) if the Offering Price is less than the maximum subscription price for each Unit, or (iv) if the investor is eligible for the Volume Discount. The Offering Price of between S$0.83 and S$0.88 per Unit will be determined following a book-building process by agreement between the Underwriters and the Manager on a date currently expected to be 13 November 2002 (the Price Determination Date ), which date is subject to change. Notice of the Offering Price will be published in one or more major Singapore newspapers such as The Straits Times, The Business Times and Lianhe Zaobao not more than two calendar days after the Price Determination Date. JPMorgan, Salomon Smith Barney and DBS Bank have been granted an over-allotment option (the Over-allotment Option ) by the Sponsors, exercisable by JPMorgan (the Stabilising Manager ), in consultation with the other two Underwriters, in full or in part within 30 days after the Listing Date, to purchase from the Sponsors up to an aggregate of 40,875,000 Units at the Offering Price, solely to cover the over-allotment of Units (if any). The total number of outstanding Units immediately after the completion of the Offering will be 545,000,000 Units. The exercise of the Over-allotment Option will not increase this total number of outstanding Units immediately after the completion of the Offering. The Units are being offered and sold outside the United States in reliance on Regulation S under the U.S. Securities Act of 1933 (the Securities Act ). The Units have not been and will not be registered under the Securities Act and, subject to certain exceptions, may not be offered or sold within the United States. Joint Financial Advisers Joint Global Coordinators, Joint Underwriters and Joint Bookrunners
Ascendas Real Estate Investment Trust Experienced and professional management The Manager believes that A-REIT s Unitholders will benefit from the combined strengths of Ascendas experience in the Singapore business park and industrial property market and Macquarie Goodman Management Limited s ( MGM ) experience in business and industrial park funds management and property services. Ascendas, an indirect, wholly owned subsidiary of JTC Corporation ( JTC ), has been developing, managing and marketing properties in Singapore for over 12 years. Currently, Ascendas Pte Ltd, the parent company of Ascendas, and its group of companies have a property portfolio of approximately S$1.8 billion of assets (including the Properties) with approximately 1.2 million sq m of lettable area in Singapore, China, India and the Philippines. MGM is the fund and property manager for Australia's largest listed industrial property trust, Macquarie Goodman Industrial Trust ( MGI ). MGI currently owns a portfolio of 56 properties valued at approximately S$1.7 billion. MGI was rated first out of 49 trusts in Australia and New Zealand based on selected financial, investment and non-financial criteria in the BDO Listed Property Trust Survey for 2002, a survey conducted by BDO Chartered Accountants & Advisors, an independent advisory and chartered accountancy firm based in Australia (see The Manager and the Sponsors ). See Experienced and professional management on page 4 of this Prospectus
This overview section is qualified in its entirety by, and should be read in conjunction with, the full text of this Prospectus. Words and expressions not defined herein have the same meaning as in the main body of this Prospectus, unless the context requires otherwise. Key Investment Highlights A-REIT will own a diversified portfolio of eight properties comprising business park (including science park), light industrial and built-to-suit properties (the Properties ), with an aggregate Net Lettable Area (as at 30 June 2002) of approximately 245,179 sq m. As at 30 June 2002, the Properties had over 300 tenants and, for the three months ended 30 June 2002, the Properties had an average occupancy rate of approximately 84.6%. The Manager believes that an investment in A-REIT will offer Unitholders the following benefits: