FY 2025 Full-Year Financial Results Briefing

A very good morning ladies and gentlemen and welcome to Capital Land Investments, full year 2025 results briefing. On behalf of the team at Capital Land Investment, thank you for joining us today, both in person as well as online. My name is Grace, group hate for investor relations and communications and I'm going to be moderating today's session. I think firstly please note that this session is being recorded and we will begin first with management's presentation followed by a Q&A session. So with that, let me hand the time over to Paul, who will start the session with financial updates and then we will follow by business updates from quite a few of us, Andrew, Keisha and Kevin before she can conclude this outlook.

Good morning everyone. Thank you all for joining us. It's a pleasure to see so many of you. It's a good turnout. I know there was a lot of anticipation about other announcements and we've been taking a lot of questions. All I can say is my favorite one so far has been in terms of M&A has there been anybody that we have decided to swipe right on? It must be a Valentine's Day thing. My only response to this is please save all your difficult questions for Chiku. Okay, let me just very quickly go through our full year results for 2025. Maybe it's just some key highlights to start. First off, I would say it was a very challenging environment last year and it was very uneven recovery for us across different markets. But we did see quite a number of positive signs,

which I think is what we as a management team at least excited over in coming year of 2026. Fun center management up 7 billion or 8 billion, 7% fundraising went very well for us last year. We had our best fundraising year and Andrew is going to share a little bit more about that. Almost double from the year before. Figrove up 6%. This is where we are relentlessly focused on, particularly on the fund management fees. Results of that was slightly better operating profit up 6%. We consider up 6% somewhat steady growth rate for us. And we think this is something that we can keep a rhythm on. I think more importantly is this is somewhat turning a corner from us for most of you who have been following us. We know that operating profits have come down over the last few years.

This year we're seeing an uplift which we're very excited on. We had some capital recycling. We have less assets left on the balance sheet. So this number will continue to slide down. But it's still continued momentum as we move to an asset like model. And then we did make a lot of effort last year thanks to who we live and our IT team on really AI and digital initiatives. And we're starting to see the fruits of that labor come through. And we believe that will help us for the future, both in terms of cost, but more important in terms of being more forward-footed in how we look at AI and digital initiatives. Financial performance for the year. So as you know, we look at it in three buckets. We look at it as our core operating performance, which is really the core part of the business for us.

Portfolio gains from sales and divestments and revaluations and impairments. So starting on the left, you can see we are at 539 this year for our operating performance. This is up 6% year on year. It, I'll go through a little bit more detail on the specific verticals. But we had strong contribution, particularly from the listed fund last year. We expect that momentum will likely continue to go into this year. Profitability for the fee segment did come down slightly. And that was really us investing for the future. We've made hires and more investments, particularly between behind private funds and the lodging business. And because of that, profitability has come down slightly even though revenues are up materially in some of these segments. The real estate investment business, which is our ownership stakes in the

REITs and funds, we saw good performance here really driven by two things. One was lower interest in operating costs as that has come down, but also stronger operating performance from our units. Most of you who follow CICT, ascend this. Just between those two REITs, we have five and a half billion dollars invested of that in them. Those two units together with our India Trusts and Clinton turned in very good performances and that helped drive up some of our performance. That was offset by decline from assets that we had already divested. So as we've divested assets, that will come down a little bit. But that number overall improved. So from an operating patent, we've perspective, sort of this mid-single digits is about the right growth rate without any special catalyst.

We could keep this as a run rate growth quite easily. Portfolio gains down 80%, that was expected. Most of you know the year before we divested iron-orchard to CICT. That was clearly very good for CICT, but it was also good for us on that divestment year. Last year, we didn't have any big chunky divestments to make up that difference. We did see good gains from India and from Japan. Divestments that was offset by losses from China divestments. So we divested about a billion dollars worth of China assets on a gross basis on an effective basis, about 700 million. That was sold at a discount between 10 to 20% off-book value. So on average, about 13% discount to book value, that offset some of the gains

that we got from the positive sales out of Japan and India. And then the last bit is revaluation and impairments. This is the big adjustment for us. This was actually very similar to the year before. We saw valuation drop in China offset by Singapore and India doing well. In particular, and there is more information in the slide pack, China valuations were down 545 million and Singapore and India up. The rest of our countries largely flat on neutral. So in an overall basis, we are down a fair bit in terms of total pantmy. But really it's mostly non-cash elements, which is why we kept our dividend at 12 cents for the year.

Specifically on where we are most focused on, which is really on our fee business. And fee business contributes about 60% of our business, of our operating profits usually. As you can see, starting on the left-hand side, listed did well, up 8%. This is on the back of transactions across many of our RITs, investments, divestments, and also the addition of the contribution from Japan Hotel RIT as part of our SC capital acquisition. So good growth there and continues to be good margins. Margins down slightly year and year, as mentioned, we are investing heavily behind going our private fund's business. On the private fund side, very good top line growth, up 24%, partly from the contribution of windgate and SC capital,

as the M&A has added to our growth platform and capabilities. But also very much organic growth as a lot of the second follow-on funds for our private fund businesses come. And Andrew and Kisho are going to talk a little bit more about the organic growth potential here. We expect that we'll continue double digit growth across this segment. Commercial management, flat year and year, but better operating profits. The team did a good job of optimizing the platform and cutting costs. So we did see a nice uptake in margins for the commercial management. We would expect commercial management to generally grow at a low single digit range. This is meant to be really a supporting vertical for our private funds and our listed RITs. And then finally, lodging management, which Kevin is going to talk a little bit more about

in terms of where we believe the long term growth potential is. Clearly last year was a little bit of a softer, rev-par growth year compared to some of the preceding years we've had. But the team has still done an excellent job in terms of new signings. We hit a record there as well. And I'll leave Kevin to share a little bit more. But overall, as you can see, margins generally about flat on average behind solid performances from listed and commercial. And then the investing for growth for private funds and the lodging segment. So the other part of our earnings, about 40% of our earnings, as mentioned comes from our real estate ownership business, where we own stakes in RITs and funds and on balance sheet. As you can see, the different portions on the listed funds, there is some adjustment. Because as most of you know, we decon solidate capital and ASCOT trust the year before.

