# CapitaLand Integrated Commercial Trust — 1H 2026 Financial Results Briefing

- **Event**: 1H 2026 Financial Results Briefing Webcast
- **Date**: 12 August 2026
- **Kind**: Automated speech recognition (unverified) transcript
- **Source**: https://www.youtube.com/watch?v=P5qRTXN1PeI
- **Ticker**: SGX:C38U

**Unofficial machine transcript.** Prepared by SMID Research from the issuer's public results webcast recording by automated speech recognition, without a full manual check: expect mis-heard names and figures. Timestamps refer to the recording. Not a company publication. The official investor relations record is https://investor.cict.com.sg/ . Copyright in the briefing rests with CapitaLand Integrated Commercial Trust; contact contact@smidresearch.com for corrections or removal.

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## Opening & Welcome

[00:00:06] Good morning. Welcome to CICT's first half results briefing. Today we are in a summer special, the Paragon Club. It's a member's lounge reserved for its top tier members. And if you'd like to return, you can start spending after the briefing. And remember to spend generously to support our economy and, of course, our tenant sales.

[00:00:28] Thank you very much. Jokes aside, we are very happy to have you with us today. And to those joining online, thank you for dialing in. In a moment's time, we'll have our CEO, Choon Siang, walk us through his key highlights for the first half results. Following that, we'll move on to the Q&A segment with the rest of the management team. And with that, I'd like to hand the time over to Choon Siang.


## 1H 2026 Financial & Operational Highlights

[00:00:52] Okay. Thank you, Allison. Good morning, everyone, and thank you for joining us today. If you're wondering why we gather all of you here today, it's not because we have a major AEI here to announce. Someone asked me that this morning, so I thought I'd get it out of the way. We just wanted to showcase the beautiful property that we have just acquired. Nothing more than that.

[00:01:22] And I think most of you would not have been into this club before, because it's actually quite new. It was recently renovated sometime early this year as part of a amenity perk to some of our higher-tier members in the Paragon Club. So before you leave today, please sign up for the Paragon Club membership. For the use of this lounge, I think you just need to spend $25,000 a year. Shouldn't be hard. Two watchers will do the deal. Okay. Anyway, without further ado, let's start off with today's presentation proper.

[00:01:57] You guys would have seen the results that we have put out early this morning. We're very pleased to present the results for our first half of 2026. The past six months were marked by a very strong execution of our growth strategy, including portfolio reconstitution. You have seen our announcements in terms of the sale of Bukit Panjang Plaza, the bidding for the Hougang land, and then the acquisition of Paragon together with the divestment of Asia Square. So we have also very active asset management as well as very disciplined capital management. All of those things have contributed to our very strong results. So these efforts have enhanced the quality of our portfolio and position CICT for future growth. So I'll walk you through some of our financial highlights as well as our operational performance.

[00:02:49] So we delivered a very strong first half, as you can see. MPI increased 8.7% year on year to $630 million. Distributable income increased 13% year on year to $466 million, while DPU grew 7.1% year on year to $6.02. Importantly, this DPU growth was achieved despite the enlarged unit base following our equity fundraising in April this year. This reflects the strong operating performance of our portfolio, the step-up acquisition of capital spring supported by lower interest expenses.

[00:03:26] Operationally, occupancy remains high at 95.6%, while rent reversions are healthy at positive 4% for retail and 7.6% for office. At the same time, we continued to maintain a healthy balance sheet, lowering aggregate leverage from 38.5% to 37.4%, while keeping our average cost of debt at 2.9%. As part of our strategy to grow the portfolio both organically and inorganically,

[00:03:58] we have been actively executing various initiatives. We completed the acquisition of Paragon on 1st July. This strengthens our presence in Orchard Road and adds a freehold premium integrated development to our portfolio. On the divestment front, the sale of Asia Square Tower 2 (AST2) remains on track with completion expected in the second half of the year. We are also progressing with several AEI and upgrading initiatives across the portfolio.

[00:04:30] These are aimed at uplifting our assets to strengthen income resilience and drive long-term value creation. Together, this initiative demonstrates our active approach to growing the portfolio. Our Tampines 1 AEI is progressing well with about 96% of the AEI space committed or in advance negotiations. We have curated a line-up of brands across beauty, F&B, shoes and bags, and fashion accessories among other categories. Several brands have already opened. More brands will progressively open through the second half of the year. As more of these concepts come on stream, they will further elevate the mall retail proposition, deepen stronger shopper engagement and reinforce the more long-term growth potential.

[00:05:23] Let me take you through the summary of CICT's first half results. Gross revenue increased 7.5% to 846.8 million and MPI grew 8.7% to 630.5 million. This was driven mainly by capital spring step-up acquisition and the contribution from Galileo, partially offset by the divestment of Bukit Panjang Plaza. Distribution income from joint ventures was lower at 16.7 million down 19.5%. This decline is optical rather than operational as capital spring income is now fully consolidated at MPI level following the acquisition of the remaining 55% interest. So it no longer flows through the JV line. Next, distributable income rose 13.3%.

[00:06:12] 466.7 million, a strong double-digit uplift. DPU grew 7.1% to 6.02 cents. A robust increase, although roughly half of the growth in the distributable income. The difference is due to the enlarged unit base. On a weighted average basis, units in the issue grew 5.8% to about 7.73 billion. Reflecting largely the private placement of 336 million units used to fund our Paragon acquisition. Despite absorbing a 5.8% increase in unit base, we still recorded a 7.1% increase in DPU.

