FY 2022 Full-Year Financial Results Briefing

Morning ladies and gentlemen A very warm welcome to capital and investments financial results for the full year 2022 My name is Grace. I'm the head of investor relations and you're MC for today It's amazing to think that another year has just flown by and we're delighted to share with you How CLI has performed in our first full year of operations since listing in September 2021 I'd like to extend a very warm welcome to our analysts members of the media as well as our finances who are joining us in person and For those who are watching via zoom. Thank you for joining us virtually We're broadcasting live from we was flagship asset at 21 call year key Which is an office building owned by capital and integrated commercial trust in Singapore

We have Tony Tan zero of CICD here reverse as well And this is we work the largest office in Asia Pacific spending more than 200,000 square feet So for our guests here, you're welcome to explore this amazing space after this meeting Now please allow me to give you a quick rundown of today's program We'll begin with a presentation by our newly appointed group CFO Mr. Paul Tom Paul joined CLI as deputy CFO in 2021 and this will be his first time presenting the results And after that we will have Chiku and our group CEO to share his thoughts and outlook before we proceed to Q&A So without further ado, let's welcome Paul to share some good news with us Thanks Grace. I think I'm gonna stay here because I'm a little scared. I'll fall off

Well, good morning everyone. Thank you all very much for joining us here This is actually I have to say is a lovely office and it's really nice to see all of you in person So as Grace mentioned, I'm gonna share a little bit more on our FY 2022 numbers give you an outlook of Sense of how the year went for us both from an operating and financial perspective and then I'll pass over to Chiku And who will really give you our outlook for 2023 So please save your tough questions for him So 2022 was a challenging year for real estate markets and particularly some of this really impacted us as well I think there were two main things that really did Have an impact on us. The first was really around inflation and interest rates Inflation interest rates in the second half of the year

We saw significant uplift force or hikes by a lot of central banks globally And that put a lot of pressure on us particularly in terms of transactions You know, we have a large red platform and the increasing interest rates put a lot of uncertainty and a slowdown on our transaction Volume if you look at the first half of last year think five out of six of our roots were active second half of the year That slowed down quite a fair bit So our view is that this year things will settle a little bit We may see a little bit more in terms of hikes, but as long as that little bit more stability We like to believe that that transaction activity will start to recover The second big thing that impacted us was really around China geopolitical tensions Russia Ukraine US China that had a distinct impact on our ability to raise

Global capital going into China which was always one of the thrust we had going forward Fortunately, if you've seen the news yesterday and today we've announced a couple of new funds Which is really foreign capital going into China and we think that's a very positive sign for us for the year going forward But last year certainly a challenging environment together with that COVID zero policy In China obviously with the long downs that meant direct impact to us in our lodging business in terms of rental relief And that did have a drag effect on our financials But I believe there's obviously this year with the reopening up and no pressure on Sis Yang and his team But we expect that there will be an uplift and improvement on the China side So a lot of macro factors last year that had a challenging impact on us

Some that continues into this year, but overall I think we're much more positive on how the environment would be Some very key highlights won't go through all of this. We're going to detail with the slides But one is operating performance for us was actually pretty good FUM (Funds Under Management) grew to 88 billion if you actually if it wasn't for a currency impact that would actually be closer to 92 billion But obviously sing dollars strengthened against almost every currency by the US dollar and so that brought that down to 88 In terms of embedded FUM (Funds Under Management) and this is for us is capital that has been already committed or deals that are in progress for our roots We're actually up another eight billion so currently sitting at 96 billion well on track for our organic hundred B target Logging had a great year

Ask our best year. We've had we expect that will continue, but it helped us a fair bit last year and then on divestments We hit 3.1 billion exceeding our three billion target But obviously looks a little bit more challenging given we had an exceptional year before in 21 where we Divested gross asset of 13 billion so a little bit of a drop there How the improved operating performance translated was better operating patney? We're up 22 percent However total patney comes down because of the slowdown in fair value gains and also the slower recycling So hopefully in this year we start to see a little bit more of a pick up And then in terms of dividend given the strong operating cash flow Operating cash flow for us this year was actually stronger than the year before so we're maintaining our core dividend at 12 cents

and also Distributing in species an additional six cents or approximately six cents of capital land as got trust units as a capital management two also To let shareholders and CLI also join in part of the recovery and lodging That's the quick overview Going into some of the details a little bit Patney for 2021 2022 as mentioned operating patney up 23 percent And part of that was Off-set actually so actually operating performance would have been better We had a little bit of an offset from forex losses Given the strong sing dollar versus most other currencies and also had rental rebates in China off about 30 million And so that actually offset the uplift we had but we expect that operating patney trajectory will continue

Obviously the big swing for us were the two columns in the middle portfolio gains and Evaluation and impairment or revalu- or lack of revaluation gains You can see the big drop off and if you look at the portfolio gains 616 to 2 2 That was really the big difference there for us also again was China the year before we had the raffle city Divestments last year, you know a lot of these gains actually came out of other markets So hopefully this year we get a little bit more momentum going back on the portfolio gains through more capital recycling Evaluation largely flat versus uplift the year before so we won't go into all the breakdown on our e-beda But we break down our e-beda and our financial results by business

By geography and by asset class. Maybe just highlight two things One is if you look at the middle chart The inner circle shows you the 2021 numbers the outer circle gives you the 2022 if you look at our breakdown by geography China has historically been about one third of the business Middlely before we could before restructuring it was closer to 50 percent But we should be at about one third of the business if you look at the chart what you'll notice is 2021 versus 2022 move from 28% contribution to 11% contribution So that really for us was a lot of the difference a lot of the other markets actually outperformed the year before including Singapore Which became quite significantly much larger as a contributor But overall we saw improvements in most markets and hopefully that 11% and larger this year

The other thing to highlight on this slide is asset class generally you look and you can see a pretty well balanced portfolio Obviously one distinct change is the increase in lodging lodging contribution has become much more significant for us This is great from a fee income perspective because this is good steady Recluring income from our lodging management and we're actually very very pleased by the contribution that we've seen over the last year and Given the trajectory of the market look forward to that continuing to increase This is a breakdown of our financials by business segment. I won't go through This it's just a different cut the only thing maybe to focus on is on the right-hand side of the slide You can see how operating pat me numbers and how that breaks down We break it into two components of the business our fee related business which is the FRB and our real estate investment business our real estate

Investment business is the ownership stakes in our rich trust and in our private funds Right, so this is really the property ownership and the lower part is from the fund management and the lodging management business So you can see what we've been encouraged by this year is there's a slight rebalancing our Fund management and lodging now contribute about 50% of that and generally as most of you know Generally the market gives us a better multiple on that component of the numbers and we are seeing that Improve and we believe that this is a pretty good proportion for us to keep going forward So we look at these two segments of the business in different cuts the first relating to the fee business So as mentioned we are seeing this part grow nicely. This is a revenue cut on our four different parts of the

fee related business The first is listed funds management listed fund management has trended down slightly But that's actually because of lower transaction volume if we were to strip out just the recurring part You would actually see this lift up slightly in improved on a Grow from funds on the management on the listed side But lower transaction volume so slightly low acquisition fees so the slight decline Private funds had a very nice uplift generated by good carry fees from funds in South Korea in Vietnam in Singapore That help uplift our private funds management performance Logic management had a stellar year Nice 36% uplift looking forward to that continuing And then property management slight decline partly due to property management fees out of China which were down slightly and also a little bit as we

