1H 2025 Financial Results Briefing

Good morning. Welcome to CSIT's briefing. I'm Allison from the investor relations team I hope you had a good start to the morning. We had a very busy one. We released to a Norseman's death morning offers half results and the proposed acquisition of the 55% interest in capital spring. I'll see you all trans young is here. He will be covering them in his presentation later.

We will Actually, we also have the current session. We'll be happy to hear your thoughts and address any questions that you may have. Without further ado, I'll like to invite Shinsion to the stage. Cheers, and please.

Okay, good morning everyone. Thank you for joining us today. We have quite a bit of cover today, so without further ado, we'll start. Maybe I'll just run through the presentations for both the results and the transaction and then we'll just take some Q&A at the end. Okay, so we'll try to I think most people will be more interested in the transaction. So we will try to focus on some of the key highlights for the results first. Just go through the few slides before we talk about the transaction proper. I'm sure you guys have some burning questions on the transaction. So we want to jump straight into that as soon as possible.

Okay, so today we are now the result. The ICT delivered a fairly good set of performance for the first half of 2025. Draws revenue came in about 787.6 million. This is a slight decline of 0.5% year on year due to the absence of income from 21. Collier key, which was, as you know, diversity in November 2024. However, on a life or life basis, excluding 21 Collier key, draws revenue grew 1.4% and similarly for MPI was down 0.4% year on year, but up 1.7% on a life for life basis. And these numbers really reflect underlying strength and stability of our portfolio.

Distributable income rose to 0.4% year on year to a record for 1.9 million for the first half. Union holders, or we please do also know that our first half DPU increased 3.5% due to a new high of 5.62 cents despite an enlarged unit base as a result. The EFR that we did last year. This was underpinned by the 4.6 month contribution from iron orchard. That's a performance of our existing portfolio as well as lower interest expenses. Our proactive capital management continues to put the CICT in a favorable position.

Aggregate leverage improved to 37.9% down 0.6% ditch points from N20 24, giving us greater financial flexibility. At the same time, our average cost of debt has declined to 3.4% from 3.6% months ago supported by the easing interest rate environment and as well as our proactive refinancing efforts. This matrix underscored a robustness of our balance sheet and the resilience of our diversified portfolio.

Operationally, our portfolio remains robust. Overall, occupancy is student 96.3%, with real holdings daily at 3.2 years. Tenon retention rates remain high. We retail and office showing improvement compared to the first quarter. This also reflects the tenant confidence in our properties. Ran Reversion for the office portfolio was 4.8% for the retail portfolio 7.7%. We've suburban malls achieving 8.8% and downtown malls 6.9%. As we guided earlier, we expect renter reversions to moderate to a more sustainable pace in the coming quarters. Tenon sales per square foot increased 17.9%, but this was largely due to the inclusion of iron and a numbers excluding iron. Tenon sales per square foot was about flat, but shop a traffic increased by about 3.4% indicating that conversion opportunities are intact.

In May, we completed the divestment of service residents component of capital spring, which actually allows us to do the transaction that we are now saying today as well. We'll talk a bit about that later. CICTs, 45% stake was valued at 126 million. We divested it at an exit yield of approximately 3.6%. Proceeds were used to reduce debt and support working capital, demonstrating our discipline, capital recycling and focus on financial flexibility.

And our AEIs, which is our other value at strategy, at Galileo and IAMM building are progressing well. Galileo has reached 97.7% commuter occupancy. We target Hanover to the anchor tenon from late-tech quarter. Incon contribution, we'll ramp up meaning fully from 2026. At IAMM, the AEI space for phase three has been handed over. We've posed AEI occupancy at about 98.6%. We've over 100 hours at the stores. IAMM continues to strengthen its position as a regional outlet destination.

We have two AEIs in a pipeline, commencing in a fourth quarter. At a lot one, we will be adding an additional 15,000 square feet of NLA at basement two, leveraging URA's surplus, compact conversion the space will focus on daily essentials and convenience driven retail. We will also enhance the connectivity to the mall with a new sheltered bridge extension that links directly to the residential area across the road. The mall will remain fully operational throughout the AEI and we target

the complete this in the first quarter of 2027. In the previous quarter, we also shed that we have some AEI works planned at 10 Banyz Mall. Here are some other details. In line with LTA's pedestrianization plans, we will be rejuvenating the main entrance at 10 Banyz Mall and refreshing the tenon mix and increase product offerings through the improved configuration. The works will be carried out while the mall remains fully operational and we target to complete this AEI in the third quarter next year. So that concludes the key highlights of our first half results.

I'm happy to take some questions on this later. Before that, I think we would like to proceed to share about other announcement released this morning, which is the acquisition of the proposed acquisition

of our remaining 55% interest in capital spring. Okay, so having worked through our first half results, which reflects the resilience and quality of our portfolio. We want to now look at this particular transaction that we announced this morning. I'm sure a lot of you have many questions. We'll try to address most of the important points in the presentation, but if you have any further questions, we can take them later. As a background, currently we own 45% as most of you are well of capital spring, the commercial component, excluding the service resident. The proposed acquisition is required the remaining 55% interest from our partners, capital and development, which owns 45% and Mitsubishi estate, which owns the remaining 10%. The agree property value on 100% basis is 1.9

billion, which is the average of two valuations done by Knight Frank and Seville, which is both appointed by the manager and the trustee respectively. We understand that the cap rates assume by the two appraisers in this latest valuations are compressed by 5 to 10 basis points compared to debt of the valuation assumptions in December 2024. That is from 3.75% back then to now 3.65% and 3.7% respectively. Based on the agree property value of 1.9 billion, the entry yield is approximately 4.2% based on the first half 2025 and P.I. As CICT is acquiring units in glory of its trust for the remaining 55% interest, the total acquisition outlay is about 482 million.

