FY 2023 Full-Year Financial Results Briefing

Good morning. Welcome to Cabrohap. The newly renovated home for capital land investment. I'm Grace Chen, head of investor relations for CLI. Very good to see all of you this morning. Lots of things happening this week. We're entering March guys this Friday. And the number of companies reporting earnings results, but most important of all. Taylor Swift has arrived in Singapore. So we have our CEO, retail workspace over here, Chris Chong. He might have some tickets. Why? You know that we are managing the retail portion for the Singapore sports hub, right?

Not free, because we need to generate fee and come. But if you stay to the end, who knows, right? I think that speaks to Chris Chong. I've only got one job, actually. So without further ado, I'm just going to invite Andrew Lynn, our group COO for opening remarks. Please welcome Andrew. Thanks, Grace. Good morning to everyone. Thank you for coming. I'll just make my Preface the meat of the presentation, which is my pleasure to hand over to Paul these days to take you through the nuts and bolts of our fiscal 23. But in terms of our, if I look back, I had to remind myself that actually CLI, it's in its reporting.

It's only its second full year of financial results. And so as Chikun reminds us, we are in the midst of a journey that we started two and a half years ago. It does have to say seem a lot longer than two years. And I think as an organization, we feel we have grown a lot in this relatively short period of time. A lot has happened more than we perhaps would have wished for last year, geopolitically, macroeconomically, environmentally, digitally, all the LYs that you can think of pretty much happened last year. And I think you see that reflected in our results. So let me just run through a few of the highlights and some of the challenges we faced and no doubt they are both.

In terms of execution and the management team, again, very committed to walking the talk that we set out for everyone and delivering on execution. So let's look at the four, let's start with the four verticals, okay? Our fee income verticals. I hope you're familiar with them by now. The REITs core product, challenge, challenging environment for REITs. As you, I'm sure you all know with interest rates where they are. We managed to raise a billion dollars of equity. The REITs had a, I would say, executed themselves and discharged their duties incredibly in a very difficult environment. The highlight I'd like to leave with you is in terms of capital recycling and raising, we remain very disciplined.

And I think that was a message that our unit holders, as well as our stakeholders, gave to us, right? Don't raise capital unnecessarily for the sake of it. I'm not sure everyone on the street listened to that advice from their unit holders. We certainly tried to do that. And we raised capital when we needed to demonstrate an important acquisition that was useful and beneficial for unit holders. And we tried to sell well. And I think across the REIT family, you can see evidence of that. So I think that I would like to start with that and it's an important touch point. On the PE side, Simon will tell you that the last year was incredibly challenging for capital raising.

I think Simon, the hardest you've seen in 30 years. Okay, that's a long time. So as a new capital, private equity player on the block, relatively new, these things are harder for us who are new. And despite this, I think we raised north of 3.4 billion. There was a 42% increase in year and year in capital raised. Which I think is again credible in light of the circumstances. We are starting to be noticed on the street as a serious player. We didn't enter into this previously. We entered in this with purpose and a plan. If you look at the products that are on the shelf now, I think both from a thematic perspective.

Where we are looking at wellness, we're looking at self storage, we're looking at specialist logistics. We've done some DC. We're looking at other thematic products that LPs are telling us are interesting for them, particularly in Asia. So the thematic shelf space is starting to be populated with products that we firmly believe in. And we can invest into thematically and not be standing where the cycle is. And then from a tactical standpoint, we've got our opportunistic products and we're raising money for value at funds. So I think from the way we are designing the product equity platform, it is with purpose. It is with design, it is with logic. We just have to work through this difficult environment of capital raising.

And I think the signs are starting to turn. And as I mentioned, we are starting to become noticed and make a difference in this very, very competitive space. But I will be the first to say that much more needs to be done. And I think you can see that again in our results. Third vertical is lodging. Lodging had a great year. Coming from a very difficult time at COVID, lodging is now one of our style performance. We I think signed 14,000 keys last year open close to 10 delivered record fee income. And importantly, the margins are starting to resemble or show the benefits of scale, which we've talked about. We hit 160,000 keys ahead of time and through the form we set ourselves an ambitious target in terms of doubling system revenue.

And speaking of ambitious targets, I'm sure you have lots of questions on our latest one, which she couldn't be happy to run through in great detail. So lodging again, key fee income driver for us. And I would say an important differentiator for CLI today. Very few other capital managers have what we have. And I think I would hope that you agree that this deserves to be part of CLI and the philosophy of fee income is consistent with other parts of fund management business. And then last but certainly not least is commercial management. Now call markets, this is an important enabler. Chris has wrote written the back of a healthy commercial retail workspace environment to deliver very strong leasing property management support.

We are now venturing beyond the CL ecosystem to manage third party assets for important customers, such as sports hub, such as every announced the second one Chris. So there's another one come. Sorry, this is not choreographed. But the sports hub is an important indication of what we are prepared to do. We now want to take the secret source outside the CLI ecosystem because we believe it can add value and it's incredibly capital efficient. No equity. And so I think when markets where we have competitive advantages, which are core markets. Singapore where boots on the ground, China, we are boots on the ground, India where we are boots on the ground. We can bring the secret source to our own products.

Your C-Paul talked to you about combined FRE (Fee-Related Earnings) FUM (Funds Under Management), which I think is something that is we need to explain to you how we add value to our assets. And we have multiple bytes of the same asset cherry. And this is an excellent idea and I hope you embrace this. But in our core markets, we have the ability to bring secret source to our own assets. But in addition to that, take it outside the system. And that's a fantastic endorsement of by third party people who want us to manage the assets because they believe we can bring value to the assets. So I think that's something to be proud of and something we want to continue to grow. So the four fee income verticals doing what we set out to do. Obviously, there are challenges in all of them. But I would say that if you look at the results from the FRB side of the business, we are executing and we are on point.

Based on the results, I would like to leave with you a few conclusions. Number one, I think the operating pad me is at a level which shows that there is a resilience to the recurring income that we can deliver to you. And this is what we set out to do. We set out to build a business that delivers a steady resilient recurring fee income base that you can rely on and you can predict with visibility and reasonable amount of certainty. And despite the economic challenges, despite the financial difficulties, the operating level of pad me, despite the high interest rates, the operating level of pad me is more or less at a stable level where we can confidently say we can get you to have sense of confidence. So that's an important, I think, landing point.

Obviously, we cannot control for existential events. When you saw during COVID, we took the decision of bringing dividends down. But we gave it back to you the following year when conditions improved. So I think that's an important point for any business that wants to hang its head on the ability to provide shareholders with recurring stable dividends. Number two is management's commitment to being disciplined. We've said many times, right? She can say many times we're not going to grow for the sake of growing. We're not going to buy for the sake of buying. We will do so only when it is right and good for our shareholders, our unit holders are helping us. And that is something that pervades the entire organization.

So we can set targets, we can set 100 billion, we can set 200 billion, but if it's not right for us, we can set 3 billion recycling, but if it's not right for us, we will not do it. And we will live with the consequences because we believe we're doing the right thing. We'll come out and explain to you and if every right to question us on it. Number three, I think the benefits of having a diversified business are good for all to see. The fair value loss is nothing to sneeze at. It's about 600 to 600. But it's 2% of our investment property portfolio. It's offset by pockets of strength in Singapore and India. And it's something that is cyclical and existential. So as long as we can manage that well, rely on the diversification of India, Singapore at this point in time.

And that cycle will turn. There will be times when one is up and the other is down. But this is where diversification does benefit the organization. And again, I go back to the ability to deliver strong operating cash flow and operating pad meet to support the dividend. So I think the importance of having a diversified platform in the presence of high uncertainty is strength. If you don't, if you have full conviction in a certain sector or a certain type product, then let's go all in on that. But in the absence of that conviction, it pays to be diversified and to spread the risk around. We certainly believe that as an organization. So I think these are the key takeaways I will leave with you before I turn it over the poll.

Obviously, there are lots of challenges that still remain. Interest rates eat into profit straight at the bottom line. I don't think we have seen the end of it, but I think we are starting to see the peak of it. And that's a very important distinction. Once you see the peak of it, you can start to pick up your pens again and start to do your sums about underwriting, about refinancing, and about where you can capital, and you can recycle capital. So we'll be listening to our second point, which is capital recycling. Down last year, again, very disciplined. I think we sold at 13% premium to an F, 16% premium to an F. If you wanted to hear a three-billion, easy to hear, no problem. There is a clearing price for all the assets. But we didn't know when to do that.

