FY 2022 Full-Year Financial Results Briefing

We will not proceed with the presentation for the FY 2022 Financial results by Miss Yao. Keeping head of capital markets and investor relations keeping please. Okay. Happy New Year on behalf of Captain Lander Center Street. I wish you all good health and a successful year ahead. We let's Now comments on the financial year, FYI 2022 results. presentation key highlights We achieve strong results.

across all our asset classes despite the uncertain macroeconomic conditions The portfolio occupancy hit a 10 year high of 94.6% and we achieve higher rental

The portfolio is well, Diversified and resilient. On a same store basis property valuation is stable at 16.1 billion dollars. So let's dive into some of the details. so FY 22 versus FY 21 gross revenue increased by 10.3% driven mainly By Fourier contributions from the 75% stay in galaxies grab HQ in Singapore the 11 data centers in Europe UK.

The 11 Logistics properties in the US and of course better performance from our existing properties in Singapore. NPI rows 5.2% to 968.8 million dollars despite cost pressures total amount for distribution rules in tandem to 663.9 million dollars dpu rolls 3.5% to 15.798 cents This is second half versus half Financial year, FY 2022 performance. Gross revenue is 2.9% higher driven mainly by contributions from the seven Logistics properties in Chicago us.

Net property income grew in tandem with gross revenue. Distribution income is stable at 333.2 million dollars is by an increase in borrowing costs. Dpu is stable at 7.925 cents. So this is second half this second half of the previous year gross revenue increase. By 7.1% and this is largely driven by the logistics portfolio in us. So this is the Chicago as well as Kansas City and better performance in Singapore properties.

Net property income increased 3.5% to 491.8 million dollars despite higher utilities expenses. So second half dpu increase 4.3% to 7.925 cents. Distribution we adopt a semi annual distribution frequency. So for the period of this July to 31st December 2022 a distribution of 7.925 cents will be made you will be receiving the dividends on 7th of March. moving on to investment so the highlights for the year. So on the Acquisitions front we continue to adopt a cautious approach to ensure that we only acquire good quality properties with strong tenant base and have promising long-term potential.

So during the year, we completed 223.4 million dollars of acquisitions. And all three Acquisitions, sorry. And all three Acquisitions are in the robust Logistics sector in the US and Australia. The logistics portfolio is currently sizable and about 4.1 billion dollars and represents a significant 25% of our eum. Next we completed a Redevelopment. This is you Rubik's in Singapore. It is a premium industrial property costing 38.2 million dollars the new five-story property enables us to secure a higher-based rent when we compare to the original two like industrial properties prior to the Redevelopment.

And during the year. We also completed two aeis. Posts the financial year in the first queue this year January February. We completed two acquisitions. The first one is a high tech Industrial property at TOA payoh and the second one is a cold storage facility at one Borough Lane. Mpiu for the two Acquisitions is estimated at about the 6.8 6.9% Capital Management gearing is healthy at 36.3.

% so I emphasis is to ensure healthy gearing levels during this uncertain business environment. We have a total borrowings of about 6.3 billion dollars. So during the year, we proactively come out 1.3 billion dollars of that with fresh panel of five to ten years. So we have extended the debt maturity to 3.7 years. And this you can see it is very well spread out such that less than 20% of our debt should come due for renewal in any one year to minimize refinancing risk.

The healthy leverage of 36.3% as well as a high proportion of fixed rate that of 79% a neighbor asked to moderate our interest expense despite the significant, right? interest rates But for that is 2.5% for fy2022. and the financial At very healthy Levels by exceeding what is required by the bank covenants? For example, I see are is 5.2 times? This is about the one odd or two times threshold.

Okay, A3 meeting is maintained. Providing us with financial flexibility and very strong access to Capital. This is an interest rate sensitivity table. So about 79% of our debt is fixed. So the balance 21% is on floating rate and based on that 21% proportion of variable that a hundred basis points increase will result in a 2% decline in distribution. And then if we were to assume a 200 basis points increase then this will result in about 4% decline distribution.

