FY 2023 Full-Year Financial Results Briefing

Good morning ladies and gentlemen. Welcome to capital and integrated commercial trust or CICTs FY 2023 results briefing. We are hosting this event live from our office at Capital Tower. Since this is a new year, we have also decided to try something new. So instead of a former presentation, we will be having a sort of a question and answer with the management team of CICT. Please feel free to give us feedback how you find the session and we will be glad to improve. So the sequence of the discussion will also may not follow the flow of the presentation that's

uploaded on SGAXNet, but largely the contents are there. So before we kick off the session, I'm pleased to introduce the panel starting from our CEO, Mr. Tony Tan. And on Tony's left, and on Tony's left is Ms. Jacqueline Lee, our head of investment. And on Jacqueline's left is Mr. Lee Yi Zhuan, our head of portfolio management. And on Tony's right is Ms. Mayor Jan, our Chief Financial Officer. And I may pay the head of investor relations. So to start off, we are also pleased to invite Tony to give us some of the contacts and performance of CICT's financial results. Tony, please. Thank you,

for the last few weeks of things that went the other direction. We have a series of very aggressive central bank rate height started from the first quarter. And hence, to a lot of the standard, I think has affected a lot of market volatility and economic uncertainty. So that's a little bit of backdrop. But to bring the contacts to an entry tree, we were actually positioned quite well with some of the portfolio reconstitution that we had done in 2021. And hence, you see the full effect coming in into entry entry. So the financial result is to a large extent, reflection of the completion of the acquisition that we did in 2002. And hence, to entry entry, you see that delta in numbers.

But having said that the operationally, we also very little focus on given things were moving quite rapidly during the year, focus on a few things. Versus revenue, we need to protect our revenue. And one way to do that is to do really, really go out quite early in our least asparagus and show we're locking our rental as quickly as possible. And this is exactly what we did. So, we're going to rent the tenant we want. And hence, you see across the portfolio, we have a very high level of retention and a good nice reversion as well. Secondly is cost management. Extremely important to ensure we manage the cost carefully. And we were fortunate that in 2020, versus 2022, one of the highest cost was naturally

the utility cost. And we managed to get a lower rate in the second half. So you see a second half improvement in basically the margin for the reduced OPACs. At the same time, we also restructured our property management agreement to get stronger alignment between the rate as a set owner and the property manager. So what that entails is the typical arrangement for the property manager is that the rate actually carries some cost. So in the revised property management agreement, we are structured such that certain element of the cost is specifically the manpower cost relating to leasing is taken away.

And we compensate the property manager on a transaction basis. So the closer deal, you can pay commission. So in a way, there's a bit more closer alignment in terms of where the revenue generation are costing currency. So in the long run, I think we should see the benefit even clearer. So we have been cautiously trying to focus this to enhance the city throughout the year. Naturally, obviously, we had a benefit in the first half of 2020 tree, a lower base into into a big ramp up and gradually taper down in second half. And with as a result, all these active work, you see how operating metrics has been very stable.

Hopefully, occupancy has gone up, a nice end point tree, business last year, beginning of the year. Valuation has gone up as a result of a very strong operational improvement. No, rental rate has achieved higher than what we expected. We also started to look at cost minimization in the risk perspective by looking at where relevant certain building, the cost required restructure and hence certain costs will be passed on to basically occupy to the adjusted service shut during the year as well. So all this accumulated into a very high-tech kind of operational number. So this is a little bit of backdrop of the financial number.

In the short term, this is what I have been doing in the doing tree. But in the mid to longer term, in fact, during the year, we have started to think about where the new revenue stream will come true. With the completion of a clunky in November this year, it should be a fully ramp up by hopefully by second quarter. Then we have started thinking about where is the new source of income stream. And hence, we announced that we are going to do a break on the IMM to reposition iron stronger as a key regional outlet more, not just in Singapore, hopefully around the region as well. So that story, hopefully it could carry true as we start to do the work along the way.

And also, as of now, we are very pleased that even started the work in the IMM, we have already secured 70% of the pre-combingments in the AI space. So that's the series of work that we are planning ahead. In the slightly longer term, we also, and this is also in the back of everyone's mind, including some of you that we were talking earlier about what we are going to do in Gallileo. We started to embark on a fairly different, different system to bring friends to their set so that we can protect the value for a longer period of time. If you recall Gallileo was built for unused, historically owned by a bank built for themselves, particularly, it was not a disaster to a different owner and eventually actually debug over.

So that building is constructed not for a general multi-office-lacking-time environment. So we want to do that correction so that in the eventuality, whichever perspective, tenant that we prospect out, we can survive the next five to ten years. We don't worry about a single-tener exposure because the building is built for unused. So that is something that we are working on. And naturally, a few things that will come along the way as we completed the Australian acquisition, we knew that there are certain gaps in the field and we started to plan in the necessary upgrade in the field by assets and hopefully we get some traction. Again, that will bring additional revenue source.

So if you look at a long runway, we have crossed 23 quite successfully. We enter into the field work to be done and hopefully once that clarity along the way into into the field, we can see even 25 to 26 where we'll be the potential new revenue stream that's coming in. So those are critically important for us to manage. So that's a little bit of backdrop. The other thing that has, so this is all at the asset level, at the financing level, we also very laser focus on making sure we manage the interest expense, I think it's a little a little bit more. So one of the key priorities is very active catch management.

Active catch management, active... So I tell you a lot of folks. It's not like two years ago, today money is very expensive. It's no longer cheap to home money. So we need to make sure that we get the cash in as quickly as possible and minimize any unnecessary kind of loan on the balance sheet. If I click, we'll bring down your average cost of that. So you can see our average cost of that is crypto, a little bit of a time basis point, despite the heavy load that we are carrying. So I think that's in a way a manifestation of very active catch management, active deployment of cash efficiently. At the same time looking at different instruments that we are able to get the different

source of financing. So hopefully we will eventually continue to do that in doing it 24 and hopefully we can deliver surprises for you guys. Okay. We just have a couple of slides that we definitely for you. And who is out there who will be interested in the loan, which is our distribution for the second half, 20, 23. It's 5.45 cents. So this will actually be paid out in March. So please look out for the details. So now maybe we move on to the LIX section on the valuation. So I think Tony would you like to share a bit about the thoughts about what we have actually achieved for valuation.

So if a public can see from the slides right. So Singapore has been naturally the champion has been a strong performer in our portfolio. Today contribute more than a 3% of our portfolio composition. The the the the naturally strong underpinning on this valuation up live strong underpinnew reason is obviously the operational improvement that we have seen with the strong rental reversion and the high occupancy. So that in fact cut across the audience segment within our portfolio. We see the little bit of down draft in the overseas asset. Lastly driven by a special cap rate particularly in for example Australia has been a very

transactional market where the cap rates will transact a lower. A more expanded cap cap rate. And for Germany expected by essentially a terminal cap, you know, the terminal cap has gone now and hence overall valuation has came down. So I mean in short, of course there are a variety of reasons from Joe politics, political tension in Europe as well as the economic winners in Australia seeing these are fundamental reasons that are affecting and the highly interest rate environment as well. Thanks Tony. So maybe now moving on to our debt maturity profile. Yeah, just wait. Okay. So probably a question for a million. So given that CICT we have about 1.5 billion of debt that's coming due in 2024.