We're going to be disciplined and sell when it's right to sell for our unit holders and our shareholders. So if you get interest rates starting to settle down, then your market place for buying and selling starts to settle down as well. There's a ton of capital on the sideline waiting to deploy. They want the markets we are invested in. And we will find the right buyers for assets to hit our recycling targets. So I think we are cautiously optimistic that if rates settle down, that capital recycling momentum that you have come to rely on us, and forms that I will say, an important part of our return and equity to shareholders, today, will come back. And we'll be able to get closer to our WDAG ROE target. Capital recycling is absolutely key.

And we will remain key for the organization going forward. Okay, I think I've said enough as a preface. Let me turn it over to Paul to walk you through the numbers in more detail. And then, of course, Gee Kun will be there to re-emphasize all of the key strategic priorities for us as a group and set the tone for the organization. And I'm sure you'll have lots of questions for us. Thank you very much. Thanks, Andrew. Andrew, pretty much covered everything. I think I'm good. All right, well, good morning, everyone. And everyone online, thank you all for joining us. So I'm just going to run through highlights for us of the last year and just give you a sense of how we did. And then pass it on to Gee Kun for Q&A. So just a very high level. A lot of these things I won't touch on. Andrew did mention.

a tough economic environment. We think that will continue. Geopolitical, conflict, slots of elections. A lot of uncertainty this year. Those so far so good election-wise have been pretty stable. Interest rates, internal house projections are at least four cars is that we're not going to see a turn really till second half. Which means we are sort of planning accordingly. And then global M&A activity slowed. And this one, you know, touched with it can't get any worse. But we hope this year we'll see a little bit more pickup of activity. Which will make a material difference for us. Both in terms of investments, divestments and potential opportunities for M&A. We do think that there is the spread between buyers and sellers is closing. And expectations are getting closer together, which will make deals a little bit more possible for the entire group.

I'm so our key numbers. Cash Pat me, 781. This is down from last year's 831. But relatively stable given the fact that interest rates were a huge impact on us. Total Pat me, unfortunately down quite a fair bit due to fair value losses. Which, as Andrew has mentioned, we'll go through a little bit more on where exactly that came from. But fortunately, at least non-cash in nature, which allows us to maintain our 12th cent dividend. Funds under management, we have a number here of 100B. We had a lot of internal discussion on whether to keep our previous format or not. But we got a lot of questions all the time trying to explain what and if we mean by embedded FUM (Funds Under Management). We got so tired of explaining this, we decided to go to the market norm and we've reversed the order.

So what you see now is there's 100B is where we're at, including 10 billion of not yet deployed capital. So from our internal target perspective, what we had promised was we were going to get to 100B on the all format. That is still the intent. But we're trying to align with market now. Because we know all of our peers do this this way. And when I look at some of the analysts, sell side reports, I realize that you guys mark us similarly at the number. So that's why we're reflecting the 100B. But it doesn't change the fact that including the embedded we expect to get there end of this year. And then that equity obviously some impacts from fair value, the distribution of class units last year. But still at a level where we have comfortably two to three billion, which we could easily deploy without being worried about our gearing level.

So enough room for us to do potential platform, individual asset acquisitions and grow as well. So that's sort of the overall key numbers for us. And then our three key focus areas for this year. I'll just touch lightly upon them because we'll cover them a little bit in some of the slides and she couldn't have sure it's going to cover them later on. The first for us is really on positioning ourselves for growth. And this is capital recycling being active on our portfolio. As I mentioned, we have a strong balance sheet. We still have 8.6 billion worth of assets to divest. We are expecting to divest that over the next three years. And that will give us opportunities for growth for future M&A. And obviously our new target of 200 billion, which deserves a slide on its own, so I'll get to it in a bit.

We're focusing on building scale in our funds. So obviously the lodging business is doing well, commercial business doing well from the funds business. A number of you have asked, we have a lot of these smaller funds, health care and wellness. Some of our Southeast Asia efforts. And the question was, when are you guys going to get the scale? A lot of this for us is still early days. So for a lot of these funds, they're meant for us to build trend record. So that's why we don't mind starting small. It gives us something to go back to investors to say this is not the first fund in a series. And you start to see that with our lodging fund, which we announced earlier this year. Clara, too. Our capital land, as Scott residents fund. This is the second of the series. It's targeting a close of 800 million. We are hoping it can do more than that. So you've kept in his here.

We would love to grow that as a fund in the series because we believe these areas have scalable opportunities for us. Similarly for logistics, most folks don't realize that logistics and lodging is actually half of our funds on a management. It's as big as retail in office for us, these two sectors. And you would have seen we announced a Japan logistics fund earlier this year, a small one. It was really part of our capital recycling. We have a Southeast Asia logistics fund. We have two in India and it is something that we believe we can scale together with self storage as well. So we're trying to build scale in the middle sector. And we are counting on this year our ritz continuing to grow as well. And then the last one is capturing some of the tailwinds we see. These days everybody asks about India, right? And Sanjay if he's dialed in. We joke that Sanjay gets speaking opportunities everywhere.

All of our investors now always ask you about that market. India, Southeast Asia, a lot of tailwinds. You've seen the progress from Patricia and the Southeast Asia team. We expect we'll see more growth from India this year as well. And those two we are trying to ride on the fact that there is strong investor interest. China still challenging, but obviously one of our strength markets for what we know. So the focus for us will really be on renminpy for renminpy. So really local renminpy funds and really optimizing our portfolio. And lightening our balance sheet to become a little bit more capital efficient in how we approach and grow China. And then finally we want to widen our product offerings. And this is really our three other geographies which we always talk about. So we really need to do more in Japan, Korea and Australia.

And I know we've been saying this for a while, but suddenly the intent this year is that we'll be able to try and scale in some of these markets. Maybe it's just the last point on our strategy and our overall. I think as Andrew mentioned, I think from a management viewpoint we feel that we've been disciplined on our deployment. We've actually done pretty well on fundraising. We are top 10 this year, which is new for us at 3.5 billion in a tough environment. But I wouldn't say we're satisfied with the rate of progress. We know we are not moving as fast as we would like, or as the market would like. And so while we are sticking to our strategy in some areas, we are trying to accelerate this year as well. So very quickly our financial results for the year.

Just to explain for those of you who are a little bit less familiar with us, how we look at our business. We have two components to it. We have on top here what we have is our fee related businesses, listed funds, private funds, lodging management, commercial management. This is our proportion of operating profits that it has been over the years. So it has become an increasing part of our business. This is the pivot for us. We are supposed to see that grow. And partly has grown because the base has shrunk, which wasn't quite as intended. But it also reflects the very recurring nature of these fees, which is why we like it. Which is why we think this gets the higher multiple. Because this is the part that even in the economic downturn or the challenges last two few years, continued to grow at 9%. So that's really the focus for us.

The part at the bottom is our real estate investment business. And for the analysts we are trying to make it a little bit clearer in the results. So you have feedback to us. We are trying to make it easier to understand this part of the business. This is our sponsor stakes and our ritz. Our GP stakes and funds and what we have on balance sheet. And this part was the part that was really hit by interest rates. Interest rates and fair values was really this part of the business. Which is why over time we believe as we pivot to that top section, our earnings will become more and more stable. So total pat me for us. Tied to that on the left hand side. You can see our total operating numbers. So unfortunately down from the overall we are down 609 to 568. And the proportion you can see, sorry, this is a little bit reverse.

But the fee income is at the bottom. 321 to 318. That's the stable fee profit. And on top, the drop that you can see is from the real estate investment business. And that is really the impact of higher interest rates and lower contribution from China. As a group interest rates last year pushed up our interest costs by about 130 million. If you have seen the bank results, we know exactly where it went. We would like something bank hopefully. But we expect that we'll still feel impact from the interest rates this year. Nothing to the magnitude that we felt last year. But as we refinance, if interest rates turn, that's great. Otherwise we'll still feel a little bit more impact this year. Portfolio gains relatively stable from the divestments,

slightly higher premium effective divestments, not that far off. That was pretty good. And then the big challenge for us, obviously, on the revaluation. 599 million in revaluation loss and a million in impairment. Total pat me down because of that, unfortunately, down quite a fair bit. But at least on a cash basis, 831 to 781, about 6% down, fairly stable for the year. We are hopeful that the recurring component continues to hold us going forward. On the specific fee verticals, just as Andrew mentioned, so I won't spend too much time, generally our fee businessers, which is the part that we were really trying to grow, still had decent growth, 9% overall. Cross the total number of 1 billion for the first time for us, 1.07 billion in total fees.