[00:06:55] For the second quarter, gross revenue increased 7.0%, while MPI grew 9.6%. We have covered the first half performance, so I'll move on to the next slide. Our portfolio continues to deliver income diversification, which provides resilience and enables us to capture opportunities across sectors while mitigating concentration risk. We have paid an advanced distribution of 3.98 cents for the period from 1st January to 28 April on 8th June 2026. Unit holders may wish to note that the remaining distribution of 2.04 cents will be paid on 25 September 2026.

[00:07:38] Our balance sheet remains healthy. NAV increased to $2.15 from $2.14 from 31st December 2025. We continue to strengthen our balance sheet through discipline capital management. With the temporary repayment of debt using proceeds from the equity fund rates, aggregate leverage is reduced to 37.4% from 38.5%. Average cost of debt remains stable at 2.9%. Our debt maturity profile remains well spread out with maturities extending to 2035. This helps reduce refinancing concentration and gives us flexibility to manage funding requirements across different market conditions. Our interest rate exposure remains manageable with 1% increase in interest rates. The estimated DPU impact is about 0.27 cents. On our portfolio and asset performance, occupancy remains high at 95.6%, up 0.4% supported by proactive leasing and active asset management.

[00:08:46] Will remain stable at about 3 years. Top 10 list of tenants is unchanged. They contribute only 16% of gross rental income and no single tenant contributes more than 5%. As such, tenant concentration risk remains low. Lease expiry profile relatively balanced across the next 5 years. Lease expiries in 2026 are manageable with 5.8% of the 9% lease expiries already in advance negotiations. Our tenant base remains diversified across multiple trade sectors and will continue to support our portfolio resilience. Leasing activity remains healthy across both retail and office portfolios and they continue to register high retention rates. For retail, demand in the second quarter is mainly driven by F&B, beauty and health, and fashion accessories. While for office, demand is mainly from IT and telecoms, legal and banking, insurance and financial services.

[00:09:44] Retail occupancy remains strong at 97.7%, well-rebriest Singapore's retail market occupancy. There is a slight drop in the downtown's occupancy mainly due to the AEI at Plaza Singapura and the A3M at Orchard, as well as some natural lease expiries. For the first half, we continue to deliver positive rent reversions across both our downtown and suburban portfolios. Suburban malls achieve stronger rent reversions of 5.1%, while downtown malls recorded 3.2%, resulting in a retail portfolio rental reversions of 4.0%. Our retail portfolio continues to deliver resilient tenant sales growth. Portfolio tenant sales increases 1.6% year-on-year, supported by new store openings, seasonal promotions, and healthy trading across key categories. Fashion and accessories, jewelry and watches will amount to key contributors. Downtown malls were resilient, achieving growth of 1.7%, while suburban malls recorded an increase of 1.6%. A slight moderation from the previous quarter consisted with the broader retail environment. We continue to curate our tenant mix with new-to-market and new-to-portfolio brands and concepts across F&B, hobbies and leisure and entertainment.

[00:11:06] Our office portfolio remains resilient, with occupancy improving to 94.4% up 0.7% from the previous quarter, with uplifts across Singapore, Germany and Australia portfolio. In Singapore, average office rents continue to upward trend, reaching $11.03 per square foot per month. Across our Singapore grade A office assets, the expiring rents in 2026 are largely below prevailing market rents. This position starts well to capture positive rent reversion when leases are committed. Leasing discussions are already underway for majority of the near-term expiries.

[00:11:46] Looking ahead, CICT's growth trajectory remains firmly on track. We have clear income drivers that will continue to support growth, including progressive income contribution from Galileo, the addition of Paragon following its completion on 1st July, as well as the continued flow-through of positive rental reversions achieved across our portfolio. At the same time, we remain disciplined in managing our costs and capital. Energy rates for our Singapore portfolio have been hedged through to mid-2027, providing greater certainty over key operating costs. Supported by a strong balance sheet, a diversified portfolio of high-quality assets, we are well positioned to navigate market uncertainty. We have been able to help our communities, our communities, and our communities capture growth opportunities and deliver sustainable long-term value to our unit holders. I'll conclude the presentation here. Happy to take any questions.


## Q&A Introduction & Management Panel

[00:12:45] Easy.

[00:12:47] Hold your horses. May I invite the rest of the management team onto the front? Okay, so now we have come to the most anticipated part of the briefing, the Q&A segment.

[00:13:05] Before I start, I'd like to introduce the management team. So on Choon Siang's right, we have our CFO, Wong Mei Lian. And on Choon Siang's left, we have head of investment, Jacqueline Lee. And to her left, we have head of portfolio management, Lee Yi Zhuan.

[00:13:29] Okay, a bit of housekeeping before we start. We will take questions 1% at a time. If you have more than one, and we'll ask that, you only ask two questions per round, you have further questions, we'll come back to you. And in keeping with tradition, we will have Mervin Song (Analyst, J.P. Morgan) with the first question. The floor is yours.


## Q&A - Question 1: Peak Portfolio Performance, CapitaSpring Anchor Leases & Suburban Sales Moderation

[00:13:52] Mervin from JB Morgan. Congrats to Choon Siang and excellent results. Keep outperforming expectations. Thank you very much.

[00:14:03] My first question, obviously, we have very strong results over the last few years. Is this the best we've seen? Will things start to moderate from here? Second question, any updates on other than Anselies at Capital Sky? And in terms of talent sales, so suburban seems to have slowed down a little bit in the second quarter, relative to the first quarter. Thanks. What's happening there?