Capital Spring is a 51 story integrated development comprising of great premium great office tower and celery retail as well as a service residence component which we digested in May 2025 as pointed out earlier. I think most of you are familiar with this building. It's not a new building in our portfolio. We already previously owned 25%, we have provided regular operational updates on the building so it should be something that is not unfamiliar to all of you and to us as well which is why we are, which is why we like the asset and we are proposing to do the acquisition. We like the property as it has consistently performed well maintaining almost full occupancy as that 30 June 2025 underpinned by quality tenants from diverse trade sectors.

The proposed acquisition aligns with our strategic goals to deepen our presence in Singapore, our core market. With this move our Singapore exposure will increase from 94% to 95% reinforcing our commitment to deliver long term value and resilience to our unit holders. Apart from being a high performing asset, Capital Spring has received several recognition for its architectural and commitment to sustainability and inclusive design. They further affirm the quality of the property. This like shows our ownership structure before and after the acquisition is quite straightforward.

We won't spend too much time on this. Next. So why are we buying the remaining 55% interest in Capital Spring? I think the investment merit and the transaction rationale is quite clear but we will articulate them more clearly in this like we do believe in the asset. As a owner we are seeing the performance we were able to track the potential and the performance of the underlying asset over the last call it four to five years since it was completed. This acquisition aligns with our commitment for long term value creation. Capital Spring is a prime example of a development-like growth. Transforming from a multi-story cupboard if you guys recall there used to be the golden shoe cupboard into a vibrant commercial hub in the heart of the CBD. They offer the entry U in the low 4% and potential upside especially given the limited pipeline of new great A office supply in the core

CBD. Beyond financials, Capital Spring enhances the quality and resilience of our portfolio being a premium great A property. Importantly this acquisition is a creative to DPO. 1.1% on a pro-former first half 2025 basis and reinforces our position as the proxy for high-quality Singapore commercial-reversed it. Let's go through the detail in the subsequent slides.

Capital Spring is more than just a building. It is a reflection of our value creation strategy via redevelopment and portfolio reconstitution. We started this journey in 2017 with our JV partners to redevelop the site and completed it in November 2021. As part of our portfolio reconstitution we diversed the service residence component and exit U of 3.6% this year and now we are requiring the remaining 45%. Capital Spring is a top-fooly design space that brings together work, live, play and integrated development. Since it is completion in 2021, Capital Spring stands

among the best premium great A office assets in Singapore CBD. The property has three elements. The reflect our commitment to has these elements that reflect our commitment to creating spaces that go beyond functionality. Offering a holistic experience that attracts and retains one of the key reasons we are confident in Capital Spring's long-term value is the limited pipeline of new great A office applying the cost of the D. As you can see from the table on the right there is no material news applied in 2025 and limited developments coming on stream in a subsequent use. This supply demand dynamic supports rent and potential upside-for-well located high-quality assets such as Capital Spring. You'll be further supported by

Flight of Quality demand as occupied as prioritize premium office space for relocations. Capital Spring's average rents for expiring office leases remain healthy with a well-spressed lease expiry profile giving us flexibility to capture rent growth over time. In the last two years, Capital Spring has signed leases with positive rent or reversions in the range of 5 to 7 percent. Specifically for the first half of 2025, up to now, the positive rent reversions achieved as approximately about 7 percent for Capital Spring and 10 retention for the building is above 90 percent.

Capital Spring's occupancy has been strong since its completion and kept by leading financial institutions and financial services. It is underpinned by diverse business trade sectors, supporting stable cash flows and enhances portfolio resilience. One of the strengths of Capital Spring is this tenant profile. Post acquisition, JP Morgan joins our top 10 tenants alongside hardware established names. In terms of portfolio trade mix, we remain diversified across trade sectors with banking, insurance and financial services increasing to about 18.9 percent from 17.6 percent.

With this acquisition, we are strengthening our ownership and further reinforcing CICT's leading position in Singapore's office market. From this map, you can see all our office properties located from Tung-Dong Park, I'm RRT to Reface Place and City Hall I'm RRT stations. The give us scale, visibility and relevance in the market. Bring the lead and trench in the CVD allows us to better serve our tenants, respond to market shifts and continue to deliver long term value to our unit holders. Post acquisition, our exposure to office, will increase from around 38 percent to 40 percent of our top portfolio value. Our Singapore exposure will grow to 95 percent as mentioned earlier. This reinforces our strategy of being Singapore focused with high quality assets in prime locations. As such, the acquisition of Capital Spring will further re-enhance, reinforce CICT's position as a proxy for high quality Singapore commercial RRT.

