1H 2023 Financial Results Briefing

Hi, good morning ladies and gentlemen. A very warm welcome to CICTs first half to need to retrieve financial results briefing. My name is Clarice and I'm from the CICT Investor Relations team. It's my pleasure to be our MC for today. CICT released our first half to need to retrieve financial results this morning and we are pleased to have our management team here to share the highlights with you. We will be starting off with a presentation by our CEO Mr. Tony Tan. Followed by our question and answer session with our management team. I will be introducing them later. Before we start, please note that this briefing is live, recorded, and will be uploaded on our website later.

Without further ado, let's welcome Tony on stage for his presentation. Good morning. So to be formal, I don't know why. I'm doing this long, my difficult start. Thanks for coming. First thing in the morning, I think we released our results this morning. You probably have seen it a little bit of glimpse. I would not want to tell too much on the details. I think there probably have a lot of burning questions you have given the diverse kind of probably why you see a review release in the market against the no-opiers. And hopefully you'll give you a little bit more insight

into how we look at the business, which is more important for what we're looking perspective. So I'll just give you some very high level update. So overall, I think we will help quite steadily. First half, I think on the back of it probably note, the reopening started last year more intensively from April onward. So second quarter to second quarter comparison not naturally you're comparing against a high base. So the first half you look at the first half result and the first quarter result is in the liver caporing off in some of the numbers. But nevertheless, we were quite present surprised. Rather, we were quite pleased that the momentum in second quarter seems to be holding quite OK. Against our earlier expectations

to have a deeper decline given the macro outlook. So second quarter looks pretty decent. Both from an operational level and also from a macro level looks like things are depending up, not as bad as what sound the enlaser or econrometer put the painting in the picture out there. But nevertheless, we know the headwind in the second half. But then she can build up. But they also since with some side of the little green shoot, no inflation seems to be picking in many places, that's probably the key factor underpinning the performance of the recent and for us obviously on the ground in Singapore and South market overseas. We are also single little for that impact coming through.

So some high level numbers, NPI, 10.1% increased the on year against the moderation from first quarter. Di went up by 1.7%. So a lot of the distribution has been eaten away by interest cost lastly. And the dip yield increased by 1.5%. Overall, we send the portfolio blue resident from occupancy point of view across the board, both the retail and the office that we're seeing the occupancy creeping up in a way, a manifestation of a little confidence level hopefully coming back in from marketplace. Against the backdrop of maybe three months ago where there seems to be a little bit more uncertainty.

Tenenselsto's also trending well, very pleased that we've seen both doubt how and so a bit more picking up, doubt how more naturally have a little bit by the increase in incrementally we see more tourists coming back. Going back to office seems to have normalized to do a large extent. And see a little bit busy now, now there's a doubt how location. So I've been holding up really well against my earlier rejection that I talked when the borders are reopening you've seen a lot of probably outbound traveler, which we have seen a little bit, but seems like the sales have been tracking quite nicely. So overall, I would say the outlook for retail office

well, we are cautious, but we think that there's a little bit of green sugar coming up, hopefully that would pan out true in the second half on work. So the NPI I mentioned earlier, those are DIM, I mentioned earlier, up by 1.7% DPU is up by 1.5% against the last year, first half lower base, hopefully second half will deliver a bit better numbers. We also see and started to receive distribution coming from cap spring. If we call cap spring, we list up quite well, but there always been a little bit of different timing gap. We begin to see no distribution coming back from cap spring. Our overseas assets are starting to contribute.

There'll be a lower level than we hope for, but I think they are starting to contribute. And obviously the cap sky that we have completed last year are going through steam and it's trading very well. Overall, like I alluded to earlier, the portfolio number has been very encouraging from the occupancy perspective, we creep up overall, about from 96.2, first quarter to 96.7, about 0.5% point on the quarter movement. Total, in fact, the rental revision, we will quite please that we're able to extract a little bit more revision out from both the retail and office.

And as a result, you can see quite a nice uplift between the first quarter and the first half rental revision. And within the office and retail, quite diverse range, the retail side of the office side, we've seen a lower up of three plus percent car a reversion depends on your expiring rent, right? To a high off, 20%, so that blend up into a above six point, this office is about six point, something percent. And retail, we're looking at a range of around 2% to up to about 31%, so it's quite a wide diverse range. But nevertheless, we'll be happy across the board. So, perfect momentum, I think we should expect that next second half probably will slow down a little bit

given the higher base last year. But still very decent, so perfect, we are seeing through the more. Although it's already in fact higher than what we've seen in, probably slightly, across the almost opinion, 19 level, not far away from 10 and 19 level. And then there's where we're continuing to maintain, in fact, higher than pre-COVID, on overall portfolio wide is about 8.3% higher than pre-COVID. Total borrowing will fix up to 70%, we've done some issuance which I'll elaborate a little later on and now we have a very healthy maturity profile 4.3 years left in the debt side. Just some colors, trap key,

you have to complete by, let the power of 4.4% as in TOP. Progressively, no, as you visit, if you do, go down CQ periodically, you're seeing some movement of tenants, some movement in terms of the holding. Progressively, we'll remove some holdings. Hopefully, we can start to bring in some of the tenants that we have pre-committed and start trading earlier. But gradually, we see a little bit more ramp up, probably towards the later part of this year where the border handover will happen. Raffer City, I've seen also quite a nice refreshment. We've done through quite a significant reposition or Raffer City. I will say we are only at phase one of the repositioning.

Roughly 40% of plus each of our brand target positioning as much as we achieve. And we're looking to look at remaining about, meeting, in fact, 30% of the tenants that we need to do a little bit adjustments. Now that I think the refresh city, we are quite happy with it. And we've seen, we brought a lot of our investors from overseas and local as well, to explain to them what we're doing, what we're position in our facilities, where I think most of them has been quite pleased with what they see the outcome. Open-G sense, that's, yeah. I think overseas has a little earlier, it's a little bit of green shoot.

We have ramp up a little bit on the occupancy for Sydney. It's gone up from first quarter to 3.4%, no, today we're looking at 88.6%. We have the take-up rate, for example, 66 common. Today we're close to 96% committed. And we're working through some of the other asset plans. And we're seeing some interesting phenomena, which we tested the market over there. And there seems to have a bit of preference for, at least in this environment, where there's some level uncertainty, you know, pre-fitted-up units, seems to have a little bit of traction there, you know, when you get a place well, that cop very conducive and very powerful,

they're staff. And if they want to make that decision quick, I think they can come in quite quickly. So we thought that decision to do some fit-of-space, was right, but we are trying out the other building as well. In Frankfurt, a little bit of cryptocurrency, last year from MAC, I think last quarter we were looking at 94%, today we are 95.3%. So last year we were by the MAC, the airport office that said we have. All you know, the Gallileo, we undergo AI from January, next year to the fourth, there will be the last day we get rent,

February or more, there will be no rent. But we also very pleased to say that we are actually in a quiet, fine discussion with a major tenant that would take up large majority of the building. So hopefully we can give a little bit more, news as you progress along. Financial wise, I think I will doubt too much. Maybe it's just a few points to note. So they are at some plus and minus this first half, second half when you're looking at, not generally from a trading perspective, at least for retail, the second half will be performed a little bit better than the first half because of the season effect. From an operational level,

first half we have seen the peak of our tariff rate, which is very high, we're looking about the mid 30 cents. Come for second half and for 2024, it is quite a significant reduction, about 16% lower than we are looking. So we would have a little bit of savings, hopefully. If you continue to be very vigilant and make sure we manage a consumption carefully, there should be some savings on the utility side as well. You'll probably also know that we have a new PMA, which to effect from first June. So there'll be a little bit of adjustment, potentially towards the end of the year, we'll look at some costs, realignment based on the new PMA.

