Central Pattana Public : MD&A Q4/2021 and FY 2021 21 February 2022

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Central Pattana PCL
	Major Events
Management's Discussion and Analysis (MD&A)
	Performance
Consolidated Financial Results: 2021
	Business Plan

Executive Summary

In 2021, Thailand economy was slightly recovered due to an impact from the strings of coronavirus disease (COVID-19) outbreak, which resulted in high numbers of daily cases and a restricted economic activity by lockdown approximately two months during the third quarter. However, after COVID situation unravel and vaccine roll-out proceeding lead to a recovery of economic activity in 4Q21 for instance, a household and private consumption and private investment were expandable along with an economic supported via government spending and export sector which majority driven by a recovery of world trade and overall economic circumstance. Nonetheless, tourism sector even now impacted from Omicron globally resulting in low foreign tourists compare to previous year while test & go was allowed since second half of the year. According to COVID outbreak situation, Thailand GDP increased 0.9%, higher than previous forecast. The Bank of Thailand still maintained the policy rate at 0.5% to stimulate the economic momentum and stabilized financial system.

The performance of Central Pattana Public Company Limited ("The Company" or "Central Pattana") in 2021 shows total revenue of THB 28,977 mn, a decrease of 9.6% YoY and net profit stood at THB 7,148 mn, a decrease of 25.2% YoY (for 4Q20, total revenue was reported at THB 7,981 mn, a decrease of 3.9% YoY and net profit stood at THB 1,816 mn, a decrease of 10% YoY). Excluding the non-recurringitems and impact of financial reporting standards, total revenue and net profit decreased 8.1% YoY and 39.4% YoY, respectively mainly due to rental and services revenue in 2021 was impacted by COVID-19 all over the year and impact from lockdown measures resulting in temporary close shopping malls in high risky area approximately two months during 3Q21. However, the Company implemented an effective cost saving initiatives as planned to minimize impact on business performance and protect interests of all stakeholders.

In 4Q21, Due to festive seasons in December and ease of restriction from government sector, the Company foreseen traffic improvement in shopping mall after an outbreak unravel. The Company emphasizes on "Hygiene and Safety Master Plan" to enhance cleanliness and highest safety measures for our customers and visitors. The Company has significantly concerned all stakeholders and initiated efficiency management policy in terms of maximizing cost saving and resource allocation together with manage a cashflow adequacy to operate business during uncertainty circumstance. The Company currently manages 36 shopping malls with the net leasable area (NLA) of approximately 1.86 mn sqm. At the end of 2021, the average occupancy rate for all domestic retail properties stood at 91%.

Central Pattana Public Company Limited	Page 1
Management's Discussion and Analysis (MD&A)

Major Events in 2021

Mitigation plan for businesses during COVID-19 pandemic situation

• Strictly comply with government restriction to control COVID-19 outbreak in high risky area and keep providing vaccination centers within shopping malls nationwide
• • 
    Since the beginning of 2021, the Company temporary closed shopping malls located in high-risk area totaling of 4 locations comprises Central Mahachai, Central Rayong, Central Pattaya and Central Marina since the end of last year between 7-30 days according to an announcement from government sector depends on each area then re-opening in January to February 2021. Thereafter the 3rd and 4th wave of COVID outbreak occurred during July 2021, the government announced lockdown measurement to control and reduce an outbreak in specific areas where the Company strictly comply with the provisions by temporary close shopping malls located in BMA and highly control provinces almost 2 months starting from July 2021 to end of August 2021. Only some certain essential businesses were allowed to operate such as Supermarket, drug stores and vaccination area while restaurants were not allowed dine-in. Delivery services and take away also were impacted by stringent measures for certain period. On September 1, 2021, the government allowed shopping mall to resume its business and additionally easing other restriction of a specific business and allowed dine-in which appear a recovery. Overall traffic was explicitly improved mainly supported by a strong domestic customer base. The Company closely monitors situation and promptly adjust management strategy to operate shopping malls to attract domestic customers. In addition, the Company continue put in to practice the "Central's Hygiene and Safety Plan" to enhance cleanliness and highest safety measures to ensure customers' confident and response a "New Normal" lifestyle. Tenant's sales performance recovery was in line with traffic level on average. Furthermore, the Company allocated common area or Convention Hall of 23 shopping malls nationwide, accumulating to over 40,000 sq.m. of area, to act as vaccination centers for the citizens which in turn helps accelerate the distribution of vaccines in all regions as quickly as possible and help resuming business activities.
  • Continue to provide support for impacted tenants and business partners including announcement of new business model to emphasize business ecosystem
    The Company continued tenant's relief measures by considering rent waiver during lockdown period for tenants who directly impacted and unable to operate their usual business and rent discount after easing lockdown by considering a proper rate depending on how much of the impact. The relief measures are considered based on mall traffic recovery, impacted business type and sales performance. The rent discount provided to tenant gradually reduce in 4Q21 regarding to a recovery as mentioned above.
    Moreover, the Company assists tenants to access omnichannel platform namely Chat & Shop, Drive-Thru and Delivery service during lockdown. In addition, new platform such as The 1 Biz and SERVE Central Pattana were designed to facilitate our tenants via assisting them to better understand The 1 customer's behavior which encourage a new marketing campaign for direct target customers and expand customer base going forward.
  • Exercise rigid cost control measures to retain company's profitability and sufficient cashflow
    The Company emphasizing on maintaining variable cost reduction initiatives constituted utilities, outsource service as well as reduce unnecessary costs at organization levels to mitigate the impact on revenue and profitability as plan under the situation that has yet to fully recover to normal levels. Furthermore, in light of the COVID-19 situation, the Company has entirely prepared its cashflow sufficiency, maintain liquidity and proper capital structure amidst uncertainty circumstance.