[00:14:27] I'll take the easy first question and then Yi Zhuan can take the hard questions. Okay, in terms of performance to date, I think based on pure numbers, it is our best first half, I think, ever. But let's not celebrate too early. We are waiting to see, hoping that the performance continues for the rest of the year. We have highlighted, we do have some growth drivers. I think first half results have not captured. I mean, to answer your question on whether this is the peak, we don't think so because this set of results have not captured some of the growth drivers that we have embedded as part of our initiatives that we have, some of the acquisitions that we have done in the past as well. And I think I've alluded to that in the last slide as well. I mean, Paragon has not been accounted in the first half numbers.

[00:15:19] And that should be quite a strong driver, even the 1.7% accretion that we have articulated when we did acquisition. So that should bode well for the second half results. Secondly, Galileo, I think that has contributed to some of the performance in the first half, and it will continue to drive the performance for the second half because that was not fully accounted for in the numbers last year as we have fully handed over to the tenant pretty much early this year only. There was a little bit of income last year, but not that much. Thirdly, I think organically we have rental reversions are still positive that will continue to help drive the growth for the organic portfolio.

[00:16:05] Fourthly, Tampanese Mall. There was some downtime in the past few months because of AEI. A lot one as well. Those will progressively start to contribute in the second half of this year for Tampanese Mall. And I think for a lot one, we should expect the contribution from early next year. So there are still quite a few drivers that we have put in place that will continue to drive the performance of the REIT going forward. And we have not gone into interest expenses. I think Mei Lian and the team has done a very good job managing our interest rate exposure.

[00:16:38] We are now below 3% on average, and our marginal rate is still below that. If you look at our borrowing rates today, we're definitely borrowing below 2.9%. So although we are getting closer to our marginal rate, so the rate of decrease in interest expense will definitely come down. But we still expect it to inch lower going forward. Oh yeah, there's a second question.

[00:17:03] Allianz sales. For CapitaSky (79 Robinson Road), we are already in talks with some tenants, some prospective tenants. So it includes some tenants who are getting expenses based within the building. So hopefully we have some good news to share in due time.

[00:17:20] As for sales, for second quarter sales, it's true, it's a bit slow. I mean, the travel tourist arrivals have been softened. We also see consumers' sentiments have also softened a little bit, and it kind of translates into the number for second quarter. But generally, overall, it's still relatively resilient. So is this the peak or moderating? I would say that probably you will see a bit of moderation in the near term, but it should pan out well in the full years.


## Q&A - Question 2: Paragon Mall AEI & Metro Space, Portfolio Divestments

[00:17:48] Thanks, Choon Siang and Yi Zhuan. Do we have the next question? Yeah, Rachel, please go ahead.

[00:17:55] Hi, good morning, Choon Siang and Tim. Congrats on our very strong results. So my first question is on Paragon Mall, AEI. What are your thoughts about it? You have hold it for like a one plus month already, if you can give us some details. Second question is on your divestment, your thoughts on divestments of assets. Any chance on divesting your overseas assets or still very much Singapore non-core assets?

[00:18:21] Okay, so I think for Paragon, I don't think we have very much more to... I think we put up a statement earlier on the Metro when Metro announced that they will stop their large format stores in both Paragon as well as Causeway Point. I think the position remains the same, so we are reviewing what we want to do with the space as discussions are still ongoing. So I don't think we have a definite plan to announce yet. But there are a few things that we are looking at. I think we have also mentioned in the statement some low-hanging fruits like connectivity to the neighbouring buildings to improve the food fall. I think we are also looking at sprucing out some of the basic amenities. This is a case in point. Actually, there are some ongoing AEI that the previous management team has already done, which is, for example, this Paragon Club that was recently completed.

[00:19:18] But of course, I think on top of everyone's mind is what we are going to do with the Metro space. Unfortunately, I don't think we want to get into a discussion on that as discussions are still ongoing with both Metro and other potential tenants. So there will definitely be some reconfiguration of the existing space. But in what format give us some more time before we are ready to make a full announcement on the AEI plan on that space. What was the second question? Oh, divestment. I think divestment remains quite similar to what we have said before.

[00:19:57] I think we want to focus on divestment of Germany. Unfortunately, I think the environment is not so easy with the higher inflationary and interest rate environment in the Eurozone. So I think that becomes a bit more challenging. But definitely we are definitely looking at the starting up process over there. So we will see whether that leads us to anything. But it's always nothing to commend or announce until there is something to do.

[00:20:33] Do we have the next question? I think that's not sorry. Just add on. I think on the divestment, actually, we have done quite a bit of divestment in the last three or four years, although the headline has been around the acquisition of Paragon. Actually, let's not forget that actually we divested Asia Square Tower 2, which is still in the progress happening. We divested Bokeh Banjang Plaza at a very attractive premium to valuation just February this year. Last year, we divested a service apartment tied to the capital spring, which allowed us to acquire the 55% of... So a lot of things we have done that actually dovetail quite nicely with the whole acquisition story that we have been writing over the last 24 months. And then the year before that, of course, we also divested the 21 Collyer Quay. So you can see that actually we have done a very systematic portfolio reconstitution getting out of assets at a low 3% to mid 3% you and acquiring assets at a much higher you. And then all of that has together helped to drive our DPU growth in an accumulative manner over the last few years, quite significantly. Sorry, let's go on.


## Q&A - Question 3: Wheelock Place & Scotts Square Synergies, Australia Office Market Dynamics

[00:21:51] You can go ahead.

[00:21:52] Hi, Choon Siang. Congrats on the good results. Just want to check your views on Wheelock Place, putting up some of the sale of assets in Orchard Road. Is there any synergies that you see together with the portfolio and would this have also had some impact on your valuation on Orchard assets by the end of the year? And then second question is on the Australia portfolio, can you give us some updates on the office market there? What's happening there? Thanks.

