FY 2022 Full-Year Financial Results Briefing

A very good morning to you in a big picture and to those joining us online. I'm Allison from a CIT Investor Relations team. A very welcome. CIT Relates its full year to an interview to results this morning and we have the management team here with us to share the highlights of CIT's results. I'll introduce them later. For today's briefing, we'll start off with a presentation by our CEO, Mr. Tony Tan, followed by a question and answer session. Please note that this session is live, recorded and we'll be uploaded later on our website. Now, I'd like to invite Tony to start his presentation. Thank you, Tony. Good morning. Just commented.

There is a big place for a small crowd. So we really saw this morning. I hope you have a little bit of hand to digest. I'll just click around to start the key highlights and then, of course, our management teams are here to take some questions. Okay. Move this. Is it moving? So some, just a few key highlights which can be elaborated in the following slides. A few things I think will work out quite well in 2022. We have seen some nice, improvement in operating metrics. Commuter occupancy, for example, has been going up over the year, over the quarter as well.

And we have achieved a rental reversion post-divove for the retail and office, as well as a tendency that's now already surpassed 2019. That includes downtown and so open. So I think we're quite pleased with the overall general transfer we've seen in 2022, which is quite in line with what we talked about when we met in different locations. On a sequential basis, we think trying to, towards the end of the year, which you see nice uplift, given there were a few momentum that has already triggered as a result more relaxation from the COVID measures. Shopo traffic has been rising as well over the years and of course, but towards the end of the year we've seen the year in a way, leading to the fast-

period we've seen quite nicely uplift as well. Throughout the year, I've been very, very careful about how we look at costs, very active, managing the costs. Everyone knows that in addition is hitting us. In front, interest rates have been going up, utility views has been going up as well. So we have been very proactive in trying to manage all these different things that are mixed, that's been hitting our expense line. I think we have achieved a reasonable output, given that there are given there'll be a guidance on how the utility rate vis-a-vis 2021 has moved almost 90%. And Ralph, estimate on how that work impact on the DPO front, but I think we came up better than that. We also secured quite a fair bit of financing from the market in total $2.7 billion.

They will secure in 2022. And we have had our energy rate throughout the cost of the year. And we need to increase protected. Our bid is a higher rate to improve the influence protect as well. Given that we know that the volatility on the energy price is going to be still no standing all, the geopolitical and all issue that we see in order. I think energy price will continue to stay a little bit for quite a while. Capital management is going to be active this year. Hopefully we are able to manage our balance sheet more effectively as well. We have done some proactive and frequency management balance sheet, it's in the current game a little bit, about 40.4% at the end of the year.

I'm looking forward to having quite a hot place here that China is opening up. At the end of the year, they talk about coming in February, they're going to release more or less the flat date to the rest of the world. That's the little be helpful for the retail business, especially in the downtown business. So we hope to see that trajectory coming into the industry. Also improving on the hospitality site. We have a couple of hospitality related assets in our portfolio. The hotel in Raphosity live for non-in-risk, beautiful, non-in. We've seen very healthy kind of a rough part on occupancy. So that's trending up really well. So from a number of perspective, for you, we achieve a almost, let's say,

1.73% improvement on DPU. That's the... I know it's below market consensus, but I think we have done the little things, hopefully going forward, we've seen some improvement from there. Very mind that we also have certain, hopefully, potential measure that will help improve the operating numbers we are going to do in the industry. On the revenue side, the solution distribution in campsite is up by 4.1% to $72 million. I'll talk a little bit more later on. So overall portfolio occupancy has creeped up to 95.8% from the quarter we reported 95.1,

so it's going up as well. We also came slightly from 3.8 years to 3.7. From a retail perspective, I earlier mentioned the number trending well, quite well. The quarter we crossed the quarter as in the year to day September. The retail sale was 21.3% today. We are looking at a full year, 22.5 is improvement as well. So again, now, how more lead the sub-boy more in the recovery? But surely because downtown has been getting wider, a bigger hit during the trial, the COVID period. And then you see the rebound very robust. And all the various measures, like the relaxation of the

mass mandate, I think it's a quick critical turning point. A lot of people start to flow back to the office and we've seen very healthy returning rate to the office. So downtown more is seen a little bit of relief, a little bit of tourist trickling in as well, so it's a little bit of relief from the tourist crowd as well. And as usual, we remain very resilient. People are still working for either three days, two days from home or for one, depends on which company you look at. But overall, I think it's been really resilient. Um, full year overall traffic is going on, like I mentioned earlier, and I slept by downtown. Overall, right now, we have a little bit of a discussion earlier, I think it's all positive now both the office and retail. And this in fact, I think whether you measure it from average average perspective or incoming

outgoing perspective, I think the retail retail return, the return has gone positive as well. Um, valuation overall, if you look at, um, overall for the whole 12 months, it's gone up by a close to nine, nine percent. Uh, we've a little bit of portfolio that just made we did in the year. We, uh, we divested, uh, one job street, towards the end of 10 to 21. Um, and then we had a divestment of JQ, we acquired, tap the sky, we acquired and completed the three Australian assets. So there's a bit of movement. But overall, I think the valuation has gone up by about 9%. Uh, in terms of geographical split, uh, slight movement on it, I think Singapore portfolio

shares gone up about just 1% 93%, with 3% in Germany and 4% Australia. Uh, this one had no intention to match that in itself. I spent the three. So, um, second half of year, I think revenue has gone up, um, quite nicely for the 1.4% and NPI 13.1%. Um, margin right. I think we help, uh, steady. You know, we have trying to guide the market a little bit, try to move it, uh, given all the different inflation numbers that we spent coming in, uh, we were hoping that we were able to achieve more than 70% margin. I think we achieved a reasonable margins or closer 72 72 plus percent overall.

Yeah. Uh, that's for the full year. Okay. I think for the first time we crossed our NPI by 1 billion, um, that's a big milestone. Of course, the 1 billion is just a digit, but certainly is a major milestone for, for CICD here. Um, we continue to be probably one of the most diversified, um, um, reached with in terms of different revenue streams, as you can see out layout here. Um, Singapore by far still the largest. And of course, uh, we have some minor contribution from Australia and Germany as well. So we continue to build on that. Hopefully we get a, um, even a wider diversification.