Hopefully we can see some savings as well. And lastly, we also have locking our interest costs where each of our bonds for an ability in June, a 3.98%, that would take away some volatility in the short-term rate, which is very elevated. And today we go to the short to market on the floating basis. You're probably looking at 4.5% easily, easily for an half percent, depends on which time you're looking at. So hopefully on the second half, we start to see a little bit better cash flow coming in. We have not touched our 14 million, which we take in the back from Australia, when we did acquisition, we are not actually there, we try not to, if we need to supplement, we'll do that. But ideally we try not to touch it.

We start to see some contribution, which I mentioned earlier from caps Supreme, hopefully that will improve and accelerate from second half and the internet from work through. Hopefully we can get all this mitigating factor to buffer the Gallileo effect. So Gallileo effect, Gallileo is about one and a half to percent of our contribution, so therefore, so hopefully that would be enough to cut buffer then. And with all the positive reverse-center, we're seeing that should translate into a better numbers going forward. Okay, this one, I wouldn't touch too much, I think you'll, you'll should know very well, and then the nice. Maybe just to give you a little bit of a flavor,

I think balance sheet side, very healthy. This is not what I was asked a question. Some of the peers did valuation, I think we did international size, we did assessment, in consultation with value. In fact, overall I support folio, we've seen very stable number, Singapore, very healthy. Little bit of downside risks from overseas asset, but we see how it goes for a rest of the year. But overall as a portfolio, we think the number is okay, I think holding quite well. But we are seeing a little bit of a blizzard, and that's, it's such a bit of a grant that we managed to receive from the government to sort of offset the cost of us building the underpassed food. So that goes into our balance sheet

and is almost a immediate question, or an AV by one cent. Okay, so I've been quite active. No doubt in any very volatile interest rate environment, we've been quite active on the capital management side. We did bond issue I mentioned earlier, but also we've been very active in the cash management side. So trying to minimize as much as possible the unnecessary debt carry on our book. If you look at, I mean, later we can talk to millions, she should give a bit more colors. But we have different truths in place that we can tap, no, if you need to raise money. We have a C-P program in place,

we have MTN program in place. We have more than enough bilateral bank relationship, in fact, we cover entire maturity form, in fact, and I can tell me a little bit. Majority for, even to need to need four. So this year we are done, right? 2020 four technically we're done because we have enough line, but we'll look at the opportunity time where we perhaps want to start looking at the potential that issues hopefully, and maybe potentially we'll look at some kind of early prolongation. So we are in discussion with some financial institution and see how things can move from there.

But now I'm gonna say, if you say in environment to down and the next six to 12 months where everybody is not start guessing how the interest rate will look like, of course, they're very diverse views in marketplace, active capital and interest rate management, I think it's key. The rest of sensitivity, I mean, this is not rocket science, it's essentially the floating part. We love about 22% of our floating rate. You measure that against any change in interest rate, that will be the impact you see here. I think I was saying this one, I mentioned before I think across the different subject that we are seeing increased occupancy. And we should potentially,

as we walk through the remaining of the leases and we start to also go into a 20, 24 lease expiry, you can potentially improve many of them from current state rate. Let me just jump straight. Ritio, I give you a little bit of flavor earlier. I think I don't just say too much. The reverse numbers picture itself, I think it's a little bit narrowing or gap between the downtown side, but nevertheless, very healthy. Again, it's a very diverse range of reverse numbers that I mentioned to you earlier. So this is something I don't think on the detail too much. Something to note that we also took coverage, we've seen a bit of a shift.

Now this is important because we track all these performance by trick cat very carefully because you affect the way you look at our asset planning, going forward. Compare last quarter this quarter, we're seeing actually largely the same as a big jump from the improvement from the beauty and health, because those quarter we see in an equity number and beauty and health is of the largest trick cat. So this one do well. You have some implication on the way we look at position in that. So I think we are quite pleased this sector has been seeing a nice uplift in the second quarter. Okay, this one I mentioned earlier. I think while we work through Singapore, 96.6% slightly

below, no, in fact, it's a slightly higher or a flat dish. But we are working through the remaining releases. So you should see that coming through in a third of quarter on occupancy side. Germany I mentioned before, MHC effect. And the Gallileo, I mentioned before, we are working on potentially a single tenant taking last majority of space. And Australia is a nice ramp up. Hopefully we can achieve even high occupancy by a year and overall nothing much. I mean, these are our BAU. We constantly try to curate new stuff. It's important.

It's also a signal to the market that there's still confidence coming in retail sector some new to market brand. We managed to bring into our property, both in the outside open. I mean, that's very encouraging. And I must thank the our property management team. In fact, Chris, Chris is here. I mean, he's helping us on the retail side. He's team working very hard to make sure we differentiate ourselves from our competition. Okay. The rest I wouldn't talk so much. I think otherwise, are you endless? You know, pretty much very well. what we are seeing on the ground. Hopefully that manifests in a real movement. I mentioned earlier we sent probably potential Libya or green should hopefully that that's real.

In Sydney, for example, it's been busy. You know, our folks on our ground. People are coming back to the office more regularly. You know, let's stop real life to transition and getting busy. A few of us that we need to work on. Hopefully we can translate into high occupancy. The retail side in the Sydney asset, which is the one in the green would plus that I think that's probably going to take a little bit more time. We need some repositioning of the asset that retail space location. Very prime connected to the subway line. It's no different from the reference place. But I think we need to position it correctly. Currently, we're working alongside our partner more back to look at the plan. And in fact, there's a bit of cross exchange

and hopefully we can bring them over to Singapore to see some of the things we are doing here. Germany side, I did mention earlier that is not as green as what you see. It's on the garage. It's pretty busy. We've seen some leasing momentum, picking up no MEC, for example. Some energy sector, some aviation sectors are starting to look at space again. In the midst of some, Danette, we're looking at recising. But all this is a little bit of how deep movement we're going forward. And hopefully with a little bit higher, in fact, more very much elevated costs of capital with potentially would see in the past

always large development pipeline was slowly tippled down. Because I think in the past, both in the segment market and in the German market, the low cost of capital has created quite a bit of speculative kind of development activity within going forward that activity should tippled down. I think value creation, no different. We've been doing that all the time. We continue to be very agile, looking at portfolio. Earlier, I was like, I have a question about, when you're quite excited, that's $700 million and $800 million, and it became not a sample.

