# CapitaLand Ascendas REIT (CLAR) - 1H 2025 Financial Results Briefing - **Event**: 1H 2025 Financial Results Presentation & Analyst Briefing - **Date**: 30 July 2025 - **Webcast URL**: [CapitaLand Ascendas REIT Webcast Details](https://investor.capitaland-ascendasreit.com/webcast_details.html?videoID=1107263698) - **Vimeo Video ID**: `1107263698` - **Duration**: 00:00:03 to 00:51:16 (942 cues) ### Panellists & Management: - Mr. William Tay - Executive Director & CEO - Ms. Khoo Li Sun - CFO - Mr. James Goh - Head of Portfolio Management SG - Andrea Ong - Director IR - Johanna - Moderator IR ### Participating Analysts & Journalists: - Mervin Song (Analyst, J.P. Morgan) - Dale Lai (Analyst, DBS Bank) - Derek Tan (Analyst, DBS Bank) - Rachel Tan (Analyst, Macquarie) - Joy Wang (Analyst, HSBC) - Tan Yew Kiam (Analyst, CLSA) --- ## Table of Contents - **[00:00:03]** Opening & Management Presentation - **[00:15:02]** Q&A - Question 1: US Business Park Valuations & Overseas Logistics (Mervin Song, J.P. Morgan) - **[00:24:29]** Q&A - Question 2: Rental Reversions & Singtel Kim Chuan Exit (Derek Tan, DBS Bank) - **[00:33:12]** Q&A - Question 3: Cost of Debt & Refinancing Profile (Joy Wang, HSBC) - **[00:40:04]** Q&A - Question 4: Capital Recycling & UK Developments (Rachel Tan, Macquarie) - **[00:46:37]** Q&A - Question 5: Tariff Adjustments & Portfolio Divestment Pipeline (Dale Lai, DBS Bank) --- ## Verbatim Transcript (Audited & Verified) ### Opening & Management Presentation **[00:00:03] Johanna (Moderator, IR)**: Good evening, ladies and gentlemen. Welcome to the half year 2025 Results Briefing of Capital and Asanders Read, or CLAR for short. We thank you for joining us in person and online this evening. As always, the briefing will start with a presentation by management on CLAR's financial and operational performance for the first half of 2025, after which there will be a question and answer segment. **[00:00:24]** For those in the audience, you may raise your hand during the q and a segment. I will call out your name or identify you by your company, and the microphone will be brought to you. If you're attending the briefing online, you may submit your questions via the q and a feature on Zoom anytime during this briefing, and we will address any questions that have not been asked by the audience. **[00:00:47]** After, before we begin the session proper, let me first introduce the management on the panel. **[00:00:58] Andrea Ong (Director, IR - Presenter)**: First we have Mr. William Tay, CEO of CLAR. Second, we have Ms. Khoo Li Sun, CFO of CLAR. Then we have Mr. James go head of portfolio management. Last but not least, Michelle Kipping, head of Capital Markets and Investor Relations. And with that, I will hand the time over to Kipping who will begin the presentation. Thank you. **[00:01:33]** Thanks, Andrea. Good evening everyone. Welcome to Capital Land, asanders Street first half results presentation, and also welcome those present here with us to Geneo our newly completed property in Science Park Drive. Um, so without further ado, let's uh, jump in to the results. So, despite the ongoing, uh, macroeconomic uncertainties, we are pleased to announce a steady set of results for first half 2025. **[00:02:09]** Some key likes, key high likes here, the distribution income of $331.1 million and DPU of 7.48 cents, uh, are stable. Investment properties increased to 16.83 billion. Our portfolio occupancy remain high at 91.8%, and we achieve high rental reversion of 9.5% for leases renew in the first half. Gearing is healthy at 37.4% and cost of debt is stable at 3.7%. **[00:02:50]** Diving into the financials, gross revenue in the first half decreased by about 2% to $755 million. And some of the reasons, uh, were due to the divestment of some properties in Singapore, Australia and the us. However, the contribution from newly acquired DHL logistics property in the US helped to mitigate the decline. NPI declines slightly by 0.9% to $1 billion due to lower operating expenses and distribution income was stable at $331.1 million. **[00:03:39]** DPU declined slightly to 7.48 cents due to an increase in the units. When we compare first half, uh, 2025 versus second half of 2024, gross revenue increased slightly to $755 million, mainly attributable to the acquisition of DHL, uh, logistics property in the US and partially offset by the divestment of 21 Jalan borough in Singapore and pub site, uh, business, uh, space property in the us. **[00:04:23]** So NPI increase in tandem with the increase in the revenue distribution income decreased 2% to $331.1 million due to higher interest expense. And, uh, DPU increased 2.1% in tandem with the, uh, distribution income to 7.68 cents. Okay, Distribution In, uh, on June 30th of June, we paid an advance distribution of 6.48 cents per unit for the period of first Jan to fifth June. **[00:05:08]** So for the remaining period of sixth June to 30th June, a distribution of 1 cents will be made, and you'll be receiving the dividends on the 4th of September. Moving on to investments, we completed the acquisition of DHL, uh, logistics Center in Indiana, police in the US in the first half. Uh, we also completed the redevelopment of one size park drive. **[00:05:43]** Uh, you got, you are here today. And, uh, we