Um, Singapore was still going to be very popular and dominant. Uh, and I mentioned before we hope that over the time we were able to scale me in the sound of two market that we already in. Balance sheets, uh, healthy. Um, NAV closed about two 12, uh, including the dividend, two point, oh six, uh, excluding the dividend. Funding wise, I think we can, let's show that it's all covered 1.1, six, 1.1, six, six billion. Um, more than covered. We had that order funding in place, uh, is about timing, drawing down, closing the, uh, documentation. And of course, uh, at the right moment, we do the, uh, interest, rehash. And we're also done a little bit of sensitivity on, um, the interest rate movement.

And earlier I was just discussing with all you out there. Uh, overall, I think we are quite happy because, uh, I think we had a rehash rate. And as a result, I think you see less volatility in terms of, uh, the impact from interest rate increased. On the balance sheet wise, we close, uh, you'll with some improvement in the, uh, matrices, uh, gearing as came down to 40.4, a bit more proactive. Make sure we don't have either cash sitting around, uh, total borrowing, uh, came down a little bit, which, which environment, um, fixed rate has gone up slightly from, uh, September, 81%. Um, and then interest card, I'm working down slightly from 3.9, 3.7, a reflection of the higher interest costs that we are paying now.

Right. So average cost of that, uh, creep out by about 0.2 to from 2.5 to 2.7. Okay. Um, I think, I want to run through too much detail. Uh, I can say that portfolio, we mean, uh, occupancy remained pretty stable. And it's creeping up as well. Uh, the way always slight movement, um, nothing to shout about. And, uh, this again, uh, the, the, the, the mentees is about diversification. I think the top 20 now contributed less than 20% of our overall, uh, contribution income wise. Okay. I will touch this. Um, this one I mentioned before. And, uh, yeah, or I think overall we still see the nice improvement in overall,

or retail occupancy. Uh, right. Uh, electricity, I mean, because we have completed the AI, we took the entire space back into, uh, the market, um, enhanced about 91%. Uh, not all the space in the AI has been fully led. You know, it's about 70% percent. Then later on, I don't show whether you'll be participating in the, uh, the work at Raphicity, uh, post-langer in post-langer. Yeah. So we have a can have a look at what we have done over there. Yeah. Um, overall, in reverse, I mentioned earlier, I think we have achieved, uh, post-diveration even for that time. Oh, you know, and that's a, that's a positive development. Um, and in the fourth quarter, in the fourth quarter is, uh, gone post-diver for both downtown and, uh, in, in, in either incoming or average average.

Yeah. Um, I won't talk about this too much. I think this one I mentioned before, and, uh, downtown continued to lead the, the uplift, uplift in the, in the, in terms of the sales being proven. Yeah. And we, we, we surpassed the 19 sales overall, uh, both downtown and it's open. Uh, I won't say about this too much. Um, office wise occupancy is, uh, improved, 94.4. Um, so in Singapore context, in 96.2, average ran about the same as what we reported in September. Uh, reverse, um, we mean healthy, some, some, some, some, some, some compared to the quarters of our 7.9%,

retention rate, meaning very healthy, 81%. And this is a, just a breakdown. Okay. We've seen some creep up in occupancy at Australia size, well, we hope to be on the momentum. And, uh, as the, uh, return to office, hopefully we'll pick up, uh, in the, throughout the course of this year. Okay, I won't break this. All right. Um, so all these little bit more things for you to digest at a free time. I wouldn't doubt too much. Okay. Uh, in terms of, um, naturally, I think there's a, uh, little bit of, uh, that crowd out there. Everyone knows about it. Um, there's no surprise. There's been news about, uh, various, uh, job attrition, you know, tech company, particularly, uh, some of the, uh, tech that's Singapore.

We've not seen a very, very spread, uh, impact in Singapore yet, but naturally because the environment is in the mood of rationalization. I, we tend to quite, uh, in life with what the Saudi consultants are saying, I think going to the industry will see probably a little bit of slowdown in the momentum of rental growth. But nevertheless, the other positive, uh, factor, uh, underpinnancing across office market, uh, demand, um, beyond the trade sector that in, you've been, uh, I will say quite, quite decent. FMCG, uh, we have, um, legal business, business support services are still spending the legal factor in the theory. I think I was also looking at suspension. Um, some interesting things like the, uh, which Singapore is anchor strongly in this part of the world. Uh, and speaking of champion on ESG as sustainability, I mean,

still are completely starting to move into Singapore as a base. Um, so we have seen some nice traction. Hopefully that will just mean to some real, um, um, uh, demand for space. Yeah. I think retail wise, um, trajectory wise, hopefully you first quarter, no riding into the festive river. We'll see nice, uh, uh, uh, improvement. And as the flat day I mentioned in China, I don't know how many were flat in this thing or more. Um, certainly there will be more, uh, more, uh, tourist coming in and hopefully, that will continue to get that push momentum. Uh, so I'll put more exercise before we remain pretty resilient. Yeah. So overall, a little bit about crowd, something to match on, uh, what we have been actively doing

into 2021, um, cost management is important and interest rate cost management is very important. We're continuing to do that. Yeah. Oh, this is why I mentioned. Um, so we are looking also to hopefully complete our AI in crack. T this year. Uh, we are already planning ahead. No, uh, what next, uh, there are a couple of projects we are studying and, uh, at a time limit moment, we will just, uh, let you guys know. Right. Okay. I think I'll stop here and. Our colleagues again, join me. Yeah. Very fast. I'd like to invite the rest of the management team out on the stage for the Q&A.

Before we start, I'd like to introduce the management team. To Tony's right, we have Miss own million our chief financial officer. To Tony's left, we have Miss Chachnily hit of investment. And to her left, we have Mr. Lee Ejon hit of follow management. Some housekeeping rules before we start for the physical audience. If you have any questions, please waste your hand. When the mic comes to you, please stand up. Say your name where your phone before you ask your question. We'll be limiting two questions per person per round. If more questions, we'll come back to you. I don't know your question. I don't know if I need to remember. Yeah, for those online, uh, if you have any questions, please drop them in the chat box.