Natural hash, so to minimize the effects of any adverse exchange rate fluctuation. We have a high level of natural hash of 74% for our overseas Investments. Hey revaluation. I said 35th December 2022. Clear on 227 properties was 16.4 billion dollars. So on the same store basis that is no significant change in the valuation of our property portfolio.

It is stable at 16.1 billion dollars. in local currency terms higher valuations were achieve our properties in Singapore Australia and us adult evaluations for data centers in the UK and Europe decline this data centers accounted for about 4.4% of the total AUM of 16.4 billion dollars. So this is a strong demonstration of our acquisition strategy over the past few years our portfolio is where Diversified and resilient our tenants businesses are spread across more than 20 Industries. This will reduce exposure to anyone industry and lower customer concentration risk. So when one industry is challenged another industry may be doing well.

portfolio occupancy overall the portfolio occupancy recorded a 10 year high of 94.6% driven by improvements in Singapore and Australia in the fall for the Singapore improved to 92.1% so higher than the island why occupancy rate and this is due to higher leases at some Logistics and high specification industrial properties. Australia increase further to 99.4% due to new releases in our business space properties in Sydney and this tenants have signed up for pretty long leases of five years 10 years.

us occupancy remain healthy at 94% UK Europe also very high at 99 .4% Um So based on new leases sign in the fourth quarter the biomedical engineering it and data center sectors were the largest sources of Demand by gross rental Revenue. For FY. The whole year fy2022 then the larger sources would be engineering Logistics eye candy data centers.

Okay, we have here for the international portfolio. in the fourth quarter the logistics it and data centers and education and media sectors were the largest sources of Demand by gross rental Revenue. And for the four year so tenants from Logistics biomedical retail consumer sectors accounted for the largest portion of the new demand. Okay, rental reversions overall the portfolio achieve and average rental reversion of 8% for the full year. So this is in line with our guidance.

You can see that the rental reversion for Singapore is seven percent. Australia 14.2% us 29.2% and 11.7% for UK Euro So looking ahead we expect the rental reversion to continue to be positive mid-single digit range. Okay, well stable at 3.8 years. Okay, so we have the portfolio least expiry on the portfolio basis here. So we have about 21% due for renewal in this financial year. So this quite a normal level and in Singapore. It's about 26% coming due for renewal in the first bar. You will see a darker shade of gray and you will see a 3.8% there.

So this refers to the five single lease properties, you know, and many of them are likely to renew. Australia 16.4% coming due us 9.2% UK Europe 9.4% There are five ongoing projects with 617 million dollars that undergoing development or Redevelopment AEI and compared to suit that that will help us to improve on the returns of our existing portfolio. They are expected to complete between two or two three and took you to go through five.

So to conclude we continue to face our challenges from the rising interest rates inflation and global economic uncertainties. These issues we have some impact on our tenants businesses as well as on class operating costs, but we are confident to overcome all these challenges and we are well positioned to leverage on our strong financial position to take advantage of any growth opportunities. Should they arise to deliver a sustainable, you know return to universe.

So with that, thank you very much. Thank you keeping we have also represented this from the management on today's panel May invite William C O. Kurizu CFO and Mr. James go head off portfolio management. And before we proceed to the Q&A, I would like to invite William to say a few words. We learn this. Thanks for coming. I just wanted to make a few points just to summarize what keeping is presented.

The first point is it's a very strong set of results the dpu has grown 3.5% against last year. and we actually hit 10 year high in terms of occupancy. I also can see in terms of occupancy and the resilience that we have in our assets. Rent a reversion is 8% in 3Q you about meet five plus. Guidance was Meet single digit. We're happy that we actually hit that.

