FY 2024 Full-Year Financial Results Briefing

So for those in the audience, you may raise your hand and I will call out your name or identify you by your company. And, um, uh, call a microphone will be brought to you by one of my colleagues. If you're attending this briefing online, you can submit your questions via the q and a function on Zoom anytime during this briefing.

And then we will address any questions that have not been asked by the audience after. So before we begin the session proper, let me introduce the management on the panel.

Thanks, Andrea. Happy New Year. Everyone. I believe last year, 2024 has been a very interesting year for all of us. Um, there were uncertainties around inflation trend, geopolitical tensions and changes in administration. So despite all of this, we are pleased to present a resilience set of results for FY 2024, which will enable CLAR to start this year in a strong position.

Okay, key highlights. Distributor income increase, uh, 2.2% to $668.8 million. DPU increased 0.3% to 15.20 cents. Investment properties held steady at $16.76 billion. The portfolio occupancy remain high at 92.8%, and we achieve high renter reversion of 11.6% for leases renewed during the year. Gearing is healthy at 37.7% and the cost of debt is stable at 3.7% On the sustainability front, CLA is now included in two more indices.

That is the fse, uh, good developed index and fse. Good, good. Ian Index. So let's, uh, take a closer look at the details. So, full year, uh, 2024 versus full year 2023. Gross revenue increased by 2.9% to $1.5 billion. And this is mainly due to the contribution from, uh, full year contribution from properties that were acquired in 2023.

So the properties are the chess building in the uk, the Stuga in Singapore, as well as the completion of MQX four, which is a development in Sydney, Australia, and also dis convert to suit, uh, property in last Boulevard in the us. So as a result, MPI increased by 2.6% to $1 billion. And distributable income increased by 2.2% to 6 6 8 $0.8 million.

DPU increased 0.3% to 15.30 cents, uh, due to the issuance of some new units for base management fees. When we compare second half of 2024 versus the first half of the same year, 2024, gross revenue declined 2.2%. And this is mainly, uh, due to the divestment of four properties in Brisbane and Singapore, as well as lower utilities income.

NPI decrease in tandem with the decrease in revenue, uh, but partially offset by lower operating expenses. Distributable income increased 2.2% to $338 million due to lower interest expense. DPU increased 2.1% in tandem with the increase in the distributable income. So when we compare second half of 2024 versus the second half of the year before, uh, 2023, gross revenue declined 1.1% to $753 million due, uh, mainly to the decommission of Welling Garden City and the divestment of the pro, uh, four properties in Brisbane and Singapore.

However, NPI increase by 1.4% due to lower operating expenses. So distributable income increase by a higher 3.4%, and this was boosted, um, due to the lower, uh, interest expense. So DPU increased 3.2% to 7.68 cents. Um, we adopt a semi-annual distribution frequency. So for the second half period of, uh, first July to 31st December of, uh, 2024, a distribution of 7.681 uh, cents will be made.

So you'll be receiving the dividends on the 11th of March. Moving on to investments. Uh, so this year we put more investments into us and focusing on the logistics, uh, sector, we acquired, um, SomerWALE Logistics Center and DHL Indiana Logistics Center, uh, for about $248 million at very attractive NPI use of 7.2 to 7.4%. So these two modern, um, properties and very strategically located properties will complement what we already have in the us and they're all basically located in major logistics hub.

Um, our investment strategy focuses on established, uh, industrial markets in the key growth cities, which I expected to see increasing demand for quality logistics assets driven by onshoring and reshoring trends in the us. Okay, so following these two acquisitions, our logistics footprint in the us we have spent to 20 properties in four cities they see in the map.

So it's Kansas City, Chicago, Indiana, Charleston. So a UM is now 570 million, and the GFA is sizable at 475,000 square meter. Um, so by the way, our existing US logistics property are doing well. Um, the occupancy rate is a hundred percent. Okay. Um, we continue to optimize returns, uh, from our existing properties by repositioning or upgrading them.

So 3.9 million, uh, dollars worth of AEIs were completed, uh, during the year at Pacific Tech Center, which is, um, industrial property located in Jolan bouquet Mara vicinity in Singapore, as well as one at Chinese City, which is a business park property in Chinese Business Park, which is located just next to the expo, MRT. Um, occupancy rates for both properties have increased, uh, to 89.5% and 99.5% respectively in December.

On divestment, sorry. So on divestment, uh, altogether four properties were dive divested in Australia and in Singapore. Um, total amount is about 177 million. They were divested at about 38% premium to the total valuation as it yields. Very attractive at three to 4%. Moving on to capital markets, gearing remains healthy at 37.7% for that maturity profile. It continues to be very well spread out.

