1H 2024 Financial Results Briefing

A very good morning to all of you. Welcome to Capital Land Integrated Commercial Trust, first half FY 2024 results briefing. CICG released our results this morning, and the materials are uploaded on SGXNet and on CICG's website. So similar to our what we have done for our full year briefing, we are conducting this session as a fire site chat instead of a formal presentation. So focusing on certain key themes and topics before we move on to the Q&A sessions. So before we start, we would like to introduce the panel. I am making the head of investor relations, and in the center is our CEO, Mr. Tony Tan.

And on Tony's left is Ms. Jacqueline Lee, our head of investment. And on Jacqueline's left is Mr. Lee E. Truann, our head of portfolio management. On Tony's right is Ms. Will May-Lian, our chief financial officer. So to kick off today's fire site chat, we would like to invite Tony to share with us some of the highlights of CICG's first half performance. Tony. Good morning. Hope you have a little bit of time to digest the announcement this morning. Needle to say, I think we were quite pleased

that we are able to deliver a resilient result. In the first half, bearing my performance of first half, number can be a little bit noisy. We have embarked on our AI program in Gallileo from Fabri-Deseo, which means that we have no income from Gallileo from Fabri-On-wood. And at the same time, we have been able to write on a positive, active, no rent discussion over the last 12 months or so, resulting in a higher reversion rate. So that slowly will translate into the income stream. So while we actively work to us, our active portfolio,

bearing my that second half, January, macro environment is a little bit uncertain. So we will pin our strategy, no equity to ensure we try to decrease as much as possible. Looking at some of the key matrices, I think it's been relatively stable, other than the NPLDF clone, which is backed by higher rental growth and also inclusion of CLAP key started to contribute. We also have been actively managing our costs, which is very important. Resulting in NPL growth of 5.4% for first half. For portfolio, we can see a remaining relatively stable. No, all in all, we may see some kind of a move point here and there, but January, I think we're actively managing our portfolio planning ahead.

Not just the second half of the year, but also looking beyond the NPL24 to try to de-race as much as possible. Knowing that the environment out there can be highly uncertain. So our team will touch on later on as we move along. So overall, other than the property level that we manage to secure a higher NPL, we have also stabilized of an easing cost that are now 3.5%, which is quite similar to our first quarter. We are hopeful that with a general market consensus that we begin to see some easing of the interest rate, they're hopefully to go translate into a positive outcome from an average cost perspective.

Nevertheless, in July, we already announced that we did a bond issue. We did a 10 year place symmetry by 75%. So that's sort of replaced some of the debt that would become in due in third and fourth quarter. On the passing level, I think it's just a much, much enough to creep up. But importantly, also managing the short term interest exposure is equally important so that holistically, we try to maintain a reasonable stable overall average cost of our debt. When the reverse, quite pleased, actually we managed to gain the confidence of our retailer. Very high retention rate, reasonably good rental reversion, we are propped in about 9.3% for the retail

and 15% for the office. Thanks for the team, we work very hard to ensure we are able to try a reasonably good deal with our tenant, balancing the risk as well as the well-being of our own tenant as well. They need to survive to be able to do well in a very uncertain environment. But overall, I think we are quite pleased to achieve an outcome that we have shown here. So as a result, I think the first half, unit holders, as a fact to see a distribution of 5.4% 5.4% factoring the, with the DRP, if you remember, in the beginning of the DRP, you have been about 5.4% so if you look at sequentially,

actually we are still growing our cash flow on a sequential basis. We're trying to work very hard on the rest of the period this year as well as making sure we are able to secure a stable return into the interview. So, what, that, a pass on? Yeah, I'm doing it. Thank you, Tony, for the overall highlight. So maybe I'm going to some of the specific. I think just now Tony touched on the positive re-versions, which we have achieved for the first half of this year. So I think the question will be that, so are we likely to continue to achieve such positive re-version for the rest of 20, 24 and also whether you can share a bit on 2025? I think we are reasonably, I would say cautiously often,

I don't like to use the word, but based on those discussion, we are engaging with our tenant. We should end up high into interview in 25. Now that that's, I think the interview should be high as well. I think earlier we guided, we were looking at, around high single digit, we stand by high single digit, hopefully we can outperform, but I think that's the number we are looking at overall. That's for the, both the retail and the office. Okay, and then, okay. So other than we have also been touching a lot on the growth from the portfolio. So do you think now that it will be a good time for CCT to look at external growth opportunities?

This one I think is the everyone's question in the mind, right? Certainly, I think as a responsible management, we definitely go to ensure that we are able to look at opportunity in the market, but also, bearing in mind, we want to be a recruitment and be disciplined in how we are going to deploy any county investment. Compared to a message six to 12 months ago, certainly the market becomes a little bit more constructive. We see how things flow from there. Naturally, when there are good opportunity, I think we would want to take a look. I think now it's timely for us to move on to get Jacqueline

to share with us what's happening and why she's seeing in the investment market in this, that's how we get it. So in the first half of two four, we continue to see reasonably strong investment activity both in Singapore and Australia, as evidenced by the larger ticket-sized assets in both the retail and office space being trans-standard and also being put on the market. And of course, the flight to quality theme remains. In terms of pricing levels, I think for Singapore, it remains resilient whereas in Australia, we continue to see some discounting and as such, cap rates have expanded affecting asset valuations. Frankfort Office Market has remained very, very quiet with very few transactions and very, very small deals.

So the huge gap between the buyer and seller expectations there remains. Even though interest rates have started to come off slightly in Europe, the market is still trying to find the right level, coming off a very low cost of borrowing environment that they were at the experience before. However, prime office rents in Frankfort are still holding up. OK. Thank you, Jacqueline, for the sharing. Maybe I just want to add. OK. Certainly, the investment activity seems to become a little bit compared to the transformation ago. But we're still now and now back to the pre-COVID days. There's a little bit of way and see. I think some of this will be a way and see in the market. There's worse than seeing. But you can feel that the vibe seems to be coming back

a little bit. Partly in response to a general less hawkish kind of central bank tone. And then some of the central bank are started to cut red rain. But generally, we feel that the market will take some time to come back. But we will observe the market carefully. Thank you, Tony. Next, we are going to move on to capital management. So I think question to million would be, are you happy with our financial ratios as at the end of June? OK, in terms of CICT's financial ratios, I think they are fairly steady and healthy set of numbers. And also reflect the current gearing level of around 40% range.