And as you can kind of see where it happened, maybe just a highlight, the recurring components, which is the darker colors, recurring went up for both listed and private funds, despite the environment. Unfortunately, just what came down was really the event driven. The event driven fees from fund management was 50% lower for us year and year. Our belief is, and on the overall, that 9% is more than doable, we would like to see double digit growth, and that would be the goal for us as a team. The real estate investment business components, so on the left-hand side, you can see our earnings before interest, tax, depreciation, and amortization. You can see the swing below is the non-operating. We classify that fair value loss as the non-operating component.

And so you can see the income itself before interest was actually fairly stable. NPI, those of you who follow most of our RITs, NPI was up in a lot of markets. Actually, generally, across all of our RITs did well from an NPI perspective. Unfortunately, interest costs was really what wiped that out. On the breakdown by segment, something that we are just trying to improve our disclosures, you can see in the middle section what comes from the RITs, the private funds and the balance sheet. And later on, when you see our caring values, you can see how that correlates together. But as you can see, the listed RITs are very much a good indication for how our real estate investment business does. And then on the right-hand side, you can see the geographic split. So, the geographic split thrown off a little bit by the fact that we consolidated class on our balance sheet. So, you get this large, geographic, non-easure component because of the lodging.

Accounting-wise, quite challenging for us to split out at an EBITDA level. But generally, you can see what changed was the proportion for China came down because obviously, China had a more challenging time. Sign up always down because of divestments. We sold 79 Robinson, some of these assets, and that pulled down numbers down. Over time, we expect our real estate investment business to shrink. Right? As we become more capital efficient, the balance sheet component should shrink. The private funds segment may grow a little bit. This is not the part of the business that we're necessarily looking to grow as much. Valuation. So, the big swing, US, multifamily, cabaret expansions across our assets, adds for business parts and logistics held by Claire.

That was a big impact for us. The other big impact was really China. China was due to lower projections on growth and expectations for the future NPI of the property. And that brought down across all asset classes for us for China. So, quite a big swing there. Offset a little bit by the strength of the Singapore portfolio. CICT Tony is here. That helped iron-auchred those showed improvements for us. And then India continues to be a bright spot for us. India, we saw uplift across pretty much all sectors. And then the last finance slide was really around our divestments so that you can see. We've included there to give you a sense as well how much was the infective divestments.

We've always talked about a gross divestment target. It's a little bit complicated on assets to talk about divesting. If we only own 50% or less of the asset. But you can see last year we did not achieve the $3 billion. We certainly hope to exceed that this year. On effective basis, which is the dotted box below, we dig us about 1.5, which helped offset. So, that helped give us a little bit more strength there. And that's why the portfolio gains were still sort of comparable year and year. 60% went into our RITs and funds. This is something that we love to see. We love to see what we recycle off balance. She'd go into our RITs and funds. But it's not critical for us. That has come down from the 80%, 90% the last two years preceding. We are happy, in some cases, to sell to the parties.

We have some great assets which we feel should stay within our RITs and funds. But it's not something that is we are fixated on to have to do. We can find the right divestment to the right folks at the right price we suddenly would. And then just at the bottom, you can see a little bit on our balance sheet metrics. Maybe just to highlight two things. One, interest costs 3.9%. May creep up slightly this year, depending on how the market goes. But certainly not the magnitude of the movement that we got last year, which was from 3.1 to 3.9%. And then the other thing is the 6.4 billion. This is cash and drawn facilities. For us, obviously, we are always trying to make sure we have enough space for this. But suddenly we expect to be able to take and capture opportunities as they come.

So that's our financial highlights. I will just touch a little bit on operations. We've mentioned a lot along the way. So maybe the first thing is just on our funds on the management. I know I'm not going to do this justice because it's my first time doing this pitch. I'm going to leave this to Chikun to talk about how we came out with about 200. Maybe just two things to highlight on this slide. So the first is on the left, this is including, as we mentioned at the top, includes the embedded capital. So in your include the embedded capital, the listed funds at about 61 billion, the private funds at about 39. So when we look at the growth of these two sectors historically, we are very comfortable with the idea that our listed funds quite comfortably could grow 8 to 10%. If not double digit, depending on which rent if you look over their last history. The last two years were challenging and unusual.

We don't expect the future environment with slightly higher elevated interest rates will necessarily be the same growth. But when we look over a five year timeframe, we believe that listed portfolio has always been our crown jewel. We'll still see growth. On the private funds 39, private funds much more challenging for two reasons. One is capital is recycled. Right? As funds, life ends, we give the money back, we raise new funds. So it's much, it's a much harder treadmill for the private funds team to have to grow on, to run on, to get to. But we still think, you know, even if you are conservative and you tag a five percent type growth rate. When you look at the overall, it gets us to a very credible number of five years. Where would the gaps come in? We've always talked about doing M&A to fill some of our capability gaps, whether it's by geography or by asset class.

And that is something that we think can help get us there. Five years is, I know a lot of you have been asking us for the last two years when we're going to do a deal. We've got five more years. Thanks to the target. We just asked the UB patient, but we are, and we do believe we are looking at opportunities and we believe that there will be opportunities over the next few years. On the right hand side, the other thing just to highlight is really about the funds on a management. So we've tried to give a split now to make it a little bit clearer where our funds are. On the top right, you can see we are 42 percent Southeast Asia. This is obviously a Singapore but also Malaysia, Vietnam, Thailand, Indonesia, funds that cover this region. And this proportion for us has grown year and year. As we start launching more private funds in Southeast Asia, this component is growing.

China at 31 percent is actually down slightly from the year before, but still obviously a significant portion. We believe we can grow this through renmin b-fans. But where we really want to see growth as well is really on that top right, India, the Asia, which we think can scale up. The other thing to highlight on this slide is the bottom right, which is a split by asset classes. So everybody thinks of capital land because we have our signage up on all the office and retail. That is really what we are, is our core. And it is a core part of us. But thanks very much to the ascendance merger and to ask God, the really two other parts of our business, that if you look at the pie, it actually makes up 50 percent almost of our funds on a management. It's really lodging and logistics and new economy assets. And we believe, given the current environment, what we still believe our roots in particular can grow,

we do think that other portion is actually a skill set that we can leverage and scale on funds as more people are looking at. The diversification has really helped, as Andrew mentioned this year. We don't always want to be diversified. We'd love to be focused on the areas that do incredibly well, but you can't always get that right. We think we're very fortunate to have this split on expertise and skills because as we see the market change and volatility continue, we think there'll be opportunities in different markets and sectors. On the rest of the 200B, I will leave that to Chikun. Then very lightly on the rest. Obviously, our listed funds, we've put up a fair bit of detail, but our listed funds, credible performance last year, didn't necessarily grow in terms of AUM as much. Even though there were some acquisitions, some fair value losses.

But we think going forward, if interest rates start to level out. And we see that coming down, we do expect growth from this segment. Private funds, we are very happy with the fundraising compared to the years before. It's actually very substantial growth year on year. Is it as fast as Simon would like? No, I'm sure it wasn't. But was it credible? Yes. For the first time, our fundraising is top 10 in Asia-PAC for real estate. So I think the team did a commendable job on that. So the key for us now is leveraging on that and scaling faster as the environment improves. Earlier this year, we did and make a handful of announcements. So we had a good start to the year. In line exactly with our strategy, we divested capital square and Beijing. We won 5% of the asset, divested 95%.

This is now running for renminpy, much more capital efficient. We did a small logistics Japan fund. There's a local Japanese investors and it got assets off our balance sheet. And it is an area that we think we have skill sets to develop to get good returns for our investors. And then finally, the last one on lodging, the second in the series. As mentioned, this is something that we think we can scale. And we've also announced about 700 million of deployments as of year to date. So good start to the year for us. First half of the year, we think we'll still be tricky for a lot of these funds for fundraising and for deployment. But we're hopeful by second year. Second half of the year, we start to see a pickup in that. Ludging is doing incredibly well.