Reconstruct our portfolio net net overall good growth. We love to get around that 10% 9% for last year, but overall good growth from our fee business On the real estate business. This is the ownership stakes On the left-hand side a breakdown by earnings by EBITDA Similar to the slides before what you see are two things one is you see a very steady operating income But in terms of the non operating and this is portfolio gains and fair value gains obviously that big drop down So maybe the thing to highlight different on this slide is if you look on the right-hand side on the chart similarly 2021 on the inside 2022 and the outside what you'll see is the contribution for where the real estate investment business Earnings are coming from it is now 73% coming from stakes in our funds and and Ritz

This is important because this for us is part of our balance sheet management We want less and less on our balance sheet more and more as stakes in our funds and our Ritz as they grow It's much more capital efficient for us. So you know that drop from which is the sort of middle blue I guess we got to change the colors to make it easier to explain but the middle blue drops from a 40% to a 27% on balance sheet contribution And this is directionally where we would like to be going Capital recycling so capital recycling last year's mentioned 3.1 A billion gross asset value maybe two things to highlight on this slide One is 89% of that divestment value went into our funds and our Ritz So the bulk of what we're able to get diverse is actually helping us grow our FUM (Funds Under Management)

You know and we'll talk a little bit more on one of the latest slides how much left we still have to divest But we think this is besides the third party assets that the team is acquiring This is a nice controllable divestment for us helping see new funds or helping grow some of our listed entities The other thing to mention on this one is you can see our premium above carrying value So it was 12% above carrying value for us last year the year before was 13% so largely in line Even though the market was a little bit more challenging and I think on this one the truth is could we have recycled more last year? If we really wanted to yes, but part of this also for us I think is prudence on what values we recycle our assets at you know, obviously that is something that we debate internally quite Quite robustly as well is making sure that we're looking after CLI investors as well as we look to exit some of our positions on the balance sheet

We want to make sure that we are not exiting for the sake of exiting but really looking to get a balance of returns on our assets as well So overall capital recycling well it did achieve target. This is something that we definitely want to push harder for this coming year property valuations largely stable and this gives you an also a good sense of where Geographically that came from obviously retail struggled a little bit more our business parks new economy assets did well But as you can see from the chart the two areas where we had weakness last year China net loss or down value in value by 90 million and Then slight weakness in parts of Europe and the UK so a little bit of weakness there But generally in our other markets valuations were actually relatively stable or improved

Particularly India and Singapore showed good strong improvement So in terms of just a quick snapshot on our financials one go through the details But our debt equity continues to be relatively stable and where comfortable levels about 0.5 I think the thing to highlight as mentioned operating cash flow which you can see 735 This is an improvement from the year before and this is something that gives us a lot more comfort in terms of our balance sheet going forward Which is why I think from a proposed dividend point of view We were very comfortable maintaining our 12 cent dividend core dividend which is the Dutton blue box Think this for us is a reflection of stability of earnings and our expectations going forward in terms of our earnings profile So something we're very comfortable with and then we have a special dividend this year last year

We had a three cent cash dividend which is partly to reward shareholders from sort of the drop down We had to nine the year before But then for this year what we've decided is to give a dividend in species of capital and Ascot Trust units The truth is it's probably our best performing trust this year We think given the high potential in the lodging sector and growth. This is something good for CLI shareholders This was something that was considered during our restructuring the point in time. We decided not to give Class units because it was you know in the middle of COVID Most folks at that point did not feel that hospitality was the right NASA class to own So now we feel this time round we think it will really benefit our shareholders and from a group perspective

We moved down from 37.5 percent holdings down to about 29 percent where we're very comfortable It brings us in line with a lot of other rates and trust where we hold low 20s or even high teen percentages So that is our financials in a nutshell. I'll just touch very quickly on some of the key operating highlights for us for last year Our fund management side as mentioned fund management up including embedded FUM (Funds Under Management) up to 96 Actually, if it wasn't for a currency we would have been a lot closer to the hundred b target and you know Maybe she couldn't would cut us all a bit more slack, but uh We're not quite there, but on steady track. We believe and we hope this year will accelerate some of that growth On the right-hand side something to highlight in terms of capital 10 year for us

Which is a little bit of a unique differentiator if you look at our capital pools We're actually largely perpetual capital and perpetual in the sense that obviously we have about 60 billion dollars in the ritz and unlike our open-ended fund Though it had a ton of redemption or some of our private funds There is in the risk of redemption and Mitzley there is can be some impact on share prices that can move up and down But we don't have that same impact so for us. It is a unusually steady recurring income stream Which we get compared to other fund managers and you know I think of that that's a franchise that we're very happy with on the listed side In terms of overall fund management performance where it is We see slight growth in the fee revenues on the left-hand side

And then on the right-hand side you can see a little bit more of a breakdown of what was recurring fees Starting with the listed at the bottom so a little growth in that recurring fees Then slightly lower on the acquisition fees or the transaction fees There are a event driven so that 52 down to 35 And then but that was made up for by the private funds and this for us is to essentially the benefit of having the two sides Which is why we want to see both legs of this grow is to help offset because it's southern markets It's better to be running the rates and said in markets It's better to be running private funds and we think having these two longer term for us becomes quite complex entry so on the listed side to some quick highlights so our listed side grew by about

two odd billion and Maybe actually the thing that we're actually most proud of is if you look at the bottom part starting with number five Is we actually had steady dp growth on most about rates? In fact five about us of our six rates improved With the one rate being related to China, which we think is quite understandable in the current market But this is actually for us actually critical right? We more than grow if I think for our roots What we take very seriously is the performance and being good stewards of our investors money And what you'll see is that steady dp growth to send the was grew driven by the parts above it above five number four proactive asset management a fair bit of asset enhancement you know working on our properties and Expanding in this in case in Malaysia. We expanded the logistics in India into data centers

And that helped drive that dp performance as well And so I think when we look at this you know most critical for us particularly in the coming year as well Is making sure that our roots perform well and given that we're also the largest shareholder in all of these rits Having that them deliver on npi and dp is important to us too on the private fund side Good momentum. I would love to have shown an overall growth in the private funds numbers private funds took a real hit due to currency We have a fair bit of exposure in foreign currencies and with that FX impact most currencies outside of the us Actually depreciated between eight to 12% For us and that actually shrank the FUM (Funds Under Management) so though the team has grown it doesn't always reflect in the numbers But obviously we had good domestic launches out of China

Rinden B funds our career funds generated good carry and we were able to see repeat investors and we believe that will continue to grow as well And then we had a few niche funds Self-storage obviously lodging for us which is a standout I think in terms of our ability to have a vertical stack operating platform Really helps different shaders there so some growth there as well Do we expect that it will grow faster then you all should hold that question for Simon and Patrick later on But it's certainly something that we would like to see this momentum continue to accelerate What we announced this morning and yesterday two new Programs of funds related to China. This is big for us because it is evidence of foreign capital starting to look again at investing in China First we announced

I guess on the upper part of what we announced this morning China opportunistic fund. This is really looking at special situations And it's on a programmatic basis. So what we have is we have one which is a single asset fund Un which with global investors which we are doing a repositioning of a retail asset Into a little bit more of a mixed use with more of this space and then we also have a programmatic joint venture Which we've seeded with one of our logistics assets in foreshan and which was on our balance sheet before and this is a start of programmatic joint venture and looking with some global investors in regards to How else we can find special situations in China The second fund I'll try to date a center fund. So this is was ceded by a couple of

Development projects we have on the balance sheet which were acquired for this purpose really to help us launch there This is a development fund which went fully completed Project total value should be at about one billion so equity accompaniment from global investors is about half a billion So this for us is a great complement to the domestic renmin p1 that we're doing We believe that these two aspects together with China's opening up will certainly help us pick up or continue the good momentum We've seen in this Just on the lodging business Ludging is very easy to talk about these days because people can see Travel going on more people coming back flights are expensive rooms are expensive Last year we added 33,000 new units to the portfolio