Given the current interest rate levels, we hope to lower this leverage ratio over time. This could be from driving asset performance and in turn, improving the asset values. So we also look at selective capital recycling opportunities as in when they arise. And this could also help us to give us the opportunity to lower gearing. And meanwhile, we will do our best to manage the overall cost. We've proven capital and active cash management measures. OK. So note that actually most of CICT's debt expiring as at the 30th of June have been we actually refinance post June. We have actually been the announcement. So what kind of interest rates are we seeing?

And what should we expect the average cost of debt to be by the end of 2024? OK, we have addressed the bulk of our refinancing that's due in 2024. Almost 80% are either refinanced already or in advanced stage of loan documentation. So we have recently issued $300 million, 10-year fixed rate three notes at 3.75%. So this will give you an indication of the interest rate levels that we are getting from the capital markets nowadays. So with the refinancing at rates that is higher than our previous borrowing, we expect average cost of that to be around the mid-tree areas for FY 2024.

And we also have about 24% of our borrowing in the floating rate. So this could be a positive factor. Should the fat cut rate and also depending on the magnitude of the rate cuts. So we do have a sensitivity that every 0.5% movement will move interest expense by about 11.5 million per year for the floating rate that portion. So OK, this is, I think there have been also been concerned about the debt in currency. So the next question will be, what would be our percentage breakdown of auto borrowings in their respective currencies? We have about 80% of our borrowings in $6.

Even when we raise foreign currency bonds, we have stopped back into $6. The balance 20% is the equal split between Australian dollars borrowings and Euro dollars. And this is largely taken to fund the investments of the overseas portfolio for natural hedging purpose. Thank you, Mailean. So I think now we move on to portfolio mac performance from Yi Zhuan. So Yi Zhuan of the question would be, I think we noted from our presentation that the tenant sales per square foot portfolio growth. It's about 0.1%. And downtown sales is a slight negative in the first half of 2024. What do we look at in terms of tenants sales going forward in second half of this year?

For CICT, we actually report on the per square foot basis for tenants sales. So the lower downtown sales we see here on a per square foot basis can be attributed mainly to the stabilizing of a C2 post AEI. So if you look at the first half of total for against first half of total tree on a quantum basis, actually the portfolio is up to 1.1%, where the downtown is actually up by 4.3%, where we said suburban is down by 1.3%. So the suburban sales when we see why there's this, those slightly easing is really because of the ongoing AI and which improve with the progressive completion towards little policy next year. So for the second quarter of total to increase our bound travel definitely play a part in impacting some of the tenants

sales. On the other hand, we also do see governments support programs like the climate voucher, the CDC voucher, which support consumer spending, particularly in some of our suburban models. So we are cross the optimistic that, you know, second half of total for sales should still remain relatively healthy, supported by resilient domestic spending. And then as far as we do see tourist arrivals for the upcoming events such as F1 and subtempo as well as continue active promotion by STB. OK, maybe just let me just add with that, we explain why the numbers a little bit like that. So downtown, like you try saying, we typically report our bare square foot basis in a way we measure the efficiency of the space.

So downtown is a little bit lower because crack is one component. We just open up the OP. So it's a stabilizing stage. But yeah, in the total quantum basis, actually, the downtown outperforms absolute range, absolute conversion. Where's the urban diversity or the other way around for the urban because we have the IMMAI, if you were to remove the space or IMAI, in fact, overall quantum is lower compared to what we report on bare square foot. But now, let's, I think, just give you some clarity for us. We always track for the bare square foot because the square could give us an indication of where the health for the trading of our respective tenants. Thanks, Tony.

So moving on to the next topic would be, I think, the other information that we share on our slides is the office occupancy. So do we expect the CICG's office occupancy rates to improve over the next six months? Because an enriched geography is an occupancy, are we most concerned with? I think we have centisibility and it's shown our previous sessions, right? We do expect some volatility in our office occupancy this year. So first thing, our portfolio, generally, the occupancy remains relatively healthy and above market. And so some of the easing we see in some of our properties is really more transitional in nature. So there's actually a lot of these inquiries and very interactive discussions with a lot of the prospects, as well as engaging our tenants ahead of time for the upcoming expiraries. As for the German, sorry, maybe I touched on a little bit on

this. So actually, the completion of central Boulevard has also contributed this quarter to increase in vacancy rate for the CBD office. And subsequently, the secondary stock may increase also in the timing quarters because of S3C, some of the large tenants start to move from the existing locations into central Boulevard. But internally, we do still read a view that in the midterms, the supply of new quality, CBD stock is still relatively limited and that should help to lend some support in our office portfolio in the longer term. As for the overseas portfolio, Gallileo is not actually in our populations for the occupancy as is currently undergoing AI works. But we are pleased to share the actual the committed occupancy for Gallileo has actually improved to 96.7 up from 93% previously.

So effectively, we are de-risked this asset right from occupancy standpoint. But there will be definitely some sub markets, for example, our Frankfurt Airport district, as well as the North Sydney sub markets, which are a little bit more challenge with the elevated vacancy levels that we still see. And this market may take some time to begin for thing and back-filling our spaces in some of these assets will take time in particular for me and at Boston, where we probably may see a little bit more impact in the we can see in the timing months. We do expect a bit of longer decision making in some of these for prospects. And the situation that we see, like, for example, longer FITOP periods and elevated incentives to persist in the coming quarters also. But nonetheless, our team is working 100 grams.

We do have recent refurbishments done to provide FITOP spaces, improving amenities just to make sure that we help to improve some of the the same momentum that we see in our portfolio. OK. So on a lighter note, where do we see demand for the malls and the offices in this second quarter? OK. For a second quarter, long we secure actually more than 650,000 square feet of new and new leases across Bofari retail and office portfolio and off which about 110,000 square feet of that is new leases. So for the new retail leases, we sign mainly from tricks like the such as FMB, the Fechan and SS3s as well as your beauty and health. So this is actually quite in line with the inquiry levels that we do see in our portfolio.

We also continue to see new to market interest coming from overseas. So we see brands from China, Indonesia, Malaysia, and also other international brands. And thanks to our strong leasing team, we managed to secure some interesting concepts. They still got portfolio as well as the market. For example, in a second quarter, long we see the opening of sushi samba in Capital Tower, low-last cafe at Tempen is small, which is a win for low-seasties. And of course, we also see M&G life as well as HOKA and SCS. So office, the new leases we sign mainly so far this quarter is actually from rear-state and property services. We have also investment and financial services. Probably it's not on the screen, but we do see the interest level indicated there. But probably just give a bit more color.