If you were to, if I can refer you to the, you know, the first, uh, three or four bars, you can see that about 13 of 14% we only come due in each of the year. This is a summary of our financial, uh, ratios. Just want to highlight a, a few, uh, items here. So the ICR, the interest cover ratio is healthy at 3.6 times.

Fixed rate debt is high at 83%. The weight borrow cost is stable at 3.7% despite the high, uh, interest rates environment. And we, we secured very tight spreads, uh, for some of our loans and bonds, right, to manage the interest expense. So the a three mod credit rating is maintained, and this is important. It provides us with a lot more financial flexibility and strong access to capital.

Um, I, this, this time, uh, we added a new, uh, sensitivity, uh, table, which is at the bottom. So this is the ICR, uh, sensitivity table. So the, you can see here that the ICR remains very robust, even under stress, uh, scenario. So a 10% decrease in ebitda, the ICR will be about 3.3 times and assuming a hundred basis points increase in interest rates, ICR is, uh, 2.8 times.

And both these numbers are clearly above the, uh, threshold of, uh, 1.5 times. Okay. To minimize the effects of any, um, adverse exchange rate fluctuations, we have a high level of natural hedge of 76% for our overseas investment, which told us about almost $6 billion. Okay? So NAV, uh, will be safeguarded against any adverse, um, exchange rate movement.

Uh, assuming hypothetically, you know, all the currencies, all these overseas currencies, they decline by 15% altogether. At the same time, the impact on NEV, uh, is less than 3%. Okay? Okay. Valuation, very interesting slide. So the total valuation for our 225 properties in the four geographies, the developed markets, uh, was $16.8 billion. Um, on the same store basis, the valuation was stable at $16.76 billion.

So the stable portfolio valuation was mainly due to the increase for Singapore, uh, which offset some decrease, uh, in the US and in Australia. Okay, so there, there was some adjustment in the capital values in US and Australia, uh, due to the higher cap rate, uh, applied by the independent valuers. So that is by geography. So now by segment for the business space and life science segment, uh, same, the valuation was stable at $7.7 billion for the industrial and data center.

Uh, segment valuation was higher by 1.3% at 4.82 billion. And for the logistics property stable at $4.24 billion. Okay. Occupancy, the portfolio occupancy remain high at 92.8%. Improvement will actually achieve right with Singapore rising to 92.5%. The u the US increasing to 88.9%, Australia also improving to 92.5%. And the UK Europe, uh, region remain high at 99.3%, almost full house.

Okay, so I will then, um, give some color on the demand, uh, the new demand that we saw in the fourth queue. So in Singapore, the largest sources of new demand by gross rented income were the engineering, uh, sector, the electronics, as well as the distribution and trading, uh, sectors. For the overseas market, it's the IT and data center, the lifestyle retail, and the biome, uh, sectors that were the largest sources of demand.

Okay? Rental reversions, a positive rental reversion, a positive rental of 11.6% was achieved for leases that were renewed in multi-tenant buildings in FY 2024. So I suppose, um, this met our, um, guidance, right for the high single dig, um, positive rental reversion. Okay, so the average, um, rental reversions were 11% for Singapore, 21% in the us, 13% in Australia, and about 11% in the UK and Europe.

So all the geographies are achieved positive rental reversion. So looking ahead for FY 2025, we expect rental reversion to be in the positive mid single digit range. Well, uh, continues to be stable at 3.7 years. Um, so this is the portfolio. Uh, all the geographies put together the lease expiry for this coming year. So this coming year we have about 17% of our renter revenue, uh, that will be due for renewal.

Okay? So 80% of it will be in Singapore, the balance in Australia, US, UK, Euro. Okay. Um, we have come to my last two very important slides on Redevelopment and development plans. We were embarked on a new redevelopment project, uh, for lodges hub at Clemente. So this logistics property is strategically located in Clemente Loop, uh, well connected to the major expressway, right?

Uh, as, as in the A YE and the PIE and very, very, uh, short driving distance to the CBD part of Singapore and, uh, to our second lane. So what we are gonna do here is to maximize the plot ratio and by maximizing the plot ratio to 2.5 times the GFA doubles to 58,820 square meters. The new property will also, um, uh, we have modern, uh, features.

Um, so it'll be seven story high with the facility, and there will be like 106 loading base, you know, power extension, uh, provision for closed storage and, uh, large floor plates, uh, good ceiling heights of up to 12 meters. Okay. So we are also targeting to obtain a green mark go plus certification for the new, uh, property.

