Proposed S$1.4B Acquisitions Briefing

Hello. Okay. So I will provide a quick overview of the investments and their benefits, and then we'll head into Q&A segment with the management. Right. So we're advancing our portfolio rejuvenation strategy by deploying one point four billion into high-quality logistics, business space, and data center assets. Uh, we are acquiring a hundred percent interest in a logistics asset in Singapore, a fifty percent interest in a premium business space asset known as Ascent, also in Singapore, and a forty-nine percent interest in a hyperscale data center in Greater Osaka, Japan.

The Singapore logistics asset and Japan data center are at hundred percent occupancy, while the Singapore business space asset is about ninety-one percent occupied. So these three properties present attractive initial NPI yields of four point three percent to six point nine percent pre costs. Okay. These, acquisitions strengthen our Singapore core and global REIT positioning with a selective expansion into a new developed market, Japan.

Okay. Just an overview of each asset. So the Singapore logistics asset is a multi-building industrial complex in Loyang. Uh, it's a key logistics hub in the eastern part of Singapore. So the purchase consideration is about five zero four point two million. This includes an upfront land premium, and the price is a discount of three point two percent to the independent valuation of five one eight million.

Okay. For the Singapore business space asset, it's a fifty percent interest in Ascent at two Science Park Drive, which is near Singapore Science Park. Okay, in Singapore Science Park, sorry. And the remaining fifty percent will be held by a, by a global sovereign wealth fund. The agreed property value is four hundred and ninety million, which is a discount of one point seven percent to the average of two independent market valuations. The purchase consideration for CLAR's fifty percent is two hundred and forty-five million, and it includes a deferred consideration of fifteen million.

The third acquisition is a forty-nine percent interest in a hyperscale data center, which marks our strategic entry into the Japan data center market. So we're acquiring this asset alongside a strong local partner, Mitsui, which is a leading conglomerate in Japan. The agreed property value is about one point two seven billion Sing dollars, which is a discount of about two point six percent to the valuation of about one point three billion Sing dollars.

Okay, moving on to the rationale and benefits. So the assets in Singapore that we're acquiring in Singapore reinforce CLAR's commitment to Singapore as the cornerstone of our portfolio. Okay. Post acquisitions of the s- logistics and the business space assets, the pro forma total AUM will grow to nineteen point nine billion, and Singapore remains the majority at about sixty-six percent of the portfolio AUM.

Our exposure to high growth asset classes also increases. It's twenty-seven percent or five point three billion for logistics and thirteen percent or two point six billion for data centers. The Singapore logistics acquisition will further strengthen our leadership position in Singapore logistics. So we are expanding our Singapore logistics AUM to two point two billion. We are across twenty-two properties with an impressive occupancy rate of about ninety-eight percent, which is higher than the market average.

The acquisition of Ascent, reinforces CLAR's position as one of the largest private sector owners of business space and life sciences assets. So it will bring our AUM in Singapore Science Park to about two point three billion, and the occupancy will be more than eighty-eight percent. The Japan data center acquisition diversifies our data center portfolio across six developed countries. The total AUM is two point six billion.

It also increases the proportion of our modern data center assets within our global DC portfolio to forty-three percent. Our entry into Japan is in line with our strategy to expand in developed markets with healthy fundamentals. So Japan is the largest DC market among developed countries in Asia-Pac, and its, IT capacity is projected to grow at a twenty-four percent CAGR through twenty-thirty. The growth is expected to be fueled by AI-related investments and cloud expansion.

So Osaka is the second-largest DC market in Japan, as well as one of the fastest growing. Okay. These assets, enhance our, our portfolio, because they are strategically located. So the Singapore logistics asset is near Changi Airport in the east. As mentioned, it's in a key industrial and logistics hub, and this area is home to multiple MNCs from aerospace, marine, and engineering sectors.

Okay. And, Ascent is, sorry. Ascent is located across the road from Geneo, which is jointly developed by CLAR and CapitaLand Development. It is within walking distance to Kent Ridge MRT station and next to the One-North district.So its proximity to One-North life sciences and a new AI cluster is in line with our strategy to shape the portfolio with quality assets serving resilient growth sectors.