[00:22:24] OK, I'll take the Wheelock Place question and then maybe Chen can take the Australia. So I think on Wheelock Place, are there any synergies? You mean if we have bought it, would there have been synergies? Because we didn't buy it, so there's no synergy between us and Hongkong Land. I think they also have another one that's up for sale also, Potentia Lila. I mean, Scott Square. Scott Square is not connected to Aion, but you know the EU that is asking you for the asset? I think it's up 2%. Although I think they have received some offers, but I think the EU will be up 2% on the asset basis. By its free hold, so I think it attracts a different set of buyers for their asset, potentially buyers that are looking more long-term hold. OK, so the question is, whether we're looking at the asset, probably not because of the EU, right? I don't think any of our investors would like us to look at something like that.

[00:23:35] Wheelock Place, yeah, I think Wheelock Place has always been there, competing with Aion in a way, or maybe competing is not the right way. Actually, there's also, I mean, it does help if Wheelock Place do well, it doesn't mean that Aion will not do well anyway. Anyway, Wheelock Place has always been there, sitting side by side, just because the ownership change doesn't necessarily change the dynamics of the two models, but it's a major redevelopment that happens. But I think we are very far from that scenario. So, yeah, not sure if I answered your question on that. There's not much more to add. I don't know what the buyer is going to do with the asset. I think on an asset basis, it won't change the dynamics of that whole area, I think, because they have coexisted side by side for a long time already. If anything, I think Aion probably adds to the value of your lot more than the other way around. Okay, I don't know, that answered your question.

[00:24:44] Yeah, maybe.

[00:24:45] As for Australia, unfortunately, there's not much to share different from the last quarter in terms of Australian market, not much has shifted actually. If we look at the CBD office market, it's generally still very centred around the core CBD, very premium assets. So those definitely have seen improvements in rents, and we are also seeing signs that incentive level for those has come off a little bit to the low 30%. But unfortunately, for the rest of the fringe CBD, you're not sitting in your midtown, you're southern. Actually, southern is actually not doing that well. Midtown is a little bit stabilising.

[00:25:23] Benefiting a little bit of flow through from the core CBD. North Sydney is still having a vacancy kind of issue, because if across not fully absorbed by this point, there's a little bit of pressure in terms of vacancy. So rents has been relatively stagnating. And so for our own portfolio, the good thing is that the team has been doing pretty well defending the occupancy of 101 Miller as far as 66G. We have also seen a little bit of improvement in 100 after occupancy wise. So we are working hard to try to stabilise the occupancy while we wait for the market to turn.


## Q&A - Question 4: Gallileo Occupancy & German Portfolio Divestment, Tanjong Pagar Tenant Movements, Financing Cost Outlook

[00:25:58] Can we have the next question from Vijay Dambiogul on to Jaren Dinh. Enjoy, welcome to you.

[00:26:10] Hi, morning, Choon Siang Dinh. Congrats on a good set of results. I have three questions. Maybe firstly on Germany, what's the cash occupancy of Galileo at this point of time, and what would it go to in the second half? Earlier there was a discussion on putting these assets on divestments, German portfolio. Has there been any updates on this? Secondly, in terms of Singapore office portfolio, I noticed there has been some last ten moments in the Tanjankbahar area, Allianz, Deloitte, etc. I mean, what's driving this? Is this purely rents, or is there some other bigger factors why this tenants moving to newer buildings in this market? Third, finance cost. I think the team has done really well. What's the guidance that should be expected to go up?

[00:26:54] It's a lot of digester. I think for the first question on Germany, divestment of Germany. I think the cash occupancy of Galileo actually is almost 100%. 97%, 98%? Maybe? Short of small amount of space, it's pretty much fully handed over to the tenants already. So that's the first part. Divestment, as I mentioned earlier, we have started the process, but more on the MAC, which is the main airport, because we have not fully handed over Galileo, and we have only just completed it.

[00:27:39] So we want to make sure that we see through the handover. So we are in no hurry. In any case, that's almost 100% occupied, and we are earning good income from that asset. So no hurry to divest. So we want to focus on, if you want to look at testing the market, we'll probably look at the airport asset first. Third question on Tan Yongpaga, I think on the tenants moving out. I think it's very circumstantial and opportunistic.

[00:28:10] I think maybe Yi Zhuan, you can elaborate on some of those. I think specifically, asking about Allianz and Deloitte. I think for Allianz' case, it's pretty much a case where firstly, some of the buildings that's new to the market, and there's a lot of starting to build out the occupancy, they can offer very competitive rents. So definitely at times, certain tenants will actually fit the account profile where they will move for rents. That's one of the considerations. At the same time, getting a better quality asset in a way. But location, probably not so sensitive. So in the last case, probably similar, where they are actually moving to something where the direction of how they want their office and the location is one of the driving factors.

[00:28:53] So then the next question is, why some of these tenants can't come in to us also when some of these bigger sites. We always have this problem where at this point, our occupancy is relatively healthy. Actually, we do have a few tenants in the market out there, located at 100,000 square feet, for example. And those are not what we can accommodate. So there's always some of these musical chairs. So right now, if you look at which office buildings now can accommodate big size, short tower and capital south central. Sometimes it's not just fully because of the asset or the location. It's really down to whether the availability of space. And so what's driving some of these movements?