So what are we thinking in terms of managing this debt financing? 1.5 billion. About 540 million is debt that is booked at CapitaSpring JV level. So there are plans to refinance the loan for another two to three years. And on the of the 1.5 billion, 1 billion is on CICT's books. So we'll be looking to refinance but of course in terms of our available committed facilities that we have on hand, actually we have sufficient lines to actually repay these loans. But we'll be looking to refinance it possibly with tapping the bond market to lengthen

the debt maturity profile. And are there any foreign currency debt within this 2024 financing? Yeah. They are mainly in thing dollars. Yeah. Okay. Then also since we are still under capital management, should we expect any changes to CICT's capital management strategy in 2024? I overall think our capital management strategy has suffered as well. We're standing in the market uncertainty. We continue to have good access to loans and debt capital markets with our strong financial position. And also this enables us to achieve the optimal funding costs and our desired debt maturity profile.

Yeah. And also on interest rate, we have kept more than 70% of our debt on fixed rates to mitigate interest rate volatility. And on funding the overseas investment, we've adopted natural hedge that allows us to mitigate the effects volatility on our balance sheet. Okay. I think that's good to hear. And then I guess question that most want to know would be what is our outlook for our average cost of debt by the end of 2024? So maybe I'm still there. And we don't have crystal ball. So I can make the assumption that under this current market condition, we're not expecting further rates heights.

But as to the question of when rate cuts will come, it's quite uncertain now, possibly in second half. So if we assume the current interest rate levels, we'll be looking at overall debt costs around the meet 3% range. Okay. Thank you. So now we move on to our portfolio. I think this slide we have here shows the high occupancy of our portfolio. So this question for Yi Zhuan. So given our Are you satisfied with the current portfolio matrix, are there things that you wish to do more? I think credit to the team deliver a good set of operating metrics this year. And I say that generally as a portfolio, we have very good quality and resilient assets. There's locator in the new transportation, hard-man-man-barre bustling vipes.

So it's the intention and objective for us is really to continue to build on this 3 students to have that diversification in our asset types across the retail and office as well as to achieve high-cometer rates and then to keep our lease average to these are expiry above 3 years. I think there's a level that we're very comfortable at. And also whether are there major risks that we should expect in 2024? I think the first thing would definitely be the question is leasing risk. I think we are proactive in managing this leasing risk. In fact, actually in the last quarter we actually assigned more than 400,000 square fee or new renew leases across both your retail and office, which is actually quite a good performance for your end, considering a lot of people actually go overseas. And so we already talked with a lot of the tenants that are due in the first half of

or two-four. So top of mind, I think there's no total information. Is that, um, get lady over right? With the COBA exit, even though you only have shared that the works will take at least about 18 months we already have advanced negotiation with a prospective tenant. So we have a nice uplift in terms of rental revenues for our retail portfolio. So are we expecting a similar trend for this 2020 4 lease expiry? So if we look at our numbers for the total tree, we actually got a positive conversion on 8.5%. And I would say that with the method of the ability of prime spaces in Singapore, right? Then if we look at it also we also see very good demand for retailers. In fact, we got a lot of interest coming from FMB or beauty and health as well as your

fashion both from local and overseas brands. I think this will help to actually sustain that momentum for positive conversion control to 4 home fully. Then on the operating matrix, which I'll add a share a bit on the tenant sales, but it's quite cool and the shop are traffic. Well, tenant sales on the full-year basis, we show positive numbers as you can see. Of course, there's a little bit of pressure coming up for the, I think, tenant sales was not as clearly on your shopping crease. But the uplift driven by the search tourism arrival over the full year plus the high-tuned local consumption, right? Actually, it helps to give a good deal on your number. Looking ahead, I think that there might be some challenges when it comes from our pressure in terms of retail sales for the economy uncertainty and GSD high potentially.

So it's really for us to really work very closely with our retailers, right, to drive more programs, to curate more programs that actually help to drive sales and traffic into our malls. And to just add on it, I think the, so trade categories across, not the case, probably something like that. I think if you look at the site, the broader trade categories that actually show quite a good improvement. And we also have to take note that potentially in total four, we might still see the challenges such as manpower shortages and your higher operating cost for retailers will continue to persist. So I think it's good more, you know, good more than I was probably would create better retail offerings and then to really try and build on that more experiences for our shop percentage retailers. Okay. So also moving now to the office site, what other opportunities are we can see in the office

portfolio? For office portfolio, I will say the year and year occupancy, it shows a good improvement and across all the different geographies as well. And for Singapore, I think the strong rental reversion was very good to see. In fact, the last quarter was a little bit better than I can expect. We continue to see good interest levels coming true from the wealth and asset management, or financial services legal and even your flat space operators. On a four year basis, actually there was more net expansion rather than downsizing. So I would say that for two, two far looking forward, potentially we are seeing a bill of volatility in your AAC, B-A-C-B-D kind of vacancy as well as your secondary stock with the competition or I-O-I.

But if we look at it in the mid term, we are quite comfortable in the sense that with the mid term supply and then the flight quality of flight to green, it will achieve plain and benefit our portfolio a little bit. I think how about the overseas office? Over overseas, I think for Sydney, the challenge for these things like as well as the elevated kind of incentives for continuing the process for two to four. Well, the C-B-D side, Sydney cost C-B-D is actually having a bit of a bright spot last year. And going forward, the stock markets will probably still be a bit challenge for two to four especially not Sydney is one of those. So definitely we are going to continue to build on that occupancy that we see and how do we do that? It's really the only trying to inject some of the new product offerings and service services

that we do. We will probably share a little bit more. One of the experiments that we have at 100 after a major exit was actually we have a a big deal, a big part of it. We've gathered what we should sign up for this year. Yeah. I think we saw the news. So I think the sense of talk true, the portfolio, I think now we are at the value creation things that we have shared. But I think Tony touched on this earlier about our AI plans for this year. So is there any of the three AI's that we would want to highlight to share more details? Probably, yeah. Yeah, very well, Shermore. So I think last year, a lot of questions of what are we going to and CQs completed. And we said we are actually doing a few studies across different spectrums of projects. So we are happy to share three of those for two to four.

So we are quite fair. I will do one in each geography so that we can't everybody be easy. So for Singapore, we start with IMM. We'll deal with this 48 million dollar upgrading. A big part of focus is really to refresh and rejuvenate that ground floor. But we will try to introduce even more of the stuffs to really strengthen its position as of the more. On top of that, we will also try to right-size the supermarket, improve the circulation, and also the facilities and amenities to actually elevate the whole shopping experience. So this actually a practice that this whole project will take probably all the way until next year. But we carry on in four phases. So the first phase of it will start this quarter, and then it will probably end by the end of this quarter. So even then, the mall is still operating. So please continue to visit the mall.