The DC is located within a key DC hub in Greater Osaka. So this area, this area offers strong infrastructure resilience from natural disasters and power availability. It's also well-connected, providing excellent access to infra networks, being only about thirty km away from major cities such as Kyoto and Osaka City, as well as Nara. So in sum, all three assets are modern, well-specified, and aligned with our quality standards.

So the Loyang asset features a modern four-story ramp-up logistics building. There are also thirteen standalone industrial buildings, open yard space, and terrace workshops. There is a long-term lease agreement between the seller and an unrelated third party for a floating data center. The remaining land tenure is about twenty-eight years. Okay. Ascent is a premium business space property. It has a BCA Green Mark, Green...

It has a BCA Green Mark Platinum Green certification, and the land lease tenure is more than fifty-five years, which is longer than the average in Singapore's industrial property market currently. And last, the Japan data center was newly built in twenty twenty-three, so it has a steel frame structure, built to withstand of, earthquake intensity level seven, and it has received a TRUE certification for resource use efficiency.

So besides offering land long tenure or freehold status and strong sustainability credentials, all three properties offer high occupancy. So the occupancy and WALE of CLAR's portfolio will increase to ninety-one point five percent and four point three years, respectively. So the Japan data center is fully leased to a blue-chip hyperscaler. Uh, it's a long WALE of about fourteen years, and there's an annual rent escalation of one percent.

The SG Logistics property is fully occupied by Toll, an MNC in the transportation and logistics sector. Uh, it will lease back the property under a twelve-year triple net lease, and there's an annual rent escalation of two point five percent. Uh, Ascent is occupied by high quality tenants, including Dyson, Merck, and J&J, so they are renowned companies and MNCs in healthcare, biomedical sciences, pharmaceutical, and technology industries.

And furthermore, there are organic growth, opportunities from the acquisitions. First is through the built-in rent escalations that I mentioned. Second, there is potential for expansion at both the Japan data center as well as the SG Logistics asset. So the current IT capacity of the data center is forty point five megawatts. There is potential capacity expansion of about thirteen percent or five point four megawatts.

The current plot ratio of the SG Logistics property is zero point five two, which is below the maximum of one point zero allowed, so this represents an untapped plot ratio of zero point four eight or approximately one hundred, one hundred and fifty-two thousand square meters. This can be used for potential development or AEI opportunities. Okay. Our asset, our tenant base will continue to be well diversified across twenty industries.

Uh, and also we will, have a bigger proportion of our rental income from, tenants in technology, logistics, as well as biomedical sciences. So these three acquisitions announced today build on our recently completed transactions. Just to recap, they were in Singapore, the US, as well as Europe. So we bought three properties in Singapore at the end of December, and then we bought a DHL canal, and US logistics asset in Columbus, Ohio, and then we bought a portfolio of six properties in Spain, in Madrid and Barcelona.

Okay. And then these acquisitions, present attractive NPI growth, and they are all DPU accretive. So the overall NPI is expected to grow by about twelve percent from one point, from about one point one billion to one point two billion. These acquisitions are highly DPU accretive, so they are delivering a four point one percent pro forma uplift, moving the DPU from fifteen point zero zero five to fifteen point six one six.

We are achieving this growth while keeping our gearing healthy at about thirty-nine point seven percent. This is well within regulatory limits and consistent with our capital discipline, disciplined capital management approach. Okay. So in summary, the acquisitions we have announced and completed in the recent months are in line with our portfolio rejuvenation strategy to enhance the quality of our portfolio.

These properties all present high occupancy rates, and they have long WALEs, which will continue, which will contribute to a stable income stream, and provide growth in DPU, growth in NPI, and are DPU accretive. Okay. Thank you for your attention. I've come to the end of the presentation.

And final question from me is, I think in the footnotes, accretion could go up to four point two, four point three percent on potential acquisitions, further acquisitions, about hundred and twelve million. Um, t- what's the timing of that, and what's the IRU for those, potential Singapore acquisitions? Thanks.

Occupancy was in excess of ninety-five percent in the past. Uh, we don't have the Geneo rent specifically. I mean, how under rented is it?

Uh, on your first question, whether, whether there's any expiry, I think the expiry is quite spread out. Uh, our key tenants, I think we've listed J&J, Dyson, Fa- Fe- Femerniche, uh- Mark ... Mark as well. So they will ex-- they, they have expiry in between the next, two years because the WALE is two point four, but there's no clear indication of any move right now.