Okay. If I already would like to invite the first question from the floor, please. I've been yeah, I've been. I don't need a team that I can grasp on the good set of results. And have a new year. Thank you. Maybe the first question from me is retail rental reversions. I think 1.2% average average for four years. Any sense on what was the number in four quarter? And I look from here. You're having difficulty pushing through the high electricity costs of its charges. Second question I have is regards to the distributed little income adjustments. There's a negative day six million of. Well, all over. Adjustments, I think related to some tax issues, we can explain exactly what's happening there.

Thanks. Okay. Put very sharp. Okay. To fourth quarter overall, we achieve a close to 4% average version that's combining the solar burn and down top. There. Yeah. What is enough? Not like I think we're talking to you down there. I think this year going forward, not just the expense line. Of course, we try to manage the revenue line as well. But we also very calling some not the fact that the inflation is hitting the retail. Retail are quite. Quite a bit little. So I'll move up the CPI. I mean, basically retail sales price. I'm sure you guys should feel the heat. But not all them are able to do food, get soft the cost.

So we have a very cognizant. But if more important is to be able to drive their sales. So we still think that the sales component of the rent will be very important. And that's where I think we put a lot effort into it. So be a little bit more, let's say, accommodating from a fixed rent perspective, but we try to drive the turnover. And where are the year? Pretty certain that the overall, I think GTO rents about 7 plus percent, which is not slightly on the high side. Second question, a bit more than I have passed to maybe. Is there a bit more talking about the distribution I just made? Yeah, I think this disclosure was made earlier in the first half results. It's non-cash in nature.

So this relates to the COVID-19 cash grants that was received in 2019. And it was actually distributed as a tax exam income. And subsequently we had the IRS came back to us to sort of confirm the position that it should be should not be a tax exam income. It should be under the tax outcome income. So there was a role of adjustment to adjust for the over-distribution of taxable income in 2019. Non-cash in nature has no impact on GTO. So be a library classification.

Yeah, is it a classification? Yeah, David from Taiwan. Good morning. Tony, you mentioned that last year you were very proactive and prudent in the management of your balance sheet. But as a consequence, did it limit your ability to make opportunities to acquisitions? Because you gave a few major deals a miss in the second half of last year. So can you just remind us what is your stance on potential opportunistic acquisitions last year? And then looking ahead to this year. Are the fact that you're gearing is still 40% will that still limit the size of investment you can

make? Yeah, sure. Thanks. So I think we look at holistically rep, portfolio reconstitution. What we want to do overall portfolio. We look at market condition. We look at our portion out there. So it's a triangulation or all of this with factor in any kind of deal assessment. So it's no different. It doesn't do it to enter into a tree. So we continue to be able to see whether we can find you our portfolio construct. Market condition is allowable. Obviously, we would like to participate hopefully can have some kind of critical acquisition. So it's in triangulation of everything. So I don't think the F data entry will be any different from where we look at it and we need to

to. Yeah. The entry into a very variable hotel, especially in the third quarter of the window. The market condition is not exactly there. Hopefully to any tree market condition is a bit more favorable. Brendan, from city. Just one question. I think you've passed through quarters. You mentioned that some facility studies, and the midst of some of these redevelopment opportunities. Can you share anything on that or progress? What kind of things are you looking at properties or is it AI? Is it going to be a big major development? Yeah. So cut the cross different scale. AI ongoing, we just have to prioritize timing wise. Redevelopment certainly we're a little bit more effort into studying that.

Both downtown and open both return office offsets under study. At this moment, we can't say more because the different aspect of the redevelopment that we need to consider causes one obviously. The other one, the other fact is a host scheme, whether the scheme makes sense in that in a location. And ultimately, there's a lot more time it will be required to negotiate. There's a negotiation time that you require to go through with the authorities. So take some time. I think I mentioned before, even if we, I think last year, I mentioned a couple of times that even if we said this is what we're on the June, you won't transpire in two or three years.

It's the same time for things to work through. Especially it's a life more. It doesn't just show a life more than you need to plan ahead. I was listening to something we were looking at. Okay, thanks. I'm just going back to the DAI part, right? I don't see a lot of outstanding AI actually. So it's in a chance that any reason why it didn't give back, some of the distributions from CRCT as well as central. Or the two retoading. Yeah, I mean, I know traditionally you have always without this. I think it's always been very helpful. We have the cash flow stream coming from these two reads to help supplement the K-Pax cost requirement.

So I think we still maintain the stand. I don't think we need to deep into that. We have enough. I think we're at sufficient things we can work on. Yeah. It's coming to attention. Hi, morning. My first question is on Gallileo. Can you give us a update on that? So during the quarter, I'm not sure what I meant. I mean, I was certain it was of some people I met. I think we are still working on what I just came not ready to mention. I think it. So this year we still have income by January 2024.

Officially, the lease will expire. Between now and then, we are looking at different potential kind of configuration. If you're to do a major uplift. So I think we're still working to detail concurrently. I think there are prospects we are speaking to and hopefully that we'll try to buy into something more concrete. Yeah. At the moment, nothing more to see there. Yeah. Thank you. And my second question is on acquisitions. I think earlier you mentioned diversification. Does that mean looking more overseas acquisition? And also what I thought on sponsor assets like I on. We I mean, I need to clarify. The one one of the major reason.

Why we look at overseas diversification. Besides everything we have growth, facing a portfolio we need to write on. Earlier I'm going to ask the questions. A year and we development. All this will have a drag on income. And if you're going to just depend on the one source of opportunity, I think you're just limiting your options. So for us in a long run, I think it's good to have the optionality. In place in a market. Hopefully over time we can scale so that no you'll get the economy of skills impact. And the moment the two market we are in there, we are not there yet. Yeah. So Singapore has opportunity. We've obviously explored some different obvious flows.

We didn't proceed. We're not doing to entry. Yeah, next can we have Kula before we turn to the questions online? I think so. Thanks. Congratulations. I'm 20 for the results. I'm going to just, but I can only ask two questions, right? Okay. So the first one is will you be writing down Gallileo any further? That's the first question. And the second one is you're not roughly city convention and hotel is comprised of around 6% of the EUM. Can you remind us what the least structure is like? Is there some any upside from revenue if the hotels fill up etc? Yeah. Okay. For mention. So we certainly hope the this time right now would have some more of the impact that Germany is facing.