completed a total development cost of about 600 $884 million. Uh, very soon, CLAR is set to add another $725 million of, um, income producing assets in Singapore, uh, which is Knight Tai Seng Drive, uh, data center and 5 Science Park Drive, uh, business based property next door. Okay, so the total acquisition cost for the four properties comes up to almost $1.2 billion. **[00:06:24]** If you recall, all these properties were acquired at attractive NPI use of six over percent and to as high as 7.6% for the DHL, uh, property. And they're all creative and will, you know, contribute to our income stream in the long term. So, um, these slides you have seen before. So moving on to divestment, uh, so this is new. **[00:06:56]** We have divested Parkside, uh, business park, uh, business based property in the US Portland for about 26.5, uh, million dollars. The property was sold at a 45% premium to market valuation. Uh, it was sold to an end user on capital management gearing remains healthy at 37.4% after the equity fund raise in May. Uh, you will also note that the debt EBITDA numbers, uh, have also improved. **[00:07:42]** And if you look at, uh, some of the numbers here, uh, ICR is still very healthy at 3.7 times, and the cost of that remains stable at 3.7 uh, percent. Okay. And on the debt expiry profile, we have about $6.7 billion worth of total debt. And you can see here they are very, uh, well spread out. So in the next two, three years, we have about 900 million or so are due for refinancing per annum. **[00:08:25]** Okay? Natural hedge. We continue to have this high level of natural hedge for our overseas, uh, investments. So, um, on a portfolio basis, it is about 76%. Okay, occupancy, the occupancy rate for the portfolio was stable at 91.8%. So this is on the right hand side of the slide. Um, the occupancy rate for Singapore was 91.2%, US 87.3%, Australia increased to 93.1%, and UK euro are stable at 98.9%. **[00:09:21]** So let's take a look at the details. In Singapore, the occupancy, uh, dip slightly to 91.2%, and this is mainly due to a non-renewable at an industrial property. Um, when we look at, you know, within the Singapore portfolio, occupancy rates for the business space properties and the logistics properties were stable in the us the occupancy declined 0.7% to 87.3%. **[00:10:03]** And this is mainly due to an expiry of a lease in a logistics property in Kansas City, but offset by higher occupancy for, um, business spot property in Portland, Australia. Um, Australia improve by 3.9% to 93.1%, driven by higher occupancy rates in Sydney. So we backfill two logistics property and the tenants, uh, have signed long lease of seven years, seven years, five years, seven years in 94 Leonard Drive, and 16 Kangaroo Avenue. **[00:10:50]** As for 1 9 7 Coward Street, uh, a business based property in Sydney. It also attracted a few new tenants occupancy rate in proof from 85% to 94%. Overall occupancy rates for both the logistics and business part properties have improved in the UK and Europe. As usual, the occupancy remain high at 98.9% new demand in the first half. **[00:11:26]** For Singapore, the largest sources of new demand by gross renter income were the logistics, uh, and supply chain management industry. Uh, many of these tenants, uh, moving into our logistics properties. The next, uh, large source of demand in the first half is the IT and data center sector. Many are moving into our high specs, industrial properties and education and media is the next, uh, group. **[00:11:56]** Uh, many of them are also moving into our business based properties as well. Our overseas, uh, portfolio, uh, the largest source of new demand was, uh, the logistics sector. Okay, renter reversion for lease renewals in two q, uh, the column, the first column, two Q uh, at the bottom last row, you will see, uh, 8%. So the total portfolio achieve a positive rental reversion of 8%. **[00:12:32]** Okay. And if you were to look at the various geographies, so Singapore, 7.8% US 10.9%, Australia, 3.5% for UK Europe, you see a dash that, and that's because, uh, there weren't any lease renewals during the period. Okay, Well, stable at 3.7 years. Okay? On Expiries, uh, for the whole portfolio, all four geographies put together, uh, we have a balance of 8.9% of rented income that will be, uh, due for renewal for the rest of the year. **[00:13:13]** Okay? Okay. Currently, we are working on six projects, uh, including one development, uh, three redevelopments and two ais. So these projects are scheduled for completion between three Q2 0 2 5 and one q, uh, 2 0 2 8. We will continue to add to this list, right? Um, con, so the last slide, uh, in this uncertain economic, um, situation, um, I think we'll continue to be with us in the near future. **[00:14:01]** However, we are confident to write through this period, right? Given our well diversified portfolio, good tenant base, good operational management, and prudent financial management. So we will continue to adapt to the changing market conditions. Thank you very much. Back to you, Andrea. Thank You. Ki we will start with the Q and E segment, and the first raised hand will be, uh, from JP Morgan. **[00:14:31]** Thank you. Thank you for the opportunity. I'm Terence from JP Morgan. Uh, congrats