Was an outstanding year from us on a lodging basis lodging fees up 36 percent and that was driven By a lot of recovery good occupancy, but it was also driven by Improvement in revenue per available unit rev power for us So you can look on this chart. You can see our rev power by geography if you look across the entire chart You'll see everything is green Except for China Right and overall despite that we were up 40 percent year and yeah, so this is for us. You know, this is a Good part of the business that Gives us a little bit of advantage in this space This year hopefully with the recovery in China The one Non green becomes green and it helps to offset potential You know any headwinds that we may see in some of the other markets But overall gives us good confidence that we're going to continue to see some growth on the lodging site

And then just finally just touching on our real estate investment business This is our ownership stake As mentioned in our properties in our units in the various routes and trusts and through our stakes in the funds So this is just a snapshot of how it did For those of you who track us quite closely the truth is more than 50 percent of 57 percent of our real estate investment Businesses now help through the REITs so actually if you watch the Reporting and I think all six REITs always go out before us you'll actually get a good sense of how our numbers look as well And as you would probably know from having seen results from our different teams Singapore is good performer this year high occupancy Repositive rental reversions and because of that we saw positive NPI contribution

Similarly for India good performance new development projects NPI numbers are up I would say in terms of weakness globally where we saw it obviously China was a tough one for us As mentioned for all the various reasons of which we expect will hopefully improve this year And we also saw a little bit of weakness in Germany and in Japan under our other markets, but that was offset by improvements in the US career And Australia so overall actually we had from a operating perspective a pretty good year Just offset by challenges and specific markets and unfortunately affected us on an overall basis So conscious of time last slide for me In terms of our longer term pipeline and in terms of divestments and reseeding we continue to have just over 10 billion

In terms of pipeline assets on our balance sheet and we started to put some pictures up on the bigger ones Below for two reasons ones to give you a sense of assets that we are proud of But also give you a sense of what we have on the balance sheet for potential divestment And what you can see on the From the chart below is what you would realize is when we look at our biggest assets for their investment with the exception of obviously I on orchard and Singapore the rest of our assets are actually in China a lot of our assets It's here you know half easily half of what we would look to recycle is really there so for us This makes a big difference right In terms of geographically where that recycling will come from But I think what gives us confidence is this year even though it was a little bit more challenging We still manage to divest 2.7 billion into or recycle it into fund management into our fund vehicles

And we continue to acquire to warehouse and that's the one thing we're comfortable using our balance sheet for is really acquiring holding for a while and seeding funds or Into our listed entities so this for us becomes part of our growth for the future as well And with that I will pass this over to Chiku and to talk about our future Thanks Paul I think he did a great job as the inaugural CFO for For his new appointment Congrats Paul. I think good job. Give him a round of applause. Thank you Andrew you chose well Thank you all for coming

He did such a great job. I don't want to belabor the point about talking about the doing Last year's performance Maybe just to remind everybody we embark on the restructuring exercise Less than two years ago and our ambition is really to you know after doing the the entire restructuring creating the vehicle You know we have a long-term plan of really building a globally competitive Real estate investment manager. It's gonna take time and you know some of you who are here For me little we've you know I used to see here when I was running as good and I got many many questions from Friends and some of you are still sit here asking why was the R.O.E. for esket solo

Why don't we sell the esket business and if you look at the business that the esket has done today? I mean what is an asset level that is appealing terms of how they manage the assets and growing the Feeding come business in a very asset like manner Not forgetting you know every time they sign a management contract a fees last for 20 years No, you're pure certain scale the fees flow very very nicely So when you need to we are very focused on what we want to do to build a global business to be an to be a asset management business Reputation is important try to record it's important Making sure that everything that we do we need to think on behalf and think very very in a very disciplined manner How do we deliver returns for LPs for unit holders and also for CRI shareholders and that's the basis

that we will continue to pursue growth and This is a reminder. I mentioned this before. I think to some of you When we did the restructuring two years ago the original plan Original plan when I took over the CEO of capital and in 2018 The original plan was to do the restructuring only after 2024 That is you know after we built up other capabilities after we quietly bringing people like Simon Patrick and other other Distribution team do some delivers on try record then we do the split but the COVID Situation presented the opportunity for us to do the speed ahead of time But of course at the point and the organization was not ready But we decided to go ahead don't waste the crisis bringing the team built the team and I must say that I mean today

I mean Simon and Patrick have built up the team. We have a much more global capital raising team Going out there introducing about what capital and is about You know, I mean, I'm on the road a lot You know meeting a lot of new people and they are excited about the opportunities that Asia presents Whether it is China whether it's India whether it is Southeast Asia I mean China is always a I mean I Mean many other investors many people are asking you know is China investable I Mean for us we have been China is a big part of our business You know, we said that we have to demonstrate that we can raise domestic capital from China in the last two years I think

Big thank you to the young and his team managed to raise almost about 40 billion roaming P No, we said that we're gonna do it. We executed. We demonstrated it. I think once you can demonstrate to investors that look There's a domestic capital that is prepared to acquire the assets For foreign capital that wants to invest in China first and foremost is the economy strong Is China going to continue to be one of the top two most important economy in the world At least I believe so there will be bumps on the road But if it's gonna be investable investors especially foreign investors they need to look for exit options If there are foreign LPs that start to have second ideas

Concerns, but if you can demonstrate that there is a really huge pool domestic capital ready to take on the assets I think that demonstrates confidence any demonstrates our ability to execute ability to asset manage and ability for domestic capital to come in to invest with us And I think that will slowly bring back the confidence of people to continue to invest into China I mean we are today at I will say a pretty interesting point in I will say in the in the business world especially for for China. I must say We've been there for 20 over years Reputation we have boots on the ground. We are actually particularly integrated across many of the asset classes domestic capital we start to only talking to one

Two years ago and today we have opened up I mean the relationship is a lot deeper after you open up one relationship and There has been a lot of reverse inquiries. I was just in Shanghai last week I mean to be to be fair Today my mood about the economic outlook for 2023 today is a lot better than two three months ago You know in towards the end of last year when we were preparing the budget for 2023 I was say I say China is still shut Thinking that China was only going to open maybe second half of this year recovery. I need to need 24 but when they decided to move Well things opened up very very quickly and

You know even though environment was very very difficult. We continue to stay very disciplined in looking for investment opportunity We acquired the some of you may know You know who followed last very close do we acquired the Beijing office asset? in on the first day of the 20 of The the party Congress last year first day You announced it. It was a court option due we acquired it the other price that significantly below Replacement costs and that's the discipline that all the teams on the ground have you know today in the market where Interest rates are rising where it's very difficult to underwrite deals because you You go to investment committee people argue about what is the cost of financing?