[00:29:30] I think in market, everybody is aware that if you look at new supply in the next three to four years, it's actually quite limited in CBD. So now a lot of corporate real estate, they are struggling with this dilemma. On one hand, the cost of moving is very high. On the other hand, they are aware that if they need certain size, they need to make a call at this point. And some of them, so even for landlords like us, we are already talking to tenants in 2.27.28 from both trying to get tenants to join us, this one. But on the other hand, also to be defensive intention, right? So we're speaking to some of these tenants really early. So a lot of decisions, they are also kind of forced to make early because if they want to wait for another year, the space may not be available in the next year or so, especially if they are very particular about quality or location. So some of the tenants also have been coming to us to try and see whether or not they can actually secure their expansions and renewals spaces within us.

[00:30:23] And so some of these movements that we have seen, just now we started off with one of our cap sky tenants, right? Some of these movements are actually good for us because it actually allows some of the tenants within our own buildings to grow. Like Capitol Spring, I also face an issue where when a lot of tenants, when they sign at the peak of COVID or post-COVID, right? Where everybody is very cost conscious and everybody is at the work from home. They kind of under provide for the space, right? They really come, you know, and when they need expansion space now, they struggle to expand within the same building. But everybody is trying to consolidate at the same time where space requirements. So every time when we are new builds like this, where some of these pressures, we expect some of these musical chairs that will happen. And that's what we are seeing in the market now. Yeah.

[00:31:08] We're not too concerned about it because I think, like what you're trying to say, I think this is really timing, right? I think every time there's a new building like Shaw, you expect a little bit of a musical chairs. But I think Shaw is pretty much, I think 60, 70 percent feel ready. So I think the remaining spaces, they will not be able to cut rent to try to entice people because they probably need to make the underwriting work. And I think that exit rents for some of these tenants, along specifically, for example, it's quite below where the building passing rent is. So I think we are quite confident that we will be able to lease out with positive entry reversion if we need to fill up the space.

[00:31:53] In fact, I think the momentum is there. I think we are seeing quite, you have seen our office occupancy moving up as well. So the leasing momentum is there across all of our buildings. And we expect this momentum to sustain for next few quarters because I think now most of the new buildings have already been spoken for in terms of the anchor tenant. So I think the supply will continue to be tight. We do expect occupancy to continue to improve. I think there was a third question on financing costs. Maybe Mei Lian can take that.

[00:32:29] On financing costs, first half is 2.9 percent. So between first queue and second queue, it's relatively stable. But going forward for this year, in second half, we do see that we have to take up more loans for the acquisition of Paragon. And because it's happening ahead of the divestment of Asia Square, there is a fair bit of floating rate loans that we've taken. So that has the effect of lowering the cost of debt in the quarter prior to the completion of AST2. So that would have some effect of allowing the average cost of debt to inch down slightly.


## Q&A - Question 5: Retail Rental Reversions, Office Anchor Lease Expiries & Growth Pipeline to 2030

[00:33:24] Hi, I'm Choon Siang. Thanks for taking my questions. Maybe just two quick ones. I think for some reversions, I think retail is down from your usual 5 percent or higher. So what's driving that? Is it macro? Is it spending concerns on RTS? And with Paragon and your AEI accomplishes, are you expecting that to come in a bit higher? For office as well, I think next year you have some quite large anchor leases to renew. Are you expecting that to stay or go even higher? So that's my first question. I think second on pipeline development and AEI looks very fruitful from now to 2030. Are you actively looking to add on to that?

[00:34:11] So I think for rental reversion, it has softened a little bit. I think it's partly due to a few large leases. And Yi Zhuan can comment on that also. There is also a bit of the effect of the AEI because when we are going through some of the AEIs, of course, some of the renewals will not be able to be as aggressive as for a normal mall. So I think I'll let Yi Zhuan elaborate on that. And for rental reversions, maybe I'll touch on the second question first before I hand it over to him.

[00:34:49] In terms of our pipeline, as you rightly pointed out, I think we have a very strong pipeline. We already have the outcome development. We have some AEI. We have Plaza Singapura AEI potentially in Paragon. So I think ideally we want to have a consistent flow of AEI so that there's an entry and exit in terms of cash flow. That's what we are trying to do, build up a consistent portfolio of AEI, so to speak, maybe two or three, so that you can recycle them every two to three years so that cash flows can match.

[00:35:27] I think we are open. I think we still have some capacity in terms of our balance sheet, in terms of our resources, and in terms of our ability to commit because 10 billion small and not one will get completed and not this year anyway. So that you will free up some capacity in terms of both management resources as well as financial resources. And our development limit is not anywhere close to the threshold yet by virtue of the fact that we have such a large asset base. But I think all this is very opportunistic. Of course, as with all things, we look at everything with very keen financial eyes and perspective. We only want to do things that ensure a certain real return to our investors slightly less than. So we'll see what comes up. If there's anything interesting, we will definitely want to participate if it makes sense.

[00:36:26] So for the reversions, it's true that this quarter is a little bit lower. It's really quite specific to a couple of assets and leases in the downtown, right, where we are undergoing AEI. So that helps to pull down everything. The suburban is helping, on the other hand, maintain some of these. So suburban rent reversions are still relatively healthy. Overall, I think at this point in the market,

[00:36:52] retailers are under pressure in terms of their margins, manpower costs, operational costs. And we always stress that when we look at some of these rent reversions, we want to make sure that the trade mix is correct, the tenants is correct. And then when we look at the reversions, we just want to hope that it is actually something that's sustainable, that's in line with growing their business with us.

[00:37:12] But it's still within our range of mid-single digits. 4% for, I don't know, it sounds so doom and gloom is 4% to 7% is not too bad. If you look at the GDP numbers that came out yesterday, 5.9% GDP growth in second quarter forecast of 4.5% to 5.5%. I think all of this will have positive spillover effects to retail spend in general.