on a good set of results. Um, uh, since we are here at this beautiful building, uh, perhaps I could ask a little bit more about g Um, is there anything further you could share in terms of, uh, who are the major tenants, uh, coming into GO? **[00:14:53]** Um, what's, what some of the signing rents are and, and perhaps, uh, when the cash flow ### Q&A - Question 1: US Business Park Valuations & Overseas Logistics (Mervin Song, J.P. Morgan) **[00:14:53] Andrea Ong (Director, IR - Presenter)**: contributions could start? **[00:15:04] Mervin Song (Analyst, J.P. Morgan)**: That's the first question for me. Uh, thanks Terrance. JP Morgan, always the first question. Okay. The, we have not, uh, any further updates. Uh, we have mentioned we have about 95%, uh, pre-committed and in advance, uh, negotiation, uh, about 75, 70 6% are already p committed. Uh, just now we're talking about whether our tenants have moved in. **[00:15:35]** Uh, the retail tenants are already in, uh, just got, uh, **[00:15:41] William Tay (CEO)**: after your ask, I just got update. First Tender is gonna move in in mid August and end August, September, October, right? All the way to July next year. Uh, we will progressively update the directory when the tenants move in, so you can catch who are the tenants that's moving in, uh, and, uh, the signing rents, uh, as you have heard me mention about, uh, Shopee Building next door, uh, Shoppe's Building, we believe they're 15% under rented. **[00:16:14]** Uh, and we are not even talking about the rents that, uh, Geneo has achieved. Uh, so Geneo actually has achieved much higher renter. Uh, there are, if you use a gauge against, uh, one North region, uh, and Science Park, typical signing is about five $6. Uh, Geno is above seven. Uh, we believe that this is, this sets the benchmark, uh, because of the quality of the building as well as the offering in terms of, uh, uh, retail and the catchment. **[00:16:50]** And it's directly connected to MRT station. Uh, you can walk around, it's all covered. Uh, so this is actually, uh, quite a, quite a good ran for us. Uh, we believe this was just set where asking rent is, uh, for other renewals, whether is it in Shopee across the road in Ascent. And, uh, this will be the, the, the, uh, this will set the, the expectation of rents. **[00:17:17]** Thank you. And I, I just do have a question from a client. Um, basically the client's asking, um, is there risk that, uh, like for if when tenants move into G, is there risk that they, they could be leaving? Um, some of the existing assets, uh, particularly for, uh, asanders, uh, for class properties Moving from asanders from Class properties to, into Geneo, Um, existing tenants, um, I think there's only one tenant that's moving from a Center's property. **[00:17:51]** The rest are all expansion and relocation, uh, outside of Clare properties. Okay. That's very, very good to hear. And um, maybe on my second question, uh, if I could ask on the update on the data centers from Tel and the companies redevelopment opportunities, Uh, we are still evaluating our plans. Uh, we are likely to look at commercial development, as I mentioned, uh, that's probably what we were heading towards. **[00:18:22]** And final question, uh, maybe any changes to the cost of debt guidance for this year and next year? Or what's the cost of the guidance? Um, I, we expect, uh, the cost of debt to be, to hover around current levels, the 3.7%, all things being equal. Yeah. Okay. Thank you keeping, and thank you Terrance. We'll move to Rachel from Macquarie. **[00:18:49]** Thank you. Uh, hi William and team, uh, thanks for the, the briefing and, uh, inviting us to your building here. Um, maybe my first question is on, um, the vacancies that I've seen, I think this quarter we have seen a few properties that single tenanted that's being vacated. So what are your plans on this? And, uh, you do have some lease, uh, expiries that's coming up. **[00:19:17]** Are we gonna expect to see any single tenanted vacancies coming through? Yeah, James, you wanna take that? Uh, thanks, Rachel. I, I, I think it's part and parcel for a large portfolio. When we have got single led, uh, properties, as the leases expire, we might not get a back-to-back tenant to replace. I think that's quite common. Um, the one that has just expired in Saron is actually a B two side, pretty centralized. **[00:19:51]** Um, just that the, so the location is good. The specs might be a bit dated, um, but nonetheless, we don't think it will be an issue to find a replacement tenant. Maybe not immediately, but, uh, we are pretty confident of that site. I think for the rest, uh, again, they're just part and passer because they're logistics, uh, assets. **[00:20:09]** Um, and I'm quite happy and pleased to report that, uh, 16 kangaroo, I've got a lot of questions about that. Over the last couple of quarters we found a tenant. Um, we had a couple of tenants who were very close to signing the lease, but somehow they just slipped through the cracks. I'm rea I really do not know why it really baffles me. **[00:20:29]** So I'm very happy to, uh, to report that, uh, Aussies occupancy has now improved to above 93%. Okay, so, so for over overseas, I think you, you will see the, the, the details. Yeah, we have two in