Second point I want to make is that despite all the global uncertainty career expansions worry and interest rate risers valuation has been strong. It's been stable. In terms of same store slight decline, but 1% but all all stories increase. and the point one didn't make to notice that Last year, we actually celebrated 20th anniversary. We went overseas for Past 8 years the main thing that I wanted to make note here raise that we have actually good Knowledge from Singapore and we're transfer a very good operational capabilities from Singapore to overseas, which is why we are able to maintain very strong performance across all our asset classes.

And the last point is as we look forward to 2023. They are still uncertainties around the macroeconomic environment. We will continue Safeguard and expand our business. It but we will also definitely adopt a very cautious approach as we navigate this environment. Thanks. William we are now proceed to the Q&A session for participants present. Please raise your hand and my colleagues will hand to view our microphone and for participants. They are joining us via Zoom webinar, please type in the Q&A function box to submit your question online.

Which state your name and organization before your question? The floor is not open. Okay, I have

Next three years folding after that is about 2.2 million average demand less than a million. But we also hopefull that we can still capture all this good listening demand that's out there primary reasons because of the quality assets that we have. As for where we can maintain the occupancy, I think. We will we will definitely want to maintain this lead.

In fact, if you look at Logistics across all markets is full. I think it's no Price, we're not only one that's having four occupancy across all space. So even for Logistics any new Supply will be very well absorbed. High-tech space has been in good demand. In fact, you see that industry has been growing quite strongly. The other challenge, of course, then is business park space which leads to your second question about sea.

Space Shadow space layoffs we find that we are comfortable with what we are seeing in terms of the leases that we have with the tech tenants. They're committed any of the Shadow space that you hear in the market. majority unfortunate side majority are not with us. There are some space that for example see talks about and yet they're not coming up from our space. So we are comfortable that you know, they are continued to be obligated to the leases.

other than that in the big tenants that we have like grab there's no news of that overseas. We're exposed to Pinterest strike Microsoft Oracle all these days very well. In fact, I think they are all still expanding. Which is why we want I wanted to put up a slide on International new demand. If you turn to that slide you will see that new device is still strong across different Industries. And that is the strength of a diversified tenant base as well as different asset classes that we owned.

Last question is boring cross here keeping I think. Coming up, but it they are all in the second half of this year. The rates for for these few refies will be higher. Right but the total refined amount is about less than 700 million and our total borrowings is you know, six over billions. So this is like 10% of our you know, total borrowings. So the increase in the borrowing cost should be more gradual in that sense. And also we mentioned that 79% of our debt is fixed. So, you know, there's some exposure the 21% but overall because we have that high level of fixed.

and a lot of this reply is it's only like 10% of our total borrowing so that should help us to manage the interest expense. Probably depends on where the Benchmark, you know moves how it moves. But yeah, probably three three-ish.

So I just wondering whether if there's a conversations this year you have capacity. I'm sure time the market will support you, but what kind of level or Activity should be expected this year, which markets and what kind of asset class so every bomb broad base that some thoughts on that. Thanks. Thanks, Derek. Because of the assets that we have if you're focus on you us and UK.

Let's put logistic aside. I think Logistics in terms of demand continue very strong. In fact, I think the outlook for Logistics across the four markets that we are we have is very positive. We also expect strong rental reversion in those in logistics space. So said that aside if you're looking at the other asset classes, so USB spark, and of course UK Europe is DC.

This part in terms of us. You see that there is still some challenge in terms of occupancy. We have experience lower occupancy in Portland and Raleigh, but San Diego has actually shot up. But yet. Listening activity in Portland has increased since 3Q. Which we are hopeful that we will be able to capture some of these demand and we are not just focused on the tech tenants. We are focused on a various industry, which the new demand has shown in terms of 4 q as well as 2020 for international market.

for Australia in terms of this park our business office We left very little space in Brisbane. Sydney is full first time. I see our course College Street at 100% activities are coming back. They're coming back to work. So let's worry about Australia because then the Europe DC Europe DC in terms of when we bought the the portfolio in Europe. Oh, there are some vacancies the continues more vacancies. In fact, we only left with two data Hall 500 square meters and 700 square meters very small.