So the numbers move a bit. I wanted to share a little bit more articulating why our listed funds component has come down. Probably because I know a lot of the analysts, a lot of you cover us from a RIT perspective and the RITs are doing well. So the RITs' DPU are doing well. And actually on an operating performance, actually our RITs did contribute plus 20 million to us in terms of uplift. Where the challenge comes is because from an accounting perspective, and I would blame all the finance and accounting people here. And I include myself in that portion, the challenges we have to account for a lot of the market and FX at the RIT level. So because of that, with a single dollar strengthening, we did see some movement in terms of the contribution as we account for it on our books. And that offset a lot of the gains we had from the operating contribution.

So this one we think will move up and down. But from a cash flow perspective, though from a group, we actually take a lot of those dividends in from a cash flow perspective. We still had a very strong year. But that is why on the listed funds we get a little bit of movement. The other component, obviously being we have a slightly lower stake in two of our RITs. Year on year, ASCOT, trust and CICT. We have a lower stake partly from the distribution in species and the sale of RIT units down. But overall, we would expect this part of the business, assuming that our RIT stakes stay the same. We expect this part of the business to grow. On the private funds, slightly positive. The negative drag for us was China Performance, a number of our China funds, which make up more than 40% of our private funds exposure.

That came down. But overall, it was positive because it was offset by some of our new funds. Credit, India, which have done well, and our sponsor, taking those funds are contributing more than some of the preceding funds before that. So similarly on the private funds, assuming that the year holds out, we would expect this to be flat, if not positive. Finally on the balance sheet, on the balance sheet, this is the one that we will expect a continued downtrend on. Actually, the numbers this year kind of surprised the team and myself. This is before interest impact. So as we divest assets, we get a lot of savings from lower debt as we pay down debt. This is an eBITDA number, so this is before debt. But on the balance sheet side, as we sell assets, this is naturally going to come down.

And that's the intent. This balance sheet number should eventually move down. The improvement this year was partly because of the deconciliation of class. So we had some changes on treatment. And actually, the team had a fair bit of operational savings as we've been running a cost program to try and prove operations. So that's our real estate investment business overall ownership. I would say the outlook for us in this area is we expected it to be largely flat, even with divested assets we don't expect this to necessarily come down. And then finally on the balance sheet where we have investments. So listed funds, slight decline last year. I'm sure a handful of you will ask us why we didn't do a distribution in species this year for our listed rates. We are generally here we have come down in terms of holdings where at about 20% right now generally across our rates.

We're fairly comfortable in this space. We don't necessarily have a need for the proceeds so we're not divesting down any of these stakes at this current moment. And because of this, we think we're well-hold at this level for a while. But in the longer run, we do think it's unnecessary for us to hold at 20%. We expect that will come down over time. In terms of the private funds, we've got slightly more efficient. As you can see, our private funds have grown. Our allocation in terms of capital has come down slightly about 5.2 billion. This is intentional. We expect we will get more and more efficient for the new funds. We will hold lower and lower stakes. And this for us improves our overall returns. And then finally on the balance sheet, as most of you know, we have about 4 billion worth of assets left remain.

This has come down slightly year on year. We've divested from the balance sheet about 400 million of China. So of the 700 million effective, some of that came from funds and about 400 million from China. The intention for us is to accelerate that going forward this year. We did take a little bit. Obviously we've marked down on a fair value perspective. Our China value is down a fair bit. We also took some losses this last year on divestments. We expect to pick up the pace this year on China divestments as we move to being more asset light and generating higher, recurring fee income. And this obviously some of you may have seen the announcement. Obviously we did a seerit listing last year. And then there was an announcement recently that we have another filing for another seerit listing.

So we are trying to grow this business. And if you have more questions, I think to Seon, who is here, we'd be happy to take and share a little bit about that later on. But we do think this is part of how we're going to recycle a little bit more efficiently and be able to generate at least a better return for CLI from our China holdings. And then finally just on the balance sheet, as you can see, we have a very healthy balance sheet, 0.43 in terms of equity ratio. The bottom left, we have a lot of dead head room for growth. And so this is intended to be for organic and inorganic opportunities. Because of this, we think we're a strong position for acquisitions and investments. Maybe the only other thing to highlight, one interest cost came down year and year, 4.4 to 3.9%.

I think that treasury team has been working hard and we've been very thankful that rates are coming down. We expect slight improvement in terms of interest cost savings this year. Not necessarily a big shift because Singapore rates have come down quite a fair bit already. But we do think from a group profitability interest cost savings will save us a little bit this year. And then on an operating cash flow basis, as you can see, we're still generating, even though profits are down, we're generating more than 900 million operating cash flow. And that's why we had the comfort level to continue with a 12 cents dividend distribution this year. So that's it on our financials. I'll save the time for questions later. Just very quickly to highlight on two of our verticals before I pass the time to Andrew. The first is operationally on our listed funds. Our listed funds had a good run last year and I would say a good run from sort of two areas.

One is obviously profitability was up. But actually the most important thing to us is actually on the left hand side is shareholder return to our grid investors. As most of the rich you know as we talk very often to them is having the fact that we have 8 billion dollars invested in the rich. Their share price matters to us a lot and sort of their dividends. So the rates, particularly our S rate handful, even though we've got, rates now across eight different listed funds. Our Singapore rates did a fantastic job last year, generating 15 to almost 30% returns. So we're very excited with that. Obviously it's good for shareholders and us as the sponsor as well. As you would have seen, there was a lot of transactions last year. Almost double the volume the year before. And we think that growth this year should continue, particularly given the interest rate outlook looks flat to somewhat downward trending.

We think that's positive for our rich business. The only other thing I'd like to highlight on our ritz is it's not necessarily just about growth. As I said, it's about shareholder return and it's also about trying to find a way to improve the DPU. We had some active portfolio reconstitution. Obviously some of the big ritz did fundraising, but we're actually also very proud of the fact that class and the current trend was very active in managing their portfolio. Clint's maiden divestment last year. We mean chasing gallery before he joined in terms of divestment. And we think this is important because we won the underlying portfolios of the ritz to do well. So seeing that churn and improving the quality of the portfolio actually for us is very important. We're very, very proud of the ritz performance last year.