Sorry. Now with the addition of largest hub, we have 800 million worth of projects on hand. So this financial year will be completing about $500 million a project. So they are SummerWALE the first row in the US, one side spot drive, and five togan is. So on a stabilized basis, they're expected to generate additional income of about 30, 40 million per annum.

So this is a ongoing process to rejuvenate and revitalize our portfolio and to generate more income stream. Okay, so this comes to the end of my presentation. We look forward to 2025. Thank you very much. Thank you. Keeping now we'll move to the q and a segment of this briefing.

Um, we are expecting you on cost by 8%.

So what about pre-com commitments there as well? Um, same answer to you, Dale. Uh, TOP will be soon, if it's not this month will be next month. Uh, once after TOP we will, you'll come along with information with regards to the occupancy, uh, but rest assured it will not be zero. Uh, but also don't put your hopes too high that a hundred percent on day one, given that this is a million square feet, uh, we are comfortable with what is start off and we have very strong demand, uh, for the rest of the year.

Uh, if you remember, um, we have mentioned that the overall stabilization period we project for such a big project is between three to four years. And at this point, looking at a pipeline and, uh, the discussions that we have, uh, we believe that we are, we will likely to do better than that. Okay. Okay. Got it. Uh, can I take one more question?

Okay. They just wanted to talk on the valuations part. Um, you know, you're saying that there's a bit of cap rate movements, uh, for the overseas portfolio. Can you talk us through that, as in, has there been a change in valuers or has there been a cap rate expansion? Yeah, okay. Uh, cab rate expansion, uh, mainly in Australia and us, uh, we see compression here in Singapore.

Uh, the reason given is that if you look at, compared to 2023, uh, the carrier expansion has, uh, been very, very moderate. Uh, a year ago we see up to a hundred, 200 beeps of, uh, expansion. Uh, but now for example, in US, Australia is about only 50 bips, uh, and we believe that this is also a strong, uh, uh, showing of the performance as well.

Uh, the performance will actually leave the, the valuation, not just the cap grid. Uh, and then in Singapore we had compression, uh, you probably know that last year there was a huge number of transactions in the, in the market. Uh, so despite us divesting 21 JA below, our valuation has gone up. So it's very healthy here in Singapore.

Uh, this also will lead us to our belief that, that if there's a right time, I think we can consider, uh, divestment as one strategy going forward, uh, to make sure that now this is the right time in terms of the market cap rate, uh, and our performance is strong. Uh, and we delivered, uh, some divestment of last year and we continue to see some interest in our properties.

Okay, Ken, thank you. Thank you.

Maybe that, that's my first question.

So that's my two broad thoughts around 2025, right? Um, so you are right in terms of the occupancy challenges in, uh, US and Australia, uh, Australia, we have, uh, okay, US logistics a year, a quarter ago, we have some vacancies and we are back few them. So now they're a hundred percent in the two portfolios that we have, uh, in Chicago and cancer, uh, business part continue to be a challenge.

Uh, there's, uh, there are some uptake in terms of, uh, certain assets, uh, but general trend, uh, we are seeing, uh, negative as optioned. So we are losing tenants, uh, because of downsizing and we are not refueling them as fast. Uh, but as you compare us to the general market, I think a 80%, uh, occupancy is fairly healthy and, uh, strong compared to what we see in the market.

Uh, in relation to Australia, business part has been doing fairly well, to be honest. Uh, I think I also mentioned that over the quarters we have seen rental reversion as well as occupancy. Uh, primary reason is because they're suburban location, uh, much better than where we see the challenges. The real challenge is in CBD as the most one most, uh, depressing one is probably the most fringe offices, uh, given the fact that if there are supply availability in central area and, uh, renters are well below, CODI think is just encouraging for tenants to move to the central CBD area, especially the great, great A ones so suburban location, uh, near to manatees, uh, near to, uh, where employees are living.

Uh, especially for, for example, Macquarie is near university and other ecosystem. Uh, we see healthy demand in that location. Uh, the surprising bit is, uh, Australia logistics. Uh, we now have two vacant unit. Uh, it's surprising that the feeling back feeling is not a fast enough. Uh, but if you look around the market, it's probably not a sign of a market that is, uh, softening to a level that is, uh, critical.

I think it's just transitioned. Uh, and we do see some RFPs as well as, uh, interest to acquire, uh, our, our assets. So I think this is just transitioned. Um, with regards to rental reversion, uh, we have guided mid single digit, uh, key reasons, as you have heard mentioned a few times, uh, like what you say is post covid.