For some of these new leases and inquiries that we receive, they also include new set-ups as well as re-locations. OK. Thanks. And then I think the last question for portfolio is, I think it's a trending question. So are we concerned with the increasing ease of access from Singapore to the shopping and the services at Joho Baru in Malaysia? How are we mitigating this risk? I mean, generally not just RTS Link. Generally, when we look at the market, we do monitor opportunities and trends in these markets that we operate in. And also, of course, some of these evolve in trends. So specific to RTS Link, it will definitely improve some of the access between Singapore and JB while we expect short-term impact on, in terms of sales leakage, right, given our portfolio of downtown malls and sub-modern malls.

Any impact we see is likely just going to be incremental in nature. Over the longer term, the effects on the various retail trades is probably going to vary. So it takes time to play out how the situation evolves. Nonetheless, we will, you'll find you in our most positioning and trade mix. As well as we will have to work quite closely or retailers, so I do make sure that you're on the enhanced offerings to make sure that we are most remain differentiated. I mean, our asset management team has a very good track record for finding trading very vibrant destinations for our most retail, innovative retail concepts, experiential offerings. So definitely we'll continue to curate that diverse trick mix to ensure the relevance of our assets to our shoppers. One example I think we have seen really in place, actually, our ongoing AI-IMM, which goes strengthened is

positioning as the regional other destination and also the largest more in Singapore. But on the other side of things, I also put things in context, right, the increasing cross-modern traffic, right, so those are present as with opportunities, right, it's not always just traps, right. So we'll really showcase our most to tourists coming from Malaysia, but also potentially elevating some of the manpower issues that faced by some of our retailers as well as our suppliers. Thank you. Yeah. So before we open up for Q&A, maybe it's only anything you want to wrap up the session before we open. Not much. Hopefully, I'll give you a bit of flavor, how we look at the business and how we manage in the risk and potential

opportunity as well. What we are doing is to try to optimize our step of hormones as much as possible, given a very fairly competitive environment at the same time or so. It means that we face all enough. But for us to ensure that CRCT continues to be able to deliver sustainable return, naturally we've got a plan where ahead, which is what we are doing, right. We have been quite proactive in looking at our as a positioning, our real new world. We stretch out as much as possible. Like we speak today, we are already looking at 2025, expiry, make sure that we're able to secure that stability going forward. So that as a base, we are able to maintain the

higher sanity in the portfolio. All enough, there may be opportunity for us to look at any kind of organic growth. But all things, many hands has to clap, right. The market has to come back, hopefully we can recycle some capital. And then hopefully the opportunity that comes along fits in our portfolio. We will be tactical and we will be strategic in our thinking. Looking at a short-term requirement for our investors, but also planting a milestone along the way. Hopefully, give some stability, give some confidence to our very long-term shareholders. So in that shorting, we've been doing that. No, we're standing solid challenges with face overseas.

Some of the assets. For example, MHC in Gailio as the risk, Australia, I think specifically is the 100-utter, which is a little bit more difficult. But we make some strikes. We, when we bought over, it was about 60% occupancy today. We are close to 78%, 70%, about there, almost 80%. So it's trading along the way, but it wins in Australia. The other two assets generate in a better shape. 101 miller. It's okay. I mean, location-wise, fantastic. Although it's in North Sydney, but it's prime. And we're putting a little bit more effort to ensure we are ready with market return, right. Which is why in one of the slides, I'm sure that the uplifting of the law be giving that, you know, the

residents there in our building a nice, few-good factor that be fit, a premium-brick building. And yet offering at a very competitive rate compared to a new supply that comes to the market. The other one is 66 G. It's a different story. It's very, very resilient. In fact, we close to 100% occupied. That's in the main course CBD by the South End. So I would say I would say the OCSS we have to deal quite actively with 100%. In Germany, we have to deal actively for MAC. I think in the remote head, we know over there. But now that we will deploy the same technical and strategic thinking, to make sure that our assets are in a good position,

which means that we can compromise on the quality, come compromise on safety. This ultimately, we want to bring the residents back to the building, which a lot of companies are trying to do that. You need to have a building office space that be fit the environment, that warrants them, the effort, the meet-the-afford, the combat-layer office. So along the way, hopefully we can get it right. Perhaps even the OCSS could be the icing, the cake, 25 to 26, for example. Hopefully market return. Then while we stabilized, the other part portfolio, that could in fact may potentially give us an uplift in the future. At the end, I hope we can have a little bit. In a pictorial wise, some clarity how we are planting different

milestone, different seats in our journey to try to drive performance. Yeah. Thank you, Tony. Yeah. So up here in front panel, we were open for the Q&A session. Hold on. Yes, you were raised your hand. And then we were hanging your mic. And then we also asked that you keep your questions to each time. We'll come back to you, Nick B. And for those joining us on the webcast, you can type your questions in the chat box. And we will ask them on your behalf at the appropriate time. So yes, first question. Yes, Brandon. Definitely the one behind. OK, OK. OK. You can't hear. I'm saying you can. So, not Brandon. You can't remember, I said two questions. First one is on your margins.

You've managed to do quite a good job on this. But going forward, should we expect this kind of level? I mean, when you re-contracted some of your property management services, is it for the next two years, three years? So that's the first question. Second is on your downtown mall, tenant sales. Second quarter seems to be big. And you sort of attributed that to space, that the new space created from some of the AIs. Is it purely due to CQ, cookie, or should we also expect a sort of downtrend when you start to do some of your other AIs? For example, I am M. That's coming up and all this. Yeah. You're interested? Second question, guys? Probably I addressed the second question. So I mean, of course, there's a lot of different factors

that add into a downtown. But I will say that majority is really because of the CQA, I post-competition. When we take in the full NLA back, but the increase in sales, because some of these like, for example, we have some of these pop-up event shops, we have some of the tenants who also take a better time to ramp up in terms of their sales. So it's just a method about your sales catching up to your NLA. So your NLA impact is definitely more immediate rather than your Royal sales catch up. But not withstanding that. If we do have to drill down a little bit of some of the sub-trick header movies, right? Of course, there are some sub-trick header queries in some most, but we see a little bit negative. But in the context of the downside, it's not really the main contributor. For example, we are spotting equipment probably in one of the

most. Keep up a little bit because they were just doing so well last round last year. We also see that when a lot of people, if you did a lot of their shopping for travel essentials last year. And so when it comes to this year after that, the series are part of the retrieval. That last year is a part of the buy to travel. So some of these things will come off. So if we look at the AI of IBM, I think that's why we shed a little bit of a quantum basis that a little bit will impact to the sales for IBM. But if we strip out the IBM impact definitely, then if you see a quantum basis, it's probably going to be actually OK. I saw both. Yeah. Maybe just add to the point that I mentioned in question too, right? Certainly, so the interest may be moving to a little bit of adjustment. I think June, June is a little bit quiet.