In terms of the financial effects, so let's look at the impact following our acquisition. The acquisition is expected to deliver a DPU accretion of 1.1 percent on a pro-formar basis for the first half 2025. This assumes the acquisition was completed in 1st January 2025 and CICT had operated 100 percent of the commercial component up to 30 or 20 to 25. I think pretty respectable accretion numbers considering that this transaction based on a billion dollar total value. It's about call it three to 4 percent of our total assets under management. So to deliver a 1 percent accretion is a pretty respectable number. The funding will be supported by a private placement. We proceeds to cover the estimated purchase consideration and vendor loans. loans as well as transaction related expenses. Any remaining proceeds will be used to pair down debt.

So we are balancing growth, we financial prudence. Our aggregate leverage remains consistently below 40 percent. Post acquisition, leverage is expected to be at about 38.3 percent, which is lower than our gearing level at 31st March 2025. So this is a quick table of expenses relating to the total acquisition outlay. So subject to completion adjustments, the purchase consideration takes into account amongst other things 55 percent of the agreed property value and net liabilities. For CLDs, 45 percent interest, CICT will receive, will pay 1 percent acquisition fee in units,

given that it is an interested party transaction. Post acquisition, there is no change in a number of properties portfolio and LA. And we will as this, because our current 45 percent interest in CCT in the capital spring has really included these numbers in our current portfolio. So there is no additional increase in terms of number of properties as well as the NLE. However, the property value will increase to 27 billion. While portfolio committed occupancy will be up slightly at 96.4 percent instead of 96.3 percent, as at June 2025 on a pro for more basis. So I will give a new some good insights on the transaction and why we are entering into the transaction today. If you have bad questions, we are happy to take them in the Q&A segment very fast. Mervine is not here today, but there is just as fast as we realize.

Okay, if you want to use them right here. Can we invite a measurement team on to the stage for the Q&A please? Okay, before we start the Q&A, I would like to introduce a measurement team. On Trinsons right, we have a million, our CFO. And on Trinsons left, we have a Jack team hit off investment and on her left, we have each one hit off portfolio management.

So somehow skipping rules before we start, if you have any questions, please raise your hand. And we want to come to you. Try to keep two questions at a time and we'll come back to you. You have more. For those online, if you have any questions, please support them in the chat box. All right, with that out of the way, we'll like to open the photo questions. Okay, I see perhaps Terrence, please.

Thank you very much. This is Terrence Key from JP Morgan. Thank you very much for the opportunity. Congress on the very, very strong results. The BPU growth is strong and of course, on the acquisition of capital spring. I would like to double click a little bit more into the acquisition yield. You mentioned 4.2% yield. Maybe could you, could you highlight whether there's

any potential upside to the yield? And in terms of the rentals which are upcoming for renewal, what is the market rents today and how under-rented is the property? And for my second question, I'd like to ask on what's the fuel financing cost for the transaction? Thanks.

Okay, thanks Terrence for the questions. Maybe I'll start and then I'll let you join in maybe jump in on the rents and financing questions as well. So in terms of upside, okay, so we have announced this transaction at a entry yield of 4.2%. So last year it was 4.1%. So this year is 4.2. So it's going up on option in the right direction that we'd like. But if you look at this 4.2% is actually based on straight line rent, which is typically how we are announced, which is based on accounting MPI. Typically, accounting MPI and cash MPI not that much difference. But because it's a relatively new building,

you'll expect slightly more incentives at the beginning for the first term. So in this case, I hit the cash MPI is slightly higher than the accounting MPI. And then when you renew, you're likely ready to then reference the cash rent rather than the accounting rent. So with that, we do expect that every new will is slightly to track closer to the cash, rents and cash MPI going forward. And a cash MPI actually is higher than the accounting MPI today. And we distribute based on cash MPI. So that's one. So that's kind of a roundabout way of answering where the grove is going to come

from. But if you want to zoom into the actual rentals, safe to say, I think we have covered in the presentation. In the last two years, rental returns has been positive, ranging from about 5 to 7% depending on which lease we are talking about. But of course, at the beginning of the, we are still at the beginning of the first term renewal. So there are under many reviewers that were back up our new ones, as you can see from the slide is happening in 27 to 28. I think we do expect positive rental returns for most of these leases coming out for expiry. So this year,

rental returns were about 7% across all the leases that we do in the first college 6, 7 months or this year. And then you have seen the aspiring rents. I think we put up in the slide as well, range from about 12 plus to about $10 per square for over the next two years. While it looks relatively high for a CPD office, if you look at, depending on which report we refer to. But I think for capital spring, we are trading at above average CPD rent. And so we are quite confident that we are able to renew the positive rental returns. So that's the first question. And on, maybe you

try and do you have anything to add on the rental?

I think just don't cover pretty much. I think first and foremost, one of the upsides hopefully comes from JPM. Right? Very new. But I mean, if you look at it broadly, right, the few income tenants, we have SMBC, we have millionaire capital and of course JPM. The other two of the income, the deals will kind of sign around the pure COVID. So we can understand that, you know, rents then is a little bit under compressed south. So hopefully you add an extremely new world. We will have a bit of upside from there.

Second question is on financing cost, right? Yeah. On the loan, at GOT level, there is a project loan that we will be taking over with the entity. And the interest rate we have assumed is 2.7% is on the basis that we are resetting the interest rate on the loan to the current prevailing levels.

