FY 2023 Full-Year Financial Results Briefing

[00:00:00] Opening & FY 2023 Full-Year Financial Presentation

Johanna (Moderator, IR), Andrea Ong (Director, IR)

Management opens with full-year 2023 highlights: portfolio occupancy at 94.2%, rental reversion of 13.4%, and gearing at 37.9%. Distributable income declines 1.4% to $654 million and DPU falls 4% to 15.16 cents, while investment properties grow 3% to $16.9 billion. The presentation covers acquisitions, divestments, capital management, natural hedge levels, debt maturity, and occupancy trends across Singapore, the US, Australia, and UK/Europe.

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

“Distributable income declined 1.4% to $654 million, and DPU declined by 4% to 15.16 cents.”

[00:31:17] Q&A - Question 1: Global Valuation Trends & Cap Rate Expansion (Mervin Song, J.P. Morgan)

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

Mervin Song asks about the pace of acquisitions given expanded yields and about leasing spreads in Australia. William Tay describes 2023 acquisition and development volume against a much larger deal pipeline evaluated during the year, selectivity on quality and location, and confidence in continued rental reversion catch-up, citing Australia's and Singapore's full-year reversion figures as the highest on record for each market.

[00:31:17] Mervin Song (Analyst, J.P. Morgan):

“I think James did give a good sense that us, you know, we have a 10% kind of, uh, catch up.”

[00:31:57] William Tay (CEO):

“In fact, in 2023, uh, the investment team has evaluated over 6.5 billion of, uh, deals.”

[00:38:28] Q&A - Question 2: Property Tax Increases & NPI Margins (Tan Yew Kiam, CLSA)

Tan Yew Kiam (Analyst, CLSA), William Tay (CEO)

Tan Yew Kiam asks whether performance fees are achievable for FY24 and how acquisitions will be funded given gearing has trended higher. William Tay confirms mid-single-digit rental reversion guidance, notes rising maintenance costs and property tax as margin pressures, ties performance fees to a DPU growth threshold, states an intention to keep gearing below 40%, and leaves the debt-versus-equity funding choice open.

[00:40:56] William Tay (CEO):

“it has to be 2.5% and above with, in terms of DPU growth, uh, before we can get performance fee”

[00:41:33] William Tay (CEO):

“our, our guiding principle is that we still want to maintain below 40%.”

[00:46:25] Q&A - Question 3: Science Park Data Centre Developments & DPU Headwinds (Derek Tan, DBS Bank)

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

Derek Tan asks about acquiring CLD's science park assets and whether prior DPU dilution from forward fundraising could recur. William Tay says CLD's long land tenure makes those assets unlikely to be accretive and describes US cap rate expansion, larger for offices than for logistics, plus the announced return on investment for the one-north science park redevelopment and the cap rate applied to the Watford data centre.

[00:48:04] William Tay (CEO):

“we saw about 120, uh, basis per points, um, expansion in cap rates for, uh, US offices”

[00:51:35] William Tay (CEO):

“we have actually announced the ROI for development is about 6.1%, uh, when we did the investment.”

[00:54:03] Q&A - Question 4: Cost of Debt Trajectory & Swap Expiries (Joy Wang, HSBC)

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

Joy Wang raises Australia valuation moves and later a hyperscale data centre plan and Singapore business park redevelopment. Management attributes higher Australia logistics valuations to occupancy and rental reversion, ties the office valuation decline to the business park segment, describes pushing the Watford, UK site toward 60 megawatt of power, and cites the Geneo project's increased plot ratio as an example of redevelopment potential across the portfolio.

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

“today we have about 25 megawatt, if we can push towards 60 megawatt”

[00:59:09] Khoo Li Sun (CFO):

“Originally the site was 1.2 plot ratio and we managed to get, uh, 3.6, uh, and now we are building 1 million square feet.”

[01:03:35] Q&A - Question 5: Exploration of New Geographies & Capital Recycling (Online Questions)

Johanna (Moderator, IR), William Tay (CEO)

An online question asks whether CLAR will explore new geographies such as South Korea. William Tay says the current focus stays on the US, Europe, Australia, and Singapore, points to strong Australian office occupancy despite negative market-wide vacancy news, and cites the yield achieved on the divested Brisbane logistics properties as the benchmark for redeploying capital into higher-yielding assets.

[01:03:57] William Tay (CEO):

“I think we've been asked a lot about Japan, Korea, given that they're also mature market.”

[01:05:15] William Tay (CEO):

“since we got a good offer, uh, the MPI that based on the offer price, the MPI is looking at 3%.”