We do enjoy strong rental reversion, low base, uh, which is has showing up in our numbers. Uh, but over time we have improved our assets also helps to get in the rental reversion. And if you look at, uh, across the board, uh, not just in Singapore, in us, uh, we are also trying to do a AI in us.

So that's also helpful for us. Uh, why miss single digit is not just in number that we, we feel that we can deliver, but I think that is a number that where the market rents are. Uh, we've been asked whether we continuously under rented, uh, in our portfolio. Uh, we still believe so, uh, even in Singapore, when occupancy is, uh, uh, is fairly high right now, uh, that will allow us to be able to push rent.

So I wouldn't go into detail which country give us, which require more work. I think it's all across that we still need to pay attention to leasing efforts, uh, expanding our network, uh, as well as improving our facility. Uh, more so in us, given the fact that we improve our facility, it give confidence to our tenants that our assets are well managed as compared to many other landlords who may be tight on their budget and their CapEx.

Uh, they do see that, uh, this landlord here, CLAR, uh, is here to stay and have the capacity in the balance sheet to be able to improve, uh, the assets. Uh, you also heard us mention about white boxing, which helps tenants to make a decision faster. Uh, there's a lot of movement out there. Uh, decision may be slower, but at least when it's white box, they know they can move in almost as soon as they want to, and that's helpful for them to make a decision.

So we'll continue all this effort. Uh, we will make sure that, uh, where we need to do a EI, we'll do the a EI where we need to be strategic, uh, in terms of getting our networks out, talking to different parties, we will do that as well. Uh, and then if there's any redevelopment opportunities, especially locations or countries that we believe that, uh, you'll be helpful to introduce a new asset, uh, we will do that to make sure that we can, we can reposition our, uh, portfolio over time.

Okay. Thank you. Thank you.

Uh, it may be quite a different story as you go around Chinese Business Park, uh, but we believe that what we have placed in terms of our response, uh, is to open up new channels, new industries. Uh, you have seen that we have brought in aviation engineering. Uh, we continue to work on education and we brought education com, uh, institutions into, to science park.

Uh, we are also exploring medical. Uh, so these are adjacent industries that we believe can, uh, be housed in the business park building, uh, without requiring too much of a change of use kind of application, uh, that allow us to be able to bring in new industry, which are not the traditional business part user. But having said that, we do see demands coming up or interest, not demand interest coming up from similar traits like semiconductor design, uh, such companies.

Uh, the question then is whether we business park can meet their needs and how much of this, uh, Changes to a business park building, uh, is required. Some companies may re just, just design assembly. Some require some kind of a light manufacturing. So these are, these are just boundaries that we hope to be able to, uh, obtain, uh, from the government.

Uh, in relation to, uh, just to add on, uh, just how you asked for valuation across the board, in terms of business part in Singapore, the valuation has been quite strong, uh, driven by the transactions that we see in the market. I think you probably know, which are the few ones that has been driving cap rates, uh, in the market that was transacted last year.

Uh, so overall business plan is healthy in terms of value and in terms of occupancy, I think we have done fairly well to push our occupancy and competition With regards to Congo. Uh, we believe that there are offerings that's very different. I think, uh, Congo is one district that we do see that if it's able to grow, it probably would be helpful for the entire, uh, country.

Uh, why so is because, uh, they also not doing too much of speculative demand is all targeted. Uh, and just like one north, if you remember about 20 years ago when it first started, the government like Astar need to need to see the biopolis. And that's how brought bring brought about a demand in other industries. Uh, but I think what's important for us is to be able to tap on other industries, uh, beyond just a normal business park.

Uh, if I allow me to just go onto other, other, uh, parks, like example IBP, uh, we continue to believe that with the infrastructure investments of the MRT, uh, we believe that that will be a turnaround for IP. And we are going to, as I mentioned, uh, other than 2027 IBP, uh, we are waiting for opportunity redevelop the other two buildings that we have right near the MRT.

Thank you. My second question is, in terms of, uh, UK VIN Garden, any updates in terms of power capacity or redevelopment plans? Uh, have you formalized any CapEx requirements for this? Yeah, Nothing has changed really. Uh, power is there. Uh, uh, we have been working on the customer, so I think we have mentioned that we prefer to be on a built to suit, uh, kind of arrangement and to be a speculative build.

So we are concurrently working with, uh, the authorities or the planning permission has been there. We already had the schemes as approved. Uh, now we are talking to some prospects to refine the design. Uh, at the right time, we will announced those, uh, actual, uh, CapEx and the customers that we have. Any idea of what time it would be, maybe by middle of this year, Um, hopefully this year.

