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.