I'm sure you can feel it yourself. There's a lot more travel during holiday. You can see that January the more it's a little bit quieter and hence I think the sales does get impacted. Whether it's the automata or salaben. So then trade, we are watching carefully. Like you say, it's part and parcel of adjusting the trade exposure. And we think that we, if we need to make a major change, and that's really what we'll do with that. The idea to ban in mind, maybe you want to show the slide on the tree. The tree, the tree, the sales, this is slide. Which one? The tree category sales. I mean, a few things that start off give us a bit of rating. For instance, you see the education was a big jump,

it was saying it came from nowhere. In a way, it's a really reflective of some of the things that are a little bit more resilient as you start to think about how you want to deal with any kind of sales leakage that may come, right? As a result of seeing dollar, people travel a little bit more. Perhaps the education one now seems to stand up quite strongly. There'll be others that I think we're thinking through. The under-contrary, the home for nation seems to be a bit soft. And that's across the downtown of Bun. It could be because the general property market has been also going through a little bit of a softness. But I think that it was a bit more cyclical. So we may not overreact, but we see how things go from there. I think one of the questions of margin, maybe a whole

foot that we can maintain it, we, in fact, 25-year-old risk locking. We hatch when the rate came off energy rate for the entire change in five, looking at more than 10% savings from a tariff, right? So fully that will translate into a proper savings in a utility bill overall. The new PM is, let's kick in. It does help to remove some fixed cost element, the leasing activity. So that fixed cost will come off. But the variable cost may go up, depending on our level activity and the leasing. So my overall, I think in directionally, we should probably see over time more efficient way of managing the

property expense. And hopefully, the overtime will scale, we're translating to even better savings. But I think we will study info in proving margin over time. Thank you. I think that we have a brand density from behind last year. Hey, morning, Tony and team, brand name from city. Just two questions, right? The first one would be, you sure it was your first half, 24 occupancy costs. At this stage, obviously, we have seen sales slowing down. And your rent version hasn't been so strong. So do you think that we can really normalize back to the pre COVID level of 17 to 18%. That's my first question. The second question would be on your capital recycling.

We have obviously seen a lot of assets being so over the past six months, but it's still pretty quiet on your front. Do you think it's a matter of the quality of assets or is it being a bit too aggressive on your asking prices? Thanks. Off the frequency cost ratio, we have about 17% overall. Downtown is a little bit higher. It's just up to 20%. When we're looking at 16% there about, so blender about 17. I think it's a level that's maintainable. Kiting, like fully mentioned, of tenant need to trade well. And that's something we are putting a lot of effort to ensure

our tenant be able to trade well. And we have different tools that we can deploy to at least make that higher possibility, right? So we do that now. About 17.5%, I think it's a reasonably okay level. Be then on the question about capital recycling. Generally, I think the market of course has seen something about activity like all things like for deals to transact. There has to be a meeting of minds. We will watch the space or ask whether we are seeing the higher price. We will be very pragmatic. We'll be very, very, very, very important thing about not just recycle back to the portfolio.

Obviously, you help on your overall gearing and your interest expense, but also to think about replacing the income stream, which is more long-term in nature. So we have to factor that all in together. And of course, ultimately, the investment committee must switch on again, right? At the moment, I think it's a little bit on our own office, very reactive to the market condition. Thanks. Thank you. Love income. Besides what you raised your hand moving. OK, then, direct here. Morning Tony, Derek from DBS. Just two questions right.

For your sales efficiency for retail in a portfolio, I just wondering, could you give us a quantum number for subberberne and also downtown, just to get a sense where sales are if possible? Because she doesn't. Yeah. Yeah. Yeah. Don't share all the discussion. Anyway, the second question right is on office. Right? I understand the markets very focus on IUI centro-bola right? But in the background, we have capital self tower also completing for Q. I'm just wondering whether looking at your portfolio and your expiry profile, should we turn a bit more defensive on office or do you think you're still fairly optimistic about takeout raise, reversions, et cetera? Yeah, just these two questions. I think fundamentally CBD stocks has limited supply.

I mean, that's a given right. And the new supply coming up, most likely, would be a refresh, upgraded, or even redeveloped new supply for most stock. So that's more at a fundamental level. In terms of where they are located, there'll be pockets of competition, naturally. Papo, that's one. That's closer to Tanyumbaga. The presence slightly different. Maybe a completely different Capital Tower, that location. Location, why obviously we will have a little bit of advantage. So we will factor that into how we look at engaging tenants. Then it's also a question of whether the tenants are new

tenants coming in or as a sinc tenor who are looking at a renewal, and they are considering options. So in today's setting, I think, most tenants, especially for relocation, the total cost is a one major factor, total cost of relocation. So bear in mind when we look at how we should engage our tenants when we talk about renewal, we have to be pragmatic overall. Striking the right balance from a positive revision, hopefully we want to grow income at the same time looking at the total cost of perspective. And sometimes if they need more space, ability to provide total solution in a shorter million term, there could be

also one advantage we may have. So I think we're dealing with, in many fronts, we have a good portfolio offerings, both in the cost CBD area and also at a site, a representative in the Gafunan. I mean, even considered HOM, which is today fully occupied. I mean, it's ultra location. And then we have capital sky, which is very, very new. All right. So we would try to manage as much as possible to retain our tenant within our ecosystem. Yeah, I just, just a bit. So building a bit on that, right? So definitely retention has always been one of key priorities

that we are doing. So if you look at our retention rate is actually pretty healthy, we are very sure engaged quite advanced with a lot of alternative type expiry. So in fact, a good thing is some of the expansion requirements are also coming true from some of our existing tenants. If you look at it, just the first half alone, in terms of net expansion within our portfolio net down side, she's quite even so quite a bit. So I think generally that folks well, if you have the opportunity to really visit some of the newer buildings, what actually, if you look at it, even if I take my capital green, I think my capital sky generally the quality of assets. It's not in few real compared to some of the new built. I think generally specifications is one thing. Location, our locations are very good. So it helps to build in some residents.