I mean, to ask you your long term player, right? Variation goes up and down, and sometimes it's triggered by factors that beyond the control, interest rate, cap rate transaction. And different market look at valuation in a different way. But one key thing is, if we position that's right, and that's the key fundamental. Driving value will come later for us, critically, we need to make sure every of the assets will have the chance to run this full potential. Every key pace, we keep pace to ensure that we we're putting a necessary cap tax at the right time, not overly burden on the portfolio in any particular year. So we try to keep the key based that. But overall, we'd like to keep some dry powder

for other works along the way. This one should see that CICT will able to deliver a resilient and consistent return. And that should translate over time a higher confidence on CICT as a very stable vehicle with growth rate. I mean, that's ultimately our objective. Highly liquid stable vehicle low risk premium. I think we can achieve that. We have a tremendous advantage over our peers. Yeah. I think of we're there. Stop here. Happy to take questions. And I invite my team member here, who has been very instrumental in getting all this execution. Thanks. Thanks, Dominic.

Very bad management team on stage. Let me quickly introduce our panel today. Sit down at the center. We have Tony. On Tony's right, we have Miss Juan million, RCFO. On Tony's left, we have our head of investment. Miss Jacknilly. And to the far left, we have Mr. Lee, Yi Zhuan, our head of portfolio management. Some great housekeeping rules before we start

are for our physical audience. Please face your hands if you have any questions. Please stay your name and company. And we can't ask that you limit to two questions per time. If you have more questions, we also go back to you. For online audience, please feel free to join in by dropping your questions in a chat box. OK, we can start the ball rolling. Can we have the first question? Hi, Tony. Open from JP Morgan. Yeah, congrats on the very strong retrobie version to accelerate. The rental reburgers is based on fixed rents. Can we get a sense in terms of total rent including variable rents? Is it as strong or slightly lower and kind

in small second half? Second question is regards to electricity costs. You may recommend about 16% decline. Is that half and half or dropped towards 2024? Thanks. Yi Zhuan you want to address the rental GTO rent? Yeah. Well, OK. I wasn't expecting it to start first. But yeah, I think I don't have the number of hand on actual percentage of side biosade. Actually, the GTO has been improving. I think first half has been increased from also. So I think the reversion in the total rent, including off sales, would be also pretty strong. Yeah. From the rent structure perspective,

in the cost of the last 12 to 18 months, we have gradually shifted more than normalized level. The most those that in the past, we have granted a bit more concession or restructuring of the leases. Most of them were gone back to the normal way. So the user closer to where the market ran this, I then we have a little bit of adjustment, depending on how we look at the trade, whether we want to put this bit on the upside or split less than upside here. So those are more tactical. But overall, if you look at, I think that's just like, look at the range of the turnover ran across our portfolio, it's from 5 to 7.

5 to 17. So it's still a wide range. It's a reflection of different more are quite different. Yeah. And I think, Movina has a second question from the electrical terms. It's second or against the first half. So in 24, it's still higher. It's still higher than 22. 22 was 20. I think it was 20, if I recall, Corrie was 24 cents. Now we have more like the high 20, 829 cents. Yeah. Same ring. Probably about that. Yeah. Same sense around there. Yeah.

Everyday different, there are facts in the brand. Yeah. Yes. Hi. Morning. This is Tanchan here from Coleman. First question is on the new year. Is there any key facts in also the 18 months to set into account rent free? He also comment on rent of the new 10 versus our content. It's still under discussion. So there are some confitensality. It's an uplift in the render, obviously. 18 months. No, that's the period where the land not will undertake that upgrade. So that period is not at least condensation. So anticipate this commencement by mid of the 2025.

Yeah. What about a key thanks? We're still working through the details. There will be quite a bit of a key back supply because there will be the base building that we need to upgrade because that building was built more than the most 20 years ago. So some equipment, although it's functioning well, but it's not at that level where the new occupy the manual, this day, I think they're looking at a very high grade green building. So we are putting quite a bit of attention to that upgrade. And that, to us, is very defensive because you want to protect the value or the property on a forward basis, you have to do the work today. And that will value a coming.

I think market will potentially recognize that because the this already occurred differentiation on what occupy you want. So we are bringing the building up to the best and over there. Yeah. Thanks. My second question is on second half focus. Right now that operating metrics are looking across most assets. Are you still focusing on existing operations or more in acquisition, like best for the second half? Anyway, we look at everything. That's why we have a food team here where investment and portfolio folks are. It's not a, it's not, it's still, I mean, constantly we are definitely need to ensure that our asset performance are well. And there's no sitting bag relax.

I mean, it's very tiny. Especially look at, in fact, what office have you have a lot of things to do? Office has said sound assets. You know, look at the, the range of legacy or assets. Like it's quite, quite as new as one year to year. Oh, and there's always probably 20 plus years. So I think we do have to, uh, panel work and make that plan in a logical way. You know, we don't want to drag the earning assetsively in any particular year. So we have to plan out the plan. So they are a lot of work for the portfolio folks. And I mean, it's not doing nothing. Every plan, depending on the scale of the work we require, right, uh, full-monthee, complete the entire market,

the account planning, it's, it's probably the years. Even in not in a, initial agree on, um, what an ultimate product you want to reproduce along the way they are along the causation. And they got to look at the, the timing of how you want to call tender as well. So a lot of work is, it's, it's, uh, it needed to a simple repositioning aside that would be ongoing. I mean, we have, um, both downtown and, and, and so open. I said that we need to respond because consumer, consumer, uh, uh, uh, I mean, there are, there are, there are, there are behaviors change. Obviously after COVID, I think a lot of things has changed. Um, but the consumer be here, there's definitely a change. And we, we need to take that into consideration.

Yeah. So as I managed, management actively and then of course, the, you know, look at the food development side. Then investment in part, but it's really just written a right. And no, at this point here, we may have to see whether there are a raw percentage of face and how you can do fit into our hope portfolio. What comes in? Is there something you need to, to, to, to let go? So it's a time puzzle portfolio, the constitution exercise that we do on an ongoing basis. So we don't keep our radar now. We, although we may keep our radar, but it doesn't mean that we are going to do something, but definitely we need to keep track what's happening in the market. Have you have? I've done. David. David from my,

I will, can you remind us again how you recognize government grant income for the, um, for non-workway? It seems like you're saying it improves your NAD, but it also seems like it's negative for your DPU. So can you just go through the accounting for this? I've asked you, uh, maybe later explain. There's no impact with the P.U. Yeah. Can I, under other income? In the income statement. And this is actually clear with the auditor's KPMG. And that's a requirement given that the grant is in relation to full-end, which is actually a fair value. In terms of, um,

uh, DPU impact, there is no DPU impact, because this is actually a cash, uh, that is not generated from operations. And, uh, you will not be distributed to unit holders, but you will be used to defer the cost that we've spent in the building of the underground pass. Okay. Just to clarify, you recognize like 34 million of other income, but you have to remove that from the distribution, because it's not going to be distributed. Yeah. Is that yes? Yeah. Because the money is spent on construction and, um, at the time, we look at full-end rate, the development is the hotel, you know, the plan, including building the underground

uh, message way, the link. Uh, and then, uh, we can seek reimbursement from the authority, but the cost will not be no one to is fully completed. Yeah. My follow-up question is, uh, with regard to, uh, raffle city more. Uh, now that you have more visibility as to the, uh, committed passing rent post AEI, uh, what is the magnitude of the uplift compared with, uh, when it was, you know, when Robinson was still attending? I mean, how much uplift, uh, are you going to join? Earlier, I did mention, uh, but later I can pass to, uh, you try to keep your living more color. Earlier mentioned, I think we are, we, we did a little bit about cross-ap 40%

of the repositioning exercise. Uh, a large part is in the all Robinson space where we did some movement. Right. So there are, um, uh, um, moving paths that contribute in, uh, uh, income growth a different way, but there are still errors. So I'm not completely done yet. You know, I can't name, of course it's sensitive. Uh, but generally I think we, we are looking at another potential 25 to 30% change in the, the, uh, tenant type. Yeah. So I think the full, the full impact will probably know in the next probably another 12 to 18 months. Oh, yeah. Yeah. But it's, uh, it's higher. Yeah. Um, the info for getting hotels has been doing very well overall.