Demand is strong. We have actually regearing you from 7 10 and 15 years and sorry 7:10 and 12 years or three are released. this so This actually shows that demand is strong or Supply is continued very tight. and we also trying to what we've authorities and Consultants to increase our electricity capacity that will allow us to be able to provide more for tenants.

Shaky or not. I think there will be industries that is continue to be under the stress, but we are hopeful that they're continued to be demand coming from various Industries. on your second Singapore's probably the odd one out compression. select compression about four or five beeps UK Europe is probably the largest 69 beeps expansion. Australia is more us and very stable.

So you've talked about acquisition. I think it will show that. or perhaps across all landlords asset owners the valuation will probably be also very steeper. Smoke expansion, but they allow it to realize table. so moving forward but acquisition is a different story. Whether you're prepared to sell at what buyers like us demand, so we've been quite consistent given the high interest rate and where we are trading. We probably demand something between six seven percent you assets that you look at our own valuations assets that we own assets that any of our vendors own is probably still shooting five six percent.

So in the past one year, I'll say that perhaps the mismatch in terms of pricing Gap is between 100 to 150 Pips. But we do see that in the last few months. It has actually narrowed down to webs 40 50 beeps. which means that sellers have to take a discount off their evaluation assuming The entire the markets that we are in the same experience some carry expansion by supported by renter growth. So validation will be quite stable.

But if they want to divest or they want to sell they have to take the discount given the fact that buyers like us we're expect certain level of returns. So I don't where I answer your question, and if you're looking for numbers, I hope to do better than last year. No longer a billionaire. Yeah. That's not for me. Thanks.

Brendan I'm sorry. Yeah, what's going on? I'm just back to the capric question. Right? I think given that not all the market seems to be thinking that rates have picked. Do you think that this 40 50 bits? Yeah between vendors and boys like myself could actually, you know start the result on you taking part in the bullet to buy I mean Provided I know you can still get in some form of Christian.

So, um buyers like us hasn't changed. I mentioned we expect that kind of six seven percent why so is because even last year as we price any of these unfortunately. We are looking forward towards a higher interest cost sellers are not prepared to take the kind of discount last year. So so I think that the the price is match has narrowed.

Yes, you are. Right so we have been seeing a narrowing in the past few months. perhaps the next few months second half will start to see probably more realistic expectation of prices from the vendor. And I will say that that actually goes back down to certain markets or and the asset classes that we are interested in. either with every expansion Australia continue to be our reach for us as you look at my valuation numbers as well. I'm still having a very strong 45% kind of cap rate. So quite Outreach even for us to buy in Australia.

For other countries, I think us would probably some location that it's worth spending more time in. the best part has the deals that we see in terms of this part. Has such energy increase. And the 40 40 to 50 bits primary reasons Army primary coming up from USB Spark. The other one will be Data Center and UK in Europe. Our numbers has also shown that the Cadbury expansion is the valuation drop is quite quite significant as well. That will probably be across the board in that continent.

Which means that there lies some acquisition opportunities? Singapore despite I mentioned it's a compression in my assets. my portfolio but they are still opportunities out there as we have demonstrated buying two assets here in Singapore and I will continue to hunt for good location good assets in Singapore. And Singapore being a list. So as we looked at and jdc gives a 30 year lease by a ton of the modern and we are able they are able to transact. You know, you left it seven to 10 years so that makes it very attractive for us in terms of a Christian.

Hello, I usually check on the performance fees, right? Can I just check whether you kind of wave it for fy22 because your growth is three and a half, right? Okay, the growth is three and a half but performance fee We compare against pre-performance fee of last year. So against pre-performance fee is about 2.3% Which means there's no performance fee.