Yeah, so for Germany, I think we have mentioned quite a bit of it. So this is something that along the way when we have more details, we will be happy to share more. But this is a project that we really have to do. And the last one will be for North Sydney. As I mentioned just now earlier, I think this whole return to office is encouraging trend that we see actually and there's actually an increasing return to office. I think a lot of companies realize that the past two years was a little bit suboptimal in their productivity. So they've been trying to get people back. Of course, the cost of the one that is seeing a little bit more of that, that they cover is actually quite good. But eventually we hope that it will actually go to the rest of the supermarkets. But we have to be proactive about this. And what we want to differentiate our properties

in North Sydney is the on top of just the traditional office. Last year, we actually introduced flexing our offices in Sydney. And then the third one we are going to is that we are going to upgrade the 101 miller. That's this upgrading that we are going to the main lobby where we will actually activate a communal space. We'll actually provide a better arrival experience and also to actually create a more seamless access between the people who play some more together with the office itself. So this actually can improve the kind of connectivity at a wider precinct level. And the meeting rooms, all these will also help to provide tenants with a little bit more offerings in their attempts. And we want to support the attempts to actually bring their employees back to office. And similarly, we are doing something similar at 100 after with TWP.

So the lobby that we do, that's meeting rooms and the ground lobby, that's also this activation community that we are doing with the work project. Yeah, thanks, Ejon, for sharing about the portfolio. So I think now it's timely that we will invite Jacqueline, our hero investment. Jacqueline, maybe you can share about the investment market that we're seeing. So with inflation is beginning to ease. We see interest rates looking like they may have peaked. There's been in an increase in interest in the investment market in the second half of the year. You may recall that in the first half, it was really very quiet. But the interest has been returning more to like the Singapore and Australian markets. Germany remains very, very quiet. The flight to quality team remains. So for the SG market, I think you will recall

that in the first half, most of the transactions were like shop houses and start our offices. But in the second half of the new 23, we began to see larger deals being announced in both the office and retail markets. The pricing was stable and also reflected, therefore, in valuations, cap rates remain relatively unchanged. On the Australia market, on the other hand, also in the first half, the deals were small and activity was low. But in the second half, there was more activity and larger deals being announced both in the office and retail markets. But in Australia, I think we saw more discounting. And so as a result of that, cap rates also expanded and then it affected valuations. Germany remained very, very quiet throughout the year. There were hardly any transactions.

And even when there were, they were mostly below 15 million in size. So I think in the German market, because they have come from a period of very low interest rates, the market's still trying to find the right level. So there's a very huge gap between the expectation of buyers and sellers. And therefore, we see a bit, and hardly any transactions happening. But I think the good thing is that rentals are still holding up in Frankfurt. OK, then I think that makes natural question. So looking across all these geographies, what would be CICT's focus? So I think CICT's focus will still be on Singapore predominantly. Thank you. So after hearing from the panelists, we will now open the session to Q&A.

OK, for those present in the room, please raise your hand and we will hand you a microphone. And then you please identify yourself and keep your questions to each time. And for those joining on the online webcast, you can type your questions into the chat box and we will ask the questions on your behalf. So we have the first question from Mavan. Hi, I'm David from J.P. Morgan. Yeah, thanks for all for my, and say this asking a lot of questions given you very address a lot of them. The first question I have is the tips of the top process around the DRP. You've addressed in the second sense we're here in below 40. Why go ahead with the DRP? And then obviously there's press reports of CICT potentially selling three properties as well. So maybe some thoughts around that.

On the retail side, you have very strong rental reversion from rats on that. For quite a sense, be it slow. Maybe it can help us quantify the year growth and your thoughts about occupancy costs for full year FY3 and how's that compared? Reminds how much, how does that compare against at pre-COVID levels and how much how they can push? Yes. Okay, thanks, Mavan. Yeah, the question I can answer maybe you will drop a little bit on the DRP. I think we always have this too available for us to its point password for your capital management too. And given where we are trading, I think it's quite fair to allow the investor the choice where they want to redeploy the capital back to our stocks.

And at the same time, we can conservatively build cash. Yeah, the evaluation came down last year to know a lot of effort from our team on the ground to manage the operation. The number 9% of somebody who is manageable ideally. I think I addressed before ideally over time we'd like to bring down the gearing to reflect a different interest rate scenario and interest rate era. Very nice, when 9% is good, but a little bit lower be better. Second question, the one you write in a news day. Yeah. Generally we don't comment on it. Yeah.

But it's actually not unusual for us to engage the market. And time to time, we get people who speak to us and say, why we can open up the dialogue. Sometimes you lead to some kind of commercial deal, sometimes it does. So until us, it's quite possible getting the dialogue in. And in a way, it's a good manifestation of the interest coming back in the investment market, which is very important. We need liquidity to come back so that the rest of the market overall can try. But that question is on the retail performance. You're on top of all that. Of course, the rent reversion is a very low double digit for the portfolio. And it's across all three, across both the urban assets downtown.

Also, 10 sales. Also, 10 sales. 10 sales. It's very much marginal. No, it shouldn't reflect. November was week. December was better. But still down on the year and year. But much, very much overall. Yeah, much. At the occupancy cost remained healthy. Today we end a year about 16.3%, which is really healthy. And then that is the portfolio. With the urban and downtown, naturally it'll be different. So burn, you can say easily in the mid-tins. Sadly, higher on the downtown. But still below 20%. So I think we're in the healthy range. Yes, joy. Joy from H.S.BC.

So two questions from me first. I just follow up on that investment divestment. I think you'll mention there's a narrowing gap in B.A.S.P. in Singapore and Australia. What sort of return do you want to achieve when it comes to divestment? How do you think about divestments in terms of pricing? And what are the sort of beds or comfort level? Are you expecting? I can give a little color. Maybe Jack Lincoln can help Chip in right. We don't look at divestment in isolation. For us, it's part and parcel of our portfolio reconstitution. So if we do have to monetize some assets, naturally next to normalize, how are you going to deploy it?

So that's an entire equation. And then depending on deployment, and depending on time and deployment, that may, to some extent, or so affect our decision making. So in isolation, very hard to tell your story. But naturally, we want it to, I think, most of you have seen in the transacted market, right? The happen is above valuation. So it's not unexpected for us to expect any common monetization above our valuation. And that includes Australia as well after the right now. So you're very comfortable to achieve. At this point in time, I think we have some work to do in Australia. I think Yi Zhuan has mentioned some enhancement.

I think I thought about it at beginning some gaps. The gaps between what our assets are offering and what is in the market. So we're trying to feel the gaps. To a last step, we're buying ourselves time because the return to office is coming back stronger in the core CBD. But even within the CBD itself, core CBD is not a uniform phenomena. In the certain pockets are very vibrant. I think that we know that there's certain elements that's important in the CBD environment. Just take lessons from Singapore. CBD environment is just purely on offering a workspace solution with surrounding amenities upgrading. That's going to be more difficult to happen.