a hot air benefit from the entire reposition exercise as well. Um, hospitality, I mean, of course it's on fire now, right. Um, so that I think that also be quite a nice contributor. Do we have the next question? Hey, um, one, Tony, Brandon, myself, um, just to follow on the part for the reconciliation question, right? Um, but you mentioned about these legacy assets. Are you talking more about just 10 remixing or redevelopment? And when you talk about redevelopment, is, is there a certain size that you're looking at? I mean, if you look at next year, right, we had the expiry of the two government incentive schemes. Are you looking to take advantage of that before the expires?

You trying to do one? You want to date? Yeah. Okay. Um, maybe, uh, where we talk about the redevelopment schemes, right? Those will take probably longer than something they can do next year or something. Definitely we are starting a couple of options. Um, but if you talk about timeline rights, right, it'll be a few years away. Uh, we are aware that some of the schemes that the government has been looking at, right, that SDI as well as the CBT incentive schemes, right? Some of them are expiring soon. Um, but I think some of the, at an end of the interview is that, you know, when you talk, take a look at what the government is trying to achieve, have they achieved the objectives, right? We don't think so. So some of these things we do expect some of these schemes, but they will look at how they probably extend our sheet. We look at how the schemes. Um, but at an end of the day, it's really looking at the scheme itself, right?

But at the incentives that we get, does it actually fit into the kind of things that we want to do for assets, right? And then we're on the basis we will study. Yeah. So it's not something that only 2024 is at least the, you know, they're still really volumentum. True. Yeah. Yeah. Um, and then the question is about tenants. Yeah. I think if you look at first half, it seems to have, so if we, from comparing second quarter to first quarter, so going to second half, if we see, um, Chinese tourist remaining and where they are, do you think this could be, uh, this could be a concern for you? Well, yeah. Okay. Um, maybe I'll start with. Uh, so for tenants sales, right, um, for the second half of the year, of course, um, hopefully we think that actually the Chinese tourist coming true with the reopening of the slow start.

But I think if you look at SDB's, um, US, or its own internal, um, we think these flight capacity and whatnot. And second half of the year, hopefully, you know, we see more of these, uh, Chinese stories coming. Um, they are still actually a quite affectionate people with puberty. So I think that's a try, uh, if I build one to grow. Um, we also see it at fun and, and also a whole series of kind of things that you own, the concepts, right? Every week, we're talking about concepts nowadays, right? Those should help to drive a lot more tourism, to Singapore. So I think retail wise retail sales vice in the second half year should have some kind of, you know, momentum that was still carry true. Yeah. Oh, I just don't last one on the video again, right? Doing the 18 months, we can expect things to involve income support on capital gains. Do a lead to say, do a lead to say, uh, I mean, we have some levels, but, uh,

at this point, we, we, we are not, we're not, uh, we're not, uh, we're not, uh, we're not, we're not, uh, we're not, uh, we're not, uh, we're not anything yet. Yeah. Thanks. Thanks, Brandon. Can we have the next question? Gary? I very mogginestantly, uh, just question on acquisitions. Looking at the use of federal and consumer elevator, uh, we, you can walk in on, scoring a list of platforms, like, uh, a read or, you know, private, uh, rest. Uh, we keep, we keep option open. I mean, that's the spread is one consideration. Of course, you're the spread, uh, depending on the underlying passing, right? And where the potential, and then we look at the interest and then buy the cost of capital,

I mean, it's moving right. I want to first, these, uh, hopefully training in the right direction. Um, so that's one factor we look at it, uh, from a, a, uh, from a, from a, a telephone financial point of view. Uh, platform not easy, platform typically not easy, uh, but if they are something interesting, we, uh, don't think we'll do our, like I say, we don't keep our eyes shut. Uh, we may look at it, but we may or me not go into it. Just have to see the merits of the, uh, the transaction. Yeah. Yeah. Other you mentioned, um, you know, talk to your value as some internally, uh, the purposes for those seems to be some, the reason,

which is, um, we just elaborate a bit more on how much we're doing. Yeah. Well, yeah. Well, I think if we kind of take a look across the expansion and cap rates in some of the, like Australia, right, uh, especially when some of our peers' valuation is also illustrated itself. Uh, we, we think that from the, you, we can expect, you know, kind of like, maybe, like, single, mid-single kind of, um, downside in terms of valuation. Uh, but I think that, uh, uh, I didn't go back to, um, how the whole portfolio is right overseas. It's only 7% off the overall portfolio. Right. So actually it's, it's, uh, on a portfolio level, it's not going to be very mature.

Yeah. I think it's something is manageable. Of course, um, it's very hard to say, you know, that on a full-year basis, how this number will pin out because at the end of this, it's also dependent on, you know, in Australia, the Salyi, what kind of transactions we see in the market, right? Currently, that's not a lot of it. But when some of these terms show how it actually, you know, the buyer and seller kind of price meets, right? Uh, we probably have, uh, it wouldn't have an impact on the valuation. So I think, um, we wouldn't want to kind of re-to-match into it in the how they were going, um, your end, but, uh, definitely we do expect some of the, it to come off with a little bit for the overseas. Um, but again, I go back to the overall portfolio. I don't think, uh, it won't be really changed as a overall portfolio. Yeah. Just for how much coverage expansion in Australia and Joe. Oh, I think right now, if we see some of, if I'm not wrong, we see around like, 25 plus minus

percent. Yeah. But I would say that even if, uh, even when I looked at our December Day pool kind of assumptions, right, uh, our campaign usually is a little bit on the more kinds of things. So there's a little bit of portfolio. So, uh, I would say that even with some of the expansion hopefully it will not be as extreme as on once we've seen our competitors. I believe it's for more Australia and Joe. Yes, it's for both Australia and Germany. Thank you. Thanks, Derry. I saw Rachel for her hand just now. Hi, good morning. I'm Rachel from DBS. Thanks for the call. A few questions from me. I think firstly, um, I think you're a bit cautious in terms of your outlook for office in second half of the year. I just wondered whether, um, is there any cost of concern any wages coming up?

Shadow space for being up and, uh, expect the rent. Uh, in second half. Yeah. Um, okay. So I think for the reason why we are trying to cautiously optimise, uh, cautious about the second half of this, right? Fundamentally two parts, right? One is the shadow space, uh, broadly speaking, and also in the second half of the year, we expect, you know, a major competition in the market. So that will kind of put a little bit of a thing that may tempo kind of a bit of the rent that we will see. Uh, because right now if I'm not mistaken, I will, I currently around 40 plus minus kind of percentage commitment. Um, but I will say that in the mid-term right in terms of the limiters apply right, uh, at the end of the day, we do think that there's still some links in terms of how rental

kinds do grow. Uh, but I go in touching on the shadow space perspective. I think that if you look at some of the consultancy report, the shadow space actually has come down a little bit. And even though we are seeing numbers ranging from like mid 300 to about 500, right, uh, be only about half of it is confidence CVD. So I will say that is it something that we are overly concerned with? No, it's just something that we thought that it may kind of limit the kind of rent go over my seen as can have because on top of that, that's also a little bit of uncertainty in terms of the bottom, uh, economy is right. And I think some of the dependents have also instead of looking at relocation at this point because of high-capx, uh, a lot of down-looker renewals. Yeah. Just maybe follow up.