No, the inflation is one big one. Of course the war is a risk. We made a strong number. So all of the hopefully that reflects the risk has been price, growth, and evaluation. Ultimately, it depends on how we execute the plan. To date, the valuation thing, the consideration, the cash flow expected from potential K-Pax that may be required. The downtime as a result, no income stream and hence on the discount basis and elevated and elevated discount pricing in the risk premiere. So they are all contributing to a from a DCF perspective, a low valuation. Hopefully that has been fully captured.

Yeah. Whether there will there will be further like that, I can tell, it all depends on how we execute the asset. I know how's the war in Ukraine is still ongoing. Yes. Yeah. Even though recent, recent mines begin to see less pessimism, less pessimistic numbers coming up from the Eurozone and especially Germany. It's been seen a little bit of a surprise upside in economic activities. So maybe people got used to it. Maybe they got over the deep winter where the fear on the energy rationing will have a major track on the economy. That's not a better space. Yeah.

The anticipated. Yeah. I think Gola has the next question on the AC hotel infrastructure. So our sea structure, if we recall in 2020 when in the darkest moment, we had the little bit of the investment on the infrastructure. We actually, in short, we really bring down no different from what we've done for some of the retail, the most affected retail tenants bring down the fixed cost, fixed rent, and then bump up the turnover. And we adjusted the duration of the lease because the hotels that we doesn't need for them to have longer lease period to make up for the time.

So that's been factor in. In the course of the last few years, things have revert back. And the fixed rate on that a little bit, a very very came down. Over on the net basis, I think we are probably done to writing because we have seen quite nice uplift in the sales, the room rate, and then the FMB has been doing very very well in the hotel. So in fact, we need to only treat our sea as is one of the people still in our performance. Yeah. So I think we are quite pretty city outcome. I'll come to you, Yu Kang and Derek Rachel. Turning to the questions online where you want talent sales from Terrence UBS and Jorall DBS. So the question is, well, Q, 2020, to tenants sales, how does it compare to 2019 levels

in terms of overall downtown and suburban? And also, how much of these key in November and December? Is it due to GSC fund loading? Do we compute tenants use net of checks and expectation on tenants use in DCR? Okay, a lot. Luckily, I got the bio work. So, Foff Q on its own versus 2019. Yeah, that's perfect. 2019 number, I don't know. But versus overall for the Foff, for the Foff quarter, there is a whole day in June of 2019 downtown improvement by about 4.4% and then it's about 7.5%.

Overall, it's fully about 7.2%. I don't have the Foff Q number. Maybe our teams will check later later. Tennis is guidance for DCR. I hope I had... I also hope that we had that crystal ball gazing. Earlier, earlier, there's some positive momentum. Positive attributes that we can carry through into inventory. Overall, looks like inflation numbers been tapering down. So hopefully, that will try to respond to a less than expected adverse impact on consumer sentiment. Because ultimately, it's an inflation that they are concerned about. Hopefully, economy will rise through well.

No, MTS is not in the economic growth this year. They're seeing some hate line, job of tuition, but overall, the unemployment number is below Singapore. It's still very tight. Which suddenly is going up? Whether it's enough of a carbon inflation to the extent where you're affected consumption and any one's guess. First quarter, we think we have a little bit more visibility. Hopefully, no giant fabric or things would be okay. We must do it in a bonus period. So there'll be a real discussion and spending in a host of the usual necessary spending will be today. And in the third period, we do go around the property a lot and we speak to 10. While we see some media reports that...

In fact, even today, some media report that the chicken people are selling less in a wet market. But we're also around some of the retailers and surprisingly, they're saying that this year Chinese users sales pick faster than last year. And overall, the number has been very robust, strong in 2019. But we'll see the number how they're transpired. But from FMB perspective, I'm sure you guys on the ground, you know. It's always full. Even leading up to Chinese people, of course now it's really full. But leading up to Chinese viewers has been very, very, very, very, very. Yeah. We have a next question from Suitai from Mercury. EPU lacks behind revenue and NPI growth.

What is due to interest cost being higher than expected? Can you guys on the growing cost trend in this year? Suitai. I think borrowing costs are definitely one factor that is below NPI line. So that would be affecting the PU growth. The other element is that in late 2021, we also did a small placement. So there is a large number of units. So that also is one of the factors as well. So these are the two key factors. All of the costs trend. I think we all know that we are in a rising interest rate environment.

And going to 20, 23, I think there's an on the fact there seems to be some signs of cooling. But having said that, I think rates have been have stayed quite high. So we will be watching carefully over the next few months for, you know, the indication of the rate interest rates will be, and we'll be accordingly for the, that the true rate is that we have in the next six months on the timing of hedging these fixed rates. I can also add to what millions say, if you look at 22, we did some work right in the number of, for low-move fund right. So earlier I mentioned with subject Q in March, we, we did some placement in December,

2021 in anticipation of the tree Austria set, which was completely in April and June. So there's a little bit of time in difference. So we have a naturally a couple of months of a GPU impact. Then we saw Skye, we acquired, sorry, we saw JQ and we got Skye. So again, it's a bit of time in difference. So that's one element. The other element, if you do recall that when we acquired the US, we also had a bit of guaranteed coverage, we have not tagged. So we keep it in our GPS, an option that we can look at in the future. Then the other element would be sound AI downtime that was not on the performable,

for my basis, you don't build that in. So downtime from AI as well. Yeah. So going to an entry, you'll see hopefully the, the downtime effect from electricity, no, the entry of the lesser, where some remaining space in the AI space to the cell and clap keyword, go to a little bit of a period, a quiet period, especially for self second half or three or catch up. So the rent and monetization effect was slowly taper off into any tree. No, so the bigger least that we signed in 2021, 22 for our commitment, no, when least comments, you recognize that the revenue, but the cash underline cash flow has to amortize over the period of time.