So we believe that the, assets continue to, be able to attract all these sticky tenants.

And, and, you know, looking at the previously announced acquisitions, they were all like, you know, below one percent. So, so just wanted to understand how, how did this, four, four point one percent come about? Okay. So the four point one percent, I think you have seen that is about two point

So with nine hundred million, the, we are, we are utilizing a little bit more debt, which is why the accretion went up. So four point one percent is what you're seeing on the page. You can see this page. Uh, what you see on the page, all the prior acquisitions, which is the Spain asset, the DHL, as well as the three assets that was completed end of the year, plus what we're announcing today. Uh, and if we were to include the other- Mm-hmm ... the potential acquisition, it will go up to, it will go up slightly a bit better, four point, four point two to four point three.

Okay. Okay. And if, if I, if I, if I didn't calculate wrongly, you know, based on all these acquisitions combined together with this nine hundred million, the, the, the breakdown between debt and equity, we are looking at about fifty-fifty? About there. About there, yes. Okay. Okay. Got it. Got it. Okay. And then, maybe William, just, just wanted to follow up, with regards to the two, potential acquisitions.

Um- Mm-hmm. A- are you able to share a bit more details in terms of, you know, the, the size, in, in terms of some of the metrics? Uh, size, we are looking at two, two assets, industrial and logistics.

And then secondly, you know, just trying to maybe understand a bit more about like the difference between the two point one percent accretion and then also the four point one.

Uh- Mm. So based on debt, based on the ratio that we have, for the nine hundred million EFR is about two percent for these three. And the current that was, announced, which is the Loyang, the Japan data center, and Ascent, is two point one, so total is about four point one percent. Okay. So the two point... Yeah, the two point one percent accretion- Mm.

-is fully diluted for the current EFR of nine hundred million? Uh, so the nine hundred million would, will have, we, we act... For the four point one percent is for all these six, six, acquisitions, three completed and three announced today. Uh, it do- it doesn't include the potential acquisition. Potential acquisition is additional point two, point three percent.

So you are saying that EFR is totally allocated, is allocated for this completed prior acquisition, current acquisition, and we are raising equity for another two acquisitions that will come in April or May, and that will be another point two, point three percent of accretion. Okay. So when you calculate the two point one and you calculate the four point one, for the two point one, do you like, is it fully diluted for the current EFR, and you still get a two point one?

Uh- Or you- Fully diluted. Uh, so the, the nine hundred million will fully fund all these six, and there is additional equity raised for the other two ac- potential acquisition. Okay. Okay. So you will be, it will be deployed for eight acquisitions. Okay. Understand. Got it. And, what was your first question again? Uh, I heard a mention- Floating data center. Yes. Uh, yes.

Yeah. Okay. Uh, so the site is next to a waterfront. If you go to the slide- Oh, okay. Uh, the, is it the map of the site? Yeah. Okay. Yep. Only one. The one, the first one that shows the- Yeah. No. -wharf. Yeah. Okay. Okay. It's next to a waterfront. Yeah, okay, this slide. It's next to the waterfront.

In fact, there is a, a, a wharf that is, for, for vessels to call, so it actually can serve sea logistics. So the entire assets, because if you know TOBB, this is actually an offshore base. The main, user of the site are just logistic player. So about one, this, GFA is about one point six million. Uh, so about six hundred is for, and, six hundred is the high-rise ramp-up facilities, logistics. The rest are industrial workshops, stand-alone, and they are all being used by logistics.

So TOBB can do service for any of the user, if there's a vessel needed to call.

Okay. And, what's the capacity of the data center, and, the, the current calculation for accretion, does it also, build in the contribution from this data center? I, I can't tell you exactly until the, party make the announcement. Uh, so as mentioned, it's a lease of the land, so the current MPI includes the renter for the land to build the data center.So we are not building a data center.

It's leased to a data center operator to build a data center. Okay. Okay. And so in future, once that is, built, is there an additional rental income that will be accrued to you? No. No. Okay. Uh, the data center will be fully funded by the operator, and they will pay us a land rent, a land lease for the land.