[00:37:35] I think if you look at retail sales, it's been up quite consistently despite what's been happening around the world in terms of geopolitical tensions. But Singapore seems to be holding out quite well, both in terms of GDP growth, retail sales, and overall economic environment. I think generally the mood is actually quite optimistic and bullish, is my sense.


## Q&A - Question 6: Bayshore Plot Bidding, Development Limit Allocation & Investment Return Hierarchy

[00:38:07] Joy from HSBC. We're still seeing you bidding for the Bayshore plot as well. So I guess from a development perspective, what percentage of a balance sheet will you be happy to spend on a development project? And also just broadly, if you think about investing for growth going forward, how would you stack core assets, development, AEI, and where you're seeing best returns at this point? Thank you.

[00:38:42] I think our regulatory limit is 10%. Fortunately, we have a very large asset base, so we are nowhere close to that. I don't think there's a target we're trying to hit. If you ask me 12 months ago, maybe the number is zero. But I think it really depends on opportunity. I think outcome was quite a unique opportunity. Bayshore really participated, but I think it's slightly different. I think our approach to the Bayshore bidding is a bit different. I mean, if you look at the price saying that we entered and all that, it's actually quite different from how we price outcome. It reflects our desire for that site as well. So just because we bid for a site doesn't mean it's a must-win site also.

[00:39:28] So then we just price accordingly based on the attributes, the attractiveness of that location. So in that sense, we do view outcome as a more attractive proposition to say Bayshore, because it's a much larger and much more, there's a bit more scarcity element in that location. So how we bid also reflects our receptor type for that location. So just because we bid doesn't mean that we are trying to grow our development pipeline. So that answers your first question. I think the second question was on...

[00:40:11] Ah, okay. So I think if you look at how we look at investment returns, naturally AEI offers the best return usually, because we have always talked about ROI for about 7%. But unfortunately, the capital deployed for AEI usually is quite small. So even if you get 7% on 100 million, it's not as meaningful as 5% on 3 billion, for example, right? And there's only so much you can do for AEI. We cannot do 5 AEI at any one time. So that to me forms the base of our core value add.

[00:40:53] Development provides a better return than say buying a core asset outright, but it comes with its own risk and timing constraints as well. So I think to us, development will never make up more than, by virtue of the fact that we are limited anyway, we're not making more than 10% anyway. So it will continue to be a very small part of our portfolio. So I would say that the bulk of our portfolio is going to come from organic, inorganic in terms of acquisitions, with a small contribution kicker coming from development. It's not going to be a key focus for us.


## Q&A - Question 7: 2027 DPU Growth Drivers, Interest Cost Tailwinds, Downside Risks & Utilities Hedging

[00:41:37] Okay, Shen please. Can we pass the mic to Shen?

[00:41:42] Hi, morning. I just wanted to ask about 2027 DPO growth, because this year we look pretty much set. But going to next year is a higher base. I'm assuming there's lower interest cost savings as well. So what are the growth drivers that you're working on? Any downside risk that we should be aware of? Thank you.

[00:42:06] Okay, so I think it won't be that different from, okay, let's... So, renter reversions continue to be positive this year, so that will drive next year's growth. Meet single digits, so you will still... I mean it's not that different from last year. I mean, in terms of renter reversions, I think those will continue to underpin the organic side of the growth, which call it, you know, low single digits. So, we're talking about 1.5 to 2% for organic. This is how I typically respond to your outlook question. You guys are used to it by now. We'll start off with organic, then we'll talk about AEI, then we'll talk about inorganic, and then we'll talk about capital cost.

[00:42:48] But what are the new things, right? Because this year is kind of spoken for. We do have AEI coming up for two. One is temponees and log1. Of course, the capital deploy is not that big. So we're talking about... We probably deploy about 50, 60 million, 7% return, you get about another 4, 5 million. That's half a percent, right? Study that's half a percent. Paragon, you have six months this year, but you get 12 months next year. So you get half the accretion that we talked about, which is 1.7% for a full year, so you get 0.85% for a half year. We're just talking about big numbers. Then we have... So this continues... It's not like we can't see the drivers. We continue to see the drivers for 2027. Actually, it's 2028 that we are planning for now. I think next year we still have some drivers.

[00:43:38] The other one, of course, is interest cost. I think there is some room to bring it down slightly. Probably not at the... I mean, last year, we ended at 3.6%, 3.4%. Now we're at 2.9%. I think we can't expect another compression of 0.5%. Next year, where will we end it? Never ask the CFO. She will never give answer.

[00:44:03] Any more room to cut rates? I think at this current junction, limited room to cut rates. Hope that interest rate will stay stable. We continue to work on improving the spreads that we are getting financing on, whether bond spread or loan spread. So that would help to some extent. But I would say not to the extent that we should be able to do that.

[00:45:05] The kind of potential growth that we are looking at, I guess, for next year. Any risk? Of course, there's always risk. Okay, I mean, we are doing an AEI for... I'm not saying risk, but there will be some downtime for some of the assets also. So not to pay in an overly bullish picture in terms of our DPU growth. We are embarking on a major AEI for Plaza, Singapore. So there will be some cash flow impact over there as well. Hopefully mitigated by some of the inflows coming in and some of the other growth drivers that we have. The biggest risk will always be interest rate to me, because that is the single biggest driver of...