Shadow space on your portfolio. Is it pretty easy? Shadow space in our portfolio is really quite immaterial. Right now, I think, um, we do have one that is kind of backfill already. We already find replacement tenant and in fact, uh, some of our shadow space when we find replacement tenants, right? We probably can get a program go upside. Oh, that so, um, it's not too bad. Yeah. Yeah. Yeah. I think the based on car and, um, mood, uh, the, the street spot, the amount for space is smaller. So it depends on the building's configuration. Um, and then you, you may or may not be able to cater the car and it's, um, so in our portfolio, you know, the, um, uh, couple of sets may be time to tackle the car with space,

5,000, 10,000 car with square feet area, uh, that we can tap into. Uh, but last space occupied, I think at the moment, I think probably would face a bit more challenge from the, uh, uh, those, uh, shadow space where then when you release the space in the market, it will release by floor like three or four floors in the market. So those, the largest space occupied looking to back for you, uh, what poverty along the time. Yeah. Yeah. Okay. Um, my next question is, uh, um, on tenants sales. Um, happy to see that the gap between your number and your number and your number is closing, but just maybe on more forward looking, do you expect that, uh, get between the downtown and the, uh, suburban to really close to being similar?

Uh, to drive up or do you feel that the increase in tenant sales moving forward would be last given by the Southern? If you look at trending wise, right, trending wise, last year, second half downtown fly right, so a bunch of like, I mean, trading along. So you can see the kind of year and year effect coming to play this year. While we think that downtown would start to see more traction from the inbound traffic, traffic coming in, uh, that high base on last year would probably be a so called softener vis a vis, uh, uh, up and where it's a little bit more moderated. Yeah. So I mean purely from a year on your comparison. That's the way, but more momentum perspective.

I think downtown is picking up okay. Yeah. Because all these events coming up, the inbound travel are coming in. So I think on the on a sequential basis, you should be okay. Yeah. So yeah, just one more question. In terms of a position, I was not using the market is ready for you to look at position divestments each market. Well, if you look at the use out there, there are a lot of use out there. Right. It's a weather, the expectation on is as a smell. Uh, still a bit noisy. I think the price expectation between what we observe in the market, the asking and the, the, the, what the market want, the, the buyer prepared to pay. I think it's still to be a gap in that last year's function of

broader economy outlook, uh, not very certain, which is really a factor of how their entire industry environment should shape up, right? No. So all this has got to do with the cost of capital, whether it be a cost of capital are there and it's all intertwined to me that that, um, catbitulation can come quite quickly. Right. When that signal in the market is very strong. Now for see the catbitulation very fast. Yeah. It's waiting to buy this out of the world. We'll meet. Yeah. Thank you. I think this Olivia is still in the market. Thanks. Having to the online audience, I like the person to me, being who is also our head on investor relations to share the questions.

Me being. Thanks. So, um, I'm combining a couple of questions. So, Dan, for and dictian asking about Gallileo during the, 18 months where the properties undergoing a high probability impact on a DPU is the first question. And the other question we received from Denver again. Office rents is expected to ease in the two half, 20, 23. What about the future of the office market and the impacts from what? May you want to click the video? The, the idea in fact. Yeah. And the, the impact from Gallileo on the stabilized basis is about 10 million. The year.

10 million against our, I think the area is about 700 plus million. Yes. Yeah. So it's quite small. Yeah. Yeah. Any interest receiving will be more than enough to cover that. I mean, I'm going to look at 1% move. It's 22 million. Right. Yeah. Second question is, model office market. You want to get. Um, particularly on work from home. I think it kind of launched these people, I said, this year, right around like a lot of companies I just think that, you know, it's going to be hybrid rather than a full, you know, usually around three to four days in office. So I think that what kind of support, if I share, I would say that more and more companies I actually hoping that actually there are stuff come back to office more than ever.

So in terms of how this actually depends on I think it's a good support for office demand going forward. Um, we don't expect, you know, suddenly, if actually maybe I share like, it looked in the first half of the year, right? Uh, on a portfolio Singapore portfolio basis, we actually see more expansion requirement and downsides requirement. Both in terms of the number of tenants as well as the amount of space. So I think there's a good sign of how things will come in the second half and, and even going beyond the second half. Uh, utilization rate, I think right now is around about 70% I think office written rate is, is cast a relies. Uh, hopefully this will kind of pick up by we don't think you will ever go back to the pre pandemic times. Uh, the interesting thing also is then that, you know, because of how people are like now working a little bit on the home, some of these things, uh, when people

work from who actually helps to support our supplement kind of we feel. So in a way, you know, what kind of way we're losing the office side we can't help benefit our supplement most. Uh, so I will say that by and much I think it will come from home. It's quite convenient. Thanks. Can I have the next question? Maybe, maybe Jack can give a little bit of a color how the investment market looking at this space office space. Yeah. So maybe in terms of what from home and also like, like the quality, right? That we are seeing these days. So from an investment point of view, we believe that if the asset is well located and of a quality asset, those assets will still be able to hold in terms of valuation and it will still be sought after. So I think as Yi Zhuan mentioned, what from home and also beginning to kind of

stay alive? Thanks, Jack. I think I have that next question found out. Hi, it's Donna from Bank of America. A couple questions. First is on your Singapore office occupancy on a QQ basis. There's some movements, not the beef of the Asia Square capital green capital power. Could you comment on our documents? Let's be saying which tenants you join? Yeah, so for AST 2, we saw some movement in the sense that one of our tenants 10 space account released back to us so that kind of AST 2 number came off. Similarly, I think one of the tenants in Capital Tower was also at least

kind of left. So it kind of come back. So I received a temporary drop in terms of the occupancy numbers. I think that was the time of concern that we may have. But for, I would say that we have a huge quite kind of renewed across the portfolio. We have seen some pretty strong renewals. We knew some of our key tenants in both CG RCT for instance. And I would say that there's actually a couple deals right there. We are working on that will help to bring back the CT numbers and the AST two numbers. And earlier you mentioned that you're seeing more expansion requirement than downsizing which industries are expanding. Okay, roughly we will still see a lot of those like SMH,

management, banking, financial services. Okay. There's no thing on this floor for your Australia 66 golden. On your spec streets, they are doing. What's the VC in cap, spec stay on your, your, your, your, recurring and what's the impact on your cash. Sorry, I this moment I don't have to keep back the number of hands. Probably I'll come back to you on that. Yeah. Sure. Thanks. My last question is acquisitions. Don't you think your causal capital now is conducive for acquisition? And if you were to buy anything today, is it more like in Singapore, UK or Australia? Or Europe or Australia? I can't wait. I saw the causal capital.