Okay. Alright. I'll just one last one for me right for the red reversions. Can you sort of share advise the reversions for Australia and us if we were to factor in the pis as well as the incentives if any James you want to think that question? Yeah, thanks Brendan. If we look at the US typically on renewals the TI's would.

Be half of what would be any lease and a lot of that would be factored into the rent as well. So I would say that this is a pretty clean reversion number that you see here. And for Australia is less pronounced as well going forward. So and many of these happening in our Australian office rather than Logistics since most of our Logistics properties in Australia.

Really a single length, and hence. They are not calculated inside our table here. Thanks. All right. We have question for BG. Hi Vijay from RHP. Happy New Year. I have a couple of questions. Maybe I'll take it one by one firstly on this topic of Acquisitions. You notice that the care you mentioned that the cap rates have expanded. So, how do we think is this about opportunity for divestment potentially in Australia, which you can consider doing at this point of time and maybe this year maybe with your acquisition and diverse man match together in terms of value. Is that something which you can think of?

Definitely if there's a poetry look at recycling some of these capital for better yielding for Acquisitions. That's something that we're consider. And maybe an Acquisitions would you be looking at single asset at this point of time or you think there is a portfolio opportunities in the market which you can take on considering the market dislocations? We do see singer assets opportunity as well as portfolio.

Given its portfolio. You probably will be aware that that may require efr we definitely want to look at whether ability and the window if I say we're going to do any portfolio deals. I would say in terms of any botton in terms of singer assets. I think it's still attractive given that the footprint that we have. So we will be able to at least look at the getting some Advantage based on our footprint.

If it's a portfolio, of course, the challenge is the underlying and sets performance mixed bag of good and more. Or challenging assets is something that we probably got to. Take the decision. proceeding with the portfolio acquisition If that's for example challenges. That for example, we can see in the portfolio or certain locations. Maybe if you have sex but certain location maybe more challenging because studied deploying to whether we can manage those challenges.

But you are tilt will be towards single assets. At this point of time actually both is we are comfortable with any of them. Any question is in terms of NPA margins. I noticed that half and half your npm Arjen has in fact increased and you said lower utility expense in the second half. Maybe can you elaborate a bit on this and what sort of margins can be expect on a steady state going forward in 2023?

Plus I think on the higher level if you see. So if you look at npm margin, you have noted it's a decline primary reason is of course Opex has increased. The other big Market is utility cost. utility costs gone or utility income goes up, but course has gone up as well. So it will take that into account. The mpm.

Margin will have a larger decline. but if at the strip up the utility income and expense in terms of npm margin has been very stable. Slight decline, but it's just attributed to Opex increase. So in terms of steady state, I think we are still looking at that above 70% 70 80% kind of margin. That's more for Singapore overseas is all very high primary reasons because it's all passed through.

It's very looking at. Oh, yeah. So yeah, do you need elaboration? Oh, yeah, okay with that. Okay. So my last question in terms of aeas and redevelopments. I

Construction cost has gone up. Now but what we realized that flight to quality is very key especially in this environment. So

So we work towards Redevelopment to enhance the portfolio. And for example, it's keeping mentioned about UBIX. The renter that we have achieved is very strong. In fact, I think I mentioned before it's probably about 20% higher than our underwriting. Covid has definitely helped. to bring the money into this Rubik's and the environment currently we've that we can combine better enter so we actually able to capitalize on that, but we are my phone on the continued pressure on construction course, so we got to look at how and where to spend the capex to make sure that is Meaningful, especially now when construction cost is is actually continued to be on the rise.

We want to be very watch our spending for capex, but definitely Redevelopment is one on our plate right now. And overseas we continue to look at whether we can enhance as I mentioned just now, especially for data center. We want to be able to increase our electricity Supply so that we that we require some capex to enhance that and that will actually help us in terms of renewal and leasing up.