So one of the challenges for North Sydney is that regeneration of activity hasn't really crystallized yet in a fast space. It started with the infrastructure work with the vector station, which is coming on due. I think there are operational soon. That would, as a first step, narrow the travel distance between sub-buh and CBD. So as an important step. Second is what makes North Sydney more interesting? So that's a few element to play. And naturally, we are very closely with even the Sydney house, North Sydney house, to look at placemaking. And to do that, we need to get our asset available

in a position where we can take advantage. So the upgrade that Yi Zhuan mentioned, the lobby interfacing with the outdoor space, that's a perfect location for placemaking. And we're doing that work now. My second question on Gallileo, can you update on the tenant potential leasing that you're looking at? And also, as you go through this CapEx process, if market opens up, we used to be able to sell during your CapEx spirit. Like contract. OK. So we are still in discussion. Very advanced discussion, or naturally, with a single, our largely a single tenant for much, of the order building. I mean, it's in a little bit of drama occupancy,

because we do have some retail, which you need to clearing up for the upgrade room. So hopefully, we can update a little bit more when we cross the line, but it's quite advanced. In terms of the CapEx work, I think we a little bit is really about re-infencing. But if we can sell, I think we will have to assess at the point in time. If you cross the line with a single tenant, you get a certainty of a good long-term cash flow. It may be time maybe in our head back to look at the divestment. If I ever happen to think about the divestment, the timing.

Thank you. I think that's Rachel has a question. Hi, good morning, Tony and team. Thanks, thanks for this new format in Congress on the strong result. So a few questions from me. Just following up on the potential asset divestment, right? I mean, Jack, you mentioned there's more interest in article. There was one asset issue from each asset class. So I'm just wondering what kind of interests are you seeing that's coming through who are the buyers? Like what sort of buyers are there? And which asset class sort of get a bit more interest? Yeah. So we cannot comment on rumors. But if you're asking about the general market, then in the second half of the year, there has been interest returning. And from the transactions that we have,

that have been announced, right? It has been in retail as well as office. Well, obviously retail, because it trades at a higher year, will be easier for numbers to work. But I think whether people buy retail or office really is quite asset specific. Because it depends on the location, the asset attributes, and what value they can add when they do the purchase. Maybe I can just add the state of fair in the market. Then, should you expect compared to the six months ago? It's in a way the refraction of a battery-sapitite. Sitting couple of transactions in the different segment from Strata, Strata flow to retail, big, no-sizeable

returns, actually. The more reason why it's a big office transaction, one of the challenges in the general global environment from a real estate perspective is where the private equity are deploying. And a lot of them are doing through an internal rationalization rate. So over the last six to 10 months, nothing happened at all. Begin to see some interest from private equity as well. So I think you start coming back over time. You just need to see transaction happen. Sounds good. Thanks. Next question is, I think you talk about, ideally, you want to pay down gearing. What kind of level of gearing levels would be ideal for you?

I would say that 37% of the account level give fast efficient enough flexibility to do a lot of things, even to check on any kind of opportunity transaction if there's any in the market. Sounds good. Thank you. Just one last question. Just on the reversions of our office, I think you have already done quite a bit on quite a bit on the F-I-2-3-4-3-6-5. So what kind of reversions are you expecting for our first? We are based this probably. We hope that we can get somewhere in the midst of singles hopefully. OK, great. Thank you so much. Thank you. Thank you, Rachel. Thing in front, Ashyn.

Hi, Tony. First question is on Gandy Liori. The AI is actually quite sizable. What kind of rental up-lived should we be expecting? Is the AI actually a creative to DPU? Oh, I answered the first part. And I have to recap why, Chef. So if you look at the view definitely expected throughout the F-I-2-3-7, how much of it's really subjective with the finalization of some negotiation if we do secure. The works is really quite extensive because we a lot of the MVP and the H-Vex systems, for instance, is really a little bit all. This is an understatement factor. So actually, that lot of works have to be done in the aspect.

I can give it a bit more color, as well. It's definitely a strong reversion from the outgoing. And the question is, of course, we need to find that. It's like, the moment it's going to be fun. How are we going to find it? We mean whether there will be a net positive carry. So that's something we are actively managing. Thank you. Second question is on deployment. Can you talk a bit more about within both your line and your D's portfolio? What do you think is more attractive at this moment? I think Jack mentioned a little bit before, depends on the training view of that segment, or the real sense segment.

Currently, retail is higher than office. And you're seeing all the transactions. So from a pure number perspective, looks like more retail is in a way more or creative from that end girl. But having said, I think we will look at it closely when the time comes. Thank you. Can you think, can I go to you, Jampas? Hi, you came from C L S A. Two question. The first one is, would you consider initial DPO dilution for a short period of time? Then, and then post that you do as that sales to bring down Gary? Is there something you would consider, or you would prefer to bring down Gary first, then before you do investments?

The acquisition of the acquisition, sorry. If acquisition comes to your plate, but it might see an initial dilution in the first year, by the strategic asset. But then your Gary is a little bit stretched at the moment. And would you consider doing that first? It's a very good question. And I can't give you a straight answer. It really depends on circumstances or the deal. So without having any specific mind, naturally we prefer the other flow. It means it's not very much monetization for the other. I want to appear as a doing a. Well, you can say if they are doing that for the purpose of redeployment, perhaps, yeah. I think that's an ideal situation.

But like I say, if it's something very strategic, I think we're going to think through what sort of capital is required? You probably heard me say before. We will look at different sorts of capital, not just from the capital market. We can look at the potential partnership equity. So we don't have necessary all the time going into a transaction as a single owner. I mean, that's the throw out the possibility, right? So it depends on the asset, the size, and our reconstitution plan, not the timing what's going to happen. So all this has to put in place.

But ideally we prefer to, I think ideally a little bit of money back is easier from execution point. Yeah. So the question is how we work and exposure, how do you think about the any major experience or any other coming up this year? Is there still a tenant? There's still paying rent at this moment. So we treat them as a tenant. So long as they are tenant, we're OK. But Yi Zhuan, the owner, this now in one of the comments you made about the fourth quarter, but particularly the robustness of the market, is still relatively healthy, including the exhaust space operator, the lives of the we work,

and my DR still actually in the market. So I think we are not overly concerned. Is question whether there'll be downtime if it happened? If anything happened, we will, because it's a single tenant, exposure to the gallery, whether it be a downtime. And what countdown time we are talking about? So that's more the frictional kind of occupancy that we have to deal with. Yeah. OK. Hi, Monning Dony. I dig from DBS. Just one question from me. Looking at your retail portfolio going to 2024, if we split between cyberburn and our chat, we should do things that has better prospects for the coming year.

I have a very careful. The both have challenges, and both have their key drivers. If you look at things that are planning out from a policy direction perspective, general government policy, in a little long term, we know certain things will happen. They will affect demographic. It's certainly going to see more people coming to downtown to live and just live, not just work, it's live and won't play it right. So that's going to happen. And we've seen the things happening already. You're probably also going to see more push to increase the commercial activity outside the cost CBD. How far can it go?