What is the exit cap rates? So we need to be very disciplined in finding deals that we believe it's below replacement costs and we believe can deliver good returns And we are prepared to use balance sheet Because we are confident that we can deliver the returns And if you can find good assets a lot of capital will be knocking on your door To want to participate in those deals and that's the discipline that we have been that we have been keeping in the group Going forward for this year you continue to see us Continue to look for growth on the least of each side Obviously given where the share prices You know, it can ask Jonathan later how he's gonna look at growth But we'll continue to look at opportunities through reconstitution through accurate if acquisitions or this will happen

Maybe pace a bit slower, but we'll continue to look for these on the private fund side The engine has been built You continue to see activities coming up especially in this part of the world some Some very bold ideas that Simon has to get it with his team. You can get it true. You'll be good for CLI lodging I just I mean, I Don't need to say too much you saw the numbers. I mean if you know how how much it it will cost you if you have to travel I was trying to take a shot. We can trip In April To stay in Kevin's service apartment. They kind of raised their his people gonna charge me

Was all ridiculous. They are decided. I'm gonna go tie one in state. I couldn't afford the reads so so I So I just wanted to tell you I mean I think To build a Company we have to take a long-term view how we are continuously building capability and creating enterprise value That is the basis on how we will build the company along the way. There will be bombs. There will be interest rates issues There'll be Joe political issues, but I just wanted to reassure the the investors and the analysts Here that we will continue to be very very focused in terms of our execution and be very disciplined in how we look at views and

You can look at the the team here The average age of the group has been reducing with the exception of a manoha and same chai But the team we are building younger and younger people in the team why because to build a company to be globally competitive You're talking about building You're going to fight this war for the next 10 to 20 years. Many people with that energy Right with not that manua's no energy. He's still very very he's still very He's still a lot more energetic than me in many ways But but you know we need to we are preparing for this It's a long journey that we are fighting and it's about the capabilities about the experiencing their body experience that we are building in the company

So if that thank you, we can do Q&A Can I also invite Paul as well as Andrew who is now? CLI's group chief operating officer to take this stage. I would also like to make some introductions Joining us and seated and first row are members of our CLI leadership council and they are And that includes the CEOs representing our key income streams which and they will participate in a Q&A We have Simon Tracy CEO of private equity real estate Petri book called CEO of private equity alternative assets Please ask them about the fund launches which we announced yesterday in this morning and of course Jonathan Yabsey

Oh of listed fund as well as Kevin go CEO of lodging And I would like to make a special mention of The sound and Irvin yo there seated there our senior management in China who are joining us for the first time in person First time in three years and they bring you the first hand news from China and finally I would like to shout out to our viewers online Please don't hesitate to join in the discussion by leaving us a message in the chatbot On zoom and with that we're ready to take the first question. Marvin Can we pass a mic to Marvin please? Hi, I'm Marvin from JP Morgan. I promise probably be gentle with him today So I wouldn't direct any financial questions to him

Maybe get started off Congrats on their announcements the last couple days in terms of New mandate wins but can you touch on Investing queries be that onshore offshore. What's that best appetite? Any particular asset classes that they're looking at? Obviously you would only bid for the Chinese property I assume you compared this being more aggressive with buying as well Second question I have is for Kevin. He's obviously doing exceedingly well He's effectively hit his targets one year the advance So any thoughts of Guidance of number units under management going forward. Thanks Do you want to take the question?

Okay, thanks to the question and good morning everybody In terms of investor appetite clearly Investors are spending this quarter looking at their overall portfolios looking at their operating environment Looking at what capacity they have to Invest starting probably from the second quarter this year. I think that's a very global Synchronized activity at the moment for institutional investors That said they are still underweight Asia Particularly with their portfolio is in Europe and their very careful monitoring of the US market where capital They use the starting to come down now quite significantly We continue to have with our global capital raising team Numerous meetings within this is all around the world every week

And again their views on our platform is that they're seeing a differentiated way for them to better understand real estate risk And have that capital sensibly deployed Up and down the risk returns spectrum Including a new niche sectors where we have the capability to better understand The trends happening in the market such as data centers credit etc so I'm quite Positive that in the second half of this year You're going to see investors now coming back into the market And looking at us as a very Viable complementary manager to their existing GPs in this region To invest in these markets as they recover My hunch what my strong sense is that this will be a very

Very good vintage year Four investors and that we're very well positioned to take advantage of that on their behalf as fiduciaries So I think the second question to give you a bit of context When I first joined the company we were at about probably 20,000 keys globally And at that point in time we find that we're very constrained with 20,000 keys You have no scale you can invest in a lot of people. You can't get the best systems out there You can't get the best people So at a point in time I think what we're trying to do is to focus on getting the numbers up We want to get 20,000 to 30,000 to 40,000 And since then, you know, I've seen Us grow from 20 to 40, 40 to 80 to 160

And that's doubling at V3 to 5 years Of course the doubling gets harder as the base gets bigger So but at this point in time I think at about 100 and 60,000 keys We're looking across our portfolio We also look at the different product types that give us the different margins And we're beginning to see that the service department product actually gives us a lot more fee per key Than say managing a rent a housing, which is a lot lower So we're looking into the The quality of the fee income that we can extract from each of these products And to borrow often mentioned face of not growing for growth sake We really want to look at where the quality growth is and Guide, you know, many of you here to see in which direction are we going and what kind of fee income are we going to extract from the growth

And I so I think going forward We were trying to give you a little bit more color into the various dimensions of how we measure success and how we look at how we grow I would very much want to keep to the momentum of doubling every three to five years If we do that we could be the next merit in Not too far future But I think we have also to be realistic that as the base get bigger is harder to double But we definitely continue the growth momentum, right? And I think in the course of this year We'll come up with certain matrix We look at some of the management companies out there. The hotel management companies. They look at net net room growth They look at margins Certain product types of them brands that they want to grow. They look at geographies where they have higher ADRs

We can extract higher margins So we'll start to kind of give a little bit more color on some of these factors But you know, we will we're still working things out and we're ready. We'll come to you Kevin You can Hi You can obviously say thanks Paul and she can for the lively presentation. I have two questions the first one is on As a recycling last year you managed to divest at top of some premium to book This year how are you gonna balance that between as a recycling a U.M. and That premium because I investors and beers willing to pay that kind of premium in this market

Then secondly is on any share buyback cleanse, you know Now that BIS for classes done, you know Any future plans on that? Thanks. Yeah, and to address this was okay. I'll cover the share buybacks then I will leave Andrew to talk about as a recycling On the share buyback, you know, we still have our mandate. We will go back for out to Shareholders for renewal of mandate in the upcoming AGM as well. I think we still consider share buybacks part of our capital management tools We don't have a set target on how much we are looking to do the buybacks on but obviously I think we believe intrinsically in the value of the stock so if there is an opportunity is to pick up and improve

Some of our holdings as well. I don't think that anything would stop us from doing that And so that the intent would be no last year. I think we Bought back probably about 130 million something in that range and I think for us that is a fairly comfortable number Question on recycling? I saw first thing just to remind everyone we're not in the in the business of selling for selling sake We tried it engineer good premiums and we look for partners or willing to take assets at the right price So that will continue as I mentioned this morning. I think Buyers and sellers are in this adjustment period There is a need to there is a need to recalibrate Because we've got interest rates you got funding tables. I need to be re-looked at underwriting There needs to be relooked and so on so forth

So we do think that first half it will it will continue to shift The ground has not settled yet and I think that's it's probably important to acknowledge that but if we do See the signs of stabilization from a monetary from policy perspective We do see capital waiting to come in which we do there is a wall of capital waiting to come in They just need to know how to underwrite So I think when we get this greater certainty Then the recycling will will will spool up to a comfortable level That will enable us to hit our targets comfortably whether you hit You know, we repeat on exceptional year of 21 or we get to somewhere between three and 13 I think we'll find out but it's it's again

I think not a not a difficult Period for us. We are we are very comfortable with what our targets on our budget is for this year To be honest, I'm more concerned about FX movement the strong thing dollar currency than anything. Yeah, that's my Before before that since I want to give some color about what the Chinese-reming peak capital partners I think I need you useful to share with them because you deal with them on a regular bit Just get them some color about the appetite I mean just have to know that there's a lot of capital in China that can invest outside of China Yeah, so maybe it's a second Thanks, Kevin so Anyone a bit to the asset recycling bit and what? Simon has introduced so we look at China