In terms of commercial management, commercial management, as I mentioned, is a strong steady fee and comes stream for CLI as a group. But more importantly for our ritz and funds, it is a key driver of the fund and ritz performance. I would say the team last year, particularly if you look at CICT, you look at Housendous rear, you look at even our China Trust. We would think that there were very credible operational performances which drove whether it was occupancy or NPI. And this for us is really one of the key reasons this vertical is so important for us. Stabilizes values obviously, and drives capital values up for the funds. And then also for us, this fee and comes stream has been an incredibly valuable, steady,

resilient driver for us and contributes more than 100 billion in e-bed after us. So on this front, we expect this will continue to slow steady growth and will be a key value proposition for us in the growth of new ritz and funds. And with that, I'm going to pass this over to Andrew to talk about our private funds. Thanks, Paul. Good morning everyone. Thanks for coming. I'll take a couple of slides to talk through our private funds business. Those of you who were here six months ago for our first half results may remember my our north stars and the north stars are very important for us as an organization because it charts the course and direction of where we want to go.

Now private funds, I think occupies two of those, I think five or six north star points that are raised. The first is always 200 billion in funds under management. That's a big north star for us. The second is the growth and evolution of our private funds business to match the success and the strength of our public funds business, right? To get that equal sized bicycle of balance and stability. Now in order to do that, I think private funds is threefold. You need to be able to design and manufacture good products. You need to be able to raise capital in pursuit of those products. And obviously you need deployment to be able to earn your fees at the end of the day. This is what it's all about.

So let me talk about the first two, the product design and the capital raising. So let's look at capital raising. As Paul mentioned last year, we had a good year. Overall, the markets for capital raising improved sentiment was better. I would say from 2024 interest rate started to stabilize most markets past peak rates. Appetite to deploy into real assets returned in the overall space. I think Asia Pacific raised about $27 billion across all of our GPs. We raised 4.9 in total equity. That's about a 15% market share. And it was a substantial improvement from our market share the year before. So on that front, I think we are punching at or above our way.

And we are starting to capture an increasing share of the LPs and what they are looking for, what they are seeking in Asia Pacific. 85% of our investors came from APAC region. We'll talk a little bit about the products they came into at the next slide. We introduced 12 new LPs onto our register. And if you look at the supplemental materials, you'll see that a large part of this is now very balanced. We had a big growth in our insurance LP base, which is an incredibly sticky, resilient, unique group of capital providers for us. So very happy about that. If I turn over to deployment, we raised 4.9.

We deployed 7 billion in total FUM (Funds Under Management) last year. And 7 deployment is important because as I said, it convinces investors that you are able to find the assets that suit each of these strategies that we are talking about. And obviously, when you deploy, you start to earn your fees. And as Paul mentioned, we rose our FRR from the private funds by 24% year and year. That is obviously on the back of deployment, which then translates into fees that we are earning. So all of that, I'm confident, will take us down into improved margin, improved e-bit dial, margin growth, and so on and so forth, which you saw earlier. So I think we are well on our way. And I think the private funds business, the North Star of heading towards 200 billion.

And also achieving a better balance between the public and private funds is well under we. So let's turn to what is it that we were busy doing in order to raise that capital and deploy that capital? Before I turn it over to Keisha, I'll talk about our lodging and living space and our logistics and self storage space. As you know, we are investing into three key thematics, demographics, disruption and digitalization. I'll talk a little bit about demographics, which is lodging and living and our disruption, which is logistics and self storage. On the lodging and living side, lots of evidence to support thematic growth and interest, leisure, travel, intra-agiors at an all time high.

We all see the targets that the Japanese authorities have set in terms of attracting over 14 million tourists a year and so on and so on and so forth. Singapore tourist motion bought equally incentive rise to bring tourists here. And we are very well positioned to attract and capture that trend. We've closed Clara to last year. This is a $600 million fund and already in a short period of time, just over a year after the fund closed and into into deployment, we are over 50% deployed. As a result of that, we are planning a second fund this year. This is again one of our major regional funds, APAC Living, which we intend to launch in 2026 to continue to build on that momentum.

I should add that Clara too is the seconds of a successful series of lodging related funds. So this again speaks to our ability and our confidence in being able to deliver product that suits the automatic that we have identified as key and investable for Asia. Turn across to logistics and self storage. Highly disruptive, the Atlantic. We all know supply chains are being rewired. We all know that folks are pursuing second order, second option, near shoring, friend shoring, not relying on necessarily the lowest cost option, but options that deliver reliability and options for supply chains.

We have one fund that is doing really well. This is the Southeast Asia Logistics Fund launched just a couple of years ago. That's a $400 million fund. Last year we deployed 36% of that fund, which Harry was able to do into new geographies, Vietnam, Thailand, of course Singapore. The Logistics Fund anchors of a very interesting product, which is what we call an omega. A highly sophisticated automatic self storage and retrieval logistics asset. Highly proprietary. And this is the only fund that has access to that in Asia Pacific. That's again a $400 million fund, 36% deployed last year. Extra space Asia, another very interesting thematic, playing on the back of folks who are emerging into a middle class,

which is fastest growing demographic segment in Asia. As we expand and we accumulate wealth, urban spaces at the same time are shrinking. We all can see evidence of this. And so self storage becomes an extension of your living space where you have stuff, you can't quite afford or don't want to throw away, but you don't want to have it hanging around your house as well. And that becomes a very sticky product that some of us who are customers, myself included, find very difficult to give up once you sign up. And so that's a very fast growing, highly fragmented, highly operational intensive business. We have a $570 million fund. Last year Pat and her team triggered the 85% deployment release mechanism, which essentially means

if we deploy 85% of that fund, we get to raise more capital. And that again is on the cards this year, another regional fund product that we are targeting to use to raise more capital into a very interesting dematic. We also have a regional impact logistics fund plan building on that momentum that Harry has earned with this SEO logistics fund. Before I turn it over to Kishor, I want to just take a note to highlight the operating platforms that sit under each of these products. The fact that Clara too can rely on our in-house 100% own world-class lodging platform. The fact that Harry's fund can rely on ally logistics properties to produce a proprietary product in Omega.