I think earlier a little bit of a buy-as-I was still there. I think that's still a reflection of why I feel in the marketplace. But certainly the, the, from above all the debt and equity side, he has improved compared to six months ago. Yeah. Which market we keep option open? I think ideally we still want to build our base in Singapore as much as possible. And know the, this is our whole market. It doesn't mean that it has to be a outright acquisition. It can be a outright portfolio expansion. No, no development that those are also building your presence here by entrenching your positioning stronger and growing the SSIs that would keep you that competitive

foundational. So I think we continue to do that. For my eight organic, I'll get getting from to party. I think we have options. So we, we, we, we find the right moment. We do have Python's own sponsor. We have the option for the cap spring, which we, we can look to see when we should exercise, if you want to exercise it. Then we see what's available in the market, which I see there's a thank you for the, out there. Just the expectation. I think it's still a bit okay. I think we have a couple more questions from the online audience. Hi, this question from Derek DBS can management provide some insights into the occupancy cost

for the retail malls. Are we still able to have positive and reversion given ongoing business cost pressures? And also whether retailers are generally profitable. It's a first question. The other question also a retail related is from the KTM unit holder. It's about CQ and Claki. CQ and Claki is what is the CapEx cost and projected rate of return? Also what is CQ's current occupancy or the occupancy for CQ? That's your question. You're showing your on the team. Well, for Claki, right now the kind of commitment rate, so if you're getting it's around 85% plus minus around it, we expect the commitment numbers to come up a little bit closer to

competition of the AI where retailers can see better what we are trying to achieve. I think for the first question, the rent occupancy costs. I think in my view, we are still in a pretty healthy range, with a 16.8% OC. In a normal time period, we are in a very comfortable position. Let me see quite a few of your upside in terms of a adjustment based on purely thermal occupancy costs perspective. They missed the threshold for different subsector and retail space. They should be some room. But the second question posed that is correct, because then question is whether the profitability

of a retail will be threatened. We are still assessing. At the moment, the honest truth is that the retailer themselves are making some adjustment and you've seen some price elevated, which is transmitted as if you're having all these numbers or historical numbers and state elevated. My view is that I think a lot of retailers have been passing on the cost of the consumer. And consumers have been able to absorb because then you see that the ordinances are repounding quite strongly. Where is the straight spoiler? Will they be able to continue to pass on that cost? I think we are probably near the end at the beginning. We probably can see a little bit of potential upside from rent.

Just depends on trade to trade, right? Then into ten. But importantly, I think we need to post-show correct, because for the right ten, we are prepared to take a little bit of position, which we did continue to see throughout the whole entire COVID period. For the right ten, for the right position, need to bring in. Then we want to participate a little bit more on the upside. That's where I think to ask the more importance of both the rent. And that's where we want to drive the GTO component. So it's a bit of tactical strategy that is required going forward. I said to say we are still trying to see what is the post-conducting dynamic. A sectorable occupancy cost for the different subject.

It varies from, I think sector to sector to sector. And you totally, we've tried. There's a lot of profit-tearing, a lot of the entire supply chain. So which part of the supply chain is screaming off the most? It begins to see evidence in the market when all the big corporate companies start to renounce their results. Who are making the big bucks? You probably don't know who are the ones that's screaming off the most. But at the end of the entire supply chain is the retailer and retailer, meaning the consumer, I mean, that's the end point. That part I think we have to take something to figure out. But I do think we are in the same point. We've probably still still some upside in the most of the video of rent passing on. But of course, you want to be very cognizant how you want to do it.

It has to be very tactical. Yeah. I'll answer that question. On my own hand. Can't see you off this. Thank you. Can you have the next question from Joy? Joy from HSBC. I took question first. If we go back to Gallileo, suppose cabbacks can we expect a green certificate for that building? And was that driven from management or was that driven from a demand perspective? It's definitely going to be a really green. I think it's a green out there. I think I'll look to you to a large extent or occupy the mind. But also we need to ensure beyond this AI and be even beyond,

assuming we mentioned beyond this tenant. Beyond that handler, we need to be able to sustain the value. And the only way to do is to get your specs to the market. Where the market is. So for me, it's a little bit defensive as well. To get that building up to the stage where even after five to 10 years down, we know that this building will always be on the top of the mind. I think you're not. So yeah, we just record the green. The green thing for the asset for Gallileo would really be up. And I think it's in line with our tenants, Frank Fermark is looking at in the fact of quality. And also when they are looking for their spaces. So if you look at your portfolio, about what percentage of the portfolio office portfolio still needs a green

sort of cab-backs or defensive cab-backs? Well, I would say that generally it's not specific to say any building in particular. Of course, there's a few buildings now currently. If you look at the green, green, mercury, things like this, like, no, the green mark goal or something. Based on the new standards and this standard will keep increasing, right? We say we're just keeping increasing the standard. We might always have to keep investing in green capex. I would say that green capex will kind of set our roughly average of the next three years or 40% of the overall capex that we spend in the portfolio. And then second question is on hotel. So I guess you know, you mentioned that hotel contributes to part of the clothing RSE. The rates above pre-COVID and I remember you've restructured in the lease.

So close restructuring. Do you still get sort of above pre-COVID rental from? Yeah, we are higher now. Can we get some some? It's higher than pre-COVID. Yeah, and it can give detailed discussion. We structured that it's actually quite in line why we did for some of the retail trades where we participate on the turnover rent. And then there'll be step up along the way. So I know that the trash point where to bring down what just your percentage of charges function of the projection is usually a grid and where do you think the growth, how the growth trajectory look like in 2022? There was 2020 and then where the recovery coming from?

So until restructuring 2020, we have came to a position maturity that this is a growth that was acceptable. And I think they have reached that goal. So I can say overall that's been more than be beneficial than um, it was the last landing point of where the fixed rent is and a floating rent. The floating rent especially the floating rent is higher than it used to be. So the better the trade we get even more. Yeah, so we are seeing that trajectory coming true now because the ref price where above what we projected. Yeah. I can't try. Do we have that next question?

Maven. Yeah. Moving. Moving. Yeah. We got questions to the strip of volume. Oh, seeing the pickup occupancy. Are you able to discuss what the silent rent said? Uh, it's a digital you have had to provide. We're trying it first. Really? You're on the top. Um, for Australia, uh, the rents are pretty much in the line of market. And um, if in the census around 35%, yeah, averaging around there. And um, probably just to touch on a little bit, I think, uh, you know, just now we talked also about, you know, fitted all space, right? I think the fiddle space that we did at, say, get a little right. I'm sorry. Uh, s66 g. Yeah, too many buildings or stuff. And g. Um, for 66 g, the fiddle space, the K packs, we spent actually is part of TI that, you know,

35% plus minus count TI that we're giving. Yeah. Um, in terms of portfolio mix given offices and negative carry based on spot or in costs, I look, looks a bit more challenged or at least more cautious. Is it time to give it more to us retail for the next few years? Uh, when you, I mean, there is only amount for 29 properties, which you do have, uh, despite their negative carry. So because your thoughts on today is right back to the building towards retail, given the tourist numbers are not fully covered yet. Okay. I don't know if this is quite slight 13. Actually, today, retail is a larger component in our portfolio.