I think the big question, obviously, we get on lodging is everyone knows that we've had good growth, both in terms of revenue-available unit and units opened, where we start to see that fee income. The team continues to sign new units at a very good clip. I think going forward, suddenly the environment is going to be a bit more challenging. We'll be a little bit tougher for our lodging team to get the same kind of growth in a rev path. From both occupancy and daily average rates, but we believe that even if that tape is off a little bit, it will, to a centigrade offset by the fact that the team is continuing to grow the number of units. So that part will still generate more fees for us as a group. And the fact that it is asset-like and these management contracts don't require us to put in any balance sheet money,

just generally helps our returns as they grow and improves margins for the business as well. Now, commercial management, as mentioned, this is something that has always been a core part of our business, but it's not something that we've necessarily focused on as much. I would say we've looked at this as something that we believe is complementary to the rest of what we do. And if we can scale and earn more fees from doing third-party contracts, and as our funds and reads growth, doing more of our own, as both of those grow together, this part of the business should grow correspondingly as well. So those are our fee businesses, our fee verticals, which have had a respectable run over the last 12 months.

For our real estate investment business, and, at least in my last three slides on the real estate investment business, on the left-hand side, as you can see, what we try to highlight is a little bit more of where our capital is. So the top left, you can see that balance sheet number 10 billion has down to 8.6. This is what we talk about when we talk about divesting off our balance sheet. And the intent is that over the next three years, we would like to divest pretty much all of this. Would we still keep some assets on balance sheet? We will recycle the funds, right? We still would be happy to warehouse seed portfolios, but that relation to me more than 2 to 3 billion for us. The bulk of that 8.6 will be reinvested, seeding new funds, M&A, distributed dividends, or share buybacks.

And that is the intent for us on the balance sheet. On the private fund side, we are becoming more capital efficient. The older funds, we help 30 to 50%, all of the new funds launched generally. It's about 20% on average. We would like that to be 10% on average. So we expect the private funds component will grow, but not necessarily very quickly. As some of the older funds come off, we get that capital bank. We try and be more capital efficient on the private funds component. And then on the listed fund side, this came down slightly. Obviously, we did the distribution and species of ASCOT Trust units last year. And that's why that number came down slightly from a caring value perspective. We would love to be more capital efficient on our RITs. And we think as our RITs grow, we should be. And hopefully in the future, list new RITs or MURGE platforms, we will start to see growth on this as well.

And become more efficient. I would say the good thing at least on our RITs from a performance viewpoint is we saw that NPI go up across the board. And suddenly that helped us that segment perform as well. So this is just to give you a sense of our value in the stake. And on the right hand, you can see where the contribution, which is the same data that you saw in Slide 13 earlier. That just shows you where our capital is employed is and where the investment returns are for the real estate investment business. The last two slides, I will leave a little bit for Q&A for our country heads if you have questions on to talk a bit more. Let me just say simply, Singapore and India doing well. We expect that growth will continue. We still see positive reversions in the markets. We think that will continue. And we'll see an uplift in the economy for both and that will continue as per last year, though maybe at a potentially slower rate.

China and our other markets, China still remains challenging. We're very pleased that we were able to recycle capital over the last couple of months. That is still the intent. Our China team has seen positive uplift in traffic and retail sales over Chinese New Year. So we are still hoping for some glimmers of hope on the trajectory of the market changing. But I think we are also being very tactical in how we look at this to be more capital efficient and optimised our portfolio for China. And then in the other markets, it's been a varied performance of the city of Korea office doing well. US having challenges in the office markets are a little bit of up and down depending on sector, depending on country. But I think overall we are relatively positive that from an asset level interest rates aside, most of our assets should still have a pretty decent forward 12 months.

And with that, I'm just going to leave this to pass this over to Chiku and to start talking about our future and we'll start our Q&A. Thank you. Thank you all for all. Thank you, Andrew. Thank you, Paul, for a very good, a pretty comprehensive presentation. As you can see, I'm slowly delegating a lot of the presentations to both Andrew and point. They actually captured all the issues including how we can achieve the 200-billion FUM (Funds Under Management) target.

Two things, maybe I just, before I start a Q&A, just share two key messages. First and foremost, I want to categorise state that as management, senior management, we are not happy with the performance of the share price. All of us are pretty significant shareholders in CLI. So naturally, we want the share price to perform. Last year was definitely a challenging year for us in terms of where there's fundraising, where there's disposal and whether it's in terms of looking for acquisitions. But we sort of sort of continue to stay very, very disciplined in making sure that whatever that we do, it's to focus on building the long term enterprise value for the company. So we continue to invest in our teams, where there's a fundraising team, and where there's the teams in the various markets to continue to talk to capital partners, build the long term relationship, introduce ourselves.

Also building deep relationship with different vendors, owners of properties, portfolios, and set managers. Because, personally, I feel that the ability to find off market views, the ability to match it with capital when the opportunities are there, when the gaps are there, that's the key difference in terms of being able to find views, being able to negotiate it at the price that can deliver returns to shareholder. That's the most important thing that we want to do, and we want to do it in a very disciplined manner. So we continue to invest in capabilities across all the different markets. Okay, so that's something that we state very, very disciplined to do. I'm hopeful to say that, I mean, we are starting to see interesting opportunities emerging.

Interesting dialogues happening. I hope, you know, because I mean, given the strength of our balance, given the kind of report that we have built up with the capital partners, we hope that we will be able to execute pretty interesting views that can build up our funds and management business quite significantly this year. The second thing I want to maybe just share is in terms of the fund management 200 billion target. So, I think that the company as a team, we do not set, we do not open leaders declared target for the sake of declaring targets. I recall when I was first being appointed as a CEO of S.K. 2013, I was asked to do an interview to set a target.

So, I set a growth target of 80,000 units to modern double the units. In my mind, when I did how I wanted to do it, of course, when we announced it, there was a lot of questions. By my say that the team, the entire S.K. team really delivered organic growth together with M&A. We delivered more than 80,000 before even the stipulated target. And today, if you look at an escort business, at the point in time, many of you who had used to follow S.K. was asset-heavy. We make a very strong determination to convert it into an asset-like business. And you look at the income stream that it is today. It's highly R.O.E. accretive.

It's a business. In terms of the fee-income business, the business that I can tell you many people would hope to be able to own. By the next time to build the relationship and to allow the income to flow through. So, in the same vein, you will see that when we make a decision to, you know, when the team took over the capital and business in 2018, capital and at the point in time was very much known as a developer for residential, for misdevelopment, for retail in Singapore and China. When we look at the major trends, we look at where the world is heading. We say that it's going to be very difficult for a listed entity to be competitive. So, we make a decision that we want to become an asset manager.

We need it to be multi-asset class, diversified. So, through the Sanderson Bridge merger, we open ourselves to different asset classes, to different geography. And during COVID, we make, I would say, a pretty bold decision to restructure. And if you look at the company today, I mean, in terms of the fee income, the quality, or earning, it's a lot stronger. You look at the capital allocation across the different markets. A lot healthier, a lot more diversified. When I first took over CEO of a capital in 2018, our exposure to China was 51%. Today, I mean, it's still big. I mean, relative terms, but the commitment to diversified, to build capability in different markets was dedicated focus.

And we actually executed. And you know, for a company with such a big asset base, it's not easy to move, because unlike publicly traded securities, you can move in and out with the city. And to be able to recycle and to be disciplined about it in building a diversified business, focusing on building the fee income, or something that we will raise our focus and we will continue to be. And I just want to reiterate the point, even though we said, I would say, relatively ambitious target sitting in today's environment. You look at your political environment. Everything is uncertain. Interest rates are still elevated. I think it's important that we said a target that is challenging, but I think still within the means of what we believe we could achieve.

true organic, and we need to cover it with, I would say, acquisition of good platforms that could, not just any platform, but platforms that could complement our existing capabilities to allow us to raise new capital to offer new products to many different capital. I mean, I spend a lot of time on the road together with Simon, you know, talking to different capital partners. I know where the interests are. I know where the appetite is. And I actually have a pretty strong confidence. I was a lot less confident towards in the second half of last year, because I mean, it's just, I mean, there was, you could work so hard. You put in so much energy. You just find that a lot. You just couldn't happen. You just find it so hard to execute. And you'll find that if you want to just just achieve the three billion target, you also saw, you know, should we miss it, or should we do the right thing?