Central Pattana Public Company Limited	Page 2
Management's Discussion and Analysis (MD&A)

Diversification into Mixed-use Development Projects

At the end of 2021, the Company has developed totaling of 22 residential projects by emphasizing on development of condominium project in area close to existing shopping mall which well received a good response in terms of booking. This enhances company's leadership in Mixed-used development to sustain its revenue growth. In addition, the Company continuously develops high potential low-rise projects to response customer's New Normal lifestyle given more personal space, locate in good location, close to shopping mall with full facilities. There was a plenty demand of customers to come and visit residential projects including online virtual tour. The Company launched 3 new residential projects in 4Q21 namely PHYLL PHUKET, ESCENT AVENUE RAYONG and

ESCENT VILLE AYUTTHAYA.

All 22 residential projects at the end of 2021comprise of;

• 6 Condominium projects completely transferrednamely 1) ESCENT RAYONG 2) ESCENT CHIANGMAI 3) ESCENT KHONKAEN 4) ESCENT NAKHONRATCHASIMA 5) ESCENT VILLE CHIANGRAI and 6) ESCENT VILLE CHIANGMAI
• 7 Low-riseprojects under selling and transfer processnamely 1) ESCENT TOWN PHITSANULOK, townhome projects 2) NINYA KALLAPAPRUEK, twin home projects 3) NIRATI CHIANGRAI 4) NIRATI BANGNA 5) NIRATI DONMUANG 6) NIYHAM BOROMRATCHACHONNANI, a single house project and 7) ESCENT AVENUE RAYONG. Each project is accumulated ample interest in terms of visitor number from potential customers both site visit and online format.
• 4 Condominium projects completely built and under transfer processnamely 1) ESCENT UBONRATCHATHANI 2) ESCENT PARK VILLE CHIANGMAI 3) PHYLL PHAHOL 34 and 4) Belle Grand Rama 9
• 5 Condominium projects launched for booking and under constructionnamely 1) ESCENT KORAT 2) ESCENT RAYONG II 3) ESCENT HATYAI 4) PHYLL PHUKET and 5) ESCENT VILLE AYUTTHAYA which well received attentions and booking continue to increase.

Retail-led Mixed use development project recently launched on October 27, 2021 and November 30, 2021 namely Central Si Racha and Central Ayutthaya, respectively received a good response and ample interested.

Business partnership via Joint Investment and M&A to generate long-term growth

• On May 17, 2021, the Company announced the joint investment transaction of Mixed-use development project located on Wireless Road and Soi Somkid, Bangkok. The Company joint invested in Central and Hongkong Land Company Limited ("CHKL"). The Company invested through CE Holding Company Limited, the joint venture company between the Company and Harng Central Department Store Company Limited ("HCDS") and HKL (Thai Developments) with the shareholding ratio of 25: 26: 49, respectively. The joint investment has the objective to develop the mixed-use project comprises 1 retail 8th floor with total NLA of 70,000 sq.m. and 2 offices 36th floor with total NLA of 140,000 sq.m. with total investment value of no more than THB 13,873 mn. The project is expected to be developed in 5 years and will be completed approximately by 2026. The joint investment with partners who has expertise could enhance assets potential and create long-term growth going forward.
• In July 2021, Central World Company Limited, a subsidiary which the Company own 100% stake both direct and indirect has announced to entered into an agreement to purchase of common shares in Siam Future
  Development Public Company Limited ("SF") from Major Cineplex Group Public Company Limited and a group of major shareholders at the purchase price of THB 12.00 per share, amounting to THB 13,341 mn in total. After the completion of the transactions, the Company proceed a mandatory tender offer for the remaining shares in SF during September 10, 2021 to October 18, 2021 at the purchase price of THB 12.00 per share with an approximate amount of THB 11,191 mn. The Company received a tender share 39.98% of all issued and sold SF shares at tender period ended. The Company therefore own SF stake at 96.24% according to announcement to the Stock Exchange of Thailand on October 20, 2021. Currently, under process of planning for the delisting of Siam Future Development Public Company Limited.