We will in the past pipe focus on raising foreign capital to invest but in the last 18 months in particular given what has happened in China and all the geopolitics thing was a very evident and rose critical for us to refocus and diversify efforts to tap domestic The domestic investors obviously know the market better so the domestic investors obviously can underwrite Better and the right means that they they can they can tell You know what's really going on whether rents are going to go where the occupancy is are going to go How the assets are going to perform and which asset classes to deploy in so we have had a good run last year We had our raming bill fund managers license in 2021 and then we were able to then get onto the into the act of

Really really explaining our work to the domestic market and then to last year we raised three funds FUM (Funds Under Management) coming close to 10 B I think it was my 9 B The body capital as chicken pointed out was about four four verbally Reming be the domestic investors for example like one of the biggest posts that insurance players They are doing good business domestically. They do have capital to deploy and they do need to deploy So at the end of the day you'll be looking out for assets that are well managed They are also very well They are able to understand very well the consumptions that goes on in the country So a very good example of it as a class retail Right for foreign investors, you know retail has always been difficult over the last few years because of covid

Not just China across the world but in China itself, you know, while the foreign Investors the instis may not want to Double too much in the retail, but the domestic guys. They actually can appreciate You know that the consumption is domestic consumption is actually one of the strongest themes Out there and they're able to relate to it. So that gives us the differential factor No, every back to the asset recycling. There's no I was just thinking whether the question will come to me for what China Is really the how much Premium you get in junior is the difference between how you value the assets and what the market The buyer wants to acquire the asset and again it comes back to how they see the future So if they were to be able to look at asset class, they feel comfortable with the underlying trends

They feel comfortable with the operator They know how we were under right and they're comfortable actually The asset recycling can take place at a outside comfortable margin So this is from a domestic point of view. The Instis that we have reached out to last year 2021 we had a big breakthrough with one of the big insurance players since then it has allowed us to tap into a lot more avenues Not only have we gone deeper into the insurance sector from one Player to now six instis with us. That's really a show of strength We have also touched non insurance non insurance like trust money S O E money also securities So that broadened the pool of capital available to us

so moving into the future Just answering chicken's point. I think the domestic Investors will continue to have that greater clarity over what's investable in home country Over what asset classes in fact retail or new economy I think on the asset classes will will have Well bear attraction to domestic players back to Simon's point the foreign Just want to at one point the foreign investors may some of them may have been very conservative In the COVID years. Yeah, I can tell you just over the last two two weeks You know, I've really met some middle Eastern folks I've plans to host the Canadian folks and the group European guys Everyone is penciling in dates to revisit. I'm not saying that they are going to touch

Okay, any asset class okay anytime soon, but the willingness to relook the market is there. Thank you We have my yoko son. Okay. Thank you. This is may you go from Nikkei nice to see you again On further to China Question you have new Two funds and you were talking about having that global interest back into China Investment can you give me more? details a bit more about you know where the money is coming from hopefully region or country and Now what changed them where they just you know Decide made a decision and why did they make a decision now and what does it does that change look like?

For you for the going forward rest of the year. Thanks for the question That's a really nice try to get from us who was investing We can't tell you that obviously nor the region what I can tell you that's really interesting is that there's always Global investors that focus on what's coming over the horizon a little bit and positioning their capital and their thinking Before the market starts to turn and that's really the type of investors we like dealing with where we can show our Thought leadership and present them contrarian ideas

Possibly a bit earlier than the weight of capital. What otherwise Think so there are Handful of investors now who are really just thinking about Where's the world gonna be the end of the year? how do they play that now and Given cheekbones comments about the difficulty of underwriting it's back to good old-fashioned analysis of Replacement cost that's probably one of the better indicators So I think the takeaway for you should be that there's always these investors that are very Smart thinking forward trying to get ahead Before the way to capital starts to come on in and you'll see that now increasingly to the point where then the wall of capital We're really start to evolve from Q4 this year. So there's a window for us now

particularly in China for us to capitalize upon the opportunity and My sense is that India could be next that is a market that we've got a remarkable presence Close to 30 years where again, that's transformed We a lot more than people really give it credit for and we all went and got on the ground there before Christmas and Just we're very impressed by the ongoing development of that business we have and the quality of the tenant market and the demand for International grade space so that's the next thing to watch out for We'll have joy Joy from HSBC two questions here first just on sort of fan management business in the new funds

Do you see a change in terms of return hurdles Sort of leverage requirements for the new funds and also if you comp domestic Chinese capital versus international is there a significant different Difference in what they require in return. So that's one and two on your balance sheet Could you just share your thoughts on Where you think your balance sheet stands for yourself for the group? Including reads and also how you position for sort of future growth requirements. Thank you Let me take the first one and maybe Paul can talk about actually so Joy. It's a good one I think what we've noticed is to Simon's point about thought leadership the capital that is

Happy with the risk at this point in time and we all acknowledge uncertainty is high so you're looking for returns that Compensate you for taking this position such positions So if you look at the funds that we've announced on the US dollar site and right opportunistic program data center program these are I wouldn't call these sort of vanilla cookie cutter things. These are proprietary thought leadership We have to take positions. We have to demonstrate that we have skin in the game We have conviction in our investment themes and then to Simon's point going out to look for like-minded capital partners who share our view of where things will be And they say okay, let's come in and we are willing to compensate you

Obviously returns need to be where they are for taking such positions And if you think about opportunistic programs greenfield data center Yes, those return holders are where they need to be but at the same time from a GP perspective So there's the fees for taking these positions so as long as you can match the opportunity and Capital with the investment pipeline then we've got a nice platform going So I think this is the type of product that especially for China and maybe for India is where CLI can demonstrate leadership Because again, we've been on the ground. We've got we've got vertically integrated businesses We've got a decent track record. This is where we can differentiate ourselves and quite friendly what the market is looking for from us We we can't solve these two markets then it's going to be a tough sell for the other stuff at the part of the business So in this sort of higher value add opportunistic greenfield selected all sectors credits one of them as well

I think this is something that you should look for more from us going forward at this point in time and Then I think in the other side of the the walls of the core products This is I think to my earlier point will take a bit more time to settle down Because core is much more dependent on your funding solution your margins are tighter your spreads are very important to you and so on and so forth Right we all know this so this will take a little bit more time to settle down but we think that once the policy moves to cool the global economic engine Start to take effect people will be able to work that into the underwriting work Then to the cap tables and then that appetite to deploy this amount of capital We're just sitting on the sidelines. We'll come back and we have a nice Comprehensive menu of core product for you private side public side lodging

So that's that's their waiting to happen We think second half of the year will start to see much more appetite on that by in the meantime We're putting out some interesting product a demonstrate thought leadership in the markets that we have every right to lead on So just on the balance sheet maybe a few things one is we have a strong balance sheet Right we're about at zero point five percent or zero point five zero point five two times debt equity and that includes the fact that we consolidate a couple of our rates on our balance sheet So actually close it a zero point four The reason we like the debt headroom is actually to give us room for potential M&A or warehousing of large platforms or assets So it's intentional that we we keep that headroom for future growth

But it's actually generally at a very comfortable level and given our operating cash flow has been strong That also helps us so you know that balance for us is about there I would say the other two aspects to it on our balance sheet is we're trying to become more efficient on how we use our capital So you'll see in the new funds compared to previously we really have smaller stakes So 10 to 20 percent self storage last year was a 1090 some of the new funds which are new areas for us are 8020 but generally that's the pathway going right to try and be more capilly fish tied to that obviously was the DIS of class on the rich side as well if you look at our six ritz and I Leave the Malaysia one out slightly separately. It's listed in Malaysia slightly different from the five we have here And for the other five ritz, you know, we hold 18 to 23 percent So class was a bit unusual at the 37.5. So we thought this was

effective from a capital management viewpoint in terms of returning a bit to share holders and also reducing our state That said it to be fair. I think to class we are not planning another DIS of those units So you know that 29% were quite comfortable. I believe the class team has growth plans and over time similar to the other Ritz I think we can naturally dilute down, but we're quite happy with our holdings at this level So this is a really improved efficiency from us And then the last thing on the balance sheet. I think we'd be around interest rates So we are cognizant that we're still in a rising interest rate environment and this year I mean we're 3.1 versus 2.7 in terms of interest rate cost year and year that number will move up Unfortunately as our loans come up so we will pick up a little bit more costs there