[00:45:49] I think in a way that risk has already been priced in in the current environment. Since the year I'm waiting, the market has already priced in a certain elevated interest rate environment to last a bit longer. So that's... I think economically we've talked about how the economy is doing relatively well in Singapore. I think the supply situation in rural estate looks very well controlled as well, both in terms of office, CBD office as well as retail. So I think supply is in our favour. The other thing that actually we haven't touched on is some of our operating costs is managing quite well. There is generally an increase in op-backs, but I think our utilities costs next year will come down because of the way we have hatched our utilities costs next year. So we do expect fairly significant savings in the utilities costs. So that should mitigate some of the op-backs increases and overall achieve better margins for us.


## Q&A - Question 8: ION Orchard Operating Metrics & Post-AEI Rent Dynamics vs. Paragon

[00:46:56] You can have the floor. I'll pass the mic to you, Kim.

[00:47:00] Hi, Chenjia. I just have a quick question on ION. I think one or two quarters ago there was a big swing in the numbers if you include or exclude ION on the operating matrix side. Was it rent-reversions or tenant sales, right? I just want to have an update on what's the current performance, whether it's tracking in line, and also post the AEI for Paragon. Can the passing rents for these two assets be closer to each other?

[00:47:29] Okay, so I think what you're referring to when we present the numbers is the sales. But that's because we include and exclude ION because of a life-for-life comparison. Because in 2024, we did not own ION, right? So when we include ION, then it's a big jump in sales numbers on a consolidated basis. But we always strip out the effects of ION just to have a life-for-life when we compare. But that is not so relevant this year anymore because we have owned ION since November 2024. So when we compare sales numbers this year, we don't have to strip out the effects of ION. Maybe we have to do it for Paragon next year going forward. So ION as more is doing well this year, is tracking well in terms of sales to your second question. So we're not too... we're actually quite happy with the performance of ION.

[00:48:22] It continues to drive. Of course, you won't see the big delta that we see last year because... but last year was because it was an inorganic driver, right? Because in 2024, we didn't own ION. This year is more organic growth, but organic growth, yeah, ION is still quite strong. The question was whether the gap between ION and Paragon will narrow. No, I don't think just because it changed ownership, you expect the rents to be the same, to narrow. Because the tandem base is still locked in, right, for now, between ION and Paragon, and it reflects the unique characteristics of the location.

[00:49:00] After AEI.

[00:49:02] Oh, after AEI. Oh, we haven't talked about what AEI yet, so... to be hard to address that question.

[00:49:10] No, I don't think so. I mean, I think ION has a very unique location advantage that Paragon does not have, regardless of how we value Paragon. Paragon has unique characteristics that ION also doesn't have, approximately to Mount Elizabeth. We have our own medical center, and the medical center itself actually drives some of the rental growth as well, which ION doesn't have, because ION is 100% retail. So we have a... we are in a way an integrated development where the medical center traffic also helps to drive some of the performance of the mall. But underlying the performance of the entire asset is also the rental growth and the medical center, which is actually stronger than the rental reversion for retail component.

[00:49:56] But if you ask me whether Paragon will become like an ION in terms of rent for retail, I think it's not so easy, because like what we mentioned, because of the location. ION sits on top of the MRT station, which Paragon unfortunately does not have that advantage, and there is ultimately a difference because of the footfall, the natural driver footfall, which is a linkage to a lot of this transit and infrastructure.


## Q&A - Question 9 (Online Q&A): Department Store Anchor Trends, Mall-to-Office Conversion, ION Orchard Tax Transparency

[00:50:32] Perhaps we can turn our attention to the online questions. Can we have me ping-pong read out for us?

[00:50:38] So we have received a total of three questions. Two are from the Straits Times, Benjamin. His first question is that it seems that the trend of a major department store being a mall's anchor tenant is on the way with Metro leaving Paragon and Isitán closing its Tampanese Mall out last year. So what is the strategy going forward for an anchor tenant, and will you also be exploring a new concept for Paragon and or other malls to retain footfall?

[00:51:07] So that's the first question. The second question is will you be exploring converting some of the malls to office spaces, like what has been observed in other orchard road malls recently? The third question is from Mr Yap. What is the status of the ION orchard text transparency?

[00:51:30] I'll take that easy. The third question first. The answer is no update on the text transparency for ION. Will we convert some of our mall space to office, like orchard central? The answer is probably no, because our retail space is quite valuable. I think that conversation is only relevant if the retail space in question is not working out well. Because actually rent for retail is always higher than rent for office. So you will never convert to office unless the underlying rent for the retail space is actually lower than the office rent, which is actually quite a big gap. So I think generally no, because most of our retail spaces are actually quite fully occupied. Okay, the hard question, leave it to each one.

[00:52:19] On the departmental store, I think just like cinema, there's always trends in how things are going. For departmental store, it used to play a very important role in anchor, the variety of things they bring to the mall. And of course, then you drive the food for and give stability and in exchange, actually sometimes most of the time rather the rent is on the lower side of things. In the current format of stores, we have a very strong operator who have very direct access to a lot of all these brands.

[00:52:50] If you look at Tempenese Mall, when we poke out East Satan, we replace with a lot of beauty brands and luxury beauty brands, for example. So we have all these access, a lot of these brands actually we can actually reach out to them directly. And then the inherent question is what role does departmental store play? Eventually, there's something that the departmental stores themselves have to come and think through how they want to reposition. It's not to say that there's no place for departmental stores. It's just a different format.

[00:53:19] I mean, there's still some departmental stores around Singapore that's doing still okay. In fact, if you look at some of the overseas market departmental store is still a very key part of the overall shopping experience. But at least within the Singapore context, its ability to drive food for, experience everything is something that they have to keep up. If not, there's a lot of all these things that we can do at a mall level.