I think the other bit that we are differentiated is really that we have their whole seat solution. So a tenant can come in. They can look at a flex based cost based together and also some combination. And we have a portfolio that they actually can expand within. So in that sense, if we look at some of the new deals that we are taking, I think the start I mentioned about us getting some new tenants coming true. We do see new set ups as one. We also actually see a lot of relocation from previously like central pilot bank workers and a few other locations coming into city and they are actually choosing our properties. So by and large, I would say we are actually quite okay. Yeah. Thank you. You give to the other side first? Yes. Just want to follow up on the office question for

reversions given that your rents are not for top of all this. Probably both market already. Just wondering what kind of reversions are you expecting in second half? I mean, even with flat on negative views, you'd be high single digits for a full year. Yeah. I think we're just generally what we are guiding. No high single digit even though it may be lower than 15%. But I think we'll likely end up high single digit. So for second half is probably that you see flat reversions. Potentially. Yeah. Definitely. Yeah. That. Cool. In case we do have a slide that shows the expiring rents or results, yeah. Even I mean, as we talk about rental reversion, we are also including leases that are expiring to enter into five.

Five. Yeah. Because you have to start engaging them now. Yeah. So looking at the end of five, expiring rent, I think January, they are still, I mean, that's the slide. Yeah. Slide is still slightly below market. Slide is below market. But having known that what we explained earlier, including Yi Zhuan talking about the, how we engaged in tenants, right, we will be very cognizant. We want to ensure that we keep it within our ecosystem. Depending on the budget overall of the tenants. Yeah. Right. I think on, I would say that we have to be careful about this, right, for the second half, only because of the competitive landscape that are operating within. So as I, you know, a little earlier, you know, in this, towards the end of this year,

what we expect is to see that the secondary stock that will come up and how the landlords or those secondary stock reacts to the market. So if they are actually able to hold on to rent, actually, always good. But if they start to go, you know, different rents or drop in rents, then of course we have to be at accordingly. So I would say that high singles is still a good guidance for a year end. Of course, on the case by case basis, potentially some of the leaders we have to be competitive. Depends on how the situation goes. Yeah. We're looking at always as a basket with the retail office, this is a basket. There could be some very solid retail version because it's a catching up. Yeah. But you'll be those that will take a little bit of position, maybe just flat. We'll move on. And for retail versions, second half, you're still expecting high single digit trade. Yeah. Yes. Okay. Yes.

Thank you. Yes. Joy, you have the mic. Joy from HCI. I just want to follow up also on office. Could you just share, you know, in terms of demand, what are the typical size you're seeing at the moment? And also, you mentioned about sort of being competitive. Are you likely to throw in more tenant incentives, including sort of renovation costs just to help the overall cost for relocation? Yeah. That's one. Yes. Second question just specifically on your JCE line. There's quite a bit of a drop year on year. Do you want to get? JCE. And, do you want to join me? Oh, JV. JV's. Can I assume that's entirely due to interest rate increase?

And for that, Tranche, is that a floating rate? Thank you. Interest costs? The bill bill bill. Just a couple of years. Do you think the question can repeat, good news, your? Your JV line. So the JV line actually came off quite a bit, right? Contribution funds for JV. So is that entirely due to interest increase? Or is there other factors in that? You want to take the first question. Okay. So, second question. Okay, January is both an effort to retain some cash for AI, where some work in overseas, including Australia as well as MAC, for example, the gallery, or businesses fund their externally, but the contribution coming back to the solution, I think we retain the

liberal cash over there to make sure we are some capital to look at the refreshing the assets. Yeah. Yeah. In terms of the demand for office, generally what we see is small size tendencies, if we talk about new to markets. So I mean, generally, three, five, 10,000 kilos per year. But anything above this, a bit harder, but nonetheless, we do see some expansion requirements, especially with not portfolio. Maybe it's just some examples. Like one of the demands that we actually saw is actually from a co-working or service office kind of space. They initially was taking just about 20 desks, but now they're looking at 5,000 square feet of space. So there's currently demand that we do see a lot more in the market compared to the real big deals now.

But I think from a portfolio perspective, it works generally quite okay. Right. Half a floor, one quarter of a floor, because there's a kind of vacancies that we do have now mostly within our portfolio. Okay. Thank you. I think we should. Sorry. Okay. In terms of incentives, I would say that it's processing up all. We don't really have to go out yet on terms of incentives. Generally, it's really the general fit out, probably a little bit more fit out period. But rather than giving incentives for tenant fit out, which is not our primary, might be may look at is, I think, generally our city, probably generally in the market is that we also see some tenants, actually, land lot's sorry, starting to do fit out suites to help overcome that bit. So actually, when we see some of the rents going up at some point right, some of these

rents could be because they kind of price in that fit out into the, the, the, these are what are tenants. So that's what we see in the market a little bit more getting popularity to help some of these tenants who have a bit of K-Pax constraints, right, to try and make that case to do the relocation. Thank you. Shannon. Hi. Tanya from Gorman. Two questions on capital recycling. So looking at your gearing and also a size of deal, is it fair to assume that we should see divestment before any acquisitions come through? And second question is on acquisitions. In terms of opportunities, can you walk us through what's more interesting in terms of overseas

with a Singapore and also sponsored by the party? Thank you. So first question, not easy to answer because it depends on all you. We can't time everything to in sync that perfect. Here is your blue sky. That's our blue sky environment recycle back. You get a capital back. But we can't predict. Thing will go in that car sequence. Certainly monetizing part of the portfolio is an important source of capital for us to look at redeployment besides looking for potential other equity partner, whether it's in a public market or in the private market. There will be other source of capital. But put them online nicely.

Quite difficult task to manage. But in the ideas in the road, yes, the sequence should be that way. Again, I don't think we can make a prediction how that sequence will depend on. Yeah. A possibility over here, I'll touch a little bit maybe. I'll pass on to Jack. Mark, obviously, January is still trying to find a footing. Overall, I thought in general, of course, when you have Germany and Australia this market, in terms of the journey Australia may have come a longer way in terms of how the market has reacted and there's some naturally some price adjustment.

The rate unfortunately is very elevated. So on an overall basis, this is how we look at deals right on the net after tax, after tax cash flow, where do they lend? This is what we can do outside Australia, whether it's Singapore. So I think we have to think into consideration and the factor. Germany unfortunately, I think the about hard to hit by the war effect. And as a result, I think the economy is going to tough times, tough times, probably tough times in Australia. So I think we need to see the economic cycle, getting a little bit more momentum before we see some kind of stability over there. But overall, you can find that the investment market in Germany is less active, definitely

very, very few transaction went to. Yeah. I think for Australia, although we have seen discounting, I mean, probably, I think we have probably not have totally bottomed out. So we are still watching, because like Tony said, interest rates remain high, even though you know, their yields have come up a bit in terms of what has been put on the market and being transacted. But I think we are still watching to see some kind of stabilization. I think that interest rates remain high and I think even the RBA rights that they were not going to reduce interest rates for the next six months. So I think interest rates remain elevated. For Germany, of course, it has come off slightly, but really there are no transactions in the large deal space. So especially in Frank Fertnite, people are not putting things out on the market.