stable distributions; experienced and professional management; exposure to a diversified property portfolio of income-producing business park (including science park), light industrial and built-to-suit properties; investment in a property portfolio at a discount to its appraised value; opportunities for future capital growth through active property and portfolio management and through the acquisition of additional properties; Manager motivated to maximise distributions per Unit through a performance-based management fee structure; substantial alignment of the Sponsors interests with the interests of Unitholders through a significant investment in A-REIT by the Sponsors; conservative capital structure; and 100.0% distribution of taxable income, free of tax deducted at source for qualifying Singapore tax residents. See A-REIT Overview and Key Investment Highlights on page 2 and page 3 of this Prospectus, respectively. Investing in A-REIT involves risks. Prospective investors should read this Prospectus in its entirety and, in particular, the section headed Risk Factors. The Properties have a diverse mix of domestic and international tenants (over 300 as at 30 June 2002) operating in a variety of industries, as shown below. Tenant Industry Sectors by Net Lettable Area (1) Science Park Properties tenant sectors by Net Lettable Area (1)(2) Light Industrial Properties tenant sectors by Net Lettable Area (1)(2) Built-to-suit Property tenant sectors by Net Lettable Area (1)(2) Chemical 8% Electronics 5% Food\Flavours\Fragrances 7% Information Technology 24% Life Sciences 30% Manufacturing & Engineering 10% Telecommunications 9% Others 7% Notes: Information Technology & Related Activities 7% Telecommunication & Datacentre 5% Medical, Precision & Optical Instruments, Clock 3% Electronic Products & Components 26% Electrical Machinery & Apparatus 7% Machinery & Equipment 20% Fabricated Metal Product 11% Rubber & Plastic Products 11% Printing & Reproduction of Recorded Media 3% Textiles & Wearing Apparels 3% Others 4% Electronics 92% Manufacturing 7% Information Technology 1% The Manager has determined the industrial sectors in which A-REIT s tenants are primarily involved based upon the Manager s general understanding of the business activities conducted by such tenants in the premises occupied by them. The Manager s knowledge of the business activities of A-REIT s tenants is necessarily limited and such tenants may conduct business activities that are in addition to, or different from, those shown herein. Net Lettable Area leased as at 30 June 2002. See Summary Property Statistics on page 7 of this Prospectus. (1) (2)
Expressways MRT Lines CBD The Alpha The Aries The Capricorn The Gemini Techplace I & II Techlink The Honeywell Building Summary Property Statistics The following table sets out certain information with respect to each of the Properties: Property Net Lettable Area as at 30 June 2002 (Sq m) Average occupancy for the 3 months ended 30 June 2002 (%) Net Property Income for the year ended 31 March 2002 (S$m) Appraised value as at 1 August 2002 (S$m) Percentage of appraised value (%) Land lease expiry(1) (year) Science Park Properties The Alpha 16,071 92.0 4.8 55.4 9.1 2062 The Aries 11,566 93.7 3.1 41.7 6.9 2062 The Capricorn (2) 20,361 68.5 0.5 76.1 12.5 2062 The Gemini 22,761 92.0 5.1 77.2 12.8 2062 Light Industrial Properties Techplace I 59,196 77.8 7.8 111.5 18.4 2052 Techplace II 68,591 93.1 10.3 136.6 22.5 2052 Techlink 31,948 74.7 6.8 73.9 12.1 2053 Built-to-suit Property Honeywell Building 14,685 90.0 3.2 34.8 5.7 2028 (3) Total/Average 245,179 84.6 41.6 607.2 100.0 (1) (2) (3) Notes: Each of the Properties will be held by A-REIT on a long-term state lease or on a long-term lease from Singapore Science Park Ltd or JTC. The Temporary Occupation Permit of The Capricorn was issued only in December 2001. A-REIT will have an option to renew the land lease for a further term of 30 years from 2028. See Summary Property Statistics on page 7 and The Properties on pages 98 and 99 of this Prospectus.