Okay, thank you. Thank you very much- The land will have, the land, the, the, the rent for the land will have the two point five percent escalation. Thank you. Thank you, and congrats once, once again. Thank you. Thanks, Jonathan.

Okay, so the next person would be Derek. Hi, Maureen. Can you hear me? Yes. Yes, Derek. Yes.

Mm. And given where rates are currently in Japan, how do you see the entry yield vis-a-vis risk that, you know, the tenure in Japan could also continue to rise? So that's my first question. Then maybe my second question is back to this Loyang property, right? The floating data center, what are your commitments to that? Uh, do you need to spend anything or no such, risk on your end, no further CapEx? So just, just these are two things that I wanted to, to clear up. And my third question is on your cost of debt.

Estimate about two to two and a half. Is that the right number? Uh, sorry if I missed your guidance on that. So that's all for me. Okay. Uh, for the floating data center, our commitment is just the land. Uh, we are, we will not be responsible for building the data center. Uh, and if the operator do lease out or they're for own use, this is their prerogative. So we are just in the same use or what, we are just a landlord, of the land.

Uh, no CapEx required from us.

Uh, and, if you are, if you, if you, if you like, I'd also mention that

Uh, so Japan data center, will be about seventy percent, debt-funded, to be, to be able to get our natural hedging, so that

Okay. Okay. Got it. So the land, land and sea. Sorry. Okay. Okay. Got it. Got it. That's all from me. I think Rachel, yeah, she's set up a call.

Uh, s- I can't tell you more,

Okay. Okay. I see. Uh, and- In the, in the same relation, I think we have mentioned there's untapped plot

But currently, the MPI in, is, is all in, so TOA is a back-to-back. Uh, so it's a sale and lease back. The entire MPI, well, six point nine percent is paid by TOA, and they will manage the whole site on a triple net basis including CapEx, OpEx, and, they will use the space and lease out the space.

So we will then have to talk to, to, to TOA, either when expiry of certain parcel of land, and then we can talk to them and see how we can, example, build another warehouse, and unlock the plot ratio. But the entire rights is with us. Okay. And your timeline is not gonna be so soon now, right? No, it's not gonna be soon. Because during this time, I think we need to study the site, look at all the development plans, traffic, and all the, other considerations.

Okay. Then on your Japan data center, the increase in capacity, any, like, view about when you're gonna increase or when your tenant wants to increase the capacity, or it's also not gonna be so soon? Uh, it's, it's probably about five years from now. Uh, the, the power is approved. Uh, the CapCo has to, lay the infrastructure, the cables to the site.

So we will expect it to be done in five years, twenty-thirty. So two thousand and twenty-six. Four years. Okay. Okay, got it. And just one last question on, Ascent. Can I understand, maybe I'm not familiar, but can I understand why you only acquiring fifty percent? Uh, it's with a joint venture partner, sovereign wealth fund. Uh, we decided to acquire this on a fifty-fifty.

It will give us optionality. Uh, we have a right of first refusal to acquire their stake in time to come. Uh, and also because, you look at our, how busy we are throughout since the start of the year, from January, February to March. So it give us option to, to be able to, acquire other assets, and then we leave this as an option.

Uh, in time to come, then we will acquire the fifty percent. All right. Okay. Sounds good. Okay, I'll leave others to ask questions. Thank you. Thank you.

Uh, the, the only CapEx remaining to be spent is to, fit out the data hub. But all the-- m-most of the MEP infrastructure is already catered for the additional capacity.

Okay. And, and, so can we assume that, once that CapEx is spent, actually, you know, the, the, the rental or the, could go up by- Yes. Thirteen percent? Yeah. Yes. Yeah. So it will be very- Thirteen, thirteen percent is for the- Only CapEx. It's only for the five megawatt. Uh, if you were to look at, current rent, because...

While this is a new data center, there's no additional CapEx required, as what Ram mentioned. Uh, we-- But the current, lease, it was twenty twenty-three, so it's been taken up over the last, two years. Uh, it has been, the rent has been going up. So we do expect that the five megawatt by the time in twenty-thirty, there will be further re- rental uplift.

Okay. Okay, great. And, and for Ascent, understand that the

So it give us option right now, to be able to continue to explore because the, the, the, the ground floor space, if you have been to Ascent, it was used as, F&B.So we can lease out as FMB or we can, potentially also convert back to business park space. And, and so like timelines that we should expect for, to achieve this?