us, one in, uh, in, uh, Melbourne. Uh, logistics. Single LED buildings is typical. Once a tenant leave is either you come back to back, uh, have a new tenant, if not you. **[00:20:59]** The, the current environment require us to at least three months, six months. Uh, while James mentioned kangaroo to us about a year, uh, but at least we are, we do see demand in the market, uh, in Singapore other than, uh, Singtel building in tampons, this is the other one. Uh, it's a B two site actually is very attractive given where the current demand is for B two location, uh, even before the tenant leave. **[00:21:30]** I mean, some brokers really got wind that they are moving and we actually have some sort unsolicited, uh, offers, uh, to see whether we're interested to divest. Uh, we are still evaluating options, uh, but because a B two site I think is, is quite a good location as well as, uh, suitable for manufacturing, uh, much better than a B one site. **[00:21:52]** So we will evaluate options and see where we can, uh, close this, uh, as soon as possible. So for the 16 kangaroo, um, uh, do you have to give additional incentives to get the new tenant in? Okay, I, hello. Hello. Um, generally incentives in Australia has gone up, uh, but it has helped that the headline rents have also gone up, uh, aggressively. **[00:22:18]** So we are still seeing a positive at the effective rent level improvement over the previous rents. Escalation as well has gone up. We have signed about 3.5 to 4%. Okay. And then for the US and the Melbourne properties, um, the expiring brands is uh, what, how is it compared to the market brands? I'll take that question. Uh, gen generally, if you look at us, um, we are still under rented, although debt gap is narrowing. **[00:22:52]** But you see, even in our latest reversion, we are reporting close to, uh, double digit. So we are somewhere between mid single to like a low double digit kind of, uh, under renting below market right now. Okay, thank you. And, um, just one second question from me. I think, uh, in terms of your tele part, I think you spoke about, uh, converting to commercial. **[00:23:14]** Looking at commercial, are you likely to do it yourself or are you likely to look for another party to do it for you? That means divestment. Do you have any interest? All options are being considered. So you have started to market the property? Uh, no, no. Yeah, we are still looking our plans in terms of, uh, the development options. **[00:23:37]** Yeah. Okay. So whether we divest, bring in a partner or what, uh, I think these are all options that are still open. Okay. Alright. I'll give others a chance to ask Next. Uh, next we'll have Dale from DBS. Yeah, thank you. Uh, hi. Hi, William and Tim. Thanks. Thanks for the presentation. Uh, just, just a few quick questions from me. **[00:23:55]** I think, uh, with regards to the acquisition, I mean with regards to your recent acquisitions and, and this are one science Park Drive, right? I mean, in, in, in this first few months, there will be a little bit of drag to earnings because of the placement and things like that, but how soon should we expect this additional contributions to, to start, you know, driving, driving DPU, driving earnings, uh, back, back up? **[00:24:16]** Uh, we expect to close within next one, two weeks this week or next week. Okay. Okay. Oh, sounds good. Sounds good. Okay. ### Q&A - Question 2: Rental Reversions & Singtel Kim Chuan Exit (Derek Tan, DBS Bank) **[00:24:29] Derek Tan (Analyst, DBS Bank)**: And, and next question is, um, on Shopee, uh, I know still sometime to November, but, um, how are negoti negotiations looking or what are expectations? Has it changed? Are we still expecting that 15% upside in, in nego negotiations? Uh, still early, but that sets the expectation as I mentioned. I think with 15% it sets expectation of what we think is the flaw. **[00:24:57] William Tay (CEO)**: Uh, and, uh, to Terrence's question earlier, signing rents that we have achieved and asking rent is much higher. Uh, given there's a full single building, uh, I don't think it's possible to be honest. It's possible to sign at the max rent that Geno can achieve. I mean, Geno is multi-tenanted. Uh, we bring in different tenants of different sizes, uh, and this is a single lab building. **[00:25:21]** Uh, so I think there will be a negotiation. Uh, we have not started, uh, but given where we understand from our existing, uh, negotiation on Galaxis and there movement with regards to the business unit that's been moved to Rochester Commons, uh, we got a good sense of where are their business plan. So once all this is, uh, settled, I think this is the next stage of, uh, negotiation and it's still November next year, one and a half years later. **[00:25:52]** Mm-hmm. Okay. Okay. Sure, sure. Thank you. Sorry, last question. If I can squeeze in one, I think in terms of the borrow cost, I thinking you're saying that expect to, to remain around this 3.7, uh, this is including the, the refinancing that is due for, for the next half of the year? Yeah, so, um, we are left with a Aussie dollar loan Yeah. **[00:26:13]** That we need to revise. So taking that into account, we should be able to, uh, achieve around, uh, 2.7 for the percent for the full year. Yeah. Okay. Okay. Got