Hard to say. So definition of when it's going to be live here, we know live and STEM near where residential and nowhere. And all the cars are both location. But even within downtown, in CBD, you see the spill is expanding. It used to be the cost, we cost CBD, reference place, a little bit of sending away to this expanding to federal first space, the beach road, the city hall region, near new regeneration coming up. And they're not paying low rent, some of them rent higher than what you pay in the cost CBD. It depends on the building attributes. So I think there's a bit of a moving part there. But that will affect in a way the attractiveness

are living downtown. And hence, I think we're going to get more crowded downtown. So from that angle, they quite a lot of work for us to do in downtown mode, which is started with a reference city, a big upgrade. And now we're putting the club key. Hopefully we're able to track these people are living around you. And once we've got boogie, some of you have boogie, plus the plus thing. Every single asset we have planned, it's just a question of laying out the priorities. So urban will continue to be resilient. I think it would be conducive to be resilient. If the execution or moving people to basically jobs to where people are living, right, that essentially are saying that

the location will create a live on its own. So I think that will stay fairly resilient or depends on ultimately the population growth. And Singapore. What we also trying to, at least in the short-medium term, to take advantage of the certain search in interest of having constantly Singapore, becomes a very strong attraction. I'm sure you'll know about it. And questioning in downtown mode, or even our IMM outlet, can we take advantage of that? Which is why you see why we're doing an IMM. We also laying ground ready for the RTS Link opening up.

You will know the impact. How that traffic will flow, you probably will know. But we also think potentially there will be opportunity to see some flowing. But who are these people who are going to track? Lately downtown, potentially IMM, hopefully clucky. So we need to reimagine our analysis. Yeah. Thank you. OK. Terrence, we just got an online question. Now, come back to you. OK. I think the question we have received online is from U-Fi. The first question is, is there any particular drivers behind the 59% year-on-year spikes in utilities and marketing expenses each in FY 2023 or were there one off in nature?

Is it about utility? I think overall, it is a function of reopening. So last year, you can see, you know, the reopening when you happen later part in 2020, sorry, 2022, going to ensure you get a full year. So I think it's a little bit of a return to office, higher volume coming in. Even though we have a lower contracted rate, the natural consumption has gone a little bit more. Marketing expense, there's a little bit of reclassification to some extent. If you recall, we put in the PMA and I mentioned to you just now where we take away some part of the manpower costs in the leasing site. But we compensate the leasing activity on a transistor basis. This commission pay is actually in the marketing line.

So you can see a bumping marketing, but essentially, it's a reclassification. You should see a corresponding reduction in manpower costs. OK. Thank you. The second question we have, I think from you five again, and also from Michael, would be more about CSED's plans for 2024, whether we were focused on enhancing existing assets, or you would be expanding whether we overseas or in Singapore. And the second question is about valuation. That because Singapore valuation helps they do while the overseas assets fail. So will we do the terms of acquisition, will we buy more in Singapore and divest overseas? So I think I did touch a little bit on our priority.

It will be all that you mentioned. Essentially, we need to lay ground for future revenue stream, which already announced, right? Ayes, we're going to be one. Gallileo, we know we're going to have downtime, but come hopefully by me or third quarter of 2025. We have completed the AI work and hopefully by then, we can secure tenant. And hence, you can see the revenue stream stuck coming in again. So it's all about planting the flag along the runway to allow a more sustainable climate income growth in a type of volume. So that naturally will include, if there's any opportunity to take a transaction out there,

so then you will be paying past all the air, the old, who equation as well. OK, maybe right now we go to Terrence question first before we come back to online. Yes. Thanks. Terri, the address evaluation. Oh, OK. So second question on valuation. No, the one is more on a few of focus on acquisition. So you've actually addressed it. Oh, yeah. The overall valuation. Yeah, it's addressed really because it's more using evaluation to, yeah, Terrence. And since Terrence Lee from UBS, can I go to slide 26 to ask a question? 26. So if you look at the slower tenant sales growth relative to Shopet traffic and you strip away inflation, GSD high,

is it fair to say that the tenant sales person actually declined quite a fair bit in 2023? And is this then a worrying trend? Well, certainly on the second, you compare it on the basic fact. Yes, you need to need to do on the second part, particularly in the fourth quarter, where you've seen a very strong ramp up in 22 relative leads, where we curve off quarter. That's true from, that's the truth. And whether that's translated into a reduction, or a particular, I don't think it can generalize that way, our foot forward has not gone back to pre-COVID. That's for sure.

We're still probably about 15% around there about below COVID pre-COVID. So if you use that, may not be a true reflection, because sometimes the traffic flow can be very transient, especially in the transportation hub. So again, I don't think there's a single matrix to really define whether a particular is dropped. But you look at any totally with the inflation, most of you are spending more. Questions, maybe a few of you will be both spending, but the ticket size maybe higher. And moving on to, there's this saying that real estate market valuation is then too like, and assuming this year turns out to be higher for longer and growth flows,

I have a question on valuations. Is there a time limit or a topic point where valuations finally have to then raise the rest of your estate valuation? You're talking about this, yeah. Oh, I saw what I said. The, if you talk about valuation in general, I wasn't value of assumptions I was going to be, right? And I think so far, the evaluations assumptions, I think generally are still quite not very tight. I think we become better across peers and what we have been doing. I think our cap rates assumptions have been generally quite okay. And I think parts are part of it. So at the end of the, what is a bit question mark potential these, then if what's the time transactions that we see in the market? And then where they,

right now not yet, she shifts some of these assumptions. But even if you look at the other matrix that goes into our valuation, I think in terms of the market rents assumptions, the growth rate assumptions, we are very comfortable with what we have inside. Yeah. So look at the transaction so far this year as well within the cap rate for the, whether it's office or retail. So I think from that angle, values start to look at a market comparable transaction. I think it's still comfortable. In fact, if you look at some particular office transactions, very, very on a very tight cap, right? But actually even low tree or even below tree percent. But then obviously there are different reasons behind that. It could be a,

could be a funds that coming in with a certain value at play. Right? They are putting in a, there are certain upside in terms of value. Well, they can achieve post activity that could command a higher rent. So there's a, if you use that purely from a bench market perspective, evaluate or look at across scanner cross for reference point, then there's not a transaction, there's a transaction below current valuation cap. So I'm sorry about the value. Current valuation. In other words, higher for longer has no bearing on as a valuation's until we see at the moment. Yeah. But operationally you need to run it well, right? So, so this year we've done recent decent,

and half percent there, but I think you more effectively, you're croaking 9%. So that would translate growth, coming down the road. If you continue to do that, hopefully we'll, you know, Yi Zhuan mentioned hopefully a single missing but did you then, there's a demonstration of a rank growth by sure, I think that the value in general do not move that, whether it's terminal cap or the discovery very easily. Similarly in the, in the earlier era, 2010 onward when it's only one direction, the policy value will really move a lot in a terminal U and the discovery.