I won't say it's mid middle of this year, but this year. Sorry, one last follow up. Um, in terms of acquisitions, I think you have done a lot of redevelopments, they are also doing a forward purchase. Is this something the way which we should expect forward in terms of extracting yields by forward purchase and de developments and less of completed acquisitions?

Um, well, seems like it's not a surprise to you, right? Uh, yes. I think last year we have been fairly quiet on the investment front, uh, but acquisitions for development is one area that we want to be able to leverage on, given the fact that we can introduce modern specs, uh, into our portfolio as well as the u on cost, that's more attractive than a, uh, uh, straight up investment of, uh, of, uh, income producing asset.

Uh, just now, I think keeping mentioned from a start that we are on a good footing for this year. Uh, just writing on your question, just allow me to just explain a later, uh, this year actually gave us a strong co uh, understanding of portfolio. We believe that our portfolio is very well managed and is attractive, continue to be attractive for tenants.

We are shown in our occupancy, our rental reversion, so organically we believe that this is the base that we can deliver and with this base, so let, let me say that this is the foundation. Uh, with this as a, as a key foundation, I think we can push the envelope and to build up capacity for redevelopment and to reposition our assets, uh, which is why we wanted to introduce the new development, uh, log hub.

This is just not a simple redevelopment of untapped plot ratio. Uh, the plot ratio is 1.6 is plan, you can check it up. We ran to to, to to URA and US for higher plot ratio 2.5. So we still gotta do all the analysis, tracking all this to be able to get additional plot ratio beyond the, uh, plot.

Uh, the master plan approved, uh, we introduced this time round, we want to have a constant flow of redevelopment so that during this time, while investment is a bit tougher environment, uh, we are refreshing our portfolio, repositioning our portfolio. So I would say perhaps in the next two to three years, uh, we will be looking at if time and the plans do turn out in our way, we'll be targeting about 1.5 billion of, uh, redevelopment.

And as we turn on the assets. So keeping mentioned, we have about 800 million, uh, announced today for this year. In terms of development, we will have, uh, 500 million. So, uh, sprint, uh, project, uh, Geneor, uh, uh, five, five togan and, uh, SomerWALE for 500 million will be turned on for income this year. So we believe on a recurring bus basis, if we can develop a 1.5 billion, we should be able to achieve completion of 1 billion, uh, within the next two to three years.

So this will give us, based on our on costs, a sub, a good bump in terms of revenue, perhaps within three to 4%. So this is our second strategy in our key strategy, given our strong base to do more development work and to push our, our need to do repositioning of our asset. Then the third piece, in order to make sure that we, we have a stronger balance sheet.

Our balance sheet, strong leverage is 37 healthy, uh, oil in cost. Uh, and we are h rated. The third front is to just, I sort of mentioned it about divestment when I answered deal. Uh, we probably want to do more about divestment so that we can actually prepare our balance sheet for any acquisitions that may come along the way.

So I think given a strong foundation, uh, we can push our envelope to be more aggressive in terms of development, redevelopment as well as preparing for acquisition that may come. Thank you. Sounds good. Thank you Vij. And thank you William. Uh, for convenience, you will first move to Rachel from Mac Query.

Short answer you want her to answer? I think, um, there was another question about interest rate. Yes. Now, okay, is it, yeah, so 3.5 to 3.7, that's what we have done. Uh, we believe given the rates today, uh,

So I think in terms of high recognizing the high interest is granted, I think we believe that we, with our reversion occupancy and our fundamentals in terms of performance of assets, we will be able to withstand all this interest. And we have shown in our, since this year, we don't have additional new investments to show up revenue.

It was really more organic than anything, and we can improve our DPU. So it does show that by doing the right things, controlling costs, and also costs also help in a sense, uh, positive for us. Uh, utility rates, electric theories is, is, uh, we have actually hedged and is coming down. Uh, we have done all our needs to improve or increase our service charges.

Uh, we also look at all our cost aspect. I think this is one aspect that we are, we are working on to make sure that performance continues strong, do withstand any uncertainty of, uh, interest rate movement. Okay, thank you. Uh, then my next question is a follow up from vj. I think you spoke a lot about, uh, organic redevelopment, divestments, uh, but what about acquisitions?

Are you putting that in a pause? I mean, last year you've done small acquisitions and mostly in US logistics. So what's your thoughts for this year? Is it still the same or are you looking at, uh, bigger acquisitions this year? Um, definitely we hope to be able to do more investments and acquisitions. Uh, but given where the market is today, uh, regardless of where we are in terms of, uh, ability to raise funds or our ability to, to get loans, I think this is not an issue really for us.