If I may follow up, I mean, since the building was open, I think in 4Q21, Raffles Place rents are up about 18%. Is this something that is potentially possible doable in terms of rent, reversions, let's say, when you're

renewing some of the anchors? Again, I have to ask JPM whether they want to contribute to the 18%. But I think first of all, I would say that definitely, if I look at the property now, right, actually post capital spring, we have one of the other competitions and there's not, and we know as a supply that's coming up in the next three years. And I mean, I know the property pretty well. I'm pretty confident to say real remain as one of the top buildings within CBD, right? So definitely, with this whole flight of quality and there's not a lot of alternatives. I think it will give us a

very good position in negotiations. But having said that, we are also quite mindful that, you know, there's a balance drawing between when we talk about big anchors versus smaller tenants, right? The ones that, you know, the rent that will tie that we see between anchors, like, and then of course some of the late tenants where they are smaller, they stop sticking the top floors, right? That's quite a big delta. But we will see some meaningful, we will all see everything is like $16, $17, right? But we will probably see some meaningful upsides in the next few years,

especially if I say the company is still put a lot of priority in having a well-bought out space, the old before these come amenities. And I would say that since when we did capital spring, we also see a few of our neighbors in general have also acted the update and we developed the property. So there's a little bit of a momentum shift back to Raffles place as a key business district compared to MBSE area. So I think that's a positive sign for us.

Thank you. Thank you for that benchmark. We will use that as a reference point for our next negotiation. If one of our anchor tenants. But I think just to add on Renters, I think, I mean, you, obviously, working in the building. I think the feedback from our tenants is very positive. I mean, almost all our tenants, I think they have given us very good feedback on the building. I mean, in terms of specs, in terms of the amenities and in terms of the location as well.

So I think the tenants generally love the, all aspects of the building. So I think, and that which is partly the reason why, you know, it's 99.9% occupied. And actually we do get inquiries of existing tenants wanting to expand. But the challenge for us is finding space for them to expand within the existing building. Yeah.

Thank you for question. Terrence, can we have direct and we have choice join?

All right. Thanks Derek from DBS here. Just ask two questions. So one under transaction and one of the results. So far, I noted that you mentioned there's a bit of a category of comprehension 3.75 to 3.6 versus where you see values at the end of the year. I'm just curious whether she really think that as a benchmark that your office portfolio also

enjoy a bit of a compression and I'm aware. So any of you today is considered low versus what we expect to see in the year. My second question is something that's been asked a lot. And can we give us an update on this? I want text transparency. So to click easy ones. Yeah.

Okay. One also easy. The second one I will just defer to me. I'll take that easy one. What's the first? Oh, can't break on. Question. Okay. Yeah. We expect that discussion. Okay. So I think the firstly interest rates have dropped and risk rate has declined quite significantly in the last six months. So no surprises that there's a little bit of a category compression. Whether it will extend to the rest of the portfolio, we have the other values at the end of the year. I can't really give an answer to that. But if you compare that

to the rest of our buildings in, you know, portfolio, I think it's more or less in line in any case. I mean, five to 10 bits. I mean, our careers are fairly transparent. So if you compare it to two similar buildings in that location will be capital green and maybe capital sky. So they were in a range of 3.6 to 3.75% category. So I think 3.65 to 3.7 is still well within that range. So may or may not lead to movements in other categories. So I think that's that's kind of, but I do, but I always use our NAVs under value. So. Okay. The question on iron pack transparency,

we have made progress in terms of, you know, having some clarity on the structure, the proposed structure that we think will provide for that pack transparency. But the question would be, you know, the discussion that we supposed to have with the JV partner. So that one, you know, is still something that we have to engage them. Yeah, to talk about the detailed size, actually, complex. So it's not going to be immediate, if anything, you would take, you know, at least a year. Okay. Okay. That's a surprise.

All right. Thanks. Thanks. Thanks.

Bye. Thank you. Two question from me first on the transaction self. In terms of incontinent, when is the earliest time we can actually see some of the reprising coming through? And if also you can talk broadly about rental reversion outlook for office portfolio in Singapore.

So that's question number one. Question number two on interest expense. The 2.7% can you do that immediately after takeover or there is a reprising gap, you know, on the deck. And also what's your guidance for your full portfolio? Then because of that. Thank you. Okay. So I think for the first

question, all right, the reversion, there will always be these days coming up very new. This year, I think there's not much level. I think there's only 3% of these days coming up very new. All of them, I think are already in advanced negotiation about to be signed and positive reversion. So that's a few. I think next year we have about 15% from now on according to the chat and then subsequent need. So I think the first major anchor, then I would probably be in 27 and then 28. I think it's quite clear. You look at the stacking of the experience anyway that the two engines are coming on in 2728. I think the answer is the first question. The second question or an

example? Sorry. Second part of the first question is the broader office reinterval. So I think the trend, well, this is a tough question, but maybe I'll leave it on each one. I think generally we do expect the trend to be quite similar. Maybe it's like moderation from the first half. We'll probably be at what I think the supply is actually still quite tight. That's how we feel. Question is whether that's the demand to drive the rents going forward. I think

organically we do see demand for existing tenants to expand space within our buildings. Most of the time our challenge is finding space for them because most of our buildings are quite near for occupancy. So I will say that if I were to, I will say that it will be quite similar trends. So maybe we'll start moderation. If you talk about guidance for the reversion for who your basis you are still on track. Are you looking at mid-sangos? Hopefully on the better part of the mid-sangos.

Okay, the question on the assumed interest rate reset would be I mean we intend to do it before completion at the JV level. So when we take over, you'll be based on the pre-blame. And the guidance on the cost of debt for the group. We have 3.4% as of June. So we're looking for four years this year. We'll be closer to the low trees level. Your inch down? Yeah.