If you look at the supply, it's already larger, 53%. Yeah. So, so in terms of compositional retail is marginally ahead of the office and totality and office is split by CBD and non-CVD and then of course overseas. So I mean, that's give you a little bit of sensing and number. Um, negative carry if you're assuming you're referring to Singapore, I, um, Singapore is about, um, the trip is 10. Uh, it's not an unhealthy level. I think we, we'll see, we'll see how things will shape up from there. Uh, but at the moment, I think we were quite happy with the composition. Yeah. Yeah. It's not negative carry because the you are passing, passing basis is probably close to 4% for Sunday access.

Yeah. Do we have any other questions? Hi, this is Terrence from UBS. Um, so your guidance for Singapore office is for moderating rent growth. Uh, just want to ask how this would translate to your outlook for Singapore office rental reversions. So as I see that your inspiring rents are about $11.00 to all cents per square foot. If I'm not wrong, the new buildings are calling for still a much higher asking price. Yeah. So for the office, right, uh, I think, um, right now on this first half, we have the positive revenue version of 9.6%.

Probably will come off a little bit, um, come here and, uh, but we still expect to build from the in the positive territory. Uh, yeah, I think the expiry kind of rents show that, you know, with the gap to CBRE's market rent of rent, it's a 180 for the second quarter, right? For June, uh, it does give us a little bit of, uh, uh, comfort and buffer in terms of the re-negotiation and to get a positive different revenue version of those. Yeah. But I think the, uh, uh, it's because I think we do have some cases in the second quarter, some of the deals we are seeing very strong reversion that can't push this up. But I don't know. We can still get the count been D 40% of, uh, reversion for some of these that comes from low base, right? Um, in terms of proportion, they try to mean not come true in the second half. That's why I think the revenue version will moderate a little bit.

Yeah. Yeah. So a couple of deals we work on, they think that, uh, hopefully we can, uh, get it on the, on the, on the signing page, right? Um, but those spaces are big and for a long time. So compared to the long time, we can space and get currents, but these are nice, uplift. I mean, we're looking at these little strong double G's you kind of, uplift, but there will not be a report in that reversion, because typically for too long, they can pre, we, we don't repoint in the reversion. So that may not come true. But what he tries to alert him is that, yeah, we're cracking quite a nice, no, quite pretty strong reversion. What we're negotiating now, uh, overall, maybe it was just trying to learn a little bit, but still probably pretty healthy, uh, kind of re-insure. Yeah.

And for Singapore downtown retail, I think he spoke about the moment continuing in the second half, a few wins of the reopening. Um, but I think it was alluded to how there could be a high base effect. Maybe some of these rents that we're seeing the first half is coming off from a low base signing COVID. So between the two, how do we then form expectations of your downtown retail reversions in the second half? Um, so I just want to correct you is not, um, the base effect arising for the rent last year is more the trading, the sales moment and last year, strong right, but for the same tenant, they could be training for a couple of years.

Right. So, 2023, um, some tenants that were signed 2020, uh, or at least re-innecotiate 2020 basis, maybe, maybe I'll for renew some of the spill between 24. Those you probably can see a little bit of the left from there, whether you'll be on a blender basis still on it, like a 7% plus guy while looking at, uh, how to say because it depends on case to case. That mentioned, um, the range of reversion is very wide, no retail and strong as 30% specifically to that unit. Oh, it can be three and a half percent. So on a, if you look at it on a weighted average, that's what we measure is

or weight on a weighted average basis. The number, uh, we can't make a prediction now, but January momentum wise, you can take away the fact that 2324, so that's barrier are signed during the 2020, the 2020, 2020, in one period, a couple of them. Um, and then some of them are even longer, uh, pre-COVID, may or may not be in restructure, right? And depending on how, how, how well did the, the, the sustained truth and how COVID period? So it's going to be quite, um, noisy number. Um, but what we report is just always a blender basis, but within that you can see a wide range. Thank you. Can we have the next question?

Krishna. I just wanted to squeeze something on the, on your, uh, lab duty side. So you have over 1.5 billion dollar update. For maturity. Can you give some color on or where are the, uh, interest cost? And if you assume the same thing that is, you know, the currency makes, uh, maturity and your hedging, then how much it will go up. And second question is on your F&B operation. I think you did mention that there is a spam demand from that. And give some color on what's the typical, uh, in this period for the, and the operators and, uh, also, uh, I mean, this F&B, I just pure and the operators. I just know very sure because I think I to see there is some of

commonly, right? I mean, uh, uh, uh, uh, uh, uh, shoot, uh, shoot backs that are analysis of coffee. So I just want to ensure that this is just pure and B and not, uh, even the commonly in space also is not included in the, and the inside of things. So let me give you just some comment. Okay. Um, the first question, if we assume the current interest rate, the current interest rate level stays at, you know, prevailing, uh, of the 2024 that tower, uh, we'll be looking at the increase of about 0.4 to 0.5 percent overall. So that will contribute to to say, overall, hopefully your

cost of closer to the meat tree levels. The currently at 3.2. So your question on F&B specifically is that something that you already want to know so that I can, yeah. In my own observation that when I walk around the malls, there's quite a bit of junk. There can be one goes one, one goes out. If maybe the same operator having coming up with a different sort of concept. So one, so then the cost is not on your side. The cost is on their side. So just wanted to know that this is the same operator coming or this very different operator coming then, you know, uh, it's, it's, uh, it makes up both.

Now we do have a amount of delay, but operator who kind of portfolio of different brands and different product, like Keto for a different market segment. Um, and if the market changed, you know, it could be the same operator who changed concept at the end of the aspiring. But because I mean, there will be some short live live. So then more evergreen one, we take a longer time, but then so the F&B concept, uh, uh, will come a point where they need to refresh. Um, refresh also from a look and feel perspective, they need to do that refresh. Many questions, whether you fit into an entire position of the mall. I mean, that's the discussion point we need to have with them. Like for example, we discuss it down on renew basis. You say, we have your portfolio before this brand coming.

So we had to talk to them. So it's a combination. Um, uh, necessarily we always want to try to bring also exciting new ones to the market. Uh, but it's not, I know I mentioned a few names. So that we try it out. It's a hit and miss. Sometimes we hit it. We get it right. Uh, they have a link to run for our name. We, we populate right, you know, portfolio and suddenly they're over based and they see the sales coming down. I mean, this is how I'm going to see them. Very many times in different cycles. Like, uh, it's a supply possible lifecycle for any kind of retailer, whether it's F&B or my F&B, uh, which we have to manage actively. I mean, that's part of the asset management. We talk about constant, um, adjusting to the consumer, uh, uh, preference that they will change over time.

But today you go to reference city. There's a bit new, do not, the market. Raise, I mean, it's always long queue. I don't know how long it lasts. He asked me. We'll be another two years. I have to say just wondering, you hear a feeling that you are being a bit cool. What it's supposed to a F&B. Um, no, I think as a percentage of the NLA, it is the largest compute contributor now around 35% of the revenue comes from F&B occupying about less than 30% of the space. So they are over, they're over producing from a compoire of you. Perspective, right? So I think that's a good thing. But from a space, uh, allocation is not excessive. Essentially, a very small model more.