And so there is really no benchmark or pricing level. So it's quite difficult to say once if there is going to be some kind of, let's say, for sale or something that comes along, we might see some kind of activity coming in. But so far, everyone seems to be holding up well. And so in because of no transactions, actually there's no pricing level that has been established at the moment. So I think for overseas markets, it's a bit more challenging. Thank you. Good morning. Thanks, Deb. Just two questions for you, one person, then to Vatoni. On office, specifically, in terms of foreign, from the mind, in terms of office spaces,

is this still holding up or is it come now at all? In terms of the retail side, in terms of both 10 and a mix, 10 and a side, do you see, like, demand more coming from, like, small scale foreign brands now? And in terms of, I think Toni mentioned a little bit of it just now, but in terms of demand from consumers has kind of, like, interest in luxury spending, things like that come down at all. And for Toni, two questions on the pricing. Deb, do you see that coming down all in Singapore? Obviously, you mentioned a little bit of that just now, but I was wondering, do you see that resolving it all in your favor or in terms of various interests and all the next few months?

And in terms of the one broader question, obviously, I mentioned a little bit of Malaysia and stuff like that, but what is it? Because you see that now for us, or what's keeping up at night right now, is it? Malaysia, is it interest-free? Is there a war or what's becoming up? Thank you so much. Okay. Let's see a question. So, pricing generally, I think it's been stable in Singapore. In fact, we look at some of our peers that reported, you know, with the valuation of portfolio, a lot of STEM reflects to some extent the stability or the value. All they're says, I think our peers are reported a higher valuation in Singapore portfolio, especially in terms of transactable market.

There have been a few transactions that have gone through. Every transaction very different, very hard to say this is a very rich price. By a 4% or 4.2% yield, because buyer coming with a different view, it could be a... And also the nature of the buyer may be motivated quite differently. So I will say, I will split into the two, the retail and office asset. I will say, retail asset on a net basis has been very stable. The transactable buyer, will you possibly already reflect in those transactions that you've seen in the last 12-18 months?

They're done by our peers. I will mention that level would be probably what a market will aspect. On office site range also quite wide. Also our peers are so at 3.8% very much a different kind of dynamics. And the nature of the buyer is quite different. They're looking at a bit of a value at play. So we have to factor in. And actually selling a birth valuation, ultimately still. And the valuation cap was not any major change from the year before. So I will say in a nutshell, office has shown footing.

But because of where the absolute yield depends on what can't buy the appropriate economy. Can you focus on specific how buyer for your properties? I mean, office... We would... Okay, so office and retail are quite different. We definitely would engage the potential investment market dramatically. What kind of thing they're looking at? And very mild, so what I mentioned earlier, how we should look at redeploy the capital. So we try to find the right point where we want to do a deal. But naturally, I think the guiding principle is that it has to be something that makes sense for us.

And also makes sense for the buyer and the buyer motivation can be quite different. Okay, so on the... I just want to add on the yield, right, that's reported for all these deals, right? So sometimes it's actually quite difficult to compare property to property or transaction to transaction. Because it's the yield that's reported is at a particular point in time. So it really depends on whether that property is under-entered at that point in time. Or whether there's additional enhancement work that can come in, you know, maybe in the next few years. So about that yield is reported, isn't that particular point in time? So it's not that like-for-life when we compare to its properties, property to property.

I think here's one more question. Is there a way to show? If you see me awake, many things, right? I said the volatility, the market is certainly keeping us awake. The... I think we're trying to deal with any kind of hate wins that come from operational level. And we actually try to ensure we are able to still drive revenue growth at the same time managed across effectively. So that... Tap us on our toe. That means you can't slip... You can't slip SLIP SLIP SLIP SLET. But at least this is a broad picture. As you know, you are... Reads, you product, investors. We are very cognizant of our investors.

In fact, especially our retail investors are highly dependent on our distribution. So I think that's something we buy on our chips and try to be able to deliver the current distribution. Estable as much as possible at the same time over time can drive growth. So... And that you'll also itself keep you awake now. Thanks Tony. We have a question from... Sorry. We have moved in to answer it. Then we have to go to online and come back to you. You're going to address the relationship. Maybe just join it again. Probably just touch on a little bit on the demand side of things, right? So obviously, we'll... I touch on it off this quickly. So for office, I think generally, financial services, investment services, professional services,

these are still the drivers of most of the demands we see. But interestingly, we also see that, for example, in a portfolio, we do get some requests coming from overseas kind of like, oh, looking operators again. So there's something that we do have to... You know, there's one area that we look at things. As for the retail site, generally, a lot of the new tool markets still FMB from Chinese brands coming in, but we also do see international brands. Just that unfortunately, for the international brands, they take a little bit longer time, because for them, sometimes they find the right partners for us. They have to find the right location before they can actually progress. So the lead time in terms of conversion, to pursue and convert things a little bit longer. For the last brands, of course, I think we see how the last companies have been performing generally in this past couple of months, right?

In terms of expansion, it's something that probably they may not be as aggressive in this coming year or so. We will continue to watch this space. I didn't. All right. We've been from JB Morgan. Maybe we can touch on asset level performance and outlook. Maybe Google's junction and Google's Plus. We see a lot more office being built in the area potentially upcoming residential. Can you touch on opportunities for that property? A raffle city seems to be doing quite well on the occupancy site. Can you talk about the upside for that property with that level of my activities coming through hot air performance? Therefore, a junction 8.

It's not that close to the Malaysian border, but it's closer than the downtown properties. And I know based on personal experience, the immigration clearance is significantly much faster this year. Many AIs with that property. The other question will be electricity costs. What have you been able to sign this year and then next year as well? I think last round I earlier mentioned maybe instead. So this year is more like. I noticed downtown percent, but you have the absolute rate. It does a white power. You share the absolute rate because the other component is a consumption. So we can only just get a general trend. Okay.

Let's basically set me out broadly. I think the opportunities in those assets we were looking at. I can let you try and address specific assets. Okay. So I remember all the assets there. So for B Plus and BJ definitely we do expect some of these shopper traffic as well as sales to improve. We are working in some of the retailers to kind of be positioned in the offerings to capture that improve the kind of catchment area that we see in that area. So of course we are quite aware that Broncos office towers came up. The residential part is probably if I'm not mistaken and of this year on next year sometime then. And of course that will be another bit of a boost or something to retail. Probably I would try attention to B Plus right if you look at B Plus we recently have

actually opened up have fun. I'm not sure how many of us managed to go, but it's really changing the kind of sales performance is doing very well sales. It also improves a lot of attraction in terms of the shoppers that we get. especially in the nighttime. So that will actually help to improve the performance of the asset. So in check the build new life right through that floor to the upper floor in the process has been relatively quiet. But now I think more and more Thursday or Thursday, the DCP go is pretty well packed. So hopefully we can actually bring the energy, you know continue to improve on the energy for B Plus and BJ in the coming quarters when the rest of the residential kind of start to move in. For our diversity, I think it's generally still resilient.