Uh, leasing up, I-- we will probably look at between one to two years. Uh, and we will see whether there is, continued demand for FMB and what kind of FMB will make sense because we also do not want to, create unnecessary competition to Geneor. Okay. Okay, great. And, and finally, could I ask on, you know, for the Japan BC tenant, is it like a, a Chinese hyperscaler? Is it Western hyperscaler?

And, you know, what, what's the, like, credit rating for, for this hyperscaler to give us a sense of, yeah, the, the kind of tenant that you have? Uh, it's investment grade. It's investment grade data center. I can't tell you the nationality. Yeah. Okay. That's great. But thanks, Desai.

If, if you were to factor in the loss of income from those as well. Uh, yes and no, depending on what we are divesting. Mm. If we are divesting, vacancy is good, right? Ah, okay. Um, can you give us a sense then, of that three to five hundred million, what are you looking at? Uh, we are looking at Singapore and, mainly Singapore.

The majority is Singapore. Would, would be those with lower occupancy. Uh, it should be a bundle if we- Mm ... you know, a mix of, low occupancy. Uh, and if we can just divest or just low occupancy, it'll be

Uh, I mean, we are able to look at this type of acquisition. Uh, what we've announced now is about six point nine percent. Uh, we have another two coming between six point five to seven point five. I think Singapore will continue to give us accretion. So this will probably the market that we'll spend some time on. Uh, the other two markets will probably be, Europe. Uh, since we have done Spain, we continue to like logistics and data center in Europe.

Uh, so we'll be keen to look at expanding Spain, given that this is already a, a first entry into Spain. Uh, the other market, I think no surprise if there's opportunity for logistics in US. Uh, while, while we think that it's not easy to acquire, income-producing long wheel, modern logistics, but we have been able to unlock, two DHL.

Uh, so this, what the year before and, this year. So we are, we are still looking at logistics in US. Okay. Got it. Thank you.

Uh, I don't think it's accretive for us to acquire logistics. Uh, so we'll be focusing on data center for now. Uh, this will actually be a good comparable for many, seller in the market. Uh, because of the interest rate, we have been able to unlock this at four point three percent. So it does give a signal that, in order to get deals, I think it has to be, at least for us, it has to be accretive, and data center at this point in time in Japan will be accretive.

Uh, while we are keen on logistics, but I think it's a bit too sharp for us. Cool. Uh, thank you. That's all from me. Thank you.

Uh, the five Science Park is single tenant. Obviously, the risk is risk, I mean, is higher.

And, this, asset is a multi-tenanted, so the risk is much lower. As I mentioned, the lease expiry is very, is, is well s- is, is well spread. Uh, so typically you will be, and continue to be able to give us, sticky tenants. Uh, and then the cluster is now actually growing very well with Chino now, the retail and the tenants are moving in. Uh, the entire cluster is actually s- shaping up very well.

So this, asset is actually a lower risk asset. Got it. My second question is, is there any, break losses for tow leases asset? Uh, no. And how did you get the asset? Is this a, is this open market, purchase, meaning you are the highest bidder? Uh, yes, it's a market process, but I don't think we are the highest bidder.

Uh, I think that's important for us because, while it's real estate, the entire, entire, tow, while they are logistic player, we are buying the real estate income, right?

Uh, they will be, they will be on site to provide services for any of the, subtenants, that lease up space within the warehouse, within the industrial facility.

So we are not a new player, to such, facilities. So that give us the, the... I guess they give, the, the seller the confidence for, for selecting us. Okay. And there is no break loss? No break loss. No break loss. No break loss.

Because we are still trading at premium, to be honest, I think it does give us ability to, to, to look at acquisitions. And even at this level of, issue price, it's still accretive for us. I think it's good for investors right now to be able to, to, to buy into this, very stable rate at discount pricing. Understood. It's just that I don't know whether investors are ready with a nine hundred million, nine hundred million at this point of time. Okay. Thank you.

That's all I have.

I think we'll still be similar about where we were, previously guided. Okay. Congrats again, acquisition. Looks like you're giving investors opportunity to come in at a good price at, above six percent yield, which is quite attractive. Thanks, Mervin. Yes.