So that would table down into any tree and you'll see more cash impact coming in. So let's give a little bit of hint where the potential trigger of the number will come. Okay, coming back to the physical audience, maybe we can go to Derek first. Hi, Tony and team. Just want to follow up on the interest rate question of what was the all in interest rate and some of your peers have mentioned the expectancy, 40, 50 people increase in the all in across the year. Would that be, you know, a fair statement to say as you, you know, we finance into higher rates? We both queue interest rates at about 3%.

Yeah. So going into the new year, we are looking at higher average cost. Um, 40 to 50 Bp, maybe, maybe possible, depending on where interest rates levels would be. All depends on your, uh, your hedging, um, strategy rate. If you take a new trip position, 50, 50, you say you're not very sure how they would go. It could be a 50 50 or first then your average hatch will come down. Right. But we can live with that, but you mean we, we unhatch everything. But you, those, uh, the, the refinancing is required in the industry. Our hedge ratio comes out closer to 70%, 70%, which is okay. Right. That's the extreme, but obviously, you have 100%, they will remain at 81%.

So all depends on your hedge ratio. Uh, but on the neutral level, I think my average is about closer to three, three, uh, high trees. Yeah. The expectations for high trees, I think so based on today, why we see, you know, but of course, things will change in the month ahead. Yeah. Then just wondering on, um, acquisition opportunities, um, given the comparison declines for, for Gallileo to similarly see, um, opportunities to buy at, uh, very dishedress levels and you know, which markets do you see that happening in genuine data? I think, uh, yeah, we have seen you moving up in some of the markets, but I think we are still watching because, uh, they haven't moved up as much as, uh, interest rate increases,

but we are watching to see when that will stabilize, but we are going to see some use more that in some markets. Which ones? Um, so you're up Australia. For example, yeah. Yeah. Just a caveat now, when we acquired a tree of Australia set, we actually went out there or implied, you have a five over seven. So we have sort of, uh, no based on the negotiated, uh, income guarantee that we can, uh, imply use about five, five points. Five points. Five points. Five points. So we're seeing the market, no, uh, potentially clipping up on the office space. The U. Yeah. It's chemical tool you can. Hi, Tony.

Can we talk about Australia? Like, what's the long term plan? Do we expect, can we expect you to do retail in Australia? Over the long term? The second reason on the next acquisition. Um, I mean, do you think that the pricing is fair? Can it give some, maybe some views on that? Is it a structure that you don't like? Um, would you prefer to have full control of asset when it comes to acquisition? Especially if it's a non related party. Um, okay. Three questions right? So Australia retail, I don't think we'll do it all right. I don't think we'll do it well. If you look at some, uh, again, this is what I'd like to have, you know, it's still about diversification. Right. Um, we, we so far we have, uh, office assets and some small retail in one of the, uh, JV.

Uh, so that's not full retail. It's, it needs a small retail. Not so much expensive, even though it's a CBD retail, um, a bit more challenging than why we would look at some open retail. But overall, um, management intensity, uh, attention span on retail is a lot higher. That's a given. So questions whether we are capacity to take care of. So eventually, um, I think we need to have in country level, so a bit more diversification, eventually currently is mostly office. Yeah. And not every mark. I think, okay, so you thought about Australia. Uh, the Australia retail market and retail related. Real estate has gone to the adjustment a lot earlier than, uh, what you're seeing now as a result

of interest rate impact affecting the expectation of the cap rate line. But retail has been since I can recall it's 20 or 18 or 17 has been going to the adjustment because e-commerce people worry about Amazon going in. So it's already a lot of re-prising and historically, we tell us that very chunky owned by a lot of superannuation. They also want to light the low light. So that's been a bit of portfolio constitution. I'm going to make it on the, that's why I see the adjustment multi years. So it has come to a point where I think that adjustments felt like has come, uh, less than no. Uh, and then the new trend as our result is out COVID working from home. It's not just prevalent. It's pretty, very many market, right?

Um, and so when retail has been pretty resilient, it's since all the peers reporting the results. Not bad community kill doing quite okay. So there'll be it's a reflection on a cycle. No real estate cycle that will come and go. Uh, but eventually, uh, I'll take it in some country, those countries are Singapore. First, we must have the scale. Second, we must have the resource to be able to manage and retail asset is highly, highly management intensive. So we must have that knowledge there and the moment we are not there yet. Yeah. Um, next, next move. Oh, you want to see anything about where you see or where it turns out?

I think there are some reported transaction out there, uh, which, or not Australia as well, no, no, it doesn't seem a possible. So there are some reported transaction out there. I like earlier mentioned, uh, we, we look at it holistically, right? It's. As a manager, you manage your portfolio design. What the re represent, you manage the source of capital. And then you look at how you want to redeploy a capital. So again, inspector triangulation. And now also when a market, uh, market, uh, conducive enough, there will be recently, recently, equity from there. It's simple as that. Yeah. Thank you, Tony.

Next came with a very chill. Hi. Hello. Hi, Tony. Happy Chinese, you hear. Two team. Just a few questions from me. I think, uh, firstly, is on, uh, office, Singapore office. Do you feel that, uh, there's a shadow space creeping up, uh, in your portfolio and also in your market? Uh, yeah. And secondly, my question is, uh, on, uh, how do you see, uh, looking at your portfolio? I think, uh, it's, it's, uh, everything seems quite stable. So, uh, once your thoughts, uh, where do you feel you could, you would prefer to add,

like retail, downtown or suburban or the office and, uh, divestments, uh, you know, I test your opportunities for you to, uh, I best, is a retail or a senior portfolio. Thanks. I should also say so. I'm trying your job. So, Michael Ling. Hi. Happy new year to you. Uh, so for those space, I think, uh, in general, maybe in the market, you think a little bit of creeping up in the coming quarters. I think it's quite known that the tech space, right? Uh, we will see some of these things, uh, coming up. I think roughly now some of the statistics is around 600 plus 1000. And so, sorry, you go up, but not withstanding that. I think, uh, CBD office, I generally still quite tight.