I mean of course there's a little bit of a huge jump in the past year's performance. It will stabilize. I think we will have to seize how things are spent out in the second half of the year. Definitely we do think that there's room for improvement. Of course the second quarter we do see a little bit like news on the bar room rates, you know a bit not easing off a little bit. So it's an occupancy easing off a little bit. But I think it's more of a function of the quarter and hopefully in the second half of the year when you're F1 with other major events coming true. That will actually help to improve the hot-out performance as well as the retail performance to that. Did I miss out on any property? I think there's one more. J8. Okay sorry, what about J8? J8. Ah, any high question?

It's Miss Lyden. I would say that J8 generally the traffic performance has been... Other things they're going to do some AIs there. So the competitive set me some bit more. It may do some AIs there. Ah, we'll see what we'll do there. Yeah, I think J8 is a very unique location. It's urban. It's not too far from town. Very wealthy, catch-men overall, vision location, well-connected, transportation, no look. or things that look similar, checkbox. One of the businesses is a little bit of sub-scale. So I think we are trying to think along that line whether we could really scale it up or

deal with it sometime. Otherwise, the food is strong. We want naturally to translate that food for into conversion. That's more important. Overall, it's a bit of sub-scale. For one, that's so well-loaded with two MRT lie below. I think it's a bit of sub-scale. But we see. Beyond J8, there are other assets that we also think about in the future, downtown, office, work and do AI. So even in other sort of urban retail mode. But we need to turn it out carefully. Earlier mentioned, planting mounds stone, hopefully, that would give some stability in account.

Because each time we do AI, sometimes it'll be a factor. I remember the effect of the rental. But we know that it's a no stronger food team post-the conversion and give us a stronger competitive age. Just a very small point. This is really about planning on how we are going to do our AI for the different things. One is, what are the ongoing EIs we have? I think the other part they were to consider, so sometimes it's not just us. It's also what the plants have in the precinct and how it's kind of these things a little bit better. So at the right moment, we will share our plans here. Thank you. We need to go to the online questions first. Then Gula, come back to you. So the questions from Donald, the first question.

How much is CapitaSpring contributing and when will contributions stabilize? You want to take it? Okay. In terms of the DI contribution, the first half, this is in the range of a 3 plus million. I think largely contributions have stabilized. Okay. And the next question is from Ming Liang and Hong Wei. What's about? Will the anticipated higher gearing limit of 50% by MAS? Whether we expect acquisitions and then whatever any update to CICT's capital management policy, even that.

I think we want to ensure CICT is on a strong footing for long term. So maintaining the right metrics, financial metrics is good, good important. notwithstanding, MAS relaxing the, in fact, the more or more to be able to borrow all the way up to 50% on the reduced ICR. But we mean very disciplined. Not forgetting our stakeholder involved not just equity in the investor. We also have debt investors. And naturally they are on opposite side. So on a sustainable level and given what earlier I mentioned, what are plans we have from upgrading or building a unique capital.

So we need to maintain certain level of flexibility so that when we embark on the kind of AI work, which is very creative and deep your creativity over time that we have the capacity to be. So it's important that we want to maintain the discipline. Cooling as a service. The question from Hongway is that we have actually shared that we are undertaking cooling as a service. How much cost savings do we expect for this utility's expense? And also for the other initiative that we have, the electric vehicle charging stations, that they help to increase copper income and how much margin is there from such charging stations. Okay, I'll just leave the question first.

I don't know, I'll leave to you trying to talk about the rest side. I think overall when we start to look at cooling as a service, I think we came with a view that the few things we need to ensure the CICD remain the premium investment vehicle. So that's when we look at how we treat our assets, looking at sustainability and go. So those are all very important elements. And that means what that means to translate that from an operational level, your building has to be very efficient. So what drive efficiency and energy consumption, right? Energy consumption is a factor of many things, including the equipment, maintenance or

equipment. So while we look at cooling as a service, the primary drivers really to think about, can we consistently maintain the efficiency in the prolonged period of time? So we know that we can do a good job, but perhaps there are even better operating out there who do this as a rice bowl, who can be even more efficient. So to have some extent when we start to look at what the vendors can provide services, they will realize that actually there are a lot of people out there who could provide the certainty of energy efficiency to maintain a high level of green building status for our portfolio. So that's a starting point.

Whether that translates to real savings, I think over time is should, because it all depends on the CAPAC cycle. Let's say if it's a much older building with varying equipment that may come closer to the end of cycle, your immediate conversion into that could mean a lesser savings, because we could have done yourself, the immediate savings from a replaced enemy equipment, a crooner or so immediately. If it's a equipment that's somewhere in between, that's a little bit difficult to say. The CAPAC required to upkeep that is a moving target.

The capital that need to deploy and the cost of that capital is also a moving target. So it's something a little bit more challenging to solve a manage. So if you can able to get the service provider to out basically the risk that then technically in a long run, we have more stability in maintaining the efficiency. But overall based on what we are contracted, we do see a net saving given what we have to pay, the service provider and our so-called interest expense that's been avoided. Because when you do your equipment upgrade and you buy your CAPACs yourself, essentially

you've got to carry the cost of the CAPACs. Now you actually move out to the third party. So that's how the concept will. Okay. You went for EV charging? I was saying that EV charging is not so much. I think starting point is not so much about income per series really, but making sure there are assets remain relevant in terms of these things. We do see the EV calculation actually coming up quite a lot. If you've had, I think one of the top sales has been BID or the past managed. So that's the need for us to then actually progressively expand our EV parking lots and facilities to make sure that our shoppers, our office tenants are able to actually use

some of these amenities when they're in our property. So I would say that that one is actually the primary driving at this point. Thanks, Yijuan. Do we have... Okay. Okay. The last question is from Amanda. It's asking about CQA Cloud Keys performance after the AEI. I think it's asking about performance in terms of tenant sales will... You're new to challenging. Sorry. Let me see. CQA. Maybe I'll start off first and you can... We'll start with the clarify. We don't share specific tenants, it's for individual asset. So CQA, I'll say you're going to stabilize this stage. If you're at VISTACQA, we can see CQA Cloud Key by the way, CQA Cloud Key.