it. Yeah, that's all from me. Thank you. Thank You, Dale. We'll move to Vijay from RHB, the gentleman over there. Yeah. Hi, uh, good evening. Thanks for the opportunity. **[00:26:38]** I have a couple of questions. Firstly, uh, in terms of the US divestment, uh, it was a good premium, uh, surprise, a 45% premium, considering the challenges in the market. Why do, how did you manage to get such a good premium for this asset? And are there any such opportunities available in the US portfolio, uh, for future? **[00:26:57]** And maybe also I can guide on divestment target for this year? Divestment has been a bit slow so far. Uh, thanks, Vij. It's, and, and thank you for asking this question because I, I think our team did really well. Uh, kudos to my US SM management team. Uh, to be honest, all options are always on the table, particularly for challenging markets like us. **[00:27:23]** So we look at various ways, including whether we can enhance the value of the property by doing selected ais, which we have done and we continue to do. And if we could then selectively also divest assets and try to extract maximum value for a portfolio. So in this case, um, the end user is pretty unique. It's a local government entity that runs parts around that Portland area, and they were looking for a flagship HQ to move into. **[00:27:52]** Now, just to give a bit of context, this property used to be occupied by Nike, and when, when they left, um, the occupancy went down to about in the twenties and a percent, um, and has remained that way for a while. Um, and so it was active kind of like, um, combing of the market that we managed to find this potential user. **[00:28:17]** Um, and while at first the discussion was about leasing, but it very quickly pivoted to a sale process, uh, and we are very happy that, uh, true this entire process, we were able to get very good value for this asset and to return that value back to our unit holders by selling that property. Are there any such opportunities and maybe divestment target for this year? **[00:28:42]** Um, divestment target, we, I think since, uh, four Q last year, I did mention that this year 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. So just what option, uh, James mentioned, I think all options are open for us. Uh, especially such non-core assets like the, the one that we just divested in, uh, Portland. **[00:29:18]** Uh, given that it's actually a government related company, uh, or other entity, uh, it took some time for us to close that. Uh, but there is a value to them because it's near where their operations are. So, which is why I think it helps us to get a premium. Uh, the other one is Australia. I think you also seen us demonstrated in the past, uh, last year, we divested three assets that we can get about three 4% of, uh, exit yield. **[00:29:46]** Uh, so I think Australia, uh, even when we will have, for example, some vacancies, uh, we do entertain customers who are prepared to acquire their assets if they say they do not want to lease. Uh, so we will work on that, uh, in Singapore as well. Uh, Singapore, given the, uh, there are some assets that we believe that is, uh, assets that we want to keep actually are those that we have developed redeveloped opportunities. **[00:30:15]** I think since four Q also mentioned of, uh, radio target about 1.5 billion. Uh, this includes not just the, uh, data centers in overseas, but Singapore as well, especially near MRT stations. Uh, also mentioned about IBP. Uh, so those assets that is potentially not able to achieve either higher plot ratio or redevelopment opportunities. Uh, and in, in, in Singapore's case, uh, if there's still existing good lease on, on the asset I think is where we can find, uh, buyers for Singapore assets. **[00:30:52]** So these are the few things that we are, we will do. Uh, so hopefully we can close them, uh, in the second half of this year. Thank you. My last question, in terms of occupancies, can you give us a more color in terms of the vacancy at the US logistics assets, considering that has been, this has been acquired recently and also in Singapore, the reason for the tenant exiting the asset broadly, is there any tariff impacts so far you have seen in any of your tenants or your portfolio? **[00:31:21]** James wanna take? So first I'll address the US question. I, I think US logistics. Um, there was very strong tailwind right after we did the acquisition because it was post COVID and there was the entire supply chain disruption. So that, that led to a lot of, um, um, three PL sticking on more space than they required because they were holding buffer stock. **[00:31:47]** But now that things have normalized, um, it's going, it's reverting back to the mean where there'll be some downtime. So I don't expect the US uh, logistics occupancy to vary too much. Uh, it wouldn't be like at your high 99, 90 8% kind of range. It was probably moderate a bit, but it shouldn't move, move too much. **[00:32:09]** I would just like to add that the US office continues to be challenging and we do see in the second half some potential downside there. Um, and your last question was on Singapore. Um, tariff, ah, tariff impact, sorry. So on the tariff impact, generally, we've done a refresh of the survey. So