So from a mathematical, purely mathematical point of view, issue is quite supportable. And logically, I think makes a lot sense because on the declining interest or environment, you get liquidity in the market system, you get funds chasing after assets, right? As a valuation goes up, risk factors should go higher theoretically. Similarly in a, I may also say I'll classify today's Singapore market as a sole of a beginning to revive, you know, it's going to a stalemate. It has gone, you didn't really go through a down drop, you're going to a stalemate, and start to revive and see if the case size coming back, investment activity seems to be coming back

and investment with on gradually seems to be coming back. So if all that spans out well, and if you pay not in a situation where higher for longer, question is how that longer you curve will look like? Because ultimately, is the long-term rate that's more important than the short-term rate when it comes to valuation metrics? Good, thank you. Thank you. Okay, sorry, I know I have this three of you, but let's, I need to answer, we answer a couple of online questions first. Can we have the online next online question? Okay, this is from Fraser. Are you paying out all cash flow from JV's and overseas entities? By and last year's,

the net cash flow after servicing interest and operating expense, we will pay out to unit holders with the exception of Gallileo. As you know, we are embarking on the AEI. So for the second half, we've actually retained cash at the entity level in Germany, as we anticipate there are more expenses in coming on stream. Okay, thanks, Melian. So the other question we have is that, I think this is more on the overseas assets. I think generally it's asking about what are we, what do we expect? I think because of the various trends

that we're seeing overseas, like work from home status. So what are we expected to see in across the tree geographies, the kind of portfolio performance? Probably I touched on this. Yeah, so far, I think for the work from home status, right? I think the good thing is that as we get further away from the end of the pandemic, or I think this talk about work from home, remote working starts to come down a little bit more. Let's talk about it more, but hybrid working is the new norm. A lot of companies here wanting their staff to come back. And this narrative is actually also getting stronger, so instantly. So by and large, I would say that, directionally, I think in terms of office demand, then it's not a bad thing to see. Of course, from an employee standpoint,

it's a debatable. Then so I think in terms of Singapore, I would say that the office site of things with the exception of a bit of that new competition supply that's coming true. By and large, I would say in a medium term, the office should do still hold up pretty well, partly because you know, that's limited supply. And I think some of the competitions that was initially due for the CO was actually currently due to next year. So I think even now everything is good. Probably we'll see a little bit more bigger delta between your premium rate officers and your great B properties. And what they would then do is that when the great B properties start to be a bit more under pressure and they're being picked enough or redeveloped. Then you will probably see it going, moving around some of these. So there's a sort of like equality thing

but still kind of persist as a general trend in the coming years. So for Sydney in particular, as we just talked a little bit about it, right? So the flight to car is one of the themes that we start to see, of course, CBD. And so also the broader flight to CBD. Eventually I think this will only come into play when the car CBD starts to get filled out a bit more and the premium space get filled out a bit more. It can press the rain stop, right? And then that's where your flight to value will start to come in where tenants will want to go into good quality assets and good quality centralised location. But they cannot afford the premium properties. Right then they'll start to look at the sum markets for good quality assets to go into. So but for not Sydney in particular, probably in a supply situation next year, you will see a little bit more supply coming through

that will probably kind of, and then of course it will take a bit of time for us. I do think that for not Sydney, it will take a bit more time. But in the long run, I will say that things should shape up, okay. I think it's a little bit of a no notice. We'll re-opate it. I'll show in the two overseas market we've seen. As a result of a change in the interest rate environment, I think we'll probably see less and less money going to speculative redevelopment or speculative development. I'd like you, we've seen a past where capital is very cheap, and we're almost free. You've seen a lot of capital driven towards no potentially taking a bit of high risk

from a development perspective. I think that kind of behavior will probably come down. Because financing is not so long, it's not so easy. Not about the actual cost financing, but getting the financing is also not so easy. So that can move some equation away. Some overseas market does have a history of demonstrating supply that really come on stream. Some does a little bit unfettered. And do a lot of standards created a very unhealthy kind of occupied market, because then many will be chasing after the same, unless it's the overall economy growth and you can see a net increase in demand for the space.

If it's in a very flat, this kind of economic environment where you see a whole set of streams of development pattern that keep coming to the market, then naturally the career will be a downward force from a random perspective and hence the effect valuation. But in a cheap capital environment you still get transaction happen. But in a elevated interest rate environment, I think it's gonna be a bit more challenging. So we hope that will change a little bit of behavior in a market landscape in the overseas market. That's one we're observing. The idea we're observing also quite clearly is being played out, what we're playing out here and starting to get a lot more talking, is to bring people living into CBD. Signes are same thing. They're talking about conversion, not easy.

New residential development is not easy, but they start to think about it. Eventually, whether the building is repurposed of something else, I mean, that's something to watch. But certainly there's a lot of dialogue going on there. Is there a real possibility of creating that ecosystem where living playing environments is a little bit more integrated? Thank you. I think just tomorrow, online question, the first one is about average cost of debt. So the first part is what is our average cost of debt for those maturing in 2024? And then what is the expected average cost of debt for 2024? Probably Mr. First part is now. Yeah, million. The first part is the average cost of debt for the debt

maturing in 2024 is in the range of, you know, the low tree range, low tree percentage. And the expected average cost of debt for 2024, I mentioned earlier, it will be in the, you know, your CRIPA to the range of meat tree percent. Okay. So, okay. Then the last question we have on line is more general. From Michael, what is the impact of AI in particular, Generative AI on our company and industry? That's a, that's a talking point. Everyone talking about it. I mean, honestly, we also look at what would be the use case for this new technology generator, Generative AI. There could be different application.

Could be from a processing perspective, whether we get more efficient, but actually there are some use case. It could be customer-fronting perspective, which we experimented before. So it's nothing new. Whether it's a more enhanced version or a check mode, right? We can operate looking at some possibility. Okay, be more predictive in nature. So that's something that we, at the moment still a little bit studying. So there could be different potential use case. At this point in time with a spare method, a little bit here and there, but nothing very, very significant in the moment. Yeah. Thanks Tony. I think we will have Derek to ask the question first,

then we are going to, don't know. Oh, thanks. Great on the better operations, but just looking at the four year DPO, it's 10.75 versus, you know, the OCMT's F1-19 DPO, of 11.97. It's 90% gap still after three and a half years post-merger. We have seen, you know, another small retail reads are passing the pre-COVID DPU and NAV. So just how do we tell Ashanti investors that the combined CICT entity is financially stronger than the OCMT terms of DPO and NAF, especially since some of the things that you have seen. I mean, that's a fair question. But I will also give you a fair answer.

The interest rate environment is just different, right? If you try to extrapolate at a point in time, where our funding cost is 2.3 to $1. 2.2 to $2.3% to the average 3.4, I think, naturally that Delta translate back. I don't think we are very worse off. So the landscape has changed. But certainly as a combined vehicle, I think we are a lot more resilient. Putting aside today, everybody's very positive of retail and Singapore. But you always gone through a period was challenging, especially during the period of a complete lockdown. Unknown future, no income stream. Commercial building helps daily. So I think we're about this combination.