So even this, I think it's not something out of expected. I don't think it's a big challenge or problem at this point in time. Thank you. Um, your question regarding, um, whether doubt, hours are over retail. Uh, is there ongoing iteration that we're looking at through? And when we are quite balanced, uh, 50, 50, you know, uh, somehow, I don't think it's by design, but it's just a panel that we're about 50% out of 50%, uh, so open. Um, if you try, we watch out carefully. Um, about the world from home where some impact on how the consumer travel and the A-brane, uh, the real winning or border, so the new world will be our dynamics.

Um, the increased connectivity between Singapore and A-brane country is something you want to watch carefully as well. So they are completely implication. Right. Um, and your implication on more the out movement of local rather than the original. So I think we're watching all these different dynamics quite carefully. Yeah. Um, so I can only say that, uh, at the moment, we're in a nice, so it's quite, quite balanced. Whether we should swing high-waited, the downtown is open. Uh, there are a few configurations that we're thinking to. And also depends on the opportunity out there. And earlier, Brandon asked about where the, uh, uh, uh, uh, AI potential or a video development potential. I mentioned it's going to be downtown off, uh, the downtown's open. Can be office and also can be, uh, retired that we are studying now.

Okay. Next, can we have a severe? Uh, good. Good morning, Tony. Thanks for the presentation. Uh, can you have us understand, um, for your integrated developments, um, those with office and retail component? Uh, how we learn a day on the office, uh, crowd or shop or traffic versus the toy, it's my first question. Uh, the same question is on your office, the CX tivity. I think of quarter seems to be, uh, uh, uh, uh, number of new visas, uh, number of committed visas about hundred, eight thousand square feet. Um, is this a seasonal thing? I don't do you think this is a sign that, you know, the market has been, uh, including often terms of the recent demand for office. So your question on the impact on how, uh, integrated,

I would say at the moment, uh, it's still more written, written off the impact. Let's go from the inbound travel. It's not very, uh, of course, yes, it got not very, but not very significant, uh, in my view yet. Um, and you can read, you can read all the statistics coming out from the tourist promotion program. The number is compiled, I think, but I was still along with from KICOBI. Um, so my view, that that's why I mentioned that the, the diamond dynamics on the border restriction, lifting, and many countries are lifting the other COVID measures, which we should see a more healthy to a flow and hopefully more inbound, catching up with the KICOBI level. Obviously, I think I maybe I'll pass on to Yi Zhuan. Yeah. Thank you. Uh, so for the office listing, right, I think if we look at the,

there's a couple of reasons why the number can't lower than usual, right? Uh, in four portfolios, because on one hand, it's your end, also, of course, you know, the market, um, cooling down maybe a little bit of a consensus, but at the end of the year, it's also a time, you know, see, uh, 50 season news, and to be at this store, but not we're standing there, I think, we do still actually see the man from financial services and legal, uh, real estate also for some of these things. Uh, but actually a sub for portfolio that is in the end, used for the for the so itchy, uh, we do expect some of these, uh, the man to come back a little bit more. That's cool. Yeah. Uh, but if I look up here, I think we also in talks with some of the renewals that, um, activity, I think things are shipping up quite okay. Um, I think just to clarify.

So is it fair for me to think that, uh, you know, with all this hybrid work arrangement right now, uh, for integrated developments, see, plus I think, um, it may not recover the traffic may not recover the back to where it was, even with the tourist recovery. Today we are about 75 overall pre-COVID, about 75 to 70, around 75 to 80% levels from pre-COVID traffic, traffic wise. Uh, yeah, potentially, but the buying happy has changed. Uh, a bit more intentional. It's good to something more and more intentional. That happy was cultivated during the COVID with all the restrictions. Uh, whether they've got off and more leisure, I mean, those, I think we'll come back.

Uh, whether it's very very true or 24, I think we're going to recover. Yes. My, my family will be. Thank you. Okay, I'd like to turn to the some questions online. We have a couple on the rich. I was looking to dive at some assets to pay down and what is the target leverage. That's one part of the, that's part of the political institution I talked about. Maybe I talked with them. So that's part of political constitution. Now first you also have to assess whether this asset is one of the

candidate. Maybe not this year, but five to ten years out of the look for any type of of average outlet. Um, so those factors that would be before we look at a, uh, whether it should, uh, shock, you know, the asset out into something different. Yeah. So if market is going, it's okay. We can afford to hold the asset and drive through, you know, catch, um, and, uh, uh, continue to essentially. I don't, I don't have to use the work cream now, but, you know, after my, make sure you go to the asset hard for the. It's market conditions. Okay. There's no real need for us to swap it out. Then I think we don't have to do it. So it's many, many factors that have to be considered.

Thank you, Tony. We have a next question. Of course there will be ideal, there'll be ideal position. We hope, uh, at some point, time, we'll be able to, but today we are okay. You know, uh, uh, I always use the same analogy. You know, we, we are managing the difference with the interest. Equity step older, that that markets the holder, the, you know, radiative is looking at us. Uh, and of course the consumer. So we, we just want to find a position that makes sure that we do not. Under what your balance should. Um, and of course it's a factor of where your cost of capital in the different pockets of money. Is the right moment where they would like the balance sheet. So there could be different factors that, uh, uh, may resolve us instantly to look at a

re-adjustment on the balance sheet. But in the long run, I think ideally, uh, a 3540% kind of balance sheet would be pretty safe. Pretty, uh, which is what a lot investor won a safe, predictable low-volves. Income stream with no stress on the balance sheet. And give you that firepower event or positive stick or positive key came along where you had to react fast. Right. You had a 40 level, of course you had less flexibility. You had 38, 35, nine, never probably have a lot more flexibility. But it's all again about whether you're able to hold it, 35 to 38% and continue to deliver the return you want.

Very investor aspect because technically you may be under working a balance sheet. You look at a proper accuracy, quite easy to go 50, 60%. Yeah, they're working a balance sheet very hard. But in the public market, we have to wear the different interests. The whole thing. I have a question on CapitaSpring. Did CapitaSpring contribute any distributions for you last year? And in a steady state, normalize situation, like what type of annual distributions should you receive from CapitaSpring? What's there? 2022 no. 2022, uh, CapitaSpring, uh, won't really contribute to 2022.