And we landed on making sure that we do the right thing and making, we were quite happy to land at 2.1 billion. We know that the street will be disappointed. But we feel that wherever that we do, it's in the long term interests of the investors. And we are prepared to engage. We're prepared to explain our actions and being very disciplined and telling you what is our growth target and how we intend to get there. And I want to say that, you know, we have many investors that are investors, whether it's in the REITs, the headstock, all the private funds. And we have many vendors who work with us and many employees around the world that depend on us. And that's why it's extremely important for the management here, that whatever that we do, we think of the long term interests for, not just for the company, but for the investors that have believed in us, through these years.

So, we're just open up to Q&A. Thank you, Chikun. So, in addition to Chikun Paul and Andrew on stage, our senior management team is also, we've got people putting up their hands already. Our senior management team is over here as well to take questions with God's Aunt Jeeves, and his young online. And just a word. We've got quite a number of people dawling in online to watch us. Please feel free to send us your questions through the questions that are in front of you as well. And... Maven will book you for the next first question as well for you. Okay. So, with that, we'll get the ball rolling.

Fastest hands. One, two, three. I see Rachel's hand. Rachel will go first this time. Hi, good morning, good morning Chikun and Doreen Paul. Thanks for the presentation. So maybe first question on me. I mean, we are all excited with your FUM (Funds Under Management) 200-Dillion target. So, in your plans, where do you think the geographies will be able to help you to grow faster to the 200-Dillion? And also, would you be keen on infrastructure projects as well? The focus in buying asset management capability, I want to stress we need to build a business that's a lot more diversify. So, when we look at asset management platforms, we are looking for platforms.

First and foremost, there is outside of China definitely. I think it's very important that we diversify our capabilities in other markets that can... And other products that can allow us to grow more income. In China, the team on its own, on the ground itself, they are well established. I mean, if you look at the the I don't think we need further deepening of our capabilities in China.

But outside China capabilities, we are talking about Japan, we are talking about Australia. To some extent, you as I know many people are asking whether we are interested in the US. Truth be true. I mean, US is a highly competitive market. You can go... You can find a platform that can allow you to build significant skill in the US. We need to ask ourselves, I mean, what you're going to bring on the table to compete, whether it's in terms of product sourcing or in terms of the ability to raise money. You know that the top few players raise 66% or 70% of the capital. If you are amongst other smaller asset managers, you have to fight for the remaining pools of capital. Instead, the position that you want to be in in the US at the very beginning. Not that US is not important, it's just that the points of entry, we just have to be disciplined,

how to go in a big way. Because we want to be able to tell you when we go into the market, we can be competitive. Or if we can be competitive in the first day, we need to be able to demonstrate how we are going to build a competitiveness. Yeah. Okay, thank you. Just one more question for me. Just on the flip side of divestments, your three billion targets now. Looking at where the environment is, which market and asset class is actually looking at your portfolio. Which asset market, which asset class and market is there for you to divest this year. That's the opportunities of divestments for this year. There's a lot of demand for assets actually in Singapore, in Japan and India.

Singapore, all of you are where there's so much money coming to Singapore. So much high network individuals in Singapore are looking for high quality assets. And I, we are definitely one of the most significant owners of real estate in Singapore. Whether it's true or balance your true one of our vehicles. So conversations become interesting. And that's also part of the way how you view new relationship with capital partners. One thing to enter into Singapore, but also talking to them about other ideas that we have. And that's the way that you view relationship about trust, about looking. So these are the few key things I would say. But I don't want to let the cat out of the basket.

Exactly when things will happen. Because otherwise, we will lose our negotiating leverage. Which is not good for a share with this. We have the next question. You can? Or yeah? Hi, you can from sales. The FUM (Funds Under Management) target, right? 200 billion, presumably much of it would come from M&A. Did you take a look at the deal that capital looked at? And would that be the kind of multiple that we would be willing to pay to achieve that target? Is a genine here?

Genine is not here. Genine, you want to... Yeah, why don't you say something? I'll expect myself to be speaking. Thanks, you can for the question. Obviously, I think you would know that I think the management of capital and social debt. That was a bilateral deal. For us, obviously we are looking and turning every stone universally out, say globally. We are looking for the right opportunity and platform for us. So I think I will stop there. Generally, we do not like to participate in the building process. So important to find the use that we think makes sense.

Especially if you are going to do bilateral... You're going to buy a platform. It's about people. It's about asset classes. So it's important that you spend time, know the team. And many of this conversation started several years ago, building, understanding the team, understanding the culture, understanding the minus one, and all these things takes time. If you're an example, when I was running, I was running at the first platform in Australia. I knew the founder. We started off by taking a 20% stake. Then I stepped it up to 60%.

When we first bought the 20% stake, it was totally offmarket. I can't remember my body. Maybe five, six times multiple. Because of that trust. And then we stepped it up, controlled it better, bit more. I can't remember. Maybe we paid something like $200 million for the entire platform at the end of the day. Today, the platform is delivering us $30, $40 million. It's not disclosure. But very good multiple income. Adding very nicely to the bottom line is the biggest player today in Australia, in New Zealand. Adding is led by 90 people. And the whole team just grow the whole... We dominate the entire service of human space. So, in the same way, if you think about how we would be looking at buying platforms,

you will see us... I mean, we have been here. I personally have invested a lot of time talking to various people. Because I don't believe that you should participate in a building process. Because it doesn't give me chance to know the people, the founders, the team. Because buying, doing it, M&A is not buying a portfolio of assets. I buy a portfolio of assets. I mean, sorry, I mean, let's just use a send a single bridge. If we buy a send a single bridge, let's say the send a single bridge team or decide to create... Actually, we can take over the entire assets and run. Not to say that. Mano is still here. They have been a great help and added... It's been a great addition to our talent pool. But buying an asset management platform is buying a team of professionals.

You need to find teams... You need to find people, align in terms of culture, the value system. We need to make sure that that's aligning. And that's how we look at it. We spend a lot of time investing. And I just want to assure you that we will just not buy any platform that will just give us the AUM. But we want to make sure that when we put the two platforms together, it's something that we'll be very, very active to. And Kevin can share... Why don't you share some of these M&A that you have done in SK? I don't have another phone. I just had to add to that. I would say that the pace of inbound inquiries has picked up considerably. So it's gone from a seller's market to a buyer's market. I think that's a fair statement to me.

Two years ago, pre-rate increases. If you participate in a process, you set an expectation where you're paying, low-mid high-20s multiples. And that was the price of entry at the point of time. They wouldn't return your phone calls unless they'll tell you, are you willing to pay this otherwise they won't bother participating? And we were the ones making the inquiries. Now, I would say the majority of opportunities we look at are not us making the inquiries, but someone calling us and say, would you... we would very much like to talk to you. Are you saying that you pay more than many times? No. It's a buyer's market now.

The pendulum has shifted. So it's not us making the phone calls. It's potential existing platforms who are concerned about what GQ is talking about. Bifurcation, where your big five are getting the bulk of the business. Or you are hyper specialized and you're doing something and you do something very well. If you're stuck in the middle, then you are in trouble. You can't attract capital. So these guys who will see that need to find the right partner. And this is where I think it gets interesting for us. Because then we can set the price. And I don't want to participate in it again. As you can see, we don't want to accept invitations to join bidding wars. If you feel that we are the right partner for you,

then the word on the street that we are very clear is you will reach out and talk to us personally. And we'll have a chat and it will take the time to get to know you. And we will pay you a fair price for what we both then conclude and believe is the right combination. Otherwise, your assets are your people. The people will walk if they don't believe that this is the right combination. And that is the key distinction between asset purchase and platform purchase. The important thing is the quality of the team. And I always believe that you must pay a fair price for a good quality and not a cheap price for a lousy business. Because it doesn't help you. The idea is you need to buy a strong platform that can help you to create new products.

If you, I mean, there are opportunities to buy things. And you can actually pay, it doesn't help us. You end up inheriting a lot of issues that you need to manage. Yeah. In our second question. On your China divestments, right? Is it a concerted strategy by the management to like, over the medium to long term to get out of China reduce exposure there. And when I look at the redeployment, right? It's into India where arguably I think you would have a patchy track record, especially on the mall site. And then you're going to focus in Southeast Asia. And I would think that in terms of capital values, probably Singapore is going to be the key. So then you'll be like ending up with reducing China and increasing exposure in Singapore.