Central Pattana Public Company Limited	Page 3
Management's Discussion and Analysis (MD&A)

• As a result of SF acquisition in 3Q21, the Company recognizes an increase in total assets of THB 33,372 mn and increase in liabilities of THB 7,942 mn (see details of acquisition in the Notes to Financial Statements Yearly 2021 No. 5). This investment is objectively to expand business potential into a small new retail format as well as a high potential regional mall in the long run which enhance company's competitiveness and contribute long-term shareholders' return.

Asset Enhancement Initiatives to enhance long-term competitiveness

The ex-ISETAN department store area at CentralwOrld is currently under the renovation process by developing to multi-destination zone format, comprising a mixture of anchor and retail tenants along with new magnet brands to capture all customer demands. The Company expects the renovation to be completed and ready to open by end of 2021 to serve demand from domestic and tourist customers. Currently is under the process of negotiation with tenants who potentially interested this area.

In addition, the Company continuously renovates existing shopping malls namely, Central Rama2 under "Destination Concept" introducing new area such as Tech space, Showcase, Little campus as well as arrange various interesting activities reflect customer's Center of Life by emphasizing new safety and hygiene experiences compatible with the "New Normal" lifestyle in current situation. The renovation area partially completed and inline as plan.

Uphold Excellence of Business Sustainability

The Company has been selected to be a membership of Dow Jones Sustainability Indices (DJSI) during 2021. Central Pattana is the only property developer company and be one of thirteen company in Thailand that has been selected to be a membership of DJSI World for four consecutive years (2018-2021) and DJSI Emerging Market for eight consecutive years (2014-2021) reflecting the philosophy of sustain business sense which be aware of community, environment and all stakeholders to drive a sustain social and community.

Central Pattana Public Company Limited	Page 4
Management's Discussion and Analysis (MD&A)

Financial and Operating Performance in 2021

Table 1: Summary of net leasable area and occupancy rate

		Number of projects and net leasable/salable area under CPN management as of 4Q 2021
			Total		CPN	CPNREIT(1)	CPNCG(2)
		No.		sq.m.	No.	sq.m.	No.	sq.m.	No.	sq.m.
Retail properties
Shopping malls - BMA	15	935,065	15	786,192	3	148,873
Shopping malls - Provinces(3)			20	846,846	20	749,071	4	97,775
Total domestic retail properties	35	1,781,911	35	1,535,263	7	246,648
Shopping malls - International	1	83,639	1	83,639
Total retail properties	36	1,865,551	36	1,618,903	7	246,648
Non-core businesses
Office buildings	9	247,083	4	53,425	4	111,773	1	81,886
Hotels	2	563 rooms	1	257 rooms	1	306 rooms
Residential (high rise)	15	5950 units	15	5950 units
Residential (low rise)	6	1127 units	6	1127 units
Assets under GLAND
Office buildings	1	67,604	1	67,604
Residential (high rise)	1	1991 units	1	1991 units
Retail space in buildings		24,936		24,936
Assets under SF
Shopping malls under JV	1	166,942	1	166,942
Retail space in buildings	18	209,674	18	209,674

Remarks

1. Assets under CPNREIT comprises 1) 7 shopping malls, namely 1) Central Rama 2, Central Rama 3, Central Pinklao, Central Chiangmai Airport and Central Pattaya; 2) 1 hotel, namely Hilton Pattaya and 3) 2 office buildings Pinklao Tower A & B and offices which under the management of GLAND, namely The Ninth Towers Grand Rama 9, Unilever House Grand Rama 9.
2. Assets under CPNCG comprises 1 office building, namely CENTRALWORLD OFFICES
3. Central Phuket, which consists of the Central Phuket Floresta and Central Phuket Festival, is counted as a single project

Overview

The Company has 4 business categories under management: 1) Shopping Center and office for rent; 2) Food center services; 3) Hotel; and 4) Residential for sale which includes the properties transferred to CPN Retail Growth Leasehold REIT ("CPNREIT") and CPN Commercial Growth Leasehold Property Fund ("CPNCG") as well as properties of Grand Canal Land PCL ("GLAND"), which is company's subsidiaries and all properties under Siam Future Development ("SF").

At the end of 2021 the Company managed 36 shopping centers (15 projects in Bangkok Metropolitan Area (BMA), 20 projects in the provinces, and 1 project overseas), 10 office towers, 32 food centers, 2 hotel properties namely Centara Hotel and Convention Centre Udon Thani, Hilton Pattaya and 22 residential projects consist of 15 high- rise projects and 7 low-rise projects as well as 1 regional mall and 18 community malls under investment through SF.

Central Pattana Public Company Limited	Page 5
Management's Discussion and Analysis (MD&A)