Because there are a lot of rent free and incentive given. Yeah, 2022. For 2023, we do expect some distribution to come back. On the question on steady state, I think we have come back to you. Yeah. The essentially asking the amount of data should affect this one. Now, of course, at the local entity level, you know, the level where you're going to upstream the remaining cash out after settling all the different costs and expense. So it doesn't matter. Yeah. Okay, jumping back to the online question, sorry,

I'm loving your comment too. We have Raven from Martin Curry asking on the profile of new tenants who have been taking up space in the past two years. And why is the guidance on the rental regression going forward for retail and office? You join your data. Just question is on the profile of new tenant coming in office. Well, I think just now just to kind of. So for the first part of our industry cabinet, most of the deals, the new demand that came to office is actually the financial services and legal making up most of it. And of course, I don't think it's really that no, we, it's just a function that in the top of what the currency intact used by.

I don't think there's anything very specific at this point to point to anything. We also see some real estate companies coming through. I think the co-working space we also seeing some inquiries in demand. And of course, it depends on the kind of models that we are going to actually see. going forward. Yeah, that's for the. And the next question. And guidance on the relation. We kill an office. Okay, so for the, for the reversion, I would say the first quarter coming going forward, we should still see pretty good reversions. And similarly for office, I think if you look at the rental growth, right, I think the market rents generally, it's this higher than expiring rents you are seeing for for the inventory. Hopefully this works out well for us.

But I think the rental growth is probably going to slow down a little bit for the CLS, especially second half of these going to be a bit more uncertain. So, but I think it should still be holding out. Okay. Thank you. Okay, moving in second back to you. Yeah, I got a question in terms of the boring costs, questions from investors that will see me on me. Um, I think in the end, you were saying that the boring costs could go up 40 50 pips. Then Tony mentioned the high threes is the high threes related to when you refy or the weighted average for the full year, F. Y. 23, refined refy. Refy so it should be a long mid threes with as per the other bit.

So we're seeing, or if you're lucky, carry it around three percent. Yeah. Okay. Maybe we can touch on the occupancy for couple buildings, Capital Tower and six battery road. We expect improvement in occupancy this year. Why is the symptoms negotiations? And then turning to Australia. What's the plan that are aggressive? We're offering 10 incentives given the income top of the year. Okay. So for the occupancy for Capital Tower, what is expected? Right. Maybe I think of whatever tower start first.

Right. I think generally we previously had JP and space and we have actually built a big part of it. There's interest in some of the balance space. So definitely I think for Capital Tower, we can expect some of the occupancy to go up. I think six battery roads. Similarly, we'll be finishing some of the upgraded floors. And then your start to actually fill out some of these spaces. So I think it should also be going up. As for Australia. Okay. So for Australia, the occupancy, right now we do see actually the return to office is a little bit slower compared to Singapore. So the plan there for some of our assets, we are also trying to put in certain differentiating factors and we are starting some of the plans to find how we can achieve less position

than the asset to capture the return of office and the interest when it covers. Some of the trend we see in Singapore is also beginning to shape our Australia. I like the privilege of certain hybrid model, no co-working space model. Since we're stripping up the so one of the properties that we're working together with our JP partner is really looking at the utilization of the co-working space. So I think that as a result, we are operating some of the aspect of the office, the lobby ratings going to a major event. So we are bringing up the level higher. The other one that we try to do was I think more 66 carbon street, which is in the CBD,

not in no Sydney. And there has been some departure which allow us to fast-track some of the plan Capex where we we look at our underwriting. We actually had some Capex that we set provision to cater for the upgrade because the building is a little bit like Capital Tower. I mean it's great, but it's not premium premium. But we think that there are certain aspects of the building can be for the improved. But they have a live tendency there which you can't do anything. So when the lease expires and then the move on we decided to get the space and do a major upgrade. Yeah. So we are quite reasonably positive, 166, that you have a clip of the game.

This final question for me, how should we take your part of the remaining stake and CapitaSpring? Does it just to the coverage to low at this point? Well, it's in our radar. We think about it as well. Of course, in the different opportunity we will see which is which makes sense. Yeah. Just to add on a point, I think I missed earlier. When we talk about incentives, I think for the Australian market, the incentives generally are capped out in the past year or so. But I think it's currently around 30 to 40% range. I think it's quite normal. Do we expect this to go up? Is it really hard to say because it's really on the new by new basis? Yeah, Rachel.

Hi, just one quick follow-up question. For Cathy, I saw you sign on to tenants. Just wondering was the pre-commitment level and was the interest like for the remaining space things? And the moment including those we are in deep negotiation around 80%, around 80%. Yeah. Sounds good. Yeah. All right. Thanks. We have two online questions on valuation on the job of valuation for the Germany asset. How much is it due to the beginning of the Euro versus $6? And how much is due to the assets in Euro terms? I think in terms of the FX translation effect, we have about $170 million of

the loss due to FX, the valuation of Euro and Ozzie Dollar again, $6. But this is largely mitigated by the corresponding fair value gain on the Euro and Ozzie dollar borrowings that were taken to fund these overseas assets. So the impact on net asset overall is actually mitigated to a large extent. Maybe Yi Zhuan you talk about the Euro value valuation, which I earlier in the presentation does a little bit. I'll give you a little bit more value valuation on our German assets. So I think for Germany, this time round right actually because a lot, we actually

the valuation drop value also because we took in some of the latest assumptions that won't be allowed for seeing this property. So for example, there are higher K-plex actually taken in. It also reflects the term of downtime that we're really expecting. So as far as possible, we think that this valuation hopefully already kind of takes the hit that we will see in Germany. And but of course, eventually, it's hard to predict next year how the valuation or hope because a lot of variables are moving. But by and actually, let's say once we have a bit more certainty of the plans, hopefully some of these things will reflect in the valuation in the point of time. So as a bit, if you look at purely for a very well gain on loss on the portfolio, it's a mixed back because you have to corresponding balance sheet effect, right, liability asset

netting over the repeat. And as a result of your, your natural hedging on your borrowing side. So that that committee Kla absolute valuation number for for individual property, I think in range, in Germany, it's probably about 15% for Gailieu, 15, right. I think 15% markdown. I then the MAC signal teacher, I can remember number by single digit markdown. Another question on valuation from Andy Bank of Singapore. Why did police pass register a slight compression? More couple others had a more expansion.