But we're trying as much as possible to be active on this treasury paid down They another 1.2 billion in loan. So you'll have noticed year and year cash balances have gone down I think more than has complained to me before about us being better on cash management and This is something that we are actively trying to do as well trying to reduce our interest costs and all that so a little bit more efficient a little bit more cost savings There was a question. I think I forgot about China expectations, right? Sorry about the joy So just young please jump in and buy for miss anything. Yes, I think the short answer is yes And it's a function of a couple of things the makeup of the Chinese domestic Chinese investment community is different So whenever you talk about insurance companies long duration type stuff They are looking for stability and predictability over

Alpha and high return so I think it plays into our core portfolio You saw the pictures of these assets that we have a lot of these in China Stuff that we have on the balance sheet that once we get to a stabilized state There is a very natural optic for this for this product in the past we didn't have a private equity product We could turn into on a domestic site. So that has changed So it gives us greater optionality to think about these products when we can securitize them and find the right capital partners and now that we've had conversations and meaningful relationships with these people They understand what it is we can bring to the table both from a portfolio perspective But from an also from equally from an asset management perspective which is critical when you're talking about just delivering steady core return

Right, can I partner you for the next 10 years knowing that you can deliver my? You know five to seven percent EBITDA years and so on and so forth so then I think it's placed nicely specifically into expectations for core return in China the other useful part of the equation is interest cost Going the opposite way in China and there's just a function of where we are in the cycle nothing to do with us but it helps us put these products together because Chinese investors don't have the same Concerns about where rates are going and where it will take but right. They don't have they don't have the same pressures on margin versus the cost of funding so I think for us in China we have the makings of a Healthy domestic product pipeline

That now that confidence is coming back people are willing to start to talk about Okay, what how do I deploy? Who do I deploy with? We've got a local emc license. We can go out and start to have meaningful conversations and growing from the six funds RMB three funds sorry three RMB funds six is a future sorry three RMB funds that we have I Used to know this stuff so three RMB funds that we we already have in a pipeline Allows us to then see where we can take the platform hope down to your question We'll have tungen Be follow is end on okay Okay, hi morning

Have two questions first is on lodging management Can you give us a sense of the management if it or margin in 2022 and do you think there's room for further expansion? And then second is on fm growth 100 billion doesn't look quite achievable now So why are you thinking about the next three to five years? And then lastly on class distribution Are we expected that they did console that and can you guy what is through the financial impact? Thank you Just we clear the first question. I think we disclose our margin numbers. It was at the low the T's if I'm not wrong And with sin this number going up as we scale up so as we open more properties we do expect the flow through

To go down to the bottom line and the beauty about lodging management businesses that the marginal equity required to service more Units is actually very low. All right, so this year we opened about 9,300 keys Which is operational keys that gives us revenue. I think next year we are projecting at least the same level We've not more all right, so we do have a very healthy pipeline of assets that will turn operational in the next few years And that will drive margins now you ask me if there is that target If you look at the likes of the other large management companies It could go as high as 60 70 percent. All right, but those are really big scale but between 30 to 60 I think we can learn somewhere in between and I do believe that our margins will continue to grow

Just to add on for for Kevin. I know the business a bit The details a bit better because I used to run it You see as you as he's trying to grow in a various markers He has to recruit the business development people invest in technology So that requires a bit of time as the properties comes through the cost gets Just gets amortized across more properties so that Margin that's not at the level of The other big players is one in terms of scale as the properties gets open your flow through quite quite nicely Yeah, in terms of the FUM (Funds Under Management) target. I like to give you a number I mean we have an internal target for ourselves We decided not to Make it public because otherwise every quarter you'll be asking me

You know, when am I gonna deliver that? No, no, because we don't want to give ourselves target because the fundamental basis of achieving growth must be You know, we want to deliver good returns for our LPs for unit holders. I mean I I Mean Janine and team we continuously look at M&A Platforms I mean to be honest if we want to you know grow another 50 billion a UM is not difficult I mean we can just buy a platform and stray away it's 150 and 180 But does it make sense? Does it a strategic value? Is it going to help us to drive? Feeding come is it going to help us to to grow the enterprise value for the CRI Investors so these are questions that we always ask ourselves if they're right opportunities, you know

We can be 200 billion. We can be 250 any time The the important thing is that the focus on growth is there by must be on the basis of a Responsible discipline growth. It's a long game. It's really a long game. It's a I don't want to promise you something that I deliver Next year then the whole reputation gets exploded and that's it. No, there's no more CRI to speak of Yeah And then just the last question on class accounting treatment. No, we won't decon solidate I mean the truth to us the most important thing is the holding percentage It's actually not so much whether we consolidate it and a non and the reason where at 29% is not originally We had actually talked about 30% but then if we're 30% we'll always have to you know Go for an MGA, you know, are we trigger that geo code all the time around 30?

Which is why we ended up there so the more important thing to us is the Holding percentage in regards to the treatment all it will be the difference is you'll just have to account for the difference in our Non-controlling interest component which will increase Just given that lower percentage We have Lewis morning Just two questions for me I think the first I think a while ago the MCSRC officially released some guidance on the city of private equity Where as they funds in China? Just wanted to get your thoughts on the impact of this on the competitive landscape The domestic investors and how the sector is going to develop in the near term and the second question also related to China

Just following on or from induced comments about what the domestic investors really look for Just wanted to get a sense of your legacy China more funds Not sure how how long are they in their fund life But would this year then be a good year to kind of measure the exit of some of these funds to what the domestic require? Thank you on the first question. Yes. Yes. Our series on the has also jumped into the fray and Nouns and intention to allow PERE funds to invest in residential as you can tell From the last few years Resia has been a difficult sector because of the administration wanting to keep it on a runaway price as the so

The developers have had it tough also. I'm sure everyone is familiar So there has been a slew with a bigger context that has been a slew of supportive announcements measures policies first and foremost the developers are now able to tablet bond market That's just one thing Second I think the banks are encouraged to land to the better run developers and third you know of this Six years last year the developers will now finally able to go back to on Onshore equity financing so this CSRC announcement is really just another measure to try and Possibly create a soft landing for the sector itself Having the AMAC approved PERE funds is just allows domestic capital to now go into

Development funds or I'll say build to call type of PERE funds and these funds can then flow into supporting some of the residential projects that are currently PUD projects under development. You know for whatever reasons, you know financing or cash flows from sales has been slow And then projects are stored right this will then provide relief Yeah, so that's the background to it the exact rules of engagement All of us industry players were just trying to find out But it's a positive news positive news that the sector will be supported positive news that there will be financing for the residential sector For us we are looking at that as another breakthrough into what we think we can add further value Which is rental housing so it is also residential But it is more attuned to our ecosystem where a CLI can go into PRE setups up

Develop products for LP's domestic LP's principally. We can also have our colleagues from CRD to the development of the design okay, and then we also have our colleagues from our Loging platform right coming to manage so this is a very very positive development for us and we're looking forward to it your second question was on Okay, so we have had four legacy retail funds That's our biggest portfolio Besides the reference portfolio so so in 2021 we managed to recap six Raffle cities into a core kind of open-ended platform. We want to ensure in place that that was an indication that the domestic Investor was able to relate to the product itself So it we would have continued in 2022