And sorry, just the 2.7% is based on what 10 years?

We've assumed it based on fixed between 3 to 5 years. Yeah.

And I can take that as assumptions for

all your upcoming debt refy. Well, you see average cost of debt is the average number. So within that number there are some rates that higher, some rates that are lower. So when we look at the prospect for trending down, that also depends on whether there are some lower cost debt that will be reset to prevailing levels. And actually we do have some euro borrowing that is historically low rates. There were locked in like 5, 7 years ago. So that will impact on the magnitude of the easing interest rate. Thank you.

Yeah, we expect to complete the acquisition in the quarter.

I saw Rachel has a question. Then after we can go to Shen.

Hi, Moninche and congrats on your first acquisition. Maybe just most of my questions are answered. But maybe we just go to in terms of retail and reversions. I think this quarter we saw that the suburban is holding a little bit better versus the downtown. So if you give us a sense, your guidance on reversions and how is iron tracking? So I think we have I think last few quarters we have done

quite well in terms of rent or reversions. Retail on average was about 10%. But we know that there was not sustainable in the longer term. Firstly, because you was coming off a slightly lower base, I think we have also guided that you just slightly to moderate going forward. Which he has. Now it's about now we are averaging about 7.7. We have suburban at 8.8 and downtown 6.9. So I think this quarter there were also some leases that we think were slightly out of the norm. So it did track the reversion down slightly compared to where it was in our last quarter.

No question is whether these reversions are likely to continue or the rest of the year. I think not that it has come down to these levels from 10% is probably slightly more sustainable. I think our we're probably guiding from closer to these levels closer to the end of the year. Maybe mid to some maybe to meet single digits to where we are currently showing for this June 30th.

Oh, iron. iron generally has done quite well for us. If you look at it compared to our underwriting assumptions, if you recall, I think when we acquire iron, kind of to meet the numbers where we were at one point looking at giving higher and if you wish we didn't have to. So that's big volumes about how the transaction itself has contributed without having to make the subsequent adjustments that was needed. So I think iron as a whole has done better than what we expected.

But of course having said that we know that the whole world is suffering because in terms of luxury spending and Singapore is not spent. So the trend is definitely down on a younger basis for luck spending. But I think iron is holding up well when compared to the rest of the world. I think Singapore for some reason. Last but not as much as the rest of the world. So we are hoping that

we're doing quite a bit of work at iron as well. I think if you have visited iron, you will see that there's a lot of hotting. Part of the reason this is by design is not due to tendency being or retention remains quite high. Actually it's part of our asset enhancement to bring some of the activity to the higher flows. Because if you notice iron actually is two different modes. There's a slightly more mass market mode at the basement. There's kind of a luck mode at the end of the four flows that require the compared to the basement and ground. So we also

trying to improve the performance of the asset. By trying to move somewhat the performing attendance up and then opening up space at the ground floor for potentially new attendance and a new attendance mix. So it rejuvenates the mode as well as improve the vibrancy of the entire mode for iron. So the other way we get the thing that we've been doing is also if you notice now

we have more double duplex and triplex stores in iron. So that is also a way to improve the performance of the mode. Because for example by instead of a well performing brand occupying you know 2005,000 square feet on one floor. If we had them at 2005 on ground floor 2005 second floor, it has to bring the foot for up to the second floor without while preserving the ground floor for a larger variety of attendance. So that's the other thing that we are trying to do in iron as well. But in terms of the attendance space is pretty much similar in the north section. No, not in the end of the day.

Okay. Then my next question is I know you have just done this acquisition. The next question is what is nicer. So I mean just to hear your thoughts is divestment your focus or would that be redevelopment? I think you are a master plan as a few targeted areas that affects that your modes are in. So yeah.

Yeah. Okay. So I think that very simple answer is inorganic. I mean there's nothing to do. I mean we there's nothing for us to talk about unless there's something definitive anyway. So answer to the discussion and that's what inorganic acquisition. There's not much for us to comment on. But we are always looking for opportunities. I think the current environment also allows us to be to explore for new interesting opportunities given our lower cost of funding going forward. So that's helpful. Whether there'll be

at-end divestments. I think we always evaluate things portfolio. So in terms of I mean you have seen us divest two assets in the last, call it eight months, nine months service residents as well as two call your key. So we always reviewing whether it makes sense in terms of any of our assets. I think we I think the existing Singapore portfolio generally looks quite good. The way it is now. I think most of the assets are doing very well. Most of them are trading well in terms of new. And most of them we do see the potential in terms of growth going forward. And also we've we've good cause of funding that's also less need to do divestment to fund future acquisitions.

So I think okay so that's on the inorganic part and asset recycling. In terms of asset enhancement I think that's one of the core pillars of value at creation for us. So we will continue to go down that path. We have already talked about I mean we have really completed two this while completing two this year. So we are already on the lookout for the next two which you know we have just announced one being a lot one the other one being companies more. Sadly smaller in scale but still something that we I mean there's only so much you can do in terms of existing organic a short of a complete redevelopment which as you really pointed out we can also explore for some of our sites that are

we are quite fortunate the draft master plan from URI actually a lot of the precedents that we identify are in areas where we already have a presence in. So it is helpful for us in two ways that one is we can participate in the rejuvenation the other ways even if we don't do anything the rejuvenation will actually help us anyway. So either way we benefit. So for us whether we do the participate in the rejuvenation I think depends on the commercial population. I mean to be fair to all you know who does I think whatever we put into the redevelopment must be commensurate with the returns that comes with it. So we are starting all the plans but I think unfortunately we don't have anything specific that we can discuss this is quite preliminary when the plans just came out last month so we will give it all authorities we'll see if there's anything that can be harvested.