And therefore overseas in us there will still be some approximately for us to look at in terms of Redevelopment and convert to suicide. Thanks. Just following up what sort of returns do you expect for redevelopments at this stage? So for Singapore, I think we have to look at seven. In a past six percent will will be fine.

So for example our Science Park Redevelopment with capital and development the we will achieving about 6.3 but today in terms of this environment. We definitely looked at higher, you know. hi, this is Terrence from UBS, do you mind sharing what a 4q 2022 reversions which segment was driving this number and we remind us if this is picking up against the third quarter and for the fy23 guidance for reversion, so similarly, which sector would be driving it.

Or does it look broadly similar to FYI 2022? Jim Johnson, if you don't mind, can you also Flash the version right on the screen because the data is on the table? I'll just run you through some of the numbers. Select the vehicle. Okay, so if you look at first we'll start with Singapore. It's fairly similar Trends between 3Q and 4q and it's largely driven by Logistics because that is really the hottest sector right now at Double GP digit Rand reversions for both quarters. I think at both Business Park and our industria and data center segments. They it tends to be more steady and and a lot lower compared to Logistics if I move on to us as you're aware as we acquired both the Kansas and the Chicago portfolio in the US one of the pieces that we had was that the rents were under market and this reversions is proving that he sees to be right because we have actually been able to surpass our own writing rents when we first meet those Acquisitions so that explains for the high reversion that you're seeing at the logistic cluster.

comes from a mix of both, Kansas and Chicago I would say that in the business space. It's a mix of our Legacy portfolio that we've first acquired when we went into the US in a 2019 and it comes from a diverse mix of different geographies as well. What I like to just add is that while occupancy has been challenging for us. I think one mitigating Factor has been the strong reversion that we have been experiencing. So overall the NPI hasn't decline or if in fact he has been more or less stable. We haven't really seen a negative Financial impact from the lower occupancy up to now.

so for 2023 the Reversions pattern that supports your guidance. It really looks similar to FYI 2022 In terms of the magnitude. Yeah, so I think in Singapore the trends would remain like Actually the same you see Logistics continue to outperform the other sectors in US it would depend on the specific least that come up for expiry. I would I would say that very high reversions that we saw this year might not be repeated next year. Of course, we'll try our best but we can't sort of promise that you will continue to be maintained at those levels.

Um, sorry one more clarification from BJ's question for first quarter 223 is the Opex likely to be similar or higher than fourth quarter 2022 affects meaning inclusive of the utility cost electricity and same comment for MPI margins. Is it likely going to be the same all over factoring some of the service charges if you're in the midst of raising them?

Okay, so Opex is going to increase if I just give a brief. Sort of trend of where we see utility costs on a unit rate basis. We have seen somewhere between 35 to 40 percent jump in the underlying unitary between fy21 and fy20 to so you saw a big increase in terms of Opex, but similarly there was a almost corresponding increase in terms of the revenues because we would have taken in the electricity income that will be covered from our tenants next year. That trend is gonna continue. We have locked in our unit rates. And again, it's much higher than what we saw last year or what we saw in a fight 22. So the the same Trend will continue we would see our cross Revenue continue to increase because they like income would go up but correspondingly that would also be high here in like expenses and mathematically that would result in a lower margin, but I would say that underlying if To strip away all of this noises the underlying margins of all the financial performance and profitability of our access wouldn't be would be unchanged. Yeah.

So the the short answer to your question is yes margins will drop next year. I am just one question. So if funding environment improves, right is any sponsor assets ready for acquisition? including CLD there is stabilized one yet. There is in science Park. The other one will be the data center that they have. I mean the sponsor assets come.

From Middle East CLD. There is nothing from CLI. other than that the assets the other assets like now they just a t o p for Rochester Commons is for me. It's not really for transaction. So yeah, we definitely very keen to acquire from sponsor. Okay. Thank you. Thank you for your questions. Maybe you just move on to some questions. There are online before.