Okay, turning some of our retail legacy assets into a similar type of core open-ended Platform-reming people have found in 2022 if not for what happened? I mean all the lockdowns other strain on the rentals right so This year 2023 we see a great opportunity. Okay, all eyes on the reopening We don't think that immediately the increased foot falls and the clear recovery in sales Ten and sales were immediately flowing into rentals, but it's coming so we are cautiously optimistic Okay, given another quarter or so we should see underwriting strengthen We should see confidence coming back in and we are confident of recycling some of our retail

Legacy retail assets within the funds that you just mentioned okay into similar Reming-pee type open-ended core platforms Dental from Bank of America just circling back to fund management. There's a couple of questions First is on your data center fund latest one Are you gonna get development fees for this given the CLD now is the developer? And how would the economics work would it be shared and could you guide on that? That's the first question Second is on the embedded EUM 8 billion when would you think you will start to contribute as the capital being committed and when will we see this flow through into the

Finc Is really on what's your thoughts on seaweed at the moment given that The government is may start to open up for commercial real estate going forward. Thanks Thanks for the question on the on the data center funds which we announced yesterday Great announcement to get those two assets under construction. We are entitled to development fees We do have two development partners one being cdl and another one being a third party So as you would expect they are earning some of the development fee that we're charging to the fund And he split yes I look at it would be based on the value of the work they're performing. Yeah I'll take the embedded a few more questions. She can't go down really good at this delegation business

So the embedded a few arms about 8 billion the majority of that is private funds so for instance, we would consider Patrick's cdcp data center fund as embedded capital as the fund completes You know those fees increase as well with the asset value So I would I would say we would expect most of this to contribute over the next 12 to 24 months as investment periods move There is a component that relates to obviously some of the transactions the rates have come committed to as well For instance, Queens Bay mall which is included in that FUM (Funds Under Management) number But that is more like about one and a half the bulk is private transfers And question number three was seaweeds as you don't yeah, so Consistent with what we've been able to accomplish on the private side

C the idea is to maximize optionality with the domestic Chinese economy so your products we should include for any bonafide Capital manager ability to manage private equity manage public equity have access to R&B funding both on the loan side as well as the debt side then you've got your full suite of options available to you So we've solved for two we need to solve for R&B bonds We need to solve for R&B equity, so this is on our to-do list now It's going to be a function of what the regulators allow us to do the ideas to be first in line when it opens right so We are part of the dialogue we have positioned ourselves in front of the CSRC to tell them hey We know we know how to do reads we open the read market here and sing up all we made mistakes

We can tell you how to avoid them. We can tell you how to structure it so that it's you create an ecosystem that is Tailored for your natural read investor which are your core guys your coins your pension funds share in companies your People who are looking for stable income as a source of income and that is going to be paramount for Chinese regulators So they are going to be very careful They're going to be deliberate about not getting it wrong and the sponsor that they choose to allow To put this mark product out to the market when it comes not for the infrastructure stuff But the real reads what I call the real reads commercial properties right where the vast majority of the opportunities set lies for China and Quite limited for CLI as well This stuff has to be right out of the gate They cannot afford to get it wrong because then investment or sour sentiment or sour

They will be second-guessed So our read of it is that they will be deliberate about it. They'll be they will want to be sure that they get it right with the first product And this is where I think we want to position ourselves to say let us help you do that and by the way We've got a bunch of properties that are stabilized. We can deliver the types of core returns that you can get to and Help us help you get there. So I think we have a role to play here It will be a function of where the regulator is comfortable enough if you take what you see young said earlier about sentiment and the Commitment to reopen the economy in 23 I think this False the details quite nicely as part of that whether it happens earlier 23 24 who knows but at least they it's on the table and they can see this as part of the solution set to reopen the economy

introducing products for an internal circulation of capital and Prudent capital management guys who know what they're doing in terms of managing such portfolios So I my personal views. I think it's coming And my as an institution we want to be front of the queue We're doing what we can to demonstrate that we can we deserve to be there and when the time comes I would expect us to be in that conversation I'm sure at the back of some of your mice you may be thinking you know if you're gonna do see what you mean What does it mean for CLCT? John can I invite you to share your perspective? I mean I rather we we do with the issues and share how we are thinking about this I mean I'm sure this will be the second question John I I have to agree with Paul

I don't know is that really your question, but indeed it is and not added it to me Capital is fungible. I think things we can work things out Just how when we did some narrow Robinson or capital sky people wasn't expecting private funding public fund to go invest We did that so likewise. There's no reason why we can work our solution between CLCT wherever wreaths we may or may not do in China So I I think at up to date is working out what's the right thing and it's quite interesting right is China opened up in fact last Just as we could have two different conversation if it's from China on the same topic last I had really long one with a bunch of bankers from China I think people optimistic and I don't think there's an absolute good reason why regulators and policymakers in China would want to have

tweets opening up to beyond infrastructure and Logistics properties to me makes a lot of sense and the moment you draw the line between Residential non-residential. I think reads as she has got a very important role to play in the way the managed real estate market I do think they got that already so now I do think the space will move very quickly and from up perspective is we work out something They'll work work work very well in fact Zui I think you're here somewhere Yeah, yes, I saw everybody else pointing to him except him Yeah, I mean in fact he's part of a conversation as well as to how do we find a logical way to deal with the opportunity that we see and Clearly Chinese capital is very Very competitively priced so it would be silly of us not to leverage on it

And likewise it would be silly of us not to do justice to CLCT so trust us we are logical people Thank you Okay in the interest of time We'll take another couple of questions But before that I don't think we have a lot of questions on the new funds that we launch and I'm quite keen to tell To have our leaders tell all of you more so maybe Patrick and Simon could you perhaps? You know say what are the key highlights of CDCP as well as our CCCOP program? Sure, thanks Grace so you would have seen the announcement yesterday on the launch of our China data center fund targeting a Billion dollars of a U.M. On a fully developed basis equity size just over 500 million sing That's quite a substantial achievement for for capital and it's a it's a large project two sites

Totally 100 megawatts outside greater Beijing. It's a greenfield development business We we source those opportunities on our own through our own network and during the last 12 months have been building up a dedicated China data center team across all areas of delivery including design development operations and importantly customer Relationships so that that's the first for a foray into the China data center market Which is the second largest data center market in the world the largest in Asia So we think there's tremendous growth there and leveraging off of capital lands deep embedded boots on the ground and the third year history in China. I think we're very well placed on top of that I think it's worth noting that we have we do have a

Substantial global data center business both in UK Europe and in Asia pack today We have 26 data centers 500 megawatts on a fully developed basis six billion of a U.M And that that puts us in terms of other global operators, you know mid to high tier So we've got a really good capability globally The other thing I would add is and we have in country teams that are capable of doing what the China team is doing design development Operations and customer relationships the other important link and we're already starting to see it bear fruit is the is the linkage of having a global Data center portfolio and frankly having a global portfolio of traditional real estate We're starting to to identify customers who want space if we have space in our London data center

They call us up and say hey Do you have space in your data center and Singapore and we've we've had some live examples of this just recently and? Similarly, we may have tenants You know financial institutions as tenants in our office buildings or office parks in the case of India who what who need data center capacity So we're having that cross selling capability in the organization is very very powerful So we do plan now that we've announced and launched this China data center fun We do have ambitions to do more in the region and potentially more in Europe So the China Special situations fund that we announced this morning is really a reflection of the market and where it's at again, it's a contrarian play

enabling investors to Take advantage of the dislocation is happening in the Chinese market and the pressures particularly on owners of real estate The two investments that we announced this morning one was a logistics property in Fusan That is a fully leased facility and it's under a 15 year lease Again, it's a situation because of the owners position the real estate is fantastic and we're able to procure A world-class facility there for that textile e-commerce tenant So again, right time right place right location Able to assess the market and move very quickly to secure that property for for our investors