when the first, uh, announcement was made, we actually polled internally our 10 of our largest, uh, tenants in each location to ask them what the impact was at that point in time. **[00:32:43]** The response that came back was, oh, it was too early. It still BAU for them. So we, we did another sense check very recently to find out, has anything changed now that things seems to be settling down? Um, and again, the response is the same. Uh, there's a lot of, uh, uncertainty still. So, but at the same time we do not see them holding back in terms of either renewing their leases or continuing to expand. ### Q&A - Question 3: Cost of Debt & Refinancing Profile (Joy Wang, HSBC) **[00:33:12] Joy Wang (Analyst, HSBC)**: So I think, uh, in g we haven't really seen any material impact. And this is not just in Singapore. This cuts across all of our operations into us, uh, UK and Australia as well. Uh, thank you Vijay, and thank you James. We'll move on to Chen from Goldman Sachs. Hi, uh, good evening. Um, can I ask how are you thinking about redevelopment versus **[00:33:37] Khoo Li Sun (CFO)**: acquisition at this point? And also what are some of the opportunities that you're reviewing? Uh, both are exciting for us. I think redevelopment is quite clear given the fact that we are sitting on assets that we know very well tested location, uh, we know what we can achieve out of testing, um, whether there's additional plot ratio, additional capacity, uh, even for overseas, uh, where there's opportunity. **[00:34:11]** We also looked at whether there is redevelopment to reposition the asset. Uh, if, you know, a lot of our overseas asset actually of certain vintage, so we want to be able to refresh them, uh, as well as for if this data center, the first thing we will do is if there's opportunity. We looked at whether we can increase power. **[00:34:31]** Uh, so with our assets, we can have more control and more, uh, if you like, examine more options for us in terms of a redevelopment. Uh, and especially when you're holding onto assets for a while, we know whether it is leaseable, uh, if it's a redevelopment, uh, on spec, or even if you're customer, we know what we are entering into. **[00:34:55]** So that is one key, uh, strategy which we have mentioned. That is we will go into because as the re gets large enough, uh, in the past, uh, we typically have about three to 500 million, right? And as we develop sector, for example, this, we invest about 300 million. Uh, we also have a few others that is coming on the way. **[00:35:18]** Uh, once it becomes income producing it give us a capacity, uh, to bring in development. So there's a, it is a cycle, uh, where we redevelop and then in time to come when there is new income from the redeveloped sites and we can continue with redevelopment. So this will be a continuous cycle, if you like, uh, and allow us to reposition asset either for green purposes or to increase our ability to lease out higher, higher specs, as well as, uh, uh, reposition the assets. **[00:35:50]** Uh, on acquisitions. Uh, we have done now to date 700 million we fought with approved at the EGM and the DHL acquisition. I think on acquisition site, we are still active. Uh, we continue to explore opportunities here in Singapore, uh, and mostly in Singapore and Europe. Uh, us, we have took a slight pause of where it is today, uh, to see where the DA will settle and we'll see whether we can reactivate, uh, our acquisition opportunities, uh, in us. **[00:36:29]** As I mentioned, Australia has always been a difficult market for us, given where cap rates are against, uh, uh, debt. Uh, and the acquisitions, I would say includes both sites for development, just like what we done in the us uh, logistics development as well as, uh, core products. Thanks. Um, if I can follow up on occupancy, I think others, James, you mentioned us could see some weakness. **[00:36:57]** What, what about the other geographies that cla See, Okay, I'll take that question. So I, I think first we start with Singapore. Generally we expect it to be pretty stable. I don't expect to see any material movements. Uh, as a side note, I'd just like to highlight that CBP, we have actually quite quietly pushed up occupancy there to about 84%. **[00:37:21]** That's the highest in the last nine quarters. So while it's no longer in the news, uh, we continue to work hard to squeeze the most, uh, and to try and reinvigorate some of this assets. Uh, in UK Europe, again, we don't expect any large movements because, uh, a lot of those, uh, single LED buildings with long leases Australia, now that years improved to 93%. **[00:37:42]** We expect it to hold, uh, above the 90% mark, um, us, as I mentioned earlier, that the logistics will remain close to where they are currently and there might be some downside to the office. Thanks. Uh, just one last question. Maybe just, uh, touch on CBP. Uh, a year ago it was 74% we push up to last year's 81. **[00:38:08]** Uh, now it's 84. At 84 is similar to where science park is. Science Park two. So if you look at Science Park, two is about 85 Science Park, one is about 91, north is the best, 98. So I think CBP, uh, what we've done is, uh, we have injected, uh, we have actually injected new target markets. We deemed, uh, that likely to be