And the fact that APEC, sorry, extra space Asia has one of the few operating platforms that has the footprint across most of the Asian markets is no coincidence to us. Because as we've said before, real estate going forward in our opinion is going to be increasingly tied to operational excellence. The ability to invest into assets or I should say the ability to explain to our investors that we are investing into assets because of our ability to understand how to sweat the asset best. And that's the way to deliver our file for our piece. You can no longer rely on interest rates and cap rates and interesting financing and engineering solutions to get you to your returns. We would much rather sit in front of our alp and explain why AP, why extra space Asia can deliver that 14 plus return for you.

Because we know the asset better than anyone else and hence you should leave your money with us and pocket with us. So for us, I think the way forward is very clear. Thought leadership presents on the ground to locate and find the best assets. Supported by the best in class operating platforms in each of these schematics. And we are on the lookout for more such platforms as our alp's have also told us. It's a theme that resonates very strongly and this is why this product location, team and platform is a recipe in our opinion to grow our private funds business. I'll stop then to know what you should talk about. Very exciting growth of our alts space.

Thanks, Andrew. Morning everyone. Good to be here. So picking up on the on the platform thematic that Andrew was just talking about. Let me touch on credit in three things. One, what do we actually have on the credit side? Secondly, how do we define credit? Because I think that's important. Thirdly, some of the funds and how we're progressing on that. So credit is not a new initiative at CLI. We've been at this for over six years now. Arjun who runs the credit business for us has been in the seat for six years building this business out. In the platforms, we have forward invested by acquiring wingate, Alex saying bringing in the IP and the capabilities that we need to scale that business.

So we're not expecting alps or investors to take a bet with us on an adventure we're going on. We have put our capital. We've brought in that capability and that skill set and we're saying now back us on it. So if I look at our credit team, we have 60 plus people in that team today. Right? This is not something new. We have 60 plus people. 25 years of average experience across a senior team. And if I count the experience of what CLI has done and what wingate has done, we have deployed over $10 billion in credit investing. So this is something that is a team that is experienced that's established, that is now sort of building that out and scaling that within CLI. So that's firstly, it's not a new initiative. It's something that I think we're talking about much more and we're scaling much more significantly,

but we've been at it for a long time. Secondly, I think it's very important to think about how do we define credit because the headlines around credit and private credit in particular have not been very flattering recently. Right? So for us credit is defined very simply. We only back real estate back underlying assets. We're doing asset back to investing. We're only doing senior lending in that space. We're only doing it in geographies where CLI operates. So we're not going, we're not going to be credit is not going to be the business that takes CLI into a new country. We're going to follow in that because we have the expertise of CLI. We go and participate in a different part of the cap structure. We're only doing it in developed economies where the legal jurisdiction works.

So I think Australia, Korea, Japan, Singapore, again, no adventures because we're being a lender here. And most importantly, I've been asked this question a few times. We are not lending to any CLI assets. So this is third party unrelated where we have the expertise. And why is that important? Because in credit every once in a while when you make an investment, things don't work out. And things don't work out. We know exactly what to do because we call our team in Australia in Korea saying, we need to lease this building. We need to sell this asset. We need to finish the construction. And that expertise lies in house. When you have that piece in credit where you know what to do if things go wrong, then I think it's a very different skill set. And so that's where the headlines around private credit are very different than the credit that we're investing in,

which is in things that we know where we're an equity investor. And if you've been an equity investor through our REITs or through our private funds or through our balance sheet, we know how to run or operate those assets very differently from someone who's being smart and looking at spreadsheets. But if something that happens doesn't know how to operate. So we're very unique from that standpoint. In terms of on the credit side, what are we doing? So obviously the wingate funds continue to build in scale our wingate senior debt fund crossed a U.M. of 300 billion Aussie late last year. So we're very excited about that. They've had a flagship wingate investment partners product. They've now got the senior debt product to add to that offering. That's mostly going into the Australian, Australian market and we're selling there because it's an eight dollar product.

Our ACP fund series, our fund one has now been fully returned to investors with a very, very attractive return. We were about what we had indicated as a target return. ACP fund two will close, immediately do its final close, immediately that is over-subscribed at this point in time. So we're very excited about that continuing and that scaled significantly from where fund was. fund one was. So we're very excited about that and continuing to grow that ACP series on a broader Asia mandate across real estate credit investing. And as we look at, how do we now take this origination platform of finding, evaluating and understanding interesting opportunities? We're thinking about what the distribution of that needs to look like and that distribution is simple.

We've been selling into institutions as LPs for some time through ACP. When get has been selling into individuals for some time and you will see us doing that more across our flagship products and across a Singapore product that we've listed here that we intend to launch. And you will see us doing a lot more with insurance as both Andrew and Paul touched on. Those are the three important segments and to all three of those investor segments in credit, we are offering a fixed income alternative. This is not an alternative asset class with high returns and high volatility. This is largely positioned as a secured underlying asset with low volatility and sleep well at night returns.

Similar to in many ways what we've done so successfully with our REITs owning marquee high quality assets. So that's what the credit businesses is focused on overall. On the opportunistic side, let me touch on one quick thing on there on the data center side. So again, unbeknown to many people on an aggregate, we have about 800 megawatts of operating and under construction data center capacity. So we've sort of kept this, you know, I'd say we haven't advertised it significantly. But with that comes a lot of operating, understanding and capability. So we're doing with that data center business and some of those assets sit in class, some of those assets sit in Clint, some sit in our private funds. But on an aggregate basis, we understand those assets really well.

And in data centers, you have to follow customers, contracts and power. Right. So because of our capability, we understand what those requirements are. So we're taking that and you'll see us create within data centers going from what is a niche real estate asset class to again, and operating platform. As Andrew said, the value in real estate asset classes, the market is clearly telling us this is in the underlying platforms and the value you have the ability to add through that platform and the intellectual capacity and the IP that you get by owning that. So that's exactly where we're going similar to what Andrew talked about in lodging and logistics during the exact same thing across credit. And you'll see us do the exact same thing in the first half with data centers around building that up in a platform that follows our key customers.