So how does that gel with the diversification strategy? All right, over long term. We as a group, I mean, we made it very clear that we wanted to have a more diversify portfolio. And we wanted to make sure that we are asset lighter. I think in China, if we can continue to grow FUM (Funds Under Management) using domestic capital, that's willing to fund the growth and under the fee income, I don't see why we should stop in terms of the FUM (Funds Under Management) growth. I think there are opportunities. I mean, we have built up a decent reputation track record. I mean, over the years, whatever that we promised to build, we built whatever we promised to deliver with deliver.

And that's also the reason why we have been able to attract domestic capital. I think that will continue to do. And being asset light is discipline that we want to do, because we want to convert our exposure to asset into fee income. That's the key thing that we want to do rather than to just have assets that own new anything between 5, 6, 7%. We think that the multiple from the fee income is more important. So whether it is in China, whether it's in US, whether it's in Singapore, assets are still not balance sheet. We want to have the discipline to recycle and to bring down our exposure. I mean, you talk about Singapore. So obviously, I think they are interesting or India. They are interesting opportunities that we can do a lot more in Japan.

I mean, if you look at what we have done, we brought in Hideo Hooze, join us from... We do a real research about him. He used to be from GPIF, decided to come join us. He's a significant addition to our team in Japan. No need to demonstrate, you know, we really wanted to get somebody not just a local, but I would say somebody who is very known in the industry. And of course, understanding of the Japanese capital market, not only can help us with all markets in Japan, but can open up relationship dialogue of capital partners that can allow help us in many of the markets outside of Japan. So Australia is the other market that we will significantly look at.

I mean, I know capital and in his old days, I'm exited Australia at that point in time, but I think it's a market that it's highly interesting. Population grows every year organically and through this immigration. Our businesses are operating platforms are all doing very well. I think the thing that we are not quite maximizes when the escutting today is the biggest and the best operator in Australia. How, you know, the point I always put the pressure to Kevin is you should be able to raise more funds to help to grow the launching sector in Australia, which is a big market and deep market and it's an area where it's in dire need in terms of products.

Yeah. I just want to add one point on India, I think you can mention. India's always been tricky. For Singapore companies, you're right. India's always been tricky. I think we've been very fortunate with the merger with Asenders. We have Mano, Sanjeev, Gary. We have 300 people on the ground who are probably this one Singapore real estate company who is a very good track record in India. From a logistics viewpoint, we are top three player for logistics. We've got two funds running, which are going to generate very good returns. We hope to see performance carry from that. And we think we can kick out a couple more funds for that as well. So I think, well, India is still small for us overall. It's a market we want to invest behind for the long run. And because of those tailwinds, I think with the team we've got, I think we're fortunate that we've got this team and that will help us grow,

which I think is the difference from before us. Mano, you haven't seen something, Mano. Yeah, I better show my value. So maybe just to put things in perspective, Asenders and the four gang of Asenders have been in India since 30 years. So it took us about 20 years to hit the AUM of $1,000 of 1.5 billion. Of course, the rupee has depreciated right during this period. So it's $1.5 billion. And in the last 10 years we have grown more than threefold. So now we are about close to $5 billion. So you can look at the pace of development in India has become much, much faster.

I think it's also because we have understood the market much better. The tailwinds of India has become much more pro business. And the asset classes that we have chosen, we started with business parks, then we moved into logistics. And three years ago we moved into Taylor centers. Lots of tailwinds. I think someone made the point that our track record for retail has been. What's the word use? No, I think you said sketchy. I heard it there.

In everything there is a right time and a right place. And sometimes a combination of factors. So while we are not doing retail today in India, but given the size that we are in, we will also look at those opportunities. We are not doing it now, but doesn't mean we won't look at it. Because if we can even move to a position where we can do integrated developments, we'll be open to it. So I think the other point that I want to mention is the capital values in India are still very low. So a beautiful building in India today still costs only about $200 per square foot. But I think there will come a time where probably there will be a change. I hope while I'm still around.

But the same thing happened in China about 15 years ago where suddenly capital values went up. So I think that time will also come. But beyond that actually we have got a very strong pipeline. I mentioned that we have grown our AUM in India by more than three-four in the last 10 years. And I think we are very confident of at least doubling it if not more within the next five years. So of course I think Chikun's target is much more aggressive. But we will be looking for more such opportunities. That's the reason I think we are quite positive about India. And I think we are one of the only foreign developers, foreign real estate companies or real estate investment managers that has got end-to-end capabilities.

So we've got over 300 people and we can develop managed, a source for land, operate all these assets. So I think these are the reasons that makes us confident about India. And I think our India business is also very capital efficient. That's why the capital that we have employed because a lot of it is through our listed business trust which is clean. So a lot of the developments go through the clean portfolio. Okay, thanks. Thank you, Mano. I'll come to you, Mervin. I'll have Jesse from Business Times. Jesse, over here. Jesse, Mike. What did you do to her?

I don't want to show a favor to you, sir. So you can just leave us. So I have a question please. This is more about the valuation. I understand that they were following for capital and overseas investment properties. I did like specific reasons. I can share such as maybe markets and demand, falling office runs in the US. I know, like the falling like the valuation. I guess I all have capital ends. Okay, so I mean, that's a very wide ranging question. Let me jump in and tackle some of this in the pool please.

So let me start with the US. Let's say the two pockets where we had the biggest drops. So the US specifically multi-family and office. The combination of, I think the biggest single driver in the US is rates. The US has had the sharpest interest rate increase. And it has a correlation on caps generally speaking. So you'll see a natural wide-living of cap rates based on interest. Just pure interest rate increases because of capital has gone up. In terms of specific structural issues, I think we also see structurally in the office space, work from home, work from anywhere as a secular trend is strongest in the US. And perhaps we cursed in Asia.

In most Asian markets, we are pretty much all back to the office. Whether we like it or not. So there's, it's a much more pronounced move away from work from home. In the US, it has become, it is still, I would say, up for debate as to where it will land. And then of course in particular sectors, your tech, your healthcare, your bio. All of these guys are very resistant to coming back to the office. So again, depending on your asset where you're invested. The structural issue bleeds into rental reversions, occupancy and so on and so forth. And the value has taken that into account. So I think this is where you see the impact on Claire.

And I'm sure William can share a lot more on that. For multi-family, a little bit of interest rates, less so. The secular trend remains strong. We still believe multi-family is a long runway because there is a long term gap in demand versus supply. A lot of people are still looking for a home to rent. But there has been a recent over bill in certain cities. And so as a valuable, you go down into the pockets of cities where the asset is. And you look at the demand supply situation. And this is again very typical or real estate, right? There's a big need to get a rush of people coming in to build. You get an over supply. That over supply takes time to work itself out.

And then the secular trend takes over again. So that's exactly what's happening in multi-family. You got specific pockets in Austin and Nashville where the sun shines states. Where people are migrating towards and are looking for a home has attracted a lot of attention. We were there. We are there. A lot of other people have come in. There is a short term glut in supply. And the values are taking their into account. But the secular trend, I think most of us agree that the secular trend is there. There is a gap in demand versus supply. Same things happening in Australia. That's the state. In China, I will maybe perhaps ask, I'll have to help me out here.

But also again, I would see lack of sentiment. Rental reversions are weak. We are as, as, as Vin would tell you, focus very much on occupancy. But the fact of the matter is with weak sentiment, you don't get that confidence in rental reversions. So if you go to a tenant today and you ask him to renew at a 10% increase in rent, that's a very tough conversation to have. Simply because your tenant is also as uncertain as you as the way the economy is headed. So it's very much sentiment driven. It also becomes an asset specific situation. The lack of capital recycling and transactions are also a factor. Because the value is used as a triangulation data point to see where cap rates ought to be.

And because there hasn't been a lot of transaction activity, there is a lack of data to corroborate where cap rates, where the true cap rate is. You know, we sold Bory last late last year and that cap rate was very tight. But it's a single data point. And it's not enough, I would say, to stem the tide about rental reversions and uncertainties about the NNCs and so on and so forth. So I would think that's the biggest, I would say, principal driver on China and where that has affected the evaluations for our portfolio. Paul, I don't even want to add anything or everyone's supplement. Hi, I'm Evan. So for China, I think we are seeing a bit of trend.