But what, what is out there in the market seems to be still quiet. Uh, there's still a lot of uncertainty. Uh, if you ask me two months ago, well three months ago, we thought that this year will be a good year for us to restart our investments. But at this point in time, uh, we believe that this market will continue to be there, except that we may not be in a position to acquire in terms of big portfolio if there's small ones that comes along.

For example, we had opportunity to acquire a DHL facility at above 7%, which is very rare. And we will continue to hand deep and wide to make sure that we can source for the good acquisition targets for the trust. Uh, but I think right in front of us where there's more opportunities development, uh, we still like to be able to deploy capital and development because we can then look at the type of facility, the cities that we want, the type of facilities as well as the tenants that we can bring in.

Instead of just buying a portfolio or an asset. Uh, we then can determine exactly what kind of specs, uh, where's the location, and we can then look at development to supplement the existing portfolio. Uh, while we may see that development give us higher yield, obviously, because if you do development that comes higher risk. Uh, but what we've been trying to do is been to be prudent, uh, look at the developers that we work with, uh, the locations that we are in, study the market to make sure that all these reads are well mitigated.

And, uh, if you look at the unfortunate or or the at the projects that we have announced are still million in Singapore. Uh, we have, we want to be able to do more here in Singapore as well as, uh, US where there's a lot more opportunities and hope, we hope to be able to do more of that in these two places.

Um, in terms of target acquisitions, are you still looking at US logs or would you be looking at some properties in Singapore? Uh, we are open for business, to be honest, Singapore, US, Europe. Um, I still think that Australia is tougher for us, uh, given where interest cost is and the cap rates that's trading. You look at our numbers, we are probably at five or 6% in terms of cap rate for Australia portfolio.

Uh, so I think for acquisition, those market continually challenging. Uh, but us, given there's a large market, continued trade between four to 7%, uh, we believe we still can find deals and hand, uh, hand well if we can. Uh, Europe becomes more interesting right now. Uh, we do see some development opportunities and hope to be able to do some in in Europe.

Okay. And my last question is, uh, what's any updates on your plans for the Syntel data center and uh, for Ffy 2025? Do you need to do any top up, uh, with the potential loss in income? Um, okay, I think maybe we address the syntel. Uh, there's also another question about syntel, uh, three data center with us.

Uh, I mentioned that expiry is between this year to 2030. Uh, I'll be, I'll just tell you right now, um, in a matter of one or two months, uh, the syntel DC in tampons, uh, we expired. Uh, so, but having said that, I think, uh, is probably unknown to many. The underlying land use is commercial. So we are fairly excited with this opportunity, uh, to explore developing it or redeveloping the commercial property.

Uh, if you know location, you know, location, location is ese. So it's exciting for us to look at our plans there, uh, obviously including other options like divestments or just finding a new tenant. Uh, but since the underlying asset is commercial, uh, we will definitely look hard into our options, uh, to extract more value from there. Uh, do you need to top up any, if let's say you choose to do a redevelopment, do you need to do any income top up to cover some of the income loss?

Um, we will think about that. Honestly, uh, in terms of where we are, we haven't done done a top up to be honest. Uh, so we just want to be very clean in terms of our, uh, DPU, uh, we will approach that and see where it goes. Uh, but having said that, uh, the impact of that income is not that great.

It's 3% my number one ten three percent, even with that loss of that one building, tel is still top 10 on our list. So we believe that we should be able to, to, to, uh, explore, uh, try to push our performance to see whether we can cover those. Okay. Thank you so much.

They will not take 60 on day one. So there is flexibility for both party, both party, I mean the delivery on the supply side when the government got to make sure the network is delivered on site as well as customer's business plan. Yeah. But the contractual agreement is there, you, you have gotten that contract? Yeah, we have 60 megawatt.

Okay, cool. That's great. Um, and I guess on the, um, the tenant profile, um, as has deep seek changed the way you, you are, you approach potential tenants? Like are you looking at hyperscalers for ETS or you know, I guess more smaller, smaller tenants then changed there? So The customers that we've been talking to hasn't changed. They continue to be on the table to discuss with us, uh, given that location, uh, and the power, um, it's not your mega scale data center, uh, customers.

So we believe that, uh, cloud players or whoever that needs about 60 megawatt continue to be our target market, and they are still there on the table for us to discuss. Mm-hmm. That's good to hear. And um, just, um, one last follow on the divestments that you mentioned. I think it seems just more US centric, or did I get it wrong?

