FY 2022 Full-Year Financial Results Briefing

[00:00:04] Opening & FY 2022 Full-Year Financial Presentation

Terrence (IR), Yeow Kit Peng (Head CM & IR), William Tay (CEO)

Yeow Kit Peng presents FY2022 results: portfolio occupancy reaches a 10-year high of 94.6%, rental reversion is 8%, and DPU rises 3.5% to 15.798 cents. Gross revenue grows 10.3% and NPI rises 5.2% to 968.8 million dollars despite cost pressures. Gearing stands at 36.3% with 79% of debt on fixed rates. William Tay notes the DPU growth and record occupancy while valuations remain stable amid rising interest rates.

[00:01:25] Yeow Kit Peng (Head CM & IR):

“reversion of 8% for leases renewed in the financial fy202.”

[00:19:38] Q&A - Question 1: Inflation, Utility Tariffs & Operating Cost Pass-Through (Mervin Song, J.P. Morgan)

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

Mervin Song asks whether occupancy levels can be sustained and about tech-sector space risk; William Tay responds that new supply is limited against demand, logistics space is fully occupied across markets, and tenants holding shadow space remain obligated to their leases. He adds refinancing due this year is about 10% of total borrowings, with rates probably three, three-ish.

[00:19:38] Mervin Song (Analyst, J.P. Morgan):

“How do you think you can sustain these levels or are you seeing some weakness?”

[00:23:04] William Tay (CEO):

“the total refined amount is about less than 700 million and our total borrowings is you know, six over billions.”

[00:24:35] Q&A - Question 2: Singapore Business Park Demand vs. Logistics (Derek Tan, DBS Bank)

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

Derek Tan asks about demand for logistics and business park space across markets and about acquisition pace this year. William Tay answers that logistics demand stays firm across the four markets, occupancy in Australia and Europe stays tight, US business park space shows mixed results, and pricing gaps between buyers and sellers have narrowed though acquisition volume depends on rates and valuations.

[00:24:35] Derek Tan (Analyst, DBS Bank):

“I will limit him congrats once again on a very strong set of results just a few questions from me adding firstly.”

[00:25:02] William Tay (CEO):

“So that's one part of the comfort that we like to get second thing is on valuations.”

[00:39:30] Q&A - Question 3: 1 Science Park Drive (Geneo) Redevelopment Scope (Dale Lai, DBS Bank)

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

Dale Lai asks whether redevelopment activity will continue this year given construction costs. William Tay answers that the team continues to pursue redevelopment opportunities, particularly in Singapore where untapped plot ratio exists, citing the Ubi project rental uplift of about 20% above underwriting. He adds that overseas redevelopment focuses on increasing data center electricity capacity to support renewal and leasing, while Singapore projects are weighed against rising construction costs.

[00:39:30] Dale Lai (Analyst, DBS Bank):

“Maybe is that something which you would consider doing more this year?”

[00:40:35] William Tay (CEO):

“I think I mentioned before it's probably about 20% higher than our underwriting.”

[00:55:35] Q&A - Question 4: Energy Contract Renewals in Q4 (Tan Yew Kiam, CLSA)

Tan Yew Kiam (Analyst, CLSA), Khoo Li Sun (CFO)

Tan Yew Kiam asks how much utility contract costs increased at renewal. Khoo Li Sun answers that utility costs rose by 64% for the year, split between tenant and landlord components, with landlord-side utility cost as a share of opex falling below seven percent from about 8% previously; the rates have already been contracted for two years, locking in 2023, and Singapore represents 60% of the portfolio.

[00:55:35] Tan Yew Kiam (Analyst, CLSA):

“Can you share how much higher when you renewed it like versus the previous contracts?”

[00:56:10] Khoo Li Sun (CFO):

“looking at 50 to 70% higher utility cost compared to the year before.”