We go to the online questions. Welcome back to you. Join them. Okay. There's a question from Mr. Aaron go why your thoughts on last small Logistics as opposed to big box out during assets particularly in the Australia. What's my thoughts? I like last mile. Primary reason is there the tenants are very sticky as you have seen from.

a good demonstration is our us Logistics rental reversion supplies, very limited in a lot smaller location and the tennis need a space and yes, I mean, they've been there. For 20 years the comfortable with the location you definitely coming from whenever has been increasing whereas in Australia, whereas in the US whether it's in Singapore in Singapore, you see that we have double digit rental reversioned across to quarters.

That means that the asset class is very resilient across cycle and Last Mile location is not just for logistic player last month location making me just for standard distribution owner who wants to have a place to store their goods big boxes has been interesting but we have not been keen on that primary reason is pricing is Outreach for us and big box is definitely very different Market, which means that if you're a big box that always challenge if you can't find a big tenant to take the big box, you have to chop it up which means that will affect efficiency and sharing or loading base and all all these becomes an issue So definitely we prefer last month.

Join, you have a question. Oh, yeah. Thanks. So to question from If I just saw on the rental reversion just to clarify that is before taking to account tenant incentives. Right and if you look at tenant incentive across your portfolio, what sort of movement are you seeing, you know for different asset classes? yeah, okay, so Thanks, Joy, uh tenant incentive week. It's typically a keepex item rather than being. All right, so it doesn't show up.

But as I was saying for renewals, they tend to be a lot lower but particularly for office tenants. so I would say that the we've regards to the Aussie business-based reversion. You wouldn't see a lot the tenant is. Centive wouldn't have moved them the figure too much. Yeah. tenant incentive changes, you know over the last cause of last year also Okay, that's specific to which geography or across the board. You can just make a sort of General common across your portfolio. What are you see in terms of key changes, maybe? Okay. We haven't seen too much material changes. We haven't really seen it. Go up too much. Maybe I'll say that for Australia.

TI's or tenants incentives is typically use as to help them and to attract new tenants rather than as a reversion kind of incentive. And in this case what we've done particularly for our vacancies in in Australia is we have done speculative of vacant buildings, but we do we For rather small units because this tend to appeal to your smaller occupiers who might not have the aware with the expertise to carry out their own Renovations Etc. And in that in that case, we put the capex up front but we cut the TI's and then the tis goes down to a very low level but they get almost like a fully fitted.

They just need to bring in their movable Furnitures and they can start operating so we have seen quite a lot of success there which is why you see that our office occupancy across Sydney across Brisbane is close to 100% right now and Besides that I would say, yeah, so just coming back to my earlier Point even in the US. We haven't really seen too much changes in terms of tenant incentive. I would say that particularly for Logistics where TI also plays a big part.

It's really still landlords market. So we are able to dictate a lot of the terms and we don't necessarily need to push ourselves and go above Market. Thank you. And second question is on Redevelopment early on you mentioned about Singapore Target 7% You could you share what sort of Target you will look at for us and is us going to be a meaningful market for you down the road.

Um, we don't have a very big portfolio in us. So there's some opportunities here and there. In fact, including Europe some redeveloped opportunities. If you really want to look at for Logistics summer sets are all we definitely can be able to improve or redevelop them in terms of you as we have demonstrated in our last case for us. We are able to push up about 90% this probably be what we are looking at for overseas Market much higher than in Singapore. Our interest rate is the free higher there.

So we definitely for us given that the opportunity comes with hopefully comes to tenant that will actually enhance the deal and we can never work to what's specing out for the tenant in Singapore. If you know, I mean looking our industrial or any other business park building, they're mainly multi-channel buildings, which is why if it is a tenant that comes along is good. If not, given the market given the environment right now.

Flight to Quality is probably better and easier to list out and space.