Uh, so it's actually AI-ready data center, and there's already existing some AI workload in the, in the data center. So it's, water, water cool, liquid cool? Uh, it is, it's not liquid cool. Uh, given that the, well, the PUE now is about one point four, which is, which is fantastic, because an average PUE in Japan is about one point six.

Yeah, one point six. Uh, so if there is a requirement, for liquid cool, the tenant will require, then there will be further CapEx. But at this point in time, the lease they have signed, fifteen years, does not have that in, as a, as a requirement. Is air cool now? That's air cool now. Yeah. Yeah. Thank you. Thank you, and congrats once again. Thank you.

Thank you.

Sure. Uh, the other question I have is quite small, like the fifty mil deferred payment. Um- Mm. Maybe give us some background on that and the expected timing of that payment. Yeah. Uh, so this is again negotiated, in a position that, on, on the basis that the asset is, what? Nine- ninety percent occupied. Uh, so there is recent... I mean, we have recent, FMB tenants, and we actually intentionally, placed them all in Geneor. So it was actually a negotiated position.

Uh, while we can't, we actually tried to defer that about thirty million, so fifteen million each from each of the partner. Uh, the timeline is fifteen months. Uh, during this time, if we are able to lease up, it's actually a advantage for us. Uh, so even if we are paid fully today, it's still accretive, but we have negotiated to delay some parts of the payment, in order to give us more time to be able to lease up, any of the vacancies.

Mm. Uh, just back on Sen, like, J&J, Dyson, like, were they there from the very start or- Yeah. Yes. Yeah. They were. They were. Okay. So they've been there for, I don't know, ten plus years, I guess. Yeah. They've been there for years. They've been, they were the early tenants. So best case, we expect these to, to renew at, at higher rents. Yeah. Can I say that?

Uh, yes. On valua- values and probabilities. Uh, that you, you can, you can, you can, you can, you can say that. Okay. Excellent. Okay. Uh, good luck with the raising today. Thanks. Thank you. Uh, we have one more raised hand, Xuan. Hi, Xuan. Good morning. Um, you have a couple of redevelopment that's ongoing, right? Can you remind us what is the balance CapEx that has not been disbursed yet?

And beyond what's announced, are you still looking at redevelopment? Uh, s- so we are still working with a view that over time as we grow the REIT, we should be able to support between one, one point five billion of, development and redevelopment. Uh, if I recall, I think it's about seven hundred million right now. Uh, UK, US, Singapore, and, we expect twenty-seven IPP to be commissions, this year.

Uh, so if we, if we are looking at development, we will probably s-Spend more time here in Singapore. Uh, as I mentioned, the IBP, after we stabilize twenty-seven IBP, we should be looking at development of Acer. Uh, and the other li-development limit that we are setting aside is for the data center in London. Uh, so these are the two key projects that we are looking at.

Uh, the rest, if there's a portun-opportunity, that we may work with, assuming there is a brownfield convert to suit for a single tenant, we will be keen to look at that as well. But those are probably more smaller scale. So the bigger ticket items are, is the Acer as well as the data center in London. Okay. O-out of the seven hundred million- Mm-hmm.

-can you give us a sense how much have already been, been spent? Um, twenty-seven. Twenty-seven I think is more, more or less done. Okay. Uh- Seven more ... US is probably more or less done. It's probably near TOP right now. Uh- Like UK. UK, I don't think we've started spending. Um, where else? Logistics hub. Uh, logistics hub. Logistics hub probably about twenty, thirty percent.

Okay. Got it. So when, when you do further redevelopments like, the data center in Acer, right? Mm-hmm. Uh, would you then need to come to the market, or they will be funded by the divestments? Yeah. So we, for, for Acer, it's not likely to be this year. Uh, for the London data center, as we are still waiting for confirmation, we may look that if it's, if it's a, if it's a go and we do get confirmation, possibly towards the end of the year or early next year. So that's the only one that's probably more immediate.

Uh, Acer, we have to look at stabilizing twenty-seven IBP first. Uh, and, the MRT station that is, being constructed, I think is completing in '27, '28. So Acer will probably be around that, yeah, around that, later stage. Okay. Okay. Got it. Thank you.

Okay. With that, we've come to the end of the analyst briefing.