Uh, no. Um, in terms of divestment, we explore all countries, um, us, uh, Europe, Australia and Singapore. Uh, Singapore, as I mentioned just now, uh, there's cap rate compression and valuation is strong. Uh, performance of SA very well, uh, give us some opportunity to look at divestment as well in Singapore. Is there a number that you have, um, in mind? Um, a quantum For divestments this year?

Uh, so last year we deliver over a hundred over million. Uh, I think typically that's about the size that we have been delivering, uh, but if we were to be able to prepare our balance sheet, uh, in terms of, uh, reducing our leverage, uh, perhaps we need to look a bit bigger than that. Uh, maybe three, 400,000,004.

Oh, that's to prep for I guess the uk All, all in all in, yeah, all in all the countries and all the uh, uh, countries that we are in or any projects that we have, uh, received interest in. Thank you. Thank you, Larry. Now we're most joy from H-G-S-P-C. Thanks. Uh, just a few follow up. Uh, William, you mentioned about, uh, development.

Um, could you just, um, share a little bit about, you know, how we should think about return, um,

Uh, and it's not speculative risk that we are taking, that we are delivering, asking for 7% or more. Uh, but if you look at even our portfolio, uh, it's not too far away, given that our portfolio is probably a five, 6% overall, 50 to a hundred bips increase to be able to deliver, I think is still a fairly comfortable, uh, uh, uh, risk that we take.

Uh, the profile hasn't changed. Uh, we have introduced another logistics us, we have introduced logistics. So if you think that going forward it's likely to be continued with logistics, you're probably not far from there. Okay. So that is probably where we are heading. Uh, the of care, of course, the other development includes the uk, the UK data center overall, uh, where we want to be able to develop.

So it's likely to be more logistics and, uh, data centers. Okay. Um, my second question is, um, on your 10 there, there's one slide on the tenant demand, right? And it's very interesting that Singapore manufacturing is almost half of your demand, and I think DC is about half of your overseas demand. Is this just a, a factor of your expiring leases or this is actually a shift?

Not surprised. Uh, you got it almost there. So James, Yeah, uh, just to echo what, uh, William said, I I, I think, which is your point that, uh, it really depends on the type of assets with leases expiring in that financial year and the concentration. So it just so happened that, uh, there's the, the bulk of the expires happened to be in those industries.

Okay. So there is not, uh, something that is more like, uh, yeah, we Don't see it as a macro shift in the demand from our tenants. Okay. Um, and then just lastly on Singapore, uh, particular developments, um, we've seen a lot of, you know, um, uh, sort of foreign investments into the country, but we've not heard about built to suit for a long time. Um, and I have talked too, And you talked about development and a lot of it is redevelopment.

Um, so is government willing to re-look at the underlying land use and redevelop instead of doing actual build to suit? Or where are these projects going? Um, Just lemme try to understand. Um, build to suit is a solution, right? Uh, and what we are seeing right now while we are doing redevelopments, uh, if there is a customer in mind that we can do the development for, just that we talk about uk dc our preference is to work with a customer, uh, that we can build to suit for the customer.

Uh, but you're right. In Singapore, uh, CLAR has built up a, a brand name to be able to do built to suit for customers. Uh, but in today's context, uh, we haven't, that's why I say I haven't hear that as well. Uh, we do hear a lot of, uh, foreign investments, uh, con contracting to build on their own, uh, which likely not to be the market that is open for us.

Uh, I suppose when it comes to build to suit is our cost against their costs. If they can get a better cost of funding, uh, if their rec is lower or if they can, uh, given a real estate could also be a smaller part of their entire investment. Uh, and they need to have a better control. And given the fact that some of the investments, especially if you see some of the investments are in fabs, uh, semicon industries are, they're very, very specialized.

Uh, which we may also not want to get into unless we have a very long lease in those, uh, assets. So it could be also be a preference of the manufacturers investors who have preferred to build on their own. Uh, where we are building today, if you look at our, uh, announced, uh, projects are still fairly, uh, uh, uh, industries that we feel comfortable to fine tenants, logistics, uh, there are strong demand out there and the occupancy overall in Singapore is still healthy.

And we believe that the two locations that we have introduced, uh, Towan and Jang is very prime location. Uh, and in, uh, largest hub we have power to even be able to find, uh, coastal tenants. So that actually opens up the opportunity for us to be a solution provider for some of these industries. Thank you. Thank you. Joy.