There's definitely recovery. And now it's largely sentiment driven. During the reopening last year in 2023 in March, the sentiment was a little bit ahead of the ground reality because we see the sales info for data. They weren't that strong. But by the turn of this year, this year, as you have done, the 31st December to its first January, that period sales was the strongest of the past three years on every sales and four basis. It was for the past three years in China, a little bit out of the government. In the retail business, you want to see for the past three years, China didn't want to see for four. But it turned, so this year is December, the social center, so for $600,000 on the 31st December alone. A single more.

And the Chinese New York period this year is the 70. Well, it's the 80 holiday, but we take on the average sales basis. Compared to the previous year, sales are up 10% overall. If you exclude supermarkets and cinemas, which are on the downtrend, and you will see also up 15%. And for folks also up. So you see the trend didn't get positive. But why we versus are not strong and also a factor of demand and supply. If you look over on the market, a lot of the investment decisions were taken in 1819-20. And so because of various COVID reasons, it took time to get onto the market. So a lot of supply has come on board end of last year and early this year, which means you have, you know, why your demand is up, but you also have a lot of supply. But the conversation is also true in the in 2020-2023, there are not very many investments.

So once this period of supply gets absorbed, there won't be a lot more coming up. If you compare to, you look at CRCTs for further inputting. The performance of the real day is stronger. And that's because betting has a moratorium on new commercial developments within the NA1. And that has translated into a more controlled supply of commercial office and retail into betting, which is why betting rents, betting sales are able to continue to stay. And by other cities across China, there's been a bit of over supply. But that we see moderating. And Shanghai is now starting to take a look from betting policies. Thank you, Erwin. Can I just add a small question? Sure.

Okay. So I know that rental revisions are positive and strong for Singapore's office. I mean, the ICTs office assets. But I use the office rents like, you know, falling or maintaining as they are, given there's going to be an influx of office supply this year in the CBD. Chris? Tony, I'll turn it. Yep. You're positive. They're not positive. Okay. So maybe you point one, just note that there's a difference between what people track as market rent. So market rent is one data point where rent are projected. And this is reported by all the agencies. There's another thing to take note when we talk about rent.

The reversion is really measuring your sign on rent against outgoing rent. So use that to in context. A January from up or fully, I think we're okay. Because our outgoing rent is those expiring out. I mean, so we've been a reasonable kind of buffer where market rent is where market rent is headed. I think it's a macro environment is a big question mark. But one thing, January now Singapore market context, and I think to some extent my colleague has mentioned that the situation Singapore is the supply control. I think supply control, actually probably no Singapore is a very well-planned use of land given a land resource.

So I think that's one error that from a set owner perspective, it take a lot of comfort. So we are not going to expect to see huge supply. So there's an upcoming new supply, CBT, who got a central boulevard. Current is in the market, they are trying to lease it out. But historically, every shot over the last five years the total supply come to market is below. We think that the fundamental Singapore is strong enough to absorb over time. So we're going by my market rent move depends on sentiment. But rent and reversion is another thing that you have to take in consideration. I think on central boulevard, if I'm not mistaken, Chris, that's about 60% lease to tenants and their holding rents.

They're holding asking at a very healthy level. So it tells us that new bills coming on the market are not facing pressures to lower asking, which is good for us in terms of CBT land. So maybe the little colors, I don't know whether you attended my briefing. We have a very healthy occupancy today, so 97, 98%. So we do not have a lot of space. This is a new supply-committal market. One big one which CBT I mentioned, large floor plate. So there would be a bit of adjustment needed because the current demand for space and current supply-committal. So the current supply-committal market is a little bit of mismatch.

So certainly we see a company asking for a size of more like a 5, 10,000-pound square feet. We have a little bit of low-flow plate. You need to need to need to get thousands. It's a little bit more difficult to get the kind of big occupy in today's market. But I'm going to say that I'm in things with her now. Today is all about sentiment driven. But we get inquiry. It's just that we don't have enough space to satisfy some of the demands. Maybe I just want to add also a bit more color, right? Because I guess what Tony and Andrew mentioned is really more from the statistic standpoint where you can read about the supply and the soil demand. But underlying in terms of what companies are now coming to us as well is that what we should forget is,

well, we still pretty much focus on the core and flex strategy for office where you have the core in the CBT supported by the need for business park spaces, et cetera. We also see that the demand by companies after COVID is that they need more spaces because the coming back to office is still quite good. Today we see that we are more than 10% in terms of return to the office. And increasingly more companies given the current economy climate is that they are looking at more spaces. So with the partnership in terms of the co-working spaces, that in most of our office, for example, we have, then we do see stronger commitment ahead in terms of the expiry. So I guess that also as more flavour the fact that while we may see that more supply, like the mid-house coming up, but in advance, the decent team has really been securing quite healthily even for 2020 for.

Okay, thank you, Chris. Just mindful of time. I just wanted to see a show of hands. What is the question? So I can... Okay, thank you. We'll try to clear them, but I'm also mindful that we are curious during the briefing at 10.30, and most of you have to go. We'll go to Bourbon. Yeah, but we're from JP Morgan. Two quick questions. Can you keep it one? Okay, one question. Okay, maybe I'll ask the more difficult. I mean, our best question discussions. I mean, one of the reasons why perhaps the share price of week is the timing of ROE,

like we don't know when it's going to hit double digit, or that's the concern. Maybe we could share your thoughts in terms of shrinking the equity base, be that with a more aggressive buyback or perhaps even spinning off Kevin's lodging business, which trades are high and multiple than your current business at this point in time. I know that if you double your AUM, you get closer at 10% anyway, but how can we accelerate the ROE improvement from here to get the share price higher? Because if you're new in trading, let's say, 5, 6%, or we... It's a bit harder to... You know, trade a book value given your other peers, string it at book, but 8, 9% ROE. So maybe some thoughts on how you can improve the ROE and the share price.

I have to say, from an ROE perspective, it's certainly something the CS performance was disappointing for us. Right? Of the last couple of years. You're right. A little of a... With the fair value loss, obviously it's come down last year. We're about five on a cash basis. We're about five right now. I think there are a few drivers which we are trying to address. One is, as you mentioned, is the size of our equity base, or how much we have right now. Obviously we've got 8.6 billion worth of assets to divest. That divestment is critical for us to get to our ROE target. We need to divest that off because those assets... You know, those are 4% 5% yield type assets, right? That's in our balance sheet and Singapore and China or multifamily in the US.

As we divest those assets and we really deploy them into seeding new funds. We need to re-invest our business. We need to re-invest our business. We need to re-invest our business. We need to re-invest our business. That's why strategic thrust for us, number one, is really the divestment and capital management. That has to get off the balance sheet over the next three years. We can reinvest it into higher ROE opportunities. It is a fair chunk of money to reinvest. The other two things we can do is, besides seeding new funds, for us, is really one is around M&A opportunities. Obviously the impact to ROE on us is dependent on what price we pay for those M&A opportunities for that redeployment. But in theory, even if we were to pay a higher multiple as that fund-management platform grows,

it should get us closer to the double digit ROE target. Then the other component, and I will tie this to two other questions I've seen online. One is around our distributions, and the other is about how NAV is a company. There was a question about, as a real estate company, should in our NAV and TAB growing, a question about, would we increase our dividend payout? We want to shrink our capital base. It's too large for a real estate company. It's perfectly fine. But we're trying to be a fund manager. With that pivot, we should actually have a smaller equity base. So the intent is, obviously, we've been doing share buybacks. We have kept dividend at 12 cents this year, but it's a fairly high payout ratio. We're quite comfortable at this level. Could we increase yes?

But we would need profitability to go up, I think, before we're comfortable increasing that dividend. The share buybacks give us more flexibility. The reason we have an announced a share buyback program is it ranks third in order of priority for us. The first is seeding new funds and growth organically. The second is M&A. And the third, we look at as our share buyback's independence. That for us is priority three. So if we have more clarity that, for instance, this year, we managed to divest a lot more, then we would look to ramp up all three of these areas. So it ties together for us. The goal is still to get to a double digit ROE over three years. I know this has taken longer than the market expects. It's taken longer than we have expected. And that is that I think there is a certain degree of execution. I think there is a certain degree of market that honestly we can't really help.