We're seeing a lot more volatile and potential outcome that is unpredictable. Today we're demonstrated that resilience is strong. We continue to deliver growth. Hopefully the child sense, they're looking at is within sight and working, we're looking at it. But to be fair, 2.2% to buy 3.4% of rich cost today, 3.4% to 5% is just different. I guess it's an internal time, but I'm not waiting to get to that 12 cents. I mean, I get a point on the high interest rates, but if a total of investors, they'll point out that another Singapore retail retail suffers through the same set of operating cost challenges, but their own GPU has gone past pre-COVID levels already. We don't want to give a forecast.

If you continue to do what we are doing now, actively reconstitute up our portfolio, drive growth. I think we'll be there. I don't think it's a 10 year, or do need a 5 year, hopefully within the 5 years. Thank you, Derek. Go to Donald. I don't know if I'm back for America. A few quick questions from me. First is on 21 Kauliaki. Just want to check whether the value is give a core working discount in terms of the valuations, like how it's been applied elsewhere as well. It doesn't seem like it, but... Because actually people, it's actually currently on the needs model.

So it's cheaper as a normal needs tenant. So it's cheaper as a normal lease. Yeah, okay. That's fine. The second question is, Tony, you want the lower gearing? So assuming, but your cap-ax is quite meaningful in the next one and a half years. So assuming you don't do any divestments with all the AI cap-ax, what sort of gearing will you end up with? You're still within a 41 range. 41% 14 to 41 range. But you're saying you prefer assuming no change in valuation. Assuming no change in valuation. So it appears you prefer it to be mid 30s or somewhere under. Yeah, ideally bring down the... So does that mean that divestment is imminent because you need to fund the cap-ax by extension and...

We have acquisitions B. In this? Cap-ax is not the one. Cap-ax is progressive. So I don't think we need to draw down 200 million today. Yeah, it would be a very progressive exercise. Along the way, active capital management, cash management is still key, driving all a set performance still key. So I think we have enough tools to manage around that. But in our ideal situation, we'd like to give it to Kamdo. And one last question on also down Gallileo. How are you going to manage the loss rent from Gallileo? Which assets is going to offset in terms of DPU loss from this in the next 18 months?

There's no specific asset. We do a serious activity, including organically we are growing our rent. Hopefully there's enough to offset. Gallileo contribution from a DI perspective is not huge. Looking at a low, or maybe single digit kind of contribution, not huge. Right? Yeah. Single digit. It's not huge? Not low. As well. Yeah. So yeah, it's okay. Look at a reverse number. We can cover that. Naturally, we've got to actively manage our interest costs. That would translate a bigger delta. I mean interest costs. It's really the key. Right? Interest expense. Is the single largest subtraction for your distribution? Yeah. Okay. But kept spring and CQ and RCS will contribute more.

I think it's a contribute. Yes. Okay. So thank you. Thanks, Donald. Yeah. So thanks. Thanks. Tony, yeah, better than expected results were better than I expected anyway. But I have a divestment and acquisition question. So one is on, can you remind us what the conditions are for you to acquire capital spring? Still, right? It's a... Oh, we have a call option. Yes. But what is the price welcome to be if you did it today? And how would you do it? We don't have it. How would you do it? But I think based on what was announced, we do have a call option, which can be exercised within five years from TOP.

The TOP was, I think in November of 2021. So that call option can be exercised within five years. And it would be at market price, subject to a minimum, which is based on the development, total development costs, less NPIs and quarterly compounded at a predetermined degree. So I think that was in the announcement. Yeah. But we haven't worked out the number. There's a formula there. There's a fixed formula. Yeah. It's higher. Yeah. Are you interested in that? Or would you just let it lapse? I will... When it comes to it, they go, look, we see it sometime to look at it. And also on that... So in Germany, you've got that airport office. What is it called? Main airport. So was there a decline in its valuation? And would you...

I mean, between divesting that property and something and Singapore, what would you choose? You prefer to do if you were. Well, I think a little bit, Jack did a little like this. Nothing happening in Germany at all. So first thing first, we need to see activity coming back. Then we assess. Yeah. By the meantime, I think we can't run away from the fact that we have to get the asset in good shape and operationally run efficiently and try to get the best listing outcome. And then our question on... You know, your development... You've got a development percentage which you're not using now.

What would that be? And would you be interested in tying up with, well, maybe CLD or CLA? Can you tie up with CLA if they decide to do some redevelopment in Singapore? There's talk that they may be interested in. So we do have 10% of the limit which today is on time. We... I think we would... The only depends on this circumstances situation, whether it's a redevelopable existing asset. But actually, right? I mean, I think Yi Zhuan did mention that there are different things you are looking at. And then the question is, what does AMP product fit? And AMP product has to be designed for the best use case in that locality.

And whether the AMP product fits in, it is so. Can we take it? It's not how much can we take it? Then there's the iteration that we go around. If you're not, then the question is, can we get capital partner? Is CLD what is a immediate partner that's okay? If not, then is there going to be a party, a quick, a good partner? We've done it before, like phone-in, right? For now, we develop the best of the service residents. Even during the development stage, where the product kind of fit into an integrated development, but that's not something we need to own it. Okay, thank you, Gullah. I think we have Vijay who would like to...

Hi, Hi Tony. Just a couple of follow-up questions on the earlier question. Firstly, on CapitaSpring, do you think this asset has stabilized at this point of time? And if your sponsor made this asset available, would you be open to raising funds from the market in terms of equity fund raising options at these price levels? Yeah. So I think we... I certainly stabilise this 100% right? It's not going to one cycle, that's the only thing. I hasn't gone through one of these cycle. And it's important we witness that because for new development, the expense and post-sabilisation expense would be different. So we need to make sure the number works. One second is a very chunky asset, right?

We don't necessarily have to own 100%. We own 45% today. Questions should we own more? So there's something we'll take it back and think about it. So you mean creep up by 5, 10% age, if that option continues into the... We'll take that back and think about it. Once we have a clarity in terms of how the number will work out. Got it. Second follow-up question in terms of Gallileo is that... A-liquid your A-liquid cost is about 75% to 95% of the exact... Asset value itself. Overall asset valuation, later asset valuation, considering the downtime and the marketer conditions at this point of time, does this really justify putting so much capex in an asset where the market conditions are? Maybe instead you can put it in Singapore or buy some other asset, which can give you better ROIs.

Is that a fair thing to say? Or how do you see this asset? Regardless, if we put the asset out today on the S-S basis, you're not going to interest. So regardless, we need to fix some fundamental structure problem with the asset, which is not built for today's use. So we need to do that. Second is valuation, the way that the ROI valuation is on the pure discount with the assumption of the mineral cap rate. With the passage of time, because you have a gap, right? The next 18-minewing income, but you are going to have capacts, naturally the valuation will come down. But with the passage of time, I think the valuation will creep up.

Assuming the interest of the environment stays stable, just with the passage of time, the valuation should creep up again. Okay, so just lastly, on operational cost, do you expect this to stabilize and come down a bit this year? How do you look at margins for 2024 compared to 23? Also, operational cost. Operational cost, do you expect it to come down this year? So we're working on... Where some levels they're working on, so this 20-24, you probably see the full-year effect from the new property management agreement that we assign with the property manager. And we try to work on the efficiency, that's one. Second, you also enjoy the full year of a lower tariff rate, utility, vis-a-vis, 20-23, which had a half year versus pretty high, right?