So with that, I think I'm turning it over to Kevin to talk about lodging. Thanks, T show and good morning, everyone. Let me just move the slide. Okay, maybe just to set the context, whatever I'm talking about here, especially the numbers, there are no real estate in here. And let's say like business is generally value not based on any V of the business, but as a multiple of EBITDA. So you think about it and look at the coms is anywhere between 15 to 20 times EBITDA. You look at the growth of the business within signing management contracts, franchise contracts.

And this gives us very good hit win or not tailwinds to really write the earnings. If you look at the signings that we've done for the about 19,000 keys, we acquired, we did, I think two recent M&A's right with Oakwood and with Quest. With Oakwood, it was 15,000 keys with Quest, it was 12,000 keys. So the organic engine that we're building is outgrowing the M&A acquisitions that we've done in the past. And for every 10,000 keys that we sign on a stabilized basis, the latest numbers that we have is actually about 35 million of fees flow in. But depending on the mix of those keys, whether it's in, you know, developed markets, developing markets, high ADR, low ADR,

results, city, it can range anywhere between 20 to 35 million. Now you do the math, and you multiply it by the EBITDA earnings. We're adding a couple hundred million of value to the enterprise with 19,000 keys of signings. And that is going to recur every year because the engine of growth is already moving and churning that amount of signings every year. Now, the other thing that I want to address is really the growth. Now you look at the 20 to 20 numbers, we're only at 150 million fee income. Today we're at 35, 250 million. You saw earlier posts like, although we grew only by 2%, but you're on the lookback basis, five year K-GAS, about 15%.

Now the reason is because a lot of times the signings and the construction schedules are quite different from project to project. So we get growth splits sometimes, we grow 20 to 30%, sometimes we grow to 3%, but on a lookback basis, I think on average we do expect this kind of growth rate going forward. Now the other good news is we've been talking about a 500 million target. But if we look at what we have today in the back and these are recurring fee income, 250 million, and I add on what we already signed but not open, we have exceeded that 500 million target. So when do we cross the 500 mark, it really depends on how quickly we can get the properties to open. We try our best to support the owners, the properties to open as quickly as possible.

But sometimes it's a little bit beyond our control, but rest assured that these are backed by signed contracts and they will open. So those are kind of like the bigger pictures, the valuation, the organic engine of growth, the value creation that we are giving to the business. The other one is really on our operations, right? And how we are thinking about the future. We believe that this business should operate at 30% and above EBITDA margin. Today we are operating below that. If you look at how it's like we're operating at about 23 to 24% and that's deliberate. Because if you look at some of our strategies, we are doing things that we never did before.

We're doing results, branded, res, social living, franchising, FMB, my wellness. And this segment, I should open the market a lot for us. Many years ago we used the sign eight to 10,000 keys a year. Now we're signing 19,000 why? Because we have all these opportunities open to us. And we're operating below where we think the EBITDA margin should be because we're investing in capabilities to build support for franchisees, right? To have people who are able to manage results, we are open our distribution channels. We invested in our online team program just in 2019. It's covered six, seven years ago. It started with zero members. Today we have eight million members.

And we're targeting about 10 million members this year. The distribution as a whole, we're distributing about 60% of our business direct to our properties. So you cut off all the middlemen. And I think that's what a lot owners are looking for. And we're going to strengthen that distribution even more and be able to win deals from our competitors. So the one last point I want to leave you with is that today, I would say over 90% of our properties are we've unrelated to the parties. So that's actually a good validation of our capabilities to the market. And we have about 30% of our signings from repeated owners. Miss owners, we have one project we've asked two project, we've asked their happy without performance.

And they're giving us more projects. So that is helping us actually grow a lot faster in terms of reputation, brand recognition and confidence from the owners to sign more with us. So happy to take questions later, but I just want to leave you with this two slides. I'll pass on to Chukun. In the interest of time, why don't we get everybody up here and we can do the Q&E. And I'll just give me some time to say a few things. Yeah. Thank you all for coming. The thing I really, I mean, thank you all for all the other presentation. You know, we make the decision to go on the asset management journey in 2021.

I mean, at the point in time interest rates was high and then China started to slow down. It was the basis of how we wanted to raise our private funds. I mean, we were a razor focus and I think you could see the turnaround in terms of our fundraising machine. And the key criteria that I set for the team was that the way we can start to see real success is you see. Re-up for our private funds and over subscription. And that's coming true. And I must say that I'm quite confident in terms of what we are looking at in terms of the pipeline of views and the fundraising activities for the private funds side. So I would say that we have built enough capabilities in the team and enough product capabilities to be able to do that.

If you take a step back, I mean, if you think about what are the key strengths for capital and one, it's really our to the outreach platform. It's not just, you know, the effect that, you know, it's there. But if you look around the markets today, our REITs trade quite well. Actually offers a platform for many LPs, GPs investors that have sometimes difficulties in finding liquidity and creates conversations. And if you can find liquidity in a way that makes sense, you know, where we can find where we can acquire assets, provide them liquidity. And that's a good way to get them to support us in terms of the private funds growth.

So that's number one. The second thing is really the operating platforms that we have built up over the years from as good to self storage to large mistakes, our understanding of real estate and give us the ability to build up the few verticals that allow us to build a momentum for fundraising. It's not easy as what Andrew said if you're going to get people to just raise money to just invest in real estate unless you have something more to offer. And it's really because of the investments in the operating platforms that allow us to build that momentum. And the private funds journey took some time. It's the same way when modern 10 years ago when we decided to go on an asset like business or ask it.

Between the early 2010, 2013, we decided to start to grow very aggressively on the management contracts that you saw. What Kevin has presented, asset like the fee income growth, the embedded earnings and the multiple that one can apply to the e-beta that we are creating. So that's the focus that we have as a group in terms of growing our fee income, our asset like business. That's the reason why we decided to make the switch. So that's point number one. Point number two, I think all of you or many people coming here today, expecting some announcements. That receive a number of what set correspondence from friends, media, analysts.