Okay thank you so much for the kind of

okay. Chen hi morning.

Can I follow up on the question right if you think about the next 12 months how would you prioritize between powerful management acquisition and enhancement because CIC there has been very active over the past 12 months so just try to get a sense how should we think about timeline.

Yep we want to do everything. Okay so I think I mean there's no I think it is it is opportunities so there's no there's no straight answer to that question unfortunately. I think SSA management is brand but I think it's okay we do that every day so you know we have a team that that is very good at what it does in terms enhancing the performance of the asset so I think that there's an ongoing basis and then SNA when I said is also one of the brand but for us although it's not a daily thing that we do but we always want to we are constantly looking for areas to improve the asset performance especially for some of our more tired data properties. I don't think you answered your questions directly but

by if you look at our tracker over the last few years I think we focus on all three things at the same time I don't think it's a zero-sum game just because we focus on asset enhancement doesn't drag us from the possibility of doing acquisitions in fact we have different teams doing different so we are able to do all I want to go so it's not it's not necessarily mutually exclusive in that sense which is kind of where the question is kind of driving it but under in place in a question is that is mutually exclusive but actually they're kind of not yeah and also after

acquisition we always have to do you know we don't just acquire and then maybe as it is as we continue to improve level we are doing it are you know and some of the other assets that we have acquired along the way and as I'm point you know do as a enhancement as well so don't have your answers or question.

Can I also get your thoughts on fundraising I guess because of equity has came down right do you know more fundraising over the next six months?

We wouldn't do fundraising fundraising say let's put it away so if we were to do fundraising it has to come with a attractive acquisition like today you know an acquisition that is a creative that adds long-term value to our portfolio that you know there is something that we think will add long-term value to the unit holders as well so in that sense if if if there is an opportunity that comes out that requires fundraising then so be it but you must go ahead and have a acquisition that makes sense

but having said that our gearing it also depends on the size of the transaction right I mean we are now at maybe about just call it 38% we still have some there here room technically but we try not to do get there if it's a small transaction we don't actually need to do a good fundraising or like small APIs or redevelopment yeah so I think the the shine that we have question is we wouldn't really love what we'll only do it if it makes sense yeah

can we have an alternative to the online question maybe we'll actually help

yeah hi morning I have a few questions from online so the first one is from Chenjiez asking given that cap rates have remained firm why is the exit you at 4.2% for I think capital spring higher than maple tree and since 3.8% you is the first question I think actually the 4.2% we talk about is an entry you but I think

oh so he's asking us why are you finishing with it and cheaper than cheaper than check the electric the maple tree and some one right has is a slightly different tenure the remaining tenure is different so I think I would you can add this probably different timing it's also yeah I mean so I mean that's yeah the length tenure the remaining length tenure is like 82 years

okay the second question is from Kei H. He's asking us how much tax savings approximately can we expect from iron or chit this probably relating to the tax transparency

I think I just may be pointed out I think don't hold your breath for the tax transparency it's probably well it's it can happen but it will take a long time the restructuring might take a long time so I think she has mentioned it will take probably I'll use a year so it's just take care as far as it is a price if he happens subsequently

okay I think questions and operations so from Jardin DBS not that the suburban sales of flat year and year what would our suburban sales trend be if we strip out IMM AEI

so it's flat dish it's slightly down if we take out the currently slightly down so if we take it out I am informed that right it will be also flat dish by slightly it's about 0.2% I'm sorry I'll just probably repeat that if we take out IMM AEI it was excluding that it will still be flat dish on slide out at 0.2% across both quantum as well as the post-careful basis okay then that's a couple of questions from Bloomberg that's the okay so firstly is

that Texas asking that as recently as me the management was guiding that it was not in a rush to acquire capital spring steak so what changed in the last few months this is first question second question is that there's been some chapter about the retail rents so whether we have heard similarly back from tenants and any concerns about the I think the talks about rental control is going forward

okay so I can't remember what we say first one yeah do you say there we're not in a rush to get capital spring okay but well made to August three months is not really a rush so I think okay I think on a more serious note I think it always depends on the opportunity that I make the market conditions I think all along we knew that capital spring was something that we could execute because it was an option on our part so we could have done it sort of in our own timing then the question is when is the best time to me actually now is probably as good a time as any for a few

reasons one is as we mentioned I think a cost of funding is attractive has come down over the last few months so that makes the acquisition more attractive in a sense from a financial perspective second leader a core option is based on formula and the formula I think is formula is public leader available information it has actually an embedded creep in terms of the purchase price so if you were to buy it later actually the price continues to go up so buying a lead actually makes allows us to buy it slightly cheaper as well I think that the option expires while we are not in a hurry

but obviously expires November next year the closer we get to the option expiring the more the more hands are tight because this transaction most people know we need to go with equity fundraising because the transaction size is fairly significant so if we leave too little room towards the option x between the transaction timing as well as the option expiring then the overhang will be a lot more significant as in that the market will be expecting the transaction in which case it makes it harder for us to do the transaction as well so I think now it's probably as good a time as was there second question