So naturally, there's two, we could take advantage on that and try to be more efficient as possible. Then the ongoing thing that we're doing is looking at high efficiency in terms of operation and that's together with our property manager looking at potential clustering, clustering of manpower. So that we do not need more people, even though we are expanding our business potentially. So that's something we have to discuss and work very closely on property manager. And lastly, I think there are certain interesting a possibility out there where we may go into it, we're still studying it.

What makes sense for us to look at an outsourcing certain part of the maintenance world? That's something we're working on, yeah. And hopefully with that we can achieve perhaps bad efficiency. And it may be even better grip on how we can manage the green building requirement, which is increasingly very important. Yeah. Thank you. Okay, thank you. So I think we will keep the last three questions for the online. Oh, okay, that's one more from, yeah. Thanks, Deb. Hi, good morning. Thanks, Deb from Bloomberg. I wanted to ask a few questions. One is on, you know, I do apologize now on the fact that I do have a reference recovery. I just wondering the ask them, is you sense a shift of combination in terms of obviously last

year that was thought big, do you related to high-level individuals as a family officers? Do you see a shift in the sense that no children are doing fine shifting away from the commercial retail space in favor of these cars, like bigger, deeper pocketed, like investors. And on the retail side, can you give a sense of who, like in terms of the interests you guys are getting from foreign tenants? Like, where was the makeup? Like, and last thing is obviously that's love. They have to know in the impact, for example, and finance, like, do you see that effect thing commercial demand? Thank you. So I just clarify. Your second question is about tenants. We do kind of tenants. Yeah, for overseas. So first one is on it.

The whole conversation. Well, I still think there's been some problem in the high level, where it has basically set up a family officers in Singapore. I think it's probably well telecast, right? That's a simple place, an important center for family officers. I think the opportunity to be interested in looking at some kind of investment activity in Singapore and ticket size varies different, different kind of family officers who have different requirements. And you have seen that happening. They can buy shop houses. They can buy structured floor building or they can buy a few, structured floor building. But actually, maybe even a single entire building possible. But they are motivated by different things.

Most of them are looking for protection of the capital, make sure that there's stability in a political environment. So they are a little bit of flight to safety kind of capital that potentially become here increasingly. And interestingly, beyond that, I think we're also stuck to here at least saw those investors, institutional investors in a process they very quiet in the market are starting to come back to inquire. So I think all of them are looking at how they could underwrite the, eventually, how to underwrite the investment and big components are obviously the cost of capital. So that's something that I think perhaps versus six traumas ago, I think there's a little bit more

clarity. Then the oversee retailer, you want to touch on some? Obviously it's retail, right? As we mentioned, we get interest both local and oversee brands. And I think for the oversee brands, we do a G.C. more Chinese brands, relative to some of the other markets. Large D, F and B for a start, but we are increasingly seeing more and more retail concepts but having it to Singapore also. So I think a lot of motivation is to diversify their business outside of China. I think this question was about tech demand. Tech demand. The strategy you might repeat in the last one. So there's a going normally often finance and tech.

So do you see that affecting commercial demand? Thanks. Oh, okay. Officer. Yeah, so I think for tech demand commercial, last year I think there's a good amount of shadow space in the market. I think some of those come up from the tech demand side, right? But some of these is backfill by also increasing some of them are being taken off-matter. So if you look at the shadow space stock, right, in those two 3J came down, we do still see some of these tech demands coming true by a lot of them are also using their current space and building up from there. Thank you. Okay, we just go through a couple of the online question. First one, it's about the, that we've seen more inquiries from co-working operators locally and overseas given that it seems that some of them have improving performance.

And then the second leading on question was whether do we see positive valuation impact of having co-working operators in our portfolio? Try to understand. Okay. Generally, the performance or co-working operators, we don't always have all the detailed performance metrics on the individual assets, the way they are located. But broadly speaking, if we look across some of the co-working operators like the the work project and the properties that they cover is generally quite good, we also say that actually usually the RAM part is also actually quite fast. So this one, we do also see like for example either the G coming true, if it could incorporate, we honor all of you, we talk about opportunities. So there are inquiries both locally and overseas, even though overseas as I think yesterday,

although it's not really our portfolio, you see that the work project and the access they have also somehow partnership going on. So that is the amount where you grow the co-working bit. The model will probably change along the way, right? I think in the past traditional lease model, may start to see a little bit more hybrid models management kind of contract style. And whether or not we have seen positive valuation impact on co-working operators in our portfolio comes, it's very hard to quantify because if it's like, for example, the co-working top of anyone's CQA is at least, right? Then it's value as a lease. And typically a lot of value will still look at the co-working in a way that the income is almost like a leasing come. But having said that what we are seeing co-working operators like for our portfolio, we want the co-working operators in because they add onto their flex offering,

which means that tenants can actually pay a little, take a little bit less fixed space. Have you oblida or give you a little bit higher rent? And then they don't anything else, you know, the part that, you know, they typically will kind of discount off because they are not using actively. We pull it together in a co-working setup and then, you know, the generates income at their level, right? So buy and launch as a overall property if the income level starts to be sustainable, at the higher level, it should have a direct impact on your valuation. Yeah. Okay, thanks, Yechuan. I think the second question that we have for so is that, do we foresee further valuation decline, especially for overseas assets? Actually, this one we did talk about it quite instant. It's just now. So I think Michael, if you can't, we can actually do a playback on this response.

So the last one is what is the guidance on retail rent reversion. I think we also spoke about this earlier. We spoke about this. So Yechuan, you have a quick one. Yeah, just a quick one. It's just that we do expect, you know, retail rents both sell a burn and downtown to moderate deco-out still a little bit, hopefully. And with that, then in coming back to the portfolio, we are working to watch, hopefully, we can get a count like mid-single count for reversion. Thank you. So I think we will, before we end today's session, I think we will also like to invite Tony. We don't have any things to share with investors. What it can look forward to in 2020 for the outlook. I think I said a lot, right? Short-term medium-term, long-term. I think I planned out the whole route map. And this is a constant job, right? Well, while we are in 2020, we are starting to think about 2020 when we do

it's an ongoing journey. What we want to achieve is ultimately a sustainable kind of GPU group for our investors. How we come about, again, I talked about it before. It could be different kind of levers we can do. And now we are glad that because we have a large base, that allow us that flexibility to look at different time to execute a different strategy. Okay, thanks, Tony. So for those of you who still have questions, please feel free to reach out to investor relations team. We are here around to help to address your queries. And also for thank you for joining us. A very listening to CICT. So remember, we are the proxy for Singapore,

commercial real estate. And definitely, we've been fortifying our resilience and positioning for growth. But of course, we have the way for the right opportunities to come. So we all together want to wish you all happy lunar new year. Happy lunar year. Those are nice. Well, happy lunar year. Thank you. Bye bye.