approved by the authorities. **[00:38:38]** Uh, and they have been, they've been quite supportive in relation to where are the adjacent industries, so not the typical traditional BP players. Uh, obviously you have heard mention about a aviation company entering into OCC, uh, that's engineering. Then subsequently, we also started looking at institutions, uh, which we have brought in into CBP. And uh, this allow us to be able to fuel our buildings. **[00:39:04]** Uh, quick one, what's the yield on cost on GU Uh, publicly we say 6.3, but now it's actually higher than 6.3. Thank you. Next we'll move to Joy from HSBC. Um, thank you everyone. Uh, first on, uh, maybe just updates on the upcoming, uh, redevelopment. Can we get a sense of leasing and income contribution once completed? The five entire to one entire? No, no. **[00:39:36]** So the upcoming one, five to one and, uh, 27 I About you on course, but seven and above, no leasing. Leasing, Okay. Uh, leasing we will again announced when we hit DOP. Yeah, I hope you understand where, yeah, bear with me because that's how we wanna strategize. We do not want to disclose pre-commitment and any leasing activities ### Q&A - Question 4: Capital Recycling & UK Developments (Rachel Tan, Macquarie) **[00:40:04] Rachel Tan (Analyst, Macquarie)**: because then we got a better hole of where, how we negotiate and where we want to land attendance. Okay. Uh, but There are pipelines And I, I guess, you know, maybe just in terms of income contribution, uh, how should we think about income contribution for these buildings? Like when would income start to Coming, uh, um, for, uh, for your model? **[00:40:26]** Just assume maybe a year. A year avoid, yeah. **[00:40:34] William Tay (CEO)**: Okay. Yeah. Okay. Um, second question. Updates on the UK data center. Uh, okay. UK data center. Um, not much progress. Uh, we are still talking to our tenants. I think there was a question asked about with what does our tenant include? Hyperscaler. Uh, most recently we started entertaining inquiries from Hyperscaler. Uh, as we all know, as you get closer to the date of confirmation of when the supply will come, I think that's actually trigger some interest. **[00:41:05]** Uh, we originally intended to build a 60 megawatt, uh, data center, uh, by, given the fact that we haven't got a confirmation of when with additional 35 will come in, uh, now we are working with, uh, prospect to re-look at the construction. So we may then now phase out 25 first, then subsequently take 35 when the power comes in. **[00:41:28]** And this works well with the tenant, uh, of prospect, uh, given the fact that even if there 60 megawatt on day one, they won't be utilizing 60 megawatt. So we need to go through the, uh, the, the specs and re-look at our planning and construction. Okay. Thank you. And, and just, uh, last question on rental reversions, uh, your guidance is maintained at miss, single first half is actually high to double digit. **[00:41:53]** So how should we think about it? We are still keeping at mid, uh, I think as, uh, James mentioned, we still continue to see some uncertainties, uh, the vi's questions, whether tariff has any impact, uh, we haven't seen directly hit, uh, from our tenants, or rather as, at least from our tenants. Uh, so on the question that VJ asked about whether our, uh, this quarters, uh, non-renew, was it affected by tariff? **[00:42:22]** I don't think so because they, they are business was, uh, slowing down as we see from their business. Uh, but we think that given where now tariff is landing, uh, we may start to see signs, whether it is in three Q or four Q to see whether there's impact down the, uh, down the line to our tenants. **[00:42:45]** But at this point in time, we've got no clear indication, uh, that tariff is, uh, is probably holding their expansion. Uh, if it's renewal most of the time is since it's uncertain the renewal short term, two years, three years instead of five years or seven years. So I think with all this, uh, clarity, I think we would like to see our tenants being able to make better decisions and uh, we will then evaluate whether there will be any impact. **[00:43:14]** Thank you. Thank you Joy. Uh, next we'll move to Jonathan from UOB. So sorry to repeat the topic, so I'm looking at tariff, but maybe from a positive anger and the rest tariff in Singapore is 10% a lot lower than 20% in neighboring countries, some are even higher. Does that mean that there will be positive impact on demand to expand in Singapore for multinational companies? **[00:43:41]** Would that lead to higher occupancy for business park and high tech buildings in the second half and beyond? Yeah. Um, business park is not affected. I don't think our tenants in the area are affected by the tariff. Uh, if you are weighing the point about tariff relatively lower than say our asan partners, uh, I hope what you have expected will come true. **[00:44:14]** Uh, but there are other costs, occupation costs includes labor, electricity, um, many others, uh, I would say I don't think there's any immediate. If there is, it's good, but I don't think it's gonna be immediate given the fact that you were to move an operation from a location into Singapore. It's not an overnight decision. Uh, and we hope that there