The Alpha 10 Science Park Road, Singapore Science Park II Net Lettable Area* : 16,071 sq m Title : Leasehold estate expiring 2062 (1) Average occupancy : 98.3% for year ended 31 March 2002 and 92.0% for three months ended 30 June 2002 Major tenants : Agency for Science, Technology & Research, National Starch & Chemical (Singapore) Pte Ltd, Institute of Microelectronics, Exploit Technologies Pte Ltd, Siemens Pte Ltd The Aries 51 Science Park Road, Singapore Science Park II Net Lettable Area* : 11,566 sq m Title : Leasehold estate expiring 2062 (1) Average occupancy : 93.3% for year ended 31 March 2002 and 93.7% for three months ended 30 June 2002 Major tenants : Teradyne Singapore Ltd, MCI Worldcom Asia Pte Ltd, Denso International Singapore Pte Ltd, Institute of Bioengineering, Rhodia Asia Pacific Pte Ltd The Capricorn 1 Science Park Road, Singapore Science Park II Net Lettable Area* : 20,361 sq m Title : Leasehold estate expiring 2062 (1) Average occupancy : 68.7% for year ended 31 March 2002 and 68.5% for three months ended 30 June 2002 Major tenants : Institute of High Performance Computing, Lilly Systems Biology Pte Ltd, Genome Institute of Singapore, S*Bio Pte Ltd, Novartis Institute for Tropical Diseases Pte Ltd The Gemini 41 Science Park Road, Singapore Science Park II Net Lettable Area* : 22,761 sq m Title : Leasehold estate expiring 2062 (1) Average occupancy : 94.1% for year ended 31 March 2002 and 92.0% for three months ended 30 June 2002 Major tenants : Failsafe Corporation (Singapore) Pte Ltd, Bioprocessing Technology Centre, International Flavors & Fragrances (Asia Pacific) Pte Ltd, Johns Hopkins Singapore Pte Ltd, Ministry of Environment *As at 30 June 2002 Notes: (1) A-REIT will hold a 60-year lease commencing from the date of completion of purchase of the property. See Summary on page 2 and Business and Properties starting on page 97 of this Prospectus for further details of the Properties.
Techplace I Ang Mo Kio Avenue 10, Ang Mo Kio Industrial Park I Net Lettable Area* : 59,196 sq m Title : Leasehold estate expiring 2052 (1) Average occupancy : 87.4% for year ended 31 March 2002 and 77.8% for three months ended 30 June 2002 Major tenants : Univac Precision Engineering Pte Ltd, Hock Cheong Printing Pte Ltd, Sin Star Hou Engineering Pte Ltd, Hybrionic Pte Ltd, Enzer Electronics Pte Ltd Techplace II Ang Mo Kio Avenue 5, Ang Mo Kio Industrial Park II Net Lettable Area* : 68,591 sq m Title : Leasehold estate expiring 2052 (1) Average occupancy : 93.5% for year ended 31 March 2002 and 93.1% for three months ended 30 June 2002 Major tenants : Venture Corporation Ltd, Kinergy Pte Ltd, American Fine Wire, Ltd, Manufacturing Integration Technology Ltd, NEC Semiconductors Singapore Pte Ltd Techlink 31 Kaki Bukit Road 3 Net Lettable Area* : 31,948 sq m Title : Leasehold estate expiring 2053 (2) Average occupancy : 80.5% for year ended 31 March 2002 and 74.7% for three months ended 30 June 2002 Major tenants : Federal Express Pacific, Inc, Pihana Pacific Singapore Pte Ltd, Applied Materials South East Asia Pte Ltd, Multitest Electronics Systems (Asia) Pte Ltd, Alstom T&D Pte Ltd Honeywell Building 17 Changi Business Park Central 1 Net Lettable Area* : 14,685 sq m Title : Leasehold estate expiring 2028 (3)(4) Average occupancy : 90.8% for year ended 31 March 2002 and 90.0% for three months ended 30 June 2002 Major tenants : Honeywell Pte Ltd, Pall Filtration Pte Ltd, Honeywell (S) Pte Ltd, Jetspan Pte Ltd (1) (2) (3) (4) *As at 30 June 2002 Notes: A-REIT will, on completion of purchase of the property, hold the remainder of a 65-year lease commencing from 1 April 1987. A-REIT will, on completion of purchase of the property, hold the remainder of a 60-year lease commencing from 25 September 1993. A-REIT will, on completion of purchase of the property, hold the remainder of a 30-year lease commencing from 16 December 1998, with an option to renew the land lease for a further term of 30 years from 2028. JTC as state lease holder of the Changi Business Park has imposed a number of lease restrictions on this property. Please refer to Certain Agreements Relating to A-REIT and the Properties for a description of the restrictions imposed by JTC. See Summary on page 2 and Business and Properties starting on page 96 of this Prospectus for further details of the Properties.