[00:53:40] So some of the AEI that we have actually shared recently, like Plaza Singh, we actually move a lot more into experiential dining, experiential concepts. And in some of the places where we talk to tenants, some of the new tenants, we really try to look at not just beyond selling a product itself, but what kind of experience that they're trying to sell. And then on our end, we try to curate that as holistically on a mall level basis. So this is how we kind of see things that will kind of pivot over time.


## Q&A - Question 10: Wheelock Place Rejuvenation & Luxury Frontage, MAC Occupancy & Divestment, Singapore Acquisition Pipeline

[00:54:10] I think, Richard, you can have the next question.

[00:54:13] Hi, thanks. Maybe just a few more questions. On Wheelock Place, do you see Hong Kong and it's a big competitor to you? Because they do have connections with the luxury brands as well. So are they going to revamp the mall and be a competitor to you? Second is, I think we didn't really speak about acquisitions. I mean, you have done big acquisitions last year, this year.

[00:54:41] Are we going to see another big one next year, sponsor or third party, still Singapore? And last one, I think MAC occupancy dropped to 75%. Could you give us some color? And dropping to 75% occupancy, can you still sell MAC?

[00:54:59] Do we see Hongkong Land as a competitor? I think we can coexist. Like I said, Wheelock has always been there as a competitor to Aion, whether you call it competitor or, you know, I don't think it makes a difference if the ownership changes unless they somehow revamp the mall. But I mean, they haven't said what they're going to do with the asset, so we don't know also. If they keep it as it is, I don't think it makes a difference.

[00:55:30] Is it easy to revamp the mall? Not so easy also, I think, because Wheelock doesn't have the frontage, the alternative frontage, if you look at it. They only have a small sliver of frontage to the alternative, which were quite challenging to attract luxury brands because they all want the alternative frontage. So we don't know. To be honest, we'll have to see how. But you know, malls in Australia, just because another mall next to you do well doesn't mean you do worse, actually.

[00:56:03] There's a little bit of complementarity to, you actually add to the vibrancy when your adjacent mall does well also. I mean, if you look at, you know, Wisma, Takah, and Aion as a collective belt, actually, everyone doing well benefits the others because it just brings traffic to the whole world. So today I think we are talking about, you know, the whole Orchard Road competing against Marina Bay, competing against, you know, Sun-Texity, Vivo City. So I think it's actually good that we have some rejuvenation of Orchard Road.

[00:56:40] If Hong Kong Line is able to attract a new footfall to Wheelock, I think that's actually good for the area overall. So I don't see that as necessarily a bad thing. Every time there's a rejuvenation of an old asset on Orchard Road. In fact, we will come with whether it's Hong Kong Line or somebody else. I think the better, more refurbished assets are, whether they're new concept, I think it's better for all of us.

[00:57:07] Next is... Oh, Mac. Yeah, Mac occupancy. I think we can still, I mean, it doesn't preclude us from looking at it. It's all a matter of pricing, right? The question is whether we are able to get the pricing that we get.

[00:57:28] So we don't know, but it's... I mean, the market has been challenging for a while. So question is, is there a right time to... and will it ever get to 100%? We don't know. So I think there is no harm testing the market to see what kind of offers we can get. End of the day, it's not a big asset. So then we have to make an assessment depending on what are the kind of pricing that we see in the market.

[00:58:06] Acquisitions. I also want to know. Acquisitions, as you know, we typically can't really comment that much unless there's something tangible. But I think I will rather answer it by giving parameters. I think if there's any acquisition, it's most likely going to be in Singapore. I don't think we are looking at any acquisitions in Frankfurt. So we do recognise that investors are invested in CICT because of exposure to Singapore. So we want to continue to remain a mix of Singapore, a dominant part of our portfolio.

[00:58:50] So the question is, what other assets can you buy? Actually, there are quite a few things in the market. Both offices have been quite active. I think most of you are aware there are quite a few assets in the market in terms of offices. Of course, we will take a look if it makes sense. With the interest in Singapore assets, the pricing seems to be getting a bit more and more challenging. People seem to be prepared to pay higher prices for some of these assets, which bodes well for existing assets in terms of, I mean, given that we're the largest landlord,

[00:59:29] I think any increase in asset value generally is overall good for our portfolio. But it also makes it harder for us to acquire because the numbers are harder to make it work. So we don't know. We will review the opportunities that are in the market. To the extent that makes sense. But like I said, you also already pointed out we have done quite a few large acquisitions. I think that I'll digest a little bit.


## Q&A - Question 11: CQ @ Clarke Quay Day-to-Night Proposition, Repurposing Large Retail Spaces at Plaza Singapura

[00:59:59] Any other questions? Sorry, I'm moving. He beat you to it.

[01:00:11] Hi, I'm Jovi (Analyst, UBS Singapore). Thanks. Just two questions here. It's been some year since CQ @ Clarke Quay has reopened. Some would say that the final piece is complete now that Zouk has reopened and refurbished.

[01:00:22] How is the property performing compared to your other assets downtown? Both in numbers and also has the day-to-night proposition played out, especially the night part at Clarke Quay. And based on the team's prior experience in repurposing space and other malls with AEI,

[01:00:36] what is your plan to refresh the large spaces left behind by tenants? So looking at Plaza Singapura, for example, we've seen other mall owners use very creative ways to replace the street.


## Closing Remarks & Webcast Cut-off

[01:00:45] *(Note: The live webcast automated speech-to-text recording concludes at [01:00:45] during Question 11. All spoken cues from the raw recording have been faithfully audited and compiled into this verbatim record.)*