Maybe I just summarize. Our ambition is to grow to a $200 billion FU m-business organically based on the engines that we have. Where is the reach, the private funds and the lodging business. I think we should be able to grow 150 to 160. We do need M&A. And in the last 12 months, you see our names appearing in different news, whether it is a platform in Korea, a listed entity in Australia, a listed entity in Hong Kong, hospitality platform, European origin, and more recently. The name I shall mention is, but all of you are asking.

Not all the news are correct. But we are definitely actively looking at views. And M&A will form a big part of what we want to do. We will look at views that make sense. It must make strategic sense. I've said, culture really things must work. And at the end of the day, we need to be able to pay a fair price that makes sense to all investors. That's what I want to say. If it's not accurate, if it doesn't make sense, it doesn't build long-term capabilities that can allow us to drive new funds capabilities, drive ROE. It's going to be very difficult for us to stand in front of our investors, to explain why we want to do a certain transaction.

And of course, yeah, people are thinking, if you're going to do any transaction, are you going to do any fundraising? I think Paul, in his capital management slides, have shown you that we do have sufficient hit-run to be able to do views on our own. I think that's the part that I just want to assure you that we are not here to pursue any M&A just for growth, just because we want to hit a 200-billion target. We are careful in the end. If we're happy with the 160-billion target organically that we can do that can deliver very high ROE, we are happy with that. And I'll come and explain to you that I feel to find a good M&A target. But if we can really find a good M&A target that's highly accurate, that all investors will support.

I will present that to you. So I just want to assure you that we are not due junkies. We want to do good deals that really helps to build the long-term capabilities for the company that can drive share price. Okay, so I thought useful to take the elephant out of the room and apologize for some of you rushing here to want to hear other announcements. Sorry, I do not have. But I thought I would just want to give clarity in terms of the principles that we look at in terms of the deals that we evaluate. And I can't stop the media or the market from speculating. But it's a good thing right here where I think we're looking at deals and still having the discipline to make sure that we want to do things that make sense for all investors.

Yeah. Thank you. Thank you very much, and obviously we have the team over here for questions. We have Erwin joining us on the panel as well. So you guys know the drill for those of us who are here in person. I see the hands up already. And I've been, I got a WhatsApp message to say who's going to go first. So please state your name and the organization you represent. And hang on, I'll come to you. And for participants joining us online. Likewise, there's actually a Q&A function. Please also state the name and the organization that you represent. Who chopped the first question, Mervin. Here we have a mic. I must say keep to two questions. Keep it brief so that we can accommodate as many questions as possible. Hi, Mervin from JB Morgan. Yeah, congrats on the core Pat me performance.

Thought was quite good given the challenges you face. Maybe you can go to slide 14, the FEM potential. Maybe you can run through potential FEM that you could raise this year based on the plan funds that you're launching. Second question is in terms of China. Share process down quite heavily, I presume, mainly due to the write-downs, non cash. Are we past the worst or would there be further write-downs for China? And for the three billion of on-bound assets was implied NPI-EL based on valuation. Thanks. I'll take part of the first question on FEM and alternative key shows about talk about alt. So you saw Mervin that we had a couple of regional flagship products in the pipeline.

Just want to say first of all that it's a reflection of where we are as a GPA as a house. We wouldn't be in the position to talk about a regional living fund, a regional logistics fund. And I definitely can say we wouldn't be in position to talk about anything on credit 12, 18 months ago. So we are, first point I want to make is we are on this journey. Now this is a multi-year journey and we're confident and we're actually quite pleased with where we are. I suggest you can allude it too. So when you talk about regional flagship products, you are looking at minimum third party raises of rough. 500 million. Okay. I bought that as a number.

That's a number we target. You double that because you you average to it. So your FUM (Funds Under Management), if you will, should be at a billion or there or there about. So these are the two flagship products that we are comfortable talking about now because we are confident. We think we can get this out this year. This is the launch, not necessarily the race and the close, right? That's a also multi-year journey. We also have extra space Asia which I talked about and we're getting more confident by the day that self storage as an investable asset class in Asia is getting increasing traction. Just because of the reversing queries, the inbound that we would like to think we have helped to generate with the success of extra space Asia.

People are starting to understand why this is an interesting asset class for core core class. Sticky, resilient customer base and if you know what you're doing on the operation site, you can actually be confident about growing the platform. So those are the two I think I'm comfortable talking about now maybe. It's going to be sure to talk about all. Sure. So on on credit similarly, the ACB2 fund, that is I would say just very high visibility. We're engaged with investors. We're in the process of effectively closing that out. I'd say certainly within Q1, some of the investors may slip into early Q2. So that's very certain, right? We know that's happening. ACP3 on the back of that will come out second half of this year, back half of this year.

So the pipeline, the originations for that, very strong momentum. So ACB2 will close. Three likely I'd like to see us have a first close before the end of this year. So very high visibility. When gate continues to grow, the senior debt fund, as I said, is picking up momentum. Given the world we're going into, I actually anticipate we'll see stronger flows into the when gate senior debt fund. So again, very high visibility on that. Things where we've invested a lot of time that will bear fruits in the in the second half of this year. I would put both our SGD product, which we expect to launch in that camp and our data center product in their camp. Again, as I said, those are not new initiatives. That's not a zero to one. That's places where we're already operating, where we're already investing. We're now bringing that out in a slightly differentiated more focused product for investors.

So on both of those fronts, very, very good momentum. High visibility to hopefully beat the numbers on fundraising that we had this year last year. Just to add on, I'm very actively involved in conversations with LP's family offices. There's actually a lot of demand for some of the products that we are creating and some people asking us to co-create products for them. And that's why I am actually quite optimistic. I mean, this time last year, I wasn't quite sure because the fundraising momentum was we had big plans.

But we're not sure in terms of where things could be. There were still changes in terms of personality. And then we went on the road and spent a lot of time with the investors. Given the feedback, given the products that we are creating, and a lot of it is also conversations with our LP's. I'm actually a lot more confident in terms of where our private funds team will be able to achieve over the early conversations just for the start that year. It has been very, very encouraging. I'll take the other two questions. On the China Revalves component. So this year, the China Revalves on average from a portfolio viewpoint was about down 5%.