And within the F&B is what spectrum? Right? You've got the fast food restaurant. You've got to take away. You know, we've got the cash flow dining. You've got the main waste. I think we see in Chinese cuisine. So it's a whole list of brand, my potential, uh, a mix that you can see in different assets. Um, some more relevant than others. Don't tell you maybe, maybe slightly different from what was open. Uh, in southern, and then even then, southern, maybe even more important than the sit down one. You know, you, you, you, you, so there's a bit of a, uh, curated kind of, uh, uh, not just F&B alone. I've F&B obviously, you have to curate quite well. But other asset, uh, successful, successful, radio,

subject to, I think we need to create quite carefully as well. Yeah. So to put to your point, I don't think it's as if at this point in time. Um, then for, for example, clap key will always be quite heavy on F&B because it's a unique way. But most of them more, I think you're like, okay. Yeah. I mean, I just want to, one thing, most looking in the medium, if they distribute environment, stay as there. Do you think that that comes down that you may want to stuff? Yeah. Yeah. I think, um, we will continue the diversity fire of funding sources, uh, not just allowing the banking sector.

Uh, cap markets is actually a very important source of, uh, capital for us. And, um, I think we, we were anticipate a good mix of MTN and bank loans going forward. Yeah. This will be a fight to call it the, uh, fight to safety from, uh, lender perspective, whether it's a financial institution or the, uh, that capital market site. So you can see quite clearly, right? Um, so we would, we, we, we, we think that's, uh, quite, quite encouraging. No, we, we also got information from with these that, you know, the actually raise it up to stable. Um, but we also know that, um, it is not a job done today. We have to stay static.

We constantly go and make it ensure, because when you look at the overconfidence level on why, the lenders are prepared to lend to us. This, your cash flow, right? Your, your ability to, um, reposition yourself quickly. Your market leadership position. Your assessor capital. Sometimes the irony is that you have assessed the capital, even though you're not elevated leverage, right? Because your ability to assess the capital, give the agency that confidence. Then ultimately we need to have always this ready credit facility in place and it costs money to get the ready, credit in place. That's to us is also a bit of credit enhancement.

So we pay a little bit of commitment. But actually carry a little bit of, uh, credit enhancement. So it's important to look at it to tell a deal. Yeah. So while we try to be a child, you know, try to get the different capital source, uh, and I've inspired over time, but there are a few, a few key fundamental things we, we, we work on cash flow. Make sure your, your insurance is there, right? You got your base insurance. Assess the market at the right time, create that desired investment. Us. Then we'll be okay. Thank you very much. Thank you, Krishna. I think in the interest of time, we shall take one last question probably for online. Yeah.

Okay. I think this is a question from two online viewers, Elin and we're laying asking about whether we have any plans to reduce our aggregate leverage and then whether CICT is any target, I can give the great situation. Thank you. Yes. Over time. Yeah. Uh, I think we, we are in retto, in retto spec, you look at it's all about the, the state of the weather, the, the cost capital is, right? Pre-COVID pre-changing the interest rate era where we are at this level. We are very, very comfortable in fact,

we were more than comfortable to work on a very high, you know, at a level, so the leverage level. When you're constantly in your cost, the debt goes up this level. Then you got to be less than I can expect. So it's quite dynamic. Today we are looking at three and a half to, mutually and half to four percent higher range in terms of financing costs, versus in the positive, so we do, two and a half to three percent. So it's actually a step up really. So we just got to adjust the, um, the appropriate level of curing. But when the interest rate environment change, we have the adjust because ultimately, we are still, we are undertaking the stu-shi function of capital. Make sure that our balance sheet will work hard for or stakeholders, whether it's a equity investor and investors. So we are to make sure that we don't want to have a lazy balance sheet.

I mean, ultimately, investors want to see us ensuring that, uh, whatever money we're just going to decide capital is like, we work hard to ensure that asset performed and deliver to all the stakeholders. So we have to maneuver that, uh, with time. Um, given opportunity, a right opportunity, yeah, we may want to do a little bit of, uh, the leveraging maybe. But the way to do it, I think we have to be very smart about it. I'm really technical. Why the, why is the best, best way to do it? Sometimes making sure your portfolio performed itself, create the valuation up-left software. There could be as easy as that, right? Well, because it's not easy enough,

to go to work them hard, then show that asset performed on a portfolio-wide basis. Then you get a sufficient valuation up-left. Then you solve self-soft evaluation and the cash flows that come in. The other form is, in organically, the sub-stationity will look at it. Yeah, it could be monetization. We've done that portfolio reconstitution. We do that. We know we divest some. We invest some at the same time. It will be a pretty fun reason. Or we look at joint venture partner if you cannot afford to do, uh, any company or any transaction on our own. So we just have to deploy the various tools or avenues available for us to look into it, to research a station, a, a, a, a, a, a, a, the market is confident enough,

that the data size confident enough to ensure the CFC can function as a smooth machine. And that's important, right? Ultimately, read this about managing a portfolio or asset and also managing your capital. They just have to plan this tool in a efficiently. Okay. I have one last question from Gala. I'm so sorry. I have friends from the whole presentation, Q&A. So for Gala, um, will there be any more decline in valuation? Or will the value was to look ahead at your higher rentals if you manage to sign your new tenant? So if you, uh, a stable valuation, or you're doing the AEI before lifting it once,

then new tenant comes in, uh, you know, cap rates, not less sending. Goodnight, did I? Okay. Okay. Then on. Well, um, I will say that for Gala, you do compare to these and both to, to, to definitely, um, having, the, if assuming some of these rental that's come true, what is fine in everything, um, it should help the valuation. But I will say that we do expect the valuation still to come up a little bit because of the bottom market. So I can know us just on that. Variation, we can't predict how the variation number would because the function of your discount rate they use, the discount rate they use is a functional way. The interest in market is, it also is a function of where the market transaction happened.

Also, it's also a function of the underlying passing rent. It's also a function of the underlying credit risk. Right. So if we are able to get it all right, there, I think at least confidently we say that we should be able to protect the value. But against, against all these different variables, they have to predict how the future number looks like. It can go out and down in the course of the next one to a year. It can go that it can go up. It all depends on how the, the, the market view, um, the underlying credit risk. Well, the, what the commercial term is, and then the underlying credit risk would have potential implication on your terminal yield, right? Your capric, the so called capric at the terminal yield level. And the discount rate also would be affected. So they are all intertwined.

Um, so at this point in time, we cannot really comment anything beyond that. What we can say is that when we undertake that K pass, of course, they'll be the increase, uh, they will be a progressive kind of draw down or payment. If you're only from a cash flow this year, the basis that if, if the value to look at your, this year, it would be a negative outflow in at least this before the income come in purely on that way. But with the passage of time when most of the cap taxes being incurred at pay, there was left coming in is your income, net income. So you can imagine the trajectory of the potential valuation movement. You can make go down the net grocery as you are close to hand over potentially you can go up again.

Yeah. So I can't give a number to it, but, uh, so three, I think, um, if you can confirm and secure that, that, that candidate we are talking, uh, then it's definitely a good confidence for my value protection point of view. Yeah. Solid credit. Yeah. Solid credit. Hi, I did. Thank you for the questions. Okay. I think, uh, just to quickly wrap up, uh, says that he has bipartisan results, think about, for active portfolio management and our

program capital management. Thank you for joining us. I just perfect today. Feel free to reach out to us if you have any further questions. Thank you and have a nice day. Thanks a lot. Thanks for coming.