Some of our assets, I own our shared multi-family in the US, our China assets. Over time, they will get invested. We just need better market conditions for some of those. Okay. We've got about five minutes for three questions. We have our Brendan, Shen, and... I forgot your name. Don't know. I'm sorry. I'm not so bad. Of course I remember your name, but sorry. Just Brendan first, please. Yeah. Hi. Morning, Shen. Just a two quick ones again, making me a quick. The first one is I think, can you talk a bit more about this one capital land ecosystem?

I think it was the first set up three years back when you birth CRI. So far, we haven't seen actually much activities or help from both CRI or even CRI to a certain aspects. As you look to grow your service agent and particularly Singapore, how do you... How do you... How can I help or assist us? Do you think we can see over the next three years? That's my first one. And the second would be your valuation decline for China. Is it sufficiently written down given what we're seeing in China at the moment? Yeah. Thanks. On the second question first, the hard to say, I mean, we... I mean, there are transactions that we have exited for the board-ray building in Beijing

at less than 2% cap rate. The one that we saw in another Beijing shopping mall at also around 2% cap rate. So, I think there's a range that's just not enough transaction that takes place. So, what we have done is that we look across the server. As said, we look at the rental, we look at the issue, we just think that, you know, we talk to the valuars and that's how we have returned down. I mean, in terms of the retail performance, Erwin alluded to earlier actually, and that's the large part of our exposure. Occupancy is still going out, even though the rents are weaker, I must say. But the interest rates are also coming off. So, then... And there are interested parties that look to actually take a stick in some of their platform.

So, I don't think that the gap is so far at this point. I think it's too early for us to maybe answer that question. But I want to say that, you know, we find you shirry. We want to make sure that, you know, whatever that we have in the books, you reflect the values that, you know, that... What should reflect that market carrying value? Yeah. So, that's the second question. The first question was... Was the first question again? Okay. I mean, the two things that... When we started out... I mean, the idea is for CLD is to be a development partner for us. I mean, that's really the key. So, in Singapore and Vietnam and in China,

I mean, as you can see over the... Actually, over the last X number of years, we haven't done a lot of new acquisitions in China on the development site. I mean, CLD... They have announced that they bought three residential sites. It's not something that we do. So, there's not a lot of collaboration. On Singapore, I think so far, the only thing that they have done is to acquire an asset from the V... And then they use it to redevelop into residential. So, the conversations will continue to proceed. So, we sometimes look at joint projects to get the development sites where, you know, if there's a commercial element, or even, let's say, you know,

there's a site that has a service apartment, obviously we will look at it. So, it depends, I would say, more opportunistically. And that's the first right that we have. But the interesting thing that we have is... I mean, when we go across the different markets, we can also talk to other developers that can offer us interesting views. We can work with other development partners as well. And that's the flexibility that CLI has to do. We work with partners that can give us a opportunity, and we can grow development funds. And we want to restrict to just working with CLD, although they have the first right, you know, for us to choose to work with. Okay, thank you. Can we have the mic to Don O'Andt Shrin? And perhaps both of you can ask the questions,

and we can just run through. Sorry, Don O'for forgetting. That's what happened. But I'll treat you breakfast later. Okay, so I forget the whole face. Don O'for Bioi. Very quick questions, a few of you will feel, for just follow me on the China negative re-veils. At this level, you think... What's the implied cap rate? Post the negative re-veils. And is this a clearing price now that you think buyers will buy in China? Would you be leaving to sell below? Does my first question? I want to... Maybe I'll go on to the second question. My second question is also simple. You were talking about Australia and Japan

for the growth in a few AM. Which sectors? I know you're sector agnostic, but which sectors are you looking at? That's interesting. In Australia, we'll be looking at things like BTR, or office, things that are sectors that are on the left at this point. Thanks. Shun will ask her question as well. Go to Shun. Just two questions. First is on ROU. By three years, the timeline is 27. And are we looking at cash operating or hitting on a patent? Second question is on the beta margin. Can you share the margin for lodging management? How is the trend year on year? And also, as we look at overall FRB, the beta margin, right? As you build up capabilities,

is there still room to improve in 2024? OK. Paul, I think if I may pass your questions to you, and I'll deal with Donald. Donald, right? So, I think good, very good questions. And China does it represent a clearing price. Not that we design it that way, but I do think that this year is a very important year for China. And again, Erwin can share a lot more color on this. I think if you look at the signs from the government and the policy directions, they recognize that the economy must take priority at this point in time. So the buttons they are pressing are to encourage capital formation,

or take place to encourage capital recycling to take place, and to bring confidence back into the sector, because they see that consumers, businesses are not spending. And without this, there's no amount of infrastructure spend to compensate for that. I think that they recognize this. So if those things come to pass, our sense of it is a second half of the year, the ingredients will be in place for much more of this recycling to take place, for much more of this capital formation to take place. And this is where our strategy kicks in, which is where we need to get capital recycle. Importantly, swap US dollar for RMB, so that we can show the street who are very concerned about exposure to China, for those investors who are concerned about exposure to China.

That the exposure is a domestic exposure, and there is plenty of demand and supply and the ability to formally and an ongoing ecosystem within China, for which we are good at doing it. And we have the right resources in place, the right reputation, etc., etc. So I would say, let's see where we are. Come second quarter. If what we hope happens happens, I think we will be much more optimistic about the ability to get back on track, in terms of capital recycling and being able to get these assets into RMB product. To your specific question as to whether we would sell below both, I would say that's a very tactical decision taken at the time.

Our preference, as you can see from our capital recycling record, is we're not distressed. Why do so? Why destroy value when we believe in the asset? At the right time, they are said we're delivered. But it is also tied into ROE, and what Paul is very concerned about getting the capital based down. So a lot of factors will go into a specific decision as to whether we should sell an asset and add what price. All things mean equal, absolutely not. But would I say never say never, I would not do that either. There may be a situation where we want to buy the bullet. There's no path to, or let's say the path to profitability is beyond the ROE window. And we have to make a hard decision as to whether to do that.

And in fact that actually is another strong message that we could potentially send. That we have, we hear you and we want to deliver that capital base that gives us to double digit cash ROE. Or, and in so doing we need to buy the bullet in some cases. So I would say that's certainly a tactical possibility. And just to add to that I think with a fair value adjustments in the market. I think it makes it much easier for us to sell at our above book. So that would be the hope. So just taking shins questions on the margin side, is there room for improvement on the overall? Yes, we believe so. As we showed in the earlier chart, it's come down slightly year and year from 39% to 35%. And that's partly driven by the fact that we didn't have a lot of performance. And one of these for 23 versus 22.

But on a run rate basis we expect that we'll pick up. When we look across our four different segments, listed funds is pretty stable margins. That's not going to change very much. Private funds we expect an improvement in margin as they scale. We think we have a lot of the team in place. And so as that private funds grows, our margin dash and improve, we hope quite significantly. For the lodging side through COVID it was much more challenging. For us the lodging margins then we'll single digits to teens. It has since improved to 20% plus getting to 30%. We do think there's room for that improvement as well. As things scale, the benefit for lodging is, Kevin's team has a very strong IT backbone for a lot of the room bookings and something. And that gets a huge uplift as you scale.

So we are expecting margin improvement, particularly I would say from private funds and lodging. For listed funds and commercials I think we've quite improved. I don't see an Australian lot improvement there. And then on the ROE question, the ROE question for us, we look at it from a three year. We do think there will be some reval or portfolio gains that may help us get to a double digit ROE. It becomes a much smaller component because if we stay on track in three years, we don't have a lot to divest. The valuation of lift will be a much smaller component. But we are counting on that to help our ROE at this stage. The thing that may change that if we were to, if we talk about inorganic opportunities when we acquire platforms,

it's a much higher cash generating and a little bit less on, because of depreciation and amortization when you acquire platforms. So there's a little bit of impact. It'll actually help us from a cash ROE perspective, but a little bit less from a total payment perspective. So there's a little bit of the play over the next three years, depending on what moves faster, divestment, acquisitions and our growth. But the goal ideally in the longer run would be a double digit cash payment. Okay, thank you. I know some of our viewers online have also sent in questions. I'm sorry we don't have time today to get through them about real reach out. And so we've come to the end of the briefings. Thank you all for taking time. If you're going to the concert this weekend and have time for dinner,

please come to Kalang Wave Mall and take care of for now. And thank you.