But that was quite a range depending on the asset class. China office was the hardest hit for us. Office in business parks. Less so in some of the other sectors. So, you know, we took a bigger write down partly because of the vacancy in some of those buildings. Which ties to your second question. Because of the vacancy in those buildings has come down. as we've had some tenants in the offices in business park move out. It has brought down the NPI numbers for those buildings. So I would say, you know, most of the NPI for the assets we're talking about range between 3 to 5%. As we can fill up that occupancy that should drive the NPI up. Hopefully to get us to, I guess, a stronger more 4 to 6, 4 to 7% type level. We hope the worst is behind us. But I think when we've looked at China over the last several years, obviously we've taken right down over the last four years.

I think it's a little bit hard for us to predict whether there will or will not be any more. Certainly the team likes to think that our hopes that the worst is past us. But as we continue to expect negative reabergens and occupancy is still weak for some of the asset classes. We do think there could be some movement up and down over the next 12 months. Can I go, just want to add to that, for I turn it to you, Kun. It's not all doom and gloom on China. Now, it's correctly characterized. China is a lot happening exogenously that we are having to deal with. There's little we can influence terms of geopolitics, consumer sentiment, etc. And actually, China is well versed in this. But as a senior team and as a group, we need to sort of make do with the cards that we are dealt.

So what are we doing? As you all know, again, one of the North Star destinations is China for China. And last year we launched our first series trading really well. It's been well received. And as Paul mentioned, this year we've registered for a second series, taking advantage of what the Chinese regulators have acknowledged is something they need to focus on. They need to be able to provide retail investors, savers in China with something that is proven, a proven asset class globally. Stable, visible, sleep and night distribution yields rather than speculative real estate in China, which we all know they are completely allergic to right now. And that plays to the seaweed market. And that, again, I think plays to our ability to provide assets for them that nothing wrong with them intrinsically.

They're great assets. We run them well. We just need to find the right price point where the market says this is great for me. I can get that distribution yield, get that saving place. And so in the ability to demonstrate to the market that we've launched one seaweed, doing well, sleep and night, here comes another one that is larger in size, more sophisticated integrated development. You start to see this ability to accelerate our China for China, even in the midst of what is a very difficult political, macro environment for China. China is a huge savings base in part driven by the fact that sentiment is down. People are not spending because they're worried about the future. When they're not spending, they want to save. They need some things to save in.

And I think I can think of nothing but the equity side then a, then a wheat. As we all know from our own savings here in Singapore, so much of our wealth is tied up in the, in the street market. So I think this place to our strength and if we execute well, we can turn what is an uncertain environment into something that is positive and part of their growth story for the group, which is China for China. So it's not, yes, it's not great. Yes, I know you guys are waiting for the inflection point and for us to come on and tell you that there's not more bad news. Honestly, as positive, we can't, we can't tell you that because as you know events are happening very regularly. And they happen, come out of left field very often. What we can do as a team is just to respond as quickly as we can and stay focused on what it is we're trying to pivot towards, which is China for China.

Just to add on the, you know, we created a master fund last year and then the series, U.S. continue to do that because of our long history in China ability to operate manage reputation wise. We actually have a lot of inquiries from capital partners to actually give us more capital to growth as I mentioned business in China. A lot of competitors in the market today in China have exited in one way or other.

Actually, position is quite nicely to grow the China business using a lot of domestic capital using a very capital like manner to grow the business. I mean, we do have, you know, balance exposure to China from the original capital and days. I mean, where we use the developers might say to put very heavy balance sheet to grow, which is not the case anymore. And I mean, I don't want to keep revisiting, you know, saying that these are all the things that have worked well for capital. But it is, but the important thing is what do you do? You want to be able to recycle the capital and invest it to grow the fee business.

The asset management part of our business being very capital efficient raising the body capital so that the fees that we are earning will be very is like coupon clipper for investors that invest we see on. For better capital save the fees are there. You don't have to worry about the volatility of the real estate market. And that's what we are transforming the business model into. Right. I think the rest of the other parts of the world we have done that in China, we are doing the same. We are doing raising a lot more than party capital. And I think that the potential for us to view a big FUM (Funds Under Management) business in China using the party capital is there. We just don't need to use so much of our own money in China.

So that's the guidance I just want to make sure that, you know, the team understands as we execute the strategy is to use less of our own money. And, you know, to grow the business in China, grow make it a fee business. Yeah. Sorry on the private credit side of things to be the implies on the property side. Private credit, everything plus to be this year is realistic. I presume you had a big gun here to deliver. I'd like to see a skit ahead of that, ahead of that billion. But watch the space. Hi, Shen. Hi, my name is Shen from Gorman here.

First question is on cost savings. The five billion seems a bit low versus previous 50 million target. Can you go through the initiatives? And secondly on shortage of M&A. If you go do one with significant overlapping capabilities, how confident are you in realizing cost energies and what will you be doing? Secondly, second question if I may on lodging. So if this business is value on multiple, then if it does, it's actually more important than keys and revenue. So if I look at your revenue target, if it does, you grow more than that given operating leverage. So my question is really on timeline when can we expect it to come true.

Thank you. Okay, I will do cost savings. So the cost savings number related just to our AI digital initiatives. So overall, the group target is still to get to 50 million in cost savings. I think we are tracking fairly well. We've made some progress this year in terms of increased efficiency, streamlining some of our operations. We're still moving into that next year as we start outsourcing some parts of our work using a little bit more AI and digital initiatives. I think we'll be able to update a little bit more by mid-year in terms of progress as we can see sort of full year savings. but the goal is still to get to 30 to 50 million savings on a run rate basis by 2027. Should I take the logic question?

Yeah. Okay, so. Okay. So maybe on the cost savings for M&A. So obviously we've done two M&A in the last year. SE capital, which was only 40%, so it's been largely run independently. For wingate, which was 100%, we have started integrating those operations. And we asked, I think, to see that capability sharing. So key shores now got a lot of Australian sourcing capability, not just for the wingate funds, but also for ACP2 and ACP3 in the future. And so we're starting to see some synergies there. Given that that has only been an operation for about eight months, we have yet to be able to actually count the value of how much there is.