Important Dates for Investors An indicative timetable for applicants under the Public Offer is set out below: Public Offer opens at 12 noon (Singapore time) on 5 November 2002 Public Offer closes at 8 a.m. (Singapore time) on 13 November 2002 Commence trading on a ready basis at 2 p.m. (Singapore time) on 19 November 2002 (1) (1) Subject to the SGX-ST being satisfied that all conditions necessary for the commencement of trading in the Units on a ready basis have been fulfilled. See also Indicative Timetable on page 31 of this Prospectus for certain details regarding the Public Offer as well as the Placement Tranche. Dealing in and quotation of the Units will be in Singapore dollars. The Units will be traded in board lots of 1,000 Units.
The Honeywell Building
MANAGER OF THE TRUST Ascendas-MGM Funds Management Limited 75 Science Park Drive #01-03 CINTECH II Singapore Science Park I Singapore 118255 JOINT FINANCIAL ADVISERS J.P. Morgan (S.E.A.) Limited 168 Robinson Road 17th Floor, Capital Tower Singapore 068912 Salomon Smith Barney Singapore Pte Ltd 1 Temasek Avenue #39-02 Millenia Tower Singapore 039192 JOINT GLOBAL COORDINATORS, JOINT UNDERWRITERS AND JOINT BOOKRUNNERS The Development Bank of Singapore Ltd 6 Shenton Way DBS Building Tower One Singapore 068809 J.P. Morgan (S.E.A.) Limited 168 Robinson Road 17th Floor, Capital Tower Singapore 068912 Salomon Smith Barney Singapore Pte Ltd 1 Temasek Avenue #39-02 Millenia Tower Singapore 039192 UNIT REGISTRAR AND UNIT TRANSFER OFFICE Lim Associates (Pte) Ltd 10 Collyer Quay #19-08 Ocean Building Singapore 049315 TRUSTEE Bermuda Trust (Singapore) Limited 20 Raffles Place #13-01/05 Ocean Towers Singapore 048620 LEGAL ADVISERS Legal Advisers to the Manager as to English law Linklaters Allen & Gledhill 36 Robinson Road #03-01 City House Singapore 068877 Legal Advisers to the Offering and to the Manager as to Singapore law Allen & Gledhill 36 Robinson Road #18-01 City House Singapore 068877 Legal Advisers to the Underwriters as to English law Clifford Chance (Singapore) LLP 16 Collyer Quay #10-00 Hitachi Tower Singapore 049318 Legal Advisers to the Underwriters as to Singapore law Stamford Law Corporation 9 Raffles Place #32-00 Republic Plaza Singapore 048619 Legal Advisers to the Trustee as to Singapore law Shook Lin & Bok 1 Robinson Road #18-00 AIA Tower Singapore 048542 AUDITORS / REPORTING ACCOUNTANTS KPMG Certified Public Accountants 16 Raffles Quay #22-00 Hong Leong Building Singapore 048581 INDEPENDENT VALUERS Colliers International Consultancy & Valuation (Singapore) Pte Ltd 50 Raffles Place #18-01 Singapore Land Tower Singapore 048623 TAX CONSULTANTS KPMG Tax Services Pte Ltd 16 Raffles Quay #22-00 Hong Leong Building Singapore 048581 INDEPENDENT PROPERTY CONSULTANTS DTZ Debenham Tie Leung (SEA) Pte Ltd 100 Beach Road #35-00 Shaw Tower Singapore 189702 PROFIT FORECAST REVIEWER KPMG Corporate Finance Pte Ltd 16 Raffles Quay #22-00 Hong Leong Building Singapore 048581
Ascendas Real Estate Investment Trust