Lucas plus. Can't break. Can't break. So that's a compression. Oh, they wonder for Lucas plus some of the values cap rate changes. She's more function of a change of value. Yeah. So you will see probably a few of the actually had a very marginal expansion in the Lucas plus as a slight compression. I would suggest do not return much into the cap rate. We had the change of value. We were no issue rotation, right? No, every two years would do rotation. So some value were given views, how they look at it. So they are different growth assumptions. And then they will look at the risk, risk, premium adjustment in the discount. So by a large different value, we're different view in the specific asset in the specific

locality. But on the net basis, I think that just one of the cap reels like five or 10, which is very much in us. So don't read the margin. Do it. The more important look at the trading basically operating view of the individual asset carries or both the the current cap rate that's represented. Next, on my question, we have from Gerard, what is the physical occupancy for the officers in Singapore, Germany and Sydney, and what is the current trend? And for Singapore, right, we actually see a range across our properties, right? Some are truly as high as 90 plus percent.

Some of the back to pre-coated levels. But of course, some is turning a little bit lower. I think broadly we have 70 plus percent. For Germany and Australia, the physical occupancy, we tend to office rates actually much lower. I will say that in Australia, if I will put a number to it, it's probably around in the 50, 60 plus percent range. And in Europe, it's probably going to be a little bit lower. I think it's also the sentiment generally and how the return to office has, I think in Singapore, there's a little bit more push for people coming back to office. And actually in this aspect, probably the ceiling might even see more companies taking a clearer stand on the return to office. And hopefully this will then translate to high up the law of the streets. Thank you. Just give your sense.

In terms of the very different property to the different building, to different building, and all depends on the companies, the policy. But January, Monday Friday is less, you can say Monday is Friday lesser. Tuesday, Wednesday, Thursday, January quite high. In the 80s and 90% some building above 90% return rate, which is very, very healthy. But it can take about 60% 50% on Monday and Friday. On a follow-up basis, on average, on a week. You're looking at maybe 60 plus 60, mid-60s, kind of return rate, which is decent. We don't really track so intensely the prequel video. So I'm not sure. I agree with your sense that it's not a building.

I saw it back to prequel videos. 80%, 80% so this sounds very high. Even that's not the people be either traveling, or maybe they could be working from, looking at maybe the meeting class out there. By sounds pretty much to me back to normal on the busy day. But that's only on the three days I mentioned. Monday and Friday tend to be a little lower. Yeah. We have an online question from ND Bank of Singapore. What is the retail occupancy cost? And for Australia properties, how long do we expect for occupancy to rent up to above 90%. For the retail occupancy cost generally, it's around 16% range.

So it's actually quite in line. Generally within a sector world, we're looking at as for the occupancy in Australia. I think I, to get it above the 90% range probably, we would take a little bit of time, given that's how things are translating a lot of things that she rely on, how things panel in the last city. and so on. But I think it will come back. I think they're not there for a walk. It's just something that's a little bit more time to walk. Just add what you're trying to say. Carries in the 80s, 80 plus, 80s and above. That's the retail office, we're just facing Australia. And what is your duty coming back to our offices, a little bit low in Australia? We don't track the number, but any totally from our guys on the phone,

or on the ground, it says the probably 50% 60% back here. At the same time, we are together, working at our JV partner, more than right, looking at the retail space. And we need everything. So it's not that we've, the, it's, we think it's the integrated project. Next, it's connected to the, it means up with the metal line. So it's on a busy day can be very busy. But the car, retail space, configuration, I think needs to be a retail and at the same time, because of the connection to the office building. And we started, I'm backing on the operating or the office building, including the entire lobby area. So it makes a lot of sense for us to extend to the retail space, which is connected.

Yeah. So that would be a way in progress. It may involve a little bit of AI, potentially. Yeah. I see Donna has a question. Yes. Donna for Bank of America, two quick questions from me. First is, can we have an update on Twitter? Are they still, but is still paying rent? Will they be paying rent? And if we need to backfill the space, are we expecting positive reversion on debt or, or flat? Thank you. So for Twitter, right, are they paying rent? Yes, they are paying rent. What do you pay rent? I hope they continue to pay rent. But I was just say, I mean, just as I did for, for Twitter,

I think right now, they're still a tenant of ours. But broadly across the board, I mean, we constantly talk to tenants about, you know, the expansion and rightsizing, you know, tens along the way. And I would, I wouldn't, you know, so, so what's some of these discussions I have been brought in the as a whole, right? I don't, I don't think I'll come in too much on Twitter itself, whether there's any reversion. That's not, I think it's a little bit of your uptime. What's the exposure to techno for the portfolio? As a portfolio, our exposure to techno is actually quite manageable. It's actually below 5%. And actually, if you look at it right, Twitter is not on the one of our 10 tenants in terms of exposure. So I think the exposure quite site is actually quite manageable. Go to that.

One last question is, could you remind us of the utility costs for this year again, the reprising and what sort of a impact are you expecting? And if there's any mitigation from service charge and all that. So, so I think the one is actually. Also, for utility strike, we are probably looking at heavy for going this probably somewhere. I think the last time we were mentioning this, probably about 1.5% over the current one, right? We have been actually increasing service charge from a few of these properties with the effect of this January. Generally across, if we look at both, we can obviously unfortunately for we still because COC we can't immediately or any increase in service charge, which is really only to effect kind of in the next three or more cycles. But broadly, I think in terms of whether the service charge can actually cover the

increase in tariff, I think coverage ratio is currently around 35, 40% range. And then progressively this number go up as still. If you look at how the experience profile would go, we'll start to go, go back some of these things in the subsequent renewals. When is the next contract? Sorry, when is the next contract? We know the role for the utilities. It already ends the first December. So, we have another logged in two years. Two years. Okay, two years. Right. Earlier I mentioned I think it's higher. Potentially around 50% higher than blended the energy. But technically, four who tapered our little bit. Yeah, got it. Thanks.

Do we have anyone last question? Okay, then I think that we have all the questions addressed. Thank you for the time. We look forward to seeing you again. Thank you. Thank you.