yeah there's a question this more on the retail retail rents whether we have heard feedback from tenants

oh on the recent online no we always refer them to urban tactical on Lincoln okay but okay it chokes us like I think actually if we talk to tenants you know a lot of the online back lash on rents is not really coming from more tenants because a lot of them are coming from tenants they are operating in maybe like a strut units, shot houses for a few reason typically either the previous

rent was very low and then suddenly there was a re-weighting of the rent because a new land lot took over or maybe because they just had very low rents for a long time because in a more we will never jack out rents by 50% as you all know you never see rentary versions at 50% we wish we could but it never ever happens in fact we are guiding mid to 7% 70% kind of rentary version over three yearlies which is about 2% to 2% per annum kind of escalation which kind of tracks inflation which is the way it should be I mean in the long term rentors should track long term inflation rates so okay so I think one is I think we're not getting that kind of the negative feedback from our

tenants I think the other thing is also I think tenants also appreciate that the land lot makes a big difference in terms of the footfall in terms of the marketability of the mall and in terms of the driving of the traffic and footfall to the mall with our marketing promotions with our loyalty program as well as our tenant mix so I think the and there's a reason why most of the malls that we have are still you know close to 100% occupancy because the tenants I better see the value that we provide to the to the to the space.

I'll probably just say that you know if we look at the past few further results every time when we talk about reversions have always stressed that the importance is really to ensure that it's also sustainable to our retailers and because it is a long term relationship that we have and I think at the start of the session if you could see some of the things we put up there's a lot of our tenants who have been with us for 10 15 20 30 years and the important thing is really to make sure that we have a mix that actually makes sense for the community that is sells right whether you're a downtown mall whether you're in a south urban mall so of course there's a fortunate that you

know in the media sometimes we picked up one or two examples and then we make an article of it rent is one component I think the retailers now these face a lot of pressures from all friends one we have for consumer habits is changing at the same time you have also manpower cost manpower limitation and stuff like that and what's important for us is not just looking at cutting rents per se right it's one there's no point cutting rents right if any of your mall it's irrelevant you don't get full fall you don't have arms everything that important thing is I constantly having that engagement and I think our asset managers or leasing managers is doing

their on the grounds talking to tenants to see how to get help them grow their business how to make sure that they are performing well within our malls so I will say that at this point definitely it's something that we are continuously working on we we don't take it for granted right and we will continue to make sure that you know across our malls we keep the environment and see keep that relevance and I think it reflects in the numbers that we are seeing now and hopefully can keep that going forward

okay I just I last two question from online first would be the operating margins whether we can give any guidance for this year to also to 2020 whether or not for the savings into utilities this operation and then the second one it's more moving to overseas for Germany and Australia whether the was house asset performing and whether the income contribution from Galileo has kicked in

yeah maybe I'll take the second question first and then I should get to the first question so I think overseas performance actually overseas performance of our assets we actually quite we think that okay let's look at markets separately right Germany and Australia I think Germany we have to we we only have two assets one is Galileo which is basically the risk right it's already fully talented to a single tenant with a small retail space that is the reason why no retail space plus a villa space that it sticks out very small percentage that's why the occupancy is not 100 percent but otherwise it's largely the risk

and income recognition well we will hand over phase one to the tenant hopefully by the end of TAC quarter and then there's a phase two that we will hand over possibly end of the year or beginning so then the income recognition will start after we hand over maybe we're somewhere in free but generally I will say expect most of the income to only start beginning on X here okay so that's on Germany so the Germany occupancy that you that we normally show in the slide doesn't include Galileo because it's still under construction I mean renovation so if we add that in actually our occupancy for Germany probably checks closer to about 90 percent 80 percent is the remaining asset

which is at the one at the airport but I think for Germany we are also quite constructive the government has actually been putting out a lot of news and measures to pump right the economy so we are hopeful that this will help translate into the general economy and eventually to reverse date runs at some point in time I think the other thing that's happening in Germany of course is that Euroreza was also coming off slowly but it's definitely in that right direction so we think that that is also conducive for the rest of the market eventually so I think give it some time I think we do think that the market will turn around hopefully in the next 12 to 18

I think in Australia we have three assets actually Australia out of the three assets too assets are actually doing quite well close to four occupancy for one one miller so I was 66 go when the one asset as study more challenging is a hundred others which is about close to about 80 percent occupancy but we are seeing green shoots I was just in the new the team last month and actually the Cine market looks like it's bottoming up I mean based on the conversations that we have with the stakeholders there the tenants as well as the consultants it does seem like people are taking a fairly slight bullish turn on the Cine whereas

the market but of course like all general C-B-D markets I think the the one that moves first is the cost C-B-D so we are seeing that happening in Sydney already and hopefully that momentum will then spread to the peripheral C-B-D area including some of the areas where we have assets in and in terms of leasing we are also actually we're seeing a lot in queries for some of the space so we are hoping that some of this fingers crossed with little conversions in the next three months so potentially there could also be some improvements in the occupancy for some of the for our asset in Australia

oh no just back to the first question on the utilities so we do expect it to be relatively flat dish if not we have built savings from that for 12 to 6.

Do you have any more questions from the floor or tenants, tenants?