It's actually the holistic percent, including the current rate of government work at Can-In-Dio. Because the whole micro market will a large extent need to be anchored by the product coming on the stream and it's not ready yet into the index. So while CQA has completed all AEI work, there will be this sporadic need to ensure we sustain a regular footfall. So curation of tenants, nature is very important. I'm making very honest, not all tenants will perform well. So during this in-between period, the frequent thing of weather is it a transitory kind of issue that we need to deal with? Or is it really a mismatch in terms of trick mix in CQA?

So we have to do that adjustment potentially. But once that can-in-heating come on stream, you would naturally have a little bit of base load for residents, hotel, service residents, or create some costability. Then the VISTACQA dynamics are quite different. Although we say that we wanted to deal with a little bit of CQA in the past, not wholly relying on the nitrate, but CQA is still very well-known around the world as the place to go for your negativity, right? And the demerne claps, no disco. So with that in mind, the position of CQA and also with the more living resident component

that's next to it in can-in queue, the curation of what goes there is really a little bit of art in science. And also factoring sometimes what are the quality required to put in place. You can't definitely have very lot of music close to where residents are living. So we have a move further away closer to the cop-out location, where the current lubrication is located, closer to the early part of the entrance coming from the sub-reshow, not visualizing, yeah, the location. You can't really be allowed in music, you know, vibes. But moving towards near residential, there's some kind of constraint. So the overall curating that makes to get it the device-free spot, I would imagine we need

one or two cycle. So we're going to use completion of AI, which is what we are doing now, at the same time post completion of can-in here, where your base load will start coming in. In a product like Clucky, it's really people, big ads people, you know, it's the thing where you start drawing people, you got the car people, the car, the car coming in has to be the car, the car that we effectively can do conversion. So the main actually the footfall has improved quite a bit. It's not back to the pre-COVID this for sure, because the night, live part is still a little quieter, generally, over there. But it's coming back. And hence we want to sustain that.

But the cloud coming back are also quite different. We have a lot of tour bars coming in, but very transitory, no transitory and kind of crop. Doesn't immediately do cloud conversion. But we need to imprint most of our longer-term basis. This does my weather's for a look. It's a display, actually, and I can do something. So you come here on your own. Whether you're tourists, no, you just venture and this place is a massive visit place, Riverside, good lifestyle. Give you the kind of feel that they have been to Singapore. In Clucky, it has been Singapore, but at the same time, also experienced that rather than just a very kind of transient crop, or coming in thick photograph, Instagram and the

sit. So that's the island size of part that we try to get it right over time. I think Tony has given quite a good perspective of secure performance or what's happening. So I think we have one more question online. We just related CapitaSpring. We also at this point want to also draw in just not a question on the JB line part. Just to add is that, actually, there's a higher operating cost because due to the end of the effect liability period which ended last year. This is something we already shared, which is why operating expenses higher for the first half and also higher interest expense. And the question online is asking whether we have refinance the 14 debt CapitaSpring JB and what is the interest savings whether that is refinance. The loan documentation is in the final, almost final stage.

So any time, you know, this few days you'll be signed, the interest savings from the refinance thing will be from slightly lower loan margin about 20 basis point. And then on the conversion of floating rate to fix considering all that, I think in terms of interest savings, it could be in the range of 40 basis point. Thanks, Melian. So given time, we have a last question from Gola. Yes, yes, sorry, thanks for taking my question. I'm just wondering, you know, everyone's been asking about acquisitions and investments. But what about redevelopment?

Because have you looked through your portfolio to see where you can do, but really extensive AIs or redevelops, you know, something like, you know, a lot, lot one, you know, anything there or, you know, look at Panchan Plaza's also very low rise. I mean, is there any chance of any view development in any of those assets? I'll pass that to all we've tried. I think I'll touch, I'll load it a little bit on that. Maybe you'll need some cash. So definitely we don't need any properties in specific. Because I would say that generally we would actually explore various scale of AIs as well as redevelopment plans potentially. It's just that some of those plans may take quite a while to materialize. So it's not something that, especially if you talk about redevelopment, right?

And you look at the whole process of urban efforts, engaging authorities, everything for the eventual career. We are talking about easy to three years down the road at the earliest. So that will take time. But definitely across both return officers, we do explore some of these opportunities that we see how to actually better position our assets and optimize the assets. So in a near term, then of course, then along the way, we have different skills of AI or major upgrades that we are also studying for some of our models to make sure that you only be keeping them relevant. I think some of the models we do find that there are pockets of opportunities for us to try and explore. Again, at the right time that we are probably sure, because the last thing we wanted to say is something that at the end doesn't materialize. So we will share more in due costs.

So then there's a capitalist string acquisition. I don't know whether you plan to acquire 45% of capitalist spring. They are referring to the call option of $25% of commercial components. You plan to. Because it appears fairly up. I think we do have the options. So we have the way business options. We have the flexor bid to decide whether we want to do it. And 45% is not bad contribution. We'll see. We'll see how things bend off for there. It's all about no prioritizing any capital capital. What you want to redeploy assuming the market comes spring in a nice way.

And then this one last question. That's about your ratings. Because there's all these questions about the higher leverage and leverage ceiling and all that. So how important, I mean, you talked about your debt market, debt investors. So how important is the ratings to you? And what do you have to keep your aggregate leverage in your ICR to maintain your rating? There's also the debt to a bit of ratio that the rating agencies. So I think it's important to maintain the premium, premium status of CICTR. And they are advantages of having that title.

Because you get some flexibility when it comes to looking at potential debt issuance. And it keeps us in check in terms of making sure we are able to get an overall basis, a more competitive cost of capital. So cost of capital, not just equity or so debt rise. So I think it's important. So we will try, we'll strive as much as possible to try to be able to manage that. Reading agencies obviously will look at different financial matrices. It's important to them. They also look at whether you are able to ability to generate growth, right? At the same time so that you are able to sustain the current financial matrices. So sometimes in between there could be a blips.

And there's something we have to engage the agency to explain. It could be a time-minute for an industry I am backing on a prolonged kind of AI world. And it could be a bit down time. And then if we talk about, let's say, so that we may be interested in monetized by the timing may not be right. So we just have to go and engage. Anything? Okay, thank you, Tony. So thank you very much. That's the last question we can take, given time. I think we have managed about close to an hour of Q&A from both online and on site. So if you have still had more questions, please feel free to reach out to the investor relations team. And also management will be around after this session. We have more questions.

And then so we are pleased that CSUT, we have delivered a steady first half this year, for performance and we're definitely prime for growth. So thank you very much for joining us today. Thank you. You're next to me. Thank you all.