1H 2025 Financial Results Briefing

[00:00:03] Opening & Management Presentation

Johanna (Moderator, IR), Andrea Ong (Director, IR - Presenter), Mervin Song (Analyst, J.P. Morgan), William Tay (CEO)

Management presents 1H2025 results: distribution income of $331.1 million and DPU of 7.48 cents, both stable; investment properties rise to 16.83 billion; portfolio occupancy holds at 91.8%; rental reversion reaches 9.5% for renewed leases. Gearing stands at 37.4% and cost of debt at 3.7%. Management also outlines recent acquisitions, the divestment of a Portland asset at a 45% premium, and development pipeline updates.

[00:02:09] Andrea Ong (Director, IR - Presenter):

“the distribution income of $331.1 million and DPU of 7.48 cents, uh, are stable.”

[00:15:02] Q&A - Question 1: US Business Park Valuations & Overseas Logistics (Mervin Song, J.P. Morgan)

Mervin Song (Analyst, J.P. Morgan), William Tay (CEO)

Discussion covers leasing progress at Geneo, with about 95% pre-committed space and signing rents above the Science Park benchmark. Management addresses limited tenant relocation risk from existing CapitaLand Ascendas REIT properties into Geneo, noting only one tenant moving from an existing asset. Cost of debt guidance for the year is expected to hover around current levels near 3.7%.

[00:16:14] William Tay (CEO):

“if you use a gauge against, uh, one North region, uh, and Science Park, typical signing is about five $6.”

[00:18:22] William Tay (CEO):

“we expect, uh, the cost of debt to be, to hover around current levels, the 3.7%, all things being equal.”

[00:24:29] Q&A - Question 2: Rental Reversions & Singtel Kim Chuan Exit (Derek Tan, DBS Bank)

Derek Tan (Analyst, DBS Bank), William Tay (CEO)

Management discusses ongoing lease negotiations at Shopee's building, where a 15% rent upside sets the expectation, and reiterates borrowing cost guidance for the year, including planned refinancing of an Australian dollar loan. The divestment of a Portland business park asset at a 45% premium is explained, sold to a local government entity after prior occupancy declined.

[00:24:29] Derek Tan (Analyst, DBS Bank):

“still early, but that sets the expectation as I mentioned. I think with 15% it sets expectation of what we think is the flaw.”

[00:28:42] William Tay (CEO):

“we probably look at about 300 to 400 million of, uh, divestments, uh, in Singapore, in, uh, Europe and us, uh, as well as Australia.”

[00:33:12] Q&A - Question 3: Cost of Debt & Refinancing Profile (Joy Wang, HSBC)

Joy Wang (Analyst, HSBC), Khoo Li Sun (CFO)

Management reports no material tariff impact across Singapore, the US, UK and Australia operations to date. Redevelopment and acquisition strategies are compared, noting continued acquisition activity in Singapore and Europe alongside a pause in the US. Business park occupancy at one specific property has risen to 84%, the highest level in nine quarters, aided by broadened tenant industries. Occupancy across other regions is expected to stay broadly stable.

[00:37:21] Khoo Li Sun (CFO):

“That's the highest in the last nine quarters.”

[00:36:57] Khoo Li Sun (CFO):

“CBP, we have actually quite quietly pushed up occupancy there to about 84%.”

[00:40:04] Q&A - Question 4: Capital Recycling & UK Developments (Rachel Tan, Macquarie)

Rachel Tan (Analyst, Macquarie), William Tay (CEO)

Rachel Tan asks about income contribution timing for upcoming redevelopments, and management indicates a roughly one-year lead time before income flows through. The UK data center project is now planned in phases, starting with 25 megawatts before adding a further 35 megawatts once power supply is confirmed, following recent hyperscaler inquiries. Rental reversion guidance is maintained, and no direct tariff impact on tenants has been observed so far.

[00:41:05] William Tay (CEO):

“we originally intended to build a 60 megawatt, uh, data center”

[00:41:53] William Tay (CEO):

“we haven't seen directly hit, uh, from our tenants, or rather as, at least from our tenants.”

[00:46:37] Q&A - Question 5: Tariff Adjustments & Portfolio Divestment Pipeline (Dale Lai, DBS Bank)

Dale Lai (Analyst, DBS Bank), William Tay (CEO)

Dale Lai asks how divestment proceeds will be used; management indicates a preference for debt repayment to create acquisition headroom rather than to stabilize distribution per unit, citing acquisition yields around six to seven percent as the target range for redeployed capital. US portfolio occupancy, currently near 85%, should be on a downward trend toward 80%, per management, with vacancies attributed to a mix of non-renewals and tenant downsizing.

[00:48:12] William Tay (CEO):

“when we acquired Knight Tyson, it was a seven over 7%.”

[00:49:03] William Tay (CEO):

“occupancy now is at 85%, logistics is stable, some challenging business space, you think portfolio will drift down to close to 80% occupancy.”