Thank you maybe two more questions from my side I guess I guess for for junction 8 during the draft master plan they've unveiled new plans for sub regional center in B-Shan and there's a lot of potential office developments it's in the draft master plan so wanted to understand a little bit more whether junction 8 could benefit from extra potential GFA and second question for me I wanted to understand a bit more about iron too are you able to share the reversions and cash occupancy for iron thanks

okay easier one first junction 8 I think junction 8 okay so I think just overall the actually we are quite happy with the way the draft master plan has come out because I think two key things right one is a decentralization of office as you mentioned I think some of the regional hub staff that defy a like to wrong B-Shan by a live path and pennies why is this good for us it's good for us if you notice none of it talks about increasing supply and the CBD and we only have office in the CBD so that one that will benefit our I think overall positioning of our and the supply demand dynamics of all of the building that we have in CBD including the one transaction that we are now saying today so I think that's very conducive for us

secondly all the things that we have outside the CBD are most and if you add the office buildings in some of these hubs and neighborhood sensors you study to make it more vibrant higher foot four and rejuvenate some of these towns centres and I think in some of these areas that we have most and we are ready to benefit regardless of whether we increase so so we are really we think that this actually both well for for our overall portfolio in Singapore in general so there's just on a high level specifically for B-Shan whether there will be additional GFA I we can answer that question right now because it really depends I mean that conversation we need to have with authorities so it also depends on whether it makes sense overall because there is existing income at junction

eight so to to make the development makes sense it needs to be a fairly significant uplift in terms of GFA if there's no increase in GFA definitely nothing can be done because then you are really putting your existing MPI into land value if you do a redevelopment so so the conversation I mean as value started and it's a multi-stakeholder conversation so I'm afraid I can't give you clarity on that at this point in time but in any case even without that I think existing junction is doing very well so we are happy to continue to earn the core income that we have based on existing as this

you was there a second question I yawn, Renter, Reversion, afraid we can't share that so oh okay I'll give it to you, do you have the number you try?

I'm in physical occupancy right not no no yeah we don't have the number sorry we can get back to you but we don't have the number often

so online questions again may pain sorry just for more

one is on the capital spring acquisition so the question from Derek it's from Morgan Stanley what is the JB loan that's costing now is there the delta between the current JB loan interest and versus the 2.7% that was mentioned and whether this is already factor into the one for 1% accretion the question is

okay so I think that JB loan I think what confuses the method is that it's kind of like a related party transaction but actually if you look at it as a third party unrelated transaction we will never assume the loan over third party so anybody has that is always up to the seller to unwind existing loan and then we come in and take on the loan ourselves so in a sense actually to to to keep it simple actually investors and an issue assume that whatever we buy should assume our existing cost structure and financing cost structure so actually the outgoing financing cost is irrelevant

and another question is about that the equity so I think the question from Gideon is that because in CSCT we have the gearing hit room and borrowing costs are training lower he just wanted to understand management thoughts about going through this using the equity funding to acquire the 55% but they are asking why we're not using deadline

yeah I think if we use then our clearing will probably go up to just a per 40% do a burden not ideal so I think that's always a trade-off in fact you do 100% that your appreciation will look super attractive because of the low cost of funding now but I think we have to balance this with the long-term growth of the rate because if we are at 40% in any case we cannot at least us very limited room to grow from then onwards so I think

a few important considerations is that we want to position the rate for long-term growth as well so we want to have the financial flexibility so by doing this transaction together with a equity fundraising we then preserve the ability to be more financially in the book so that's one I think secondly it's because we can also because there is sufficient appreciation in this transaction that gives us the ability to throw in a mix of debt and equity funding and despite the 500 million close to 500 million of equity fundraising that we are doing our appreciation is still about 1.1% so the appreciation are ready to into account the equity fundraising

so that's another important consideration

I think the last question on nine it's about iron-orchered I think this is a hypothetical question I think it's asking whether iron-orchered BDPU are creative in FY 2025 if we strip out all the divestment acquisitions announced this year and the fact that we did not have the tax transparency I think probably more about actually that

no the simple answer to the question is yes because actually it doesn't matter whether we are doing any divestment or acquisition iron acquisition can always be analyzed on a standalone basis based on the financing structure that was done then so if it makes sense back then and we have really said that our performance in iron performance is better than underwriting based on the underwriting it was a creative then without if it's better than underwriting then you'll be even more creative so there's a short answer so whether we are doing more acquisition this year there's not the track from the performance of iron and the creation of the iron transaction

okay thank last one is a very simple and the retail occupancy cost what is our retail

I think it's still closer to FY we are one I think yeah

oh you mean yeah retail occupancy cost 17.6%

yes okay let's go to Joy

just one question for me how strategic is your 2% in Germany and Australia each you spoke about green shoots so will you exit with these green shoots or scale up

we won't scale up

sure and see we have a one last question if not to example he like to give some closing remarks

no I think thank you for everyone for coming I'm quite excited by the many questions that will ask during this briefing I think I can tell that everyone's quite excited about the transaction about the briefing and about so yeah thank you very much we hope that it's a good outcome for

our unit holders we'll probably update again this evening or tomorrow on the outcome of the equity fund raising

thank you Trunson any any questions please feel free to email if you yeah please send them our way if you have any questions thank you for being with us today if you have if you have time please do stay around we have some refreshments outside for you and to those online and everybody else we'll see you next time thank you