will be, because when it first started, I think you also heard mentioned, uh, there was increase in inquiries, almost everybody, not just in Singapore, but overseas brokers were telling us there was increase in inquiries, but it has since died down. **[00:45:03]** So now if you're asking whether with all this certainty, uh, we hope there'll be more activities, but I think operational costs is not just about the tariff. Okay. And for us business park, they are the one imposing the tariff. Is it a positive or a negative impact for business park in the us? No direct impact from business partner. Yeah. **[00:45:28]** Okay. And just a short follow up weakness, uh, for logistic in the second half, what's the, what's the reason for weakness in the second half? Uh, not logistics office. Office? Yeah, so not weakness per se, but uh, continuing challenges with the US office market. Okay. Thank you. Thanks. I Think US office, we do need to see a catalyst, right? **[00:45:53]** I think we have started to see a bit, uh, for example, when we see Portland, uh, there's increase in occupancy, uh, small amount that came from AI related, but these are still small. If you looked at entire US market today, the big tech and the life sciences are not expanding where they were previously. So it will still be likely in this state for a while. **[00:46:18]** Uh, so it's not logistics, it's more business park. And we've been saying this, uh, actually from a quarter to quarter. So logistics, we are still confident that we can find at tenants to replace any vacancies. Thank you. Thank you very much. Okay. Thank you. Uh, ### Q&A - Question 5: Tariff Adjustments & Portfolio Divestment Pipeline (Dale Lai, DBS Bank) **[00:46:37] Dale Lai (Analyst, DBS Bank)**: can we have the next question from Dale? DPS? Yeah, thanks, uh, William, it's me again. Just, just wanted to follow up on the, uh, divestment, um, uh, targets for this year. So how, how should we look at your divestment gains? Um, you know, is it you're gonna use it to, to **[00:46:55] William Tay (CEO)**: to stabilize DPU or is entirely just used to, to repay that? Uh, we prefer to repay that, uh, that opens our head room and we can acquire. So if we do divest at better, uh, exit yield, uh, of course acquisition, we've been looking at six, 7%. Uh, it'll be helpful for us to recycle and that's probably a better use of funds. **[00:47:19]** And if you look at even our, this half year operationally, if you look at the numbers, whether it's MPI or gross revenue has been quite stable. The key reason for the slight decline in DPU is because of the new, new, new, new, new units that's issued. Uh, so the relevant question is when income will come in likely to be this two weeks, uh, that will actually be able to support the new units that was issued. **[00:47:45]** Uh, but we prefer to make, uh, all the divestment proceeds to. Okay. Okay. Got it. And, and just a quick follow on that is, um, I'm presuming, uh, you know, any, any of these divestments, it will be somewhat uh, dilutive to to DPU and in that sense, unless you get really low, really low exit use of, I don't know, below 4%, Um, depending on market, yes. **[00:48:12]** I think if you say in Singapore, I think where you've seen all the existing divestments that was done about 6%, five, 6%, obviously you hope to do better and we can acquire better. So in terms of increment between a divestment acquisition, I think it's, there's some positive carry, uh, take for example, when we acquired Knight Tyson, it was a seven over 7%. **[00:48:39]** Right? And it's huge given effects over 400 million. Uh, so we hope to be able to do that. And then while we look at divestment yes, including overseas, uh, where there's still rain growth, like for example Australia, we do expect, uh, sharper exit yield which will be helpful for us to redeploy. Okay. Okay. Got it. That's clear. Thank you. **[00:49:03]** Thank you. Dale, are there any more questions from the audience? Okay, um, if not then I think, uh, we can end this session. There's no more questions online that were not answered, mostly covered as well. We, I'll just do a final check. Um, oh, okay. There's one more question. Okay, Thank you. Um, so for us portfolio, think occupancy now is at 85%, logistics is stable, some challenging business space, you think portfolio will drift down to close to 80% occupancy. **[00:50:02]** Um, I cannot give precise guidance right now, but it should be on the downward trend. Okay, thanks. Actually took us a while to drip to 85% as well. So there's always, um, if you like, we do see non-renew, uh, after a few months we do be able to back fuel. So while there's still activities, right, I think what I men, what I mentioned about if you want to see the occupancy starts to pick up, I think we need to see catalysts. **[00:50:41]** Yeah. And the vacancies are mainly downsizing or just vacating moving to somewhere else or, Um, a mixed bag. Non-renewals as well as downsizing. Alright, thanks. Okay, thank you Rachel. Any final questions from the floor? Okay, if not then thank you everyone for joining us, uh, physically today as well as online. Uh, we wish you a good evening ahead and if you have any further questions, you can follow up with the IR team. **[00:51:15]** Thank you.