Are there any questions from the floor? Okay, Dale? Yeah, hi. Sorry. Back to this, uh, largest hub, right? I noticed you're saying that the decommissioning is only end of this year, so it continues to, to generate income until end of this year? Uh, yes, it is. Uh, so as we announce today, uh, but next thing is to work with the tenants, uh, to move them out, and then once the, uh, tenants are out, then we can decommission, uh, and start off construction.

So typically that give us, we require about five, six months to be able work with tenants, uh, which is why end of the year is the construction time. Okay. Okay. Thanks. Thanks William. And then another follow up is back to the tel data centers, right? Um, I, I mean, I, I get it that, that you're saying that it's, you know, at, at s uh, temples Mall and, and MRT there, but is is isn't data centers, um, something that is really, I know hot, hot, hot right now and then, you know, demand is is really strong.

There's a lack of, ah, there's a lack of supply. Um, wouldn't you want to keep it as a, as a data center? Uh, timing is probably not on our site. Uh, for data center number one I mentioned, if it's additional or new power, uh, we will have to work with, uh, the next CFA, uh, operators who have been given additional power.

The first batch of CFAs has really landed their power, uh, which we have actually sold one, uh, our warehouse to one of the, uh, CFA awardee. Uh, so if the government were to open up soon, it could be an area that we want to work with. Uh, but we are not saying that this is closed, uh, rightly pointed out, it could be a site potentially to be reused as data center, but given the fact the underlying land use is commercial, we also do not want to just wait on it.

Uh, we want to be able to explore and at least the, the path on the commercial side, there is no other restrictions. Right? Also. So it doesn't Mean that given That it is a existing data center, you continue to be able to use it as a data center with the power. Yeah. So in terms of any of these redevelopment, I think it's open to us, uh, whether we want to develop as existing data center, but to develop as a redevelop as a existing data or redevelop as a data center, uh, now you have to work with, uh, operator.

Okay. So there's really no speculative element of what Joyce was. Uh, joy was asking, uh, if we develop into a data center and wait for customer, it's not possible right now here in here, here in this country. So we gotta work with operator. Uh, but that's one way. Uh, but each of the site has underlying land users, it's industrial or commercial, and we can explore other, other, uh, facilities.

Uh, there's, uh, there's other users for that site. Okay. Okay. Got it. Yeah. Thank you. Okay, thank you Dale. If there are no questions from the

So there's definitely enough, uh, a room for development opportunities. Thank you, Lisa. How about we go to the final question, uh, which is, how does CLAR see the Joha Singapore, uh, SESEC as competition to Singapore's business parks and logistics assets? And we are clearly looking for redevelopment opportunities in jojo. Uh, thank you for that question. Um, I think we, we, we look at it as both.

Yes. You see that is some competition I think is probably healthy for us as well. Uh, it opens up new opportunities for new FDIs. I think Singapore continue to be a high cost of ivestment for many investors and, uh, who are considering Singapore as a destination of their manufacturing. Uh, if we can have access into Jo Assec, I think we can then look at investments not just typically in your tier ones in the industries, probably a top three or five in industries.

I believe the EDB will probably look at more than that. Uh, and EDB has delivered all the FDI targets in the past years. At a peak, they were delivering 22 billion of investment in Singapore. I think with this additional resource of ec I think that will be beneficial for the country as well as, uh, Jo Hall, uh, logistics.

Uh, that actually is uncertain. Uh, why I say that is because if the challenge is seamless, I think companies or investors will look at whether logistics will be an in, in, in joha will be alternative to Singapore. Uh, but we do not know whether the, the movement of goods will be seamless, uh, if it, so it just allow maybe a reclassification of or, or in terms of their trip flows, of their cargo flows.

Uh, in the past we have seen some of those that has been stalled up in Jo Hall, uh, has been cargoes that is not time sensitive. So it has happened in the past. I think you'll continue to be so, uh, less time sensitive will be in further location. Uh, but Singapore is small, as we have mentioned previously.

We like last mile location. So I think if that happens, Singapore will become a last mile. And because of access to ports, I think it'll continue to be a prime location for logistics and we think that that actually be helpful for us. Perhaps, uh, with better asset, we can capture all this demand that can, that can stay in Singapore.

So I think there is opportunity and competition. So we will still continue monitor and see where this, uh, bring us to. Okay. Um, with that we have come to the end of the briefing. Thank you everyone for joining us online. As far as physically, I, we wish you a good evening ahead. Thank you. Uh, happy New Year and, uh, wish, I wish to thank, uh, the re managers, uh, staff, uh, asset managers, property managers, and our leasing staff, uh, who has delivered this, uh, beautiful set of, uh, operational metrics.

Thank you.