The Beijing property that she couldn't talked about was just probably one of the most engaging discussions We've ever had at our investment committee the timing was You know the day of the opening of the 20th Congress Again, we just brought it back to very simple real estate fundamentals that it was a very well-located property on the east third ring road Where there is in that for ring roads a moratorium on office development It was a complete kind of broken situation that we have been actually monitoring over the last couple of years And we're able to really underwrite it on the basis that it's just very very good value and like all properties We acquire it has a good component also of alpha therefore

We're able to use our hands on asset management skills to deliver an even extra Quality return out of the cash flow. So again, our pipelines quite deep We're always looking at three or four properties at any one time and investors like this strategy and we'll come into the program Increasingly over time. So I'm not sure how much Many other players could actually execute that type of program The other dimension of this and something that we should talk more about is the ESG components every asset We underwrite we go through very extensively the footprint of that property and that also is the increasing part of how investors are looking at the performance Of their investments. It's not just IRR and EM

They do deeply take care for the SG and they see us as being a very good steward for that So it's really a new age proper Program and it has that nice kind of slither or V SG adding value to the investors profile as well Thank you Simon will take the last two questions Brendan first and direct DBS Brendan Yeah, hi Brandon from city. I just do a question The first one is on a capital management standpoint, right? Under what kind of circumstances? Could we potentially see CRI or screw up reads Under taking say a preemptive capital fundraising? Do we have to see like a GFC or do you have to see like a very attractive acquisition target?

Yeah, that's my first question. The second question would be How long do you think the current environment of distress as as in China? It's gonna last I think obviously we have said you're executing very well since last year. Yep. Thanks Okay, I will talk about CLI fundraising and I'll pass it to John to talk about the roots For CLI we currently see no need for equity fundraising as mentioned We've got strong cash flows strong balance sheet I think the only opportunity perhaps and there's nothing identify if there was a large M&A opportunity We believe our share capital is quite valuable for that and for that reason we may use shares for big M&A transactions There is none in the near term, but that's the only time likely we would use that otherwise

There's no need at the parent company Thank you. Paul Brandon. I guess we will raise equity where we have a need for it as to demonstrate in a past whether it's Claire or Clint we did raise equity ahead of the transaction But we know that because you cannot always match capital markets window 100% perfectly with investment closing timing So about once we're confident that there is the investment that we want to make because it's attractive It's good for unit holders and you've let's say the timing of capital market is a little bit ahead of where we see investment market We we will do it preemptively, but it's on the premise of got use of good use for the proceeds Hopefully that answer your question. Thanks

on China distress My own sense we probably would have maybe a best of 18 months remaining at pass Why I think today the balance sheet of many of the real estate developers are being repaired through massive Support from the Chinese government and they need to continue to sell the residential stock So while they do that I think they probably do not have too much attention to to play in this space But once the recovery is there then we will be again competing with the local players the second thing is I think a number of foreign investors Until they get greater clarity on the Joe political attention. I think going to investment committee today to do investments into China

It's going to be complicated for many investors that I totally can understand So the question is for us to understand the market. We can underwrite the risk. We can asset manage I think this is a time for us to find the right opportunity and to continue to place the right bets I mean this is I mean we stay very disciplined and do stay Imaginal we they know they won't even bother to come to the investment community because not in fact for the last one to two weeks We haven't had any investment committee meeting as a marginal use don't don't bother coming it has to be You know delivering the alpha returns because it's on the basis. We need to at the end of the day If we point the balance you we need to be sure you can bring it to investors and say we think this is a good deal And we can deliver the returns so I my sense is 12 to 18 months

Maximum because we know when China reopens things can go and they can recover very quickly, but I Can't predict for sure, but let's see. I was in Shanghai last week The traffic jams were horrible The queues going into the restaurants were The same like before I I mean it was it was packed. I mean I felt like it was back To the China that was familiar with I Talked to the colleagues In China. Yes, please. It's it's over. We look forward no more COVID. It's forward. I mean that's the confidence. I think domestically I think you will see and spending you will see the government doing a lot to to spur the domestic economy

Where the new FDIs will go into China today? I think people will still take away the NC approach But assisting businesses looking at the domestic economy. I was with one of the big luxury brands owner founder in Europe not to recently gonna continue to Invest in China very significantly. They say please. I mean I mean whether that's tension or no tension people are gonna spend so so so I think we have to take things in perspective and just look at the potential of the spending power of the domestic I mean which other market has such a big meter class Uning good salaries, you know, I'm if you're gonna you know that market. It's it's gonna be quite challenging right for for many companies

Just to add to that brand. I think we got Let's wind back the clock to Second quarter last year when Shanghai started to lock down so this actually the window didn't open Until let's say April last year. It was you April me we had Shanghai lockdown, right? And then the it started to get serious We started to say this is what we experienced in Singapore in 2020 2020 April me right? Extended extended restrictions and then Simon and his team came to us and say hey this is a window and we Should use this window to leverage of our boots on the ground because people cannot travel in the China anymore we become a

very small circle of investment capital managers who can start to sniff out this stuff and Be ready to move when capital is going to invest and there will be capital partners who will have similar Mindsets to us because they will see that this is going to be a window to act with Asset owners that Simon mentioned as an owners that need to transact to solve their broken balance sheets And this is indeed come to pass so it's taken us the better part of 2022 to manufacture the product and to get Capital partners who share what see what we see to see that this is a finite window and we have to strike now Whilst this window is open so Just to give you a Preciation that does this does you don't just switch the light on or just flip the switch and it manufactured the stuff comes on

It takes time it takes four-site to be able to predict that this is an opportunity for us It it it takes an appreciation that this is something that we can demonstrate leadership on and then we all have to move together and move fast So I like to think that this is we should We should take a minute to just appreciate that this is something that's not easy to do and it's important that investors recognize this Not that many opportunities it finds out there right now So I like to think that it's more to come and if we continue to keep our eyes on the ball and stay disciplined and keep our ears attuned to other Thematics that are emerging on the horizon. We should be able to similarly put up product that is In keeping with times and investment teams that are exciting to investors to build alpha for us

Okay, last question from Derek just one question, right? Okay, thank you trace Good morning management. I just one question for me and it's on asset prizes And I'm just wondering about in terms of the geography that you're looking at asset classes that you're keen to invest in You've been very disciplined. So I just money whether once asking by the sellers versus what you are keen to invest in it How big is the gap that you are that would turn a bit more aggressive and maybe if you could and indulge us wish country and wish asset class which would be king actually we are quite an Gnostic whether it is

Whether the opportunities in Singapore in Europe or in China as long as we find that The pricing is interesting. I mean the discipline that we are giving to the team is to find used their below replacement cost today as a guy I mean given the fact that It's very difficult to underwrite exit cap rates and I mean in funding in just for instance in UK It's it's just too high. I mean to be honest. I mean we were given a Very great opportunity to develop data center great location in London But we were not prepared to do the due because just simply because we say that we won't be able to underwrite the construction costs in terms of the potential cost escalation and so we say no, we are not gonna do it

Good location, but again, I don't believe that we can deliver the level of returns In the can under today's environment. So no, yeah, we we say no to the to the do so very discipline extremely discipline Okay, we're gonna close Chicken any quick closing remarks No, thank you. I think do we overshoot at time? Good CDL snakes Okay I think Sherman is giving quite a lot of dividend. Thank you for the for the time for the attention for the support as Always But this just this a reminder We are in this for the long haul building capability and creating enterprise value consistently

Okay, thank you. Thank you. Thank you. Thank you everyone