If you require mentioned our utility cost 2022 versus 2021. I'm

Embed as well including the the point I made for landlord utilities about 8% of opact if you recall now as it comes in is in fact less than seven percent. so depends on consumption And I want to make another point is that this is for Singapore, which is 60% of the portfolio. Right? So if you look there's increase.

But with the entire business of getting higher renters new releases that comes in occupancy has gone up definitely help to know this increase this needs to be really new that every year. Is it? So for current year we have already did I think I mentioned we have actually contracted for two years and we're locking the rates for 2023. My second question is on Singapore DC Market. Will you consider doing Greenfield with your sponsor?

You can't actually yeah, you have to you have to get a license. I think you know that DC required. I mean the more Turner was lifted. Yeah EDB or has actually called for RFP. So you need to be able to be awarded. The available power of 60 megawatt before you can start a new DC. So you can't expect.

Okay, thanks. I'm going to come back to you. We have a question from Jovi from the Singapore. It's regarding evaluation of our logistic properties in the US. What would the rental and occupancy assumptions as well as the Outlook? Okay, we don't typically. Such detailed information, but I can speak quite broadly in terms of how the properties are valued as well as the valuation methodology. We would typically have a combination of both capitalization method as well as DCF and we take a simple average of those two methodologies now in terms of the specific.

Assumptions that goes into the valuation model the valuable would take the market rents as The Benchmark for that particular micro market and I would also say that at least for our Logistics properties we are our in place rents are typically at about five to 15 percent lower than what the market rent is. So there's some upside from there second in terms of occupancy assumptions. They would typically for the DCF they would roll out 10 year this year looking at the least experies and they would then put in certain assumptions in terms of how long they think that you will take for us to find a replacement tenant. But if say for example in the in this year fy23 for this expiring and if they are already tendons where we have already say, please secure they are renewals or we are in advanced discussion such.

This such information would then be passed the value as well so that they will take that into account and they might then reduce their void period for such cases. So I hope Sufficiently answered that question and since direct you have a question the mic. Yeah. I am team just on the follow up on service charge question. What is the coverage like for severe charge if you fully pass deposit on the tenants or certain percentage?

The increase the increase is due to the cost. Okay, it's not pass on by way of service charge. I mean we have to better. The cost but we increase the service charge between five to ten percent. So we have actually a higher service charge for about three months last year because we increase in October so we will have a full year of higher service charge for this year.

I mean that utility for the landlord is part of our landlords all packs including. Everything else cleaning security or this and it's actually passed on true service charge. kills us on on the new course of borrowing for new loans in your markers like Singapore us Australia or been boring cost like Okay, so safe in Singapore for five years.

That I I think we can achieve below 4% Okay, then the other geographies. Generally, they are probably in the five. Five percent, you know, they're about five year. Yeah you as or Australia. Maybe you give higher. You know. Just lost on the development mentioned Science Park. You going to do it with the CLD to you? Frame speaking. I don't think we will push any new Redevelopment science part, even the fact that we are still constructing a million square feet there. We definitely got to fill it up.

and clds another building across the road that need if you are so Just thank you. Thanks. David from dogwell. I just added curiosity. I noticed you missed your performance fee this year. I'm just curious when the sponsor gets a performance fee. Is that part of your like compensation bonus because you seem pretty positive about not hitting the, you know, getting a performance fee.

Does that affect your total compensation for volunteer? It's not in my balance call cut. Okay, if you're asking for that. If you recall we have been very Equitable to all parties all stakeholders. And then he arises we have customers even before the government require us to do rental rebate. We actually was quite early on decided to give renter rebate.

If you call last year's performance fee, we also want to be Equitable as Sinai the unit holders at state with us. We have actually wait for half of our performance fee if you recall right? So we want to be fair and we want to grow together with tenants as well as all unit holders. Hope to have your support no just curious.

Thanks, David. Became more questions from all this. He's not. Thank you for attendance today. Have a good evening. Thank you so much. Thank you.