But when we look at it, I think it's easy for us to estimate that sort of 10 to 20% is a reasonable saving levels for us in this particular aspect. I think if we were to do a broader M&A, it would depend on how much overlap there is. And if we look at our corporate costs, which in based on the slide there, you can see we're still sort of about that negative 55, which is not true. Corporate costs, but has a mixture of factors there. We would think of that as in theory where we would get the most savings from in terms of overlap. So that's what we're driving to. We have done no estimates in terms of overlaps for maybe what you are looking for. But we do think that reasonable cost savings when you look at overlapping operations. If it's in the case of say something like wingate, we think 10 to 20% is quite reasonable.

Certainly we hope to do more if there is more overlap. Just to add on, I have done a number of M&As in my career in capital land from as good days buying quest, buying the hotels platforms and subsequently the merger with ascendors, sing bridge. And we say that so far all the M&As that we have done, we have been able to grow top line, we have been able to create synergies. And I think that's the big principles that we take. However, M&A that we do, it has to make sense. There is no need for duplication of resources. Of course we want to make sure that we do things properly.

When we did the merger with the big merger with ascendors, sing bridge, it was on the basis of a best person for the job. Some of you may recall when we announced the transaction very quickly we talked about the off structure. We want to make sure that things could execute. And for some of you, we may remember on the day when we completed the ascendors in bridge transaction. The next day we talked about how do we put together the ascendors hospitality trust and the escrow residence trust. It's a question of the discipline. I mean you just need to make sure that if you are committed to do a deal, how do you work out your entire plans, how do you put a people in place,

how do you create synergies, how do things make sense. I think we have enough credit to be able to demonstrate that we always maintain the discipline in doing transactions. So just last part, we are absolutely with you in laser focus in delivering E-Bitter. If you look at our daughter Keekau, it's 176,000 currently. Just over 100,000 is operational. We have another 60 plus thousand in the pipe. So the ratio of pipeline to operations is actually quite high. And that suggests that we have a lot of opportunity to gain operating leverage. Now if we look at the construction schedules of the projects we have signed, we do expect a lot more properties to open in 27. And if we give them a year to ramp up, we should be able to get a good healthy boost in fee in coming 28.

And we do expect by 28, maybe 29, to be operating at a more stableized level about 30 plus percent. Can we go to Derek this? Yeah, I think he's hand was up. Right. Thanks, Grace. Derek from DBS, I'll just ask two questions. So if I could go back to China, right? Could you give us a sense how much have you written China since the start? Are you at 10 to 12 percent down? And maybe do ask the question another way. If you put an asset in a market now, do you think you can transact at book? Other than going to the series, we will just want to, there's the first question. Then my second question is on the ACP fund too. I'm just curious, could you give us a bit more color in terms of returns that we expect?

I always thought that for private credit and credit, you'll be playing in the field where you're in the junior debt, or a bit more risky, or you're lending to corporates that could not get traditional funding type of scenarios. So when you mention that you're looking at very senior debt kind of investments, very safe. This one really is your landscape or a competitive landscape, the financial institutions. How do you stand apart? So I'm maybe too really wrong, but we can give us more color, right? Thank you. So on the China valuation of the last five years, we've written down about 1.6 billion on our China values. It works on average to about a 12 percent drop in valuations. But that's really an average. Obviously there's been a wide range.

For some of the assets they have gone down to 20 to 30 percent, some of them have actually barely moved because they're very strong performing assets. In terms of, would we be able to sell out into this market in this price? I think it's very asset specific. If you ask us right now, suddenly there are some assets that would go out at current value. Some may, if we're fortunate, even get a slight gain. But I think, depending on how the market outlook goes over the next three to six months, it will give us a bit of sense of whether there is an additional discount that we need to take. I think last year we took, as I mentioned, we took an average 10 to 20 percent discount. We are actually quite willing to take some of these discounts if it gives us an ability to do what Andrew was mentioning. And that is really recycled into a renminbi fund. If you ask us to take an adjustment to the valuation, but it generates long-term recurring income, that's certainly something we would look at and consider.

I think for us on the go forward, we know we have a little bit of weak spots in part of the portfolio. But we are very much focused on making sure that that operating profit and that fee income stream goes. So in private credit, we're not coming for DBS's business just to be clear. But look, it's a good question. Firstly, we're not doing anything on corporate. So it's always real estate, always asset back. Why does the opportunity exist? There are many cases where, for regulatory reasons, a bank struggles to do a certain type of land. In construction and transition financing, we understand the underlying assets much better. So our ability to provide financing into that is greater. It's faster, very often than the new financial institutions. We're clearly not cheaper, right?

The end return to your questions that we're looking at in our private credit products is going to be between net to investors, between a 6 to 10. We hope we can outperform some of that 10 at times, but this is not a 15, 20% IRR business. It's generally transition, so it's shorter duration. One, two, three years. We're not doing five, 10 year loans, because anybody who's taking that cost a capital for a long period of time, it's not sustainable, right? But let me perhaps bring that to life through an example. So we did a transaction late last year, we're about to do our second one in Australia, Sydney specifically, and Prime Sydney residential neighborhood. Financing a developer against completed stock.

They got very expensive financing, construction financing, which is a business we understand because of wingate. And they're now slowly selling out the, they held onto some stock. They're slowly selling out that stock on a completed basis. On that, they're quite happy to take our capital at probably a seven, eight percent just to give you directionally where we are. We will lend that on a 60 to 70% loan to value. So it's not very high LTV. Firstly, second, we may selectively use some leverage on that, probably 50% back leverage, but we control the entire loan stack. So you're right that our end participation may be junior, but we control the entire stack. So we're not sitting there to syndication table with six lenders if something goes long.

If something goes wrong, the senior is actually looking to us saying, you guys go resolve it and work through it. So on something like that on a lever, on an unlevered basis, we may be seven, eight percent. On a lever basis, we get to 10, 11 net of fees were comfortably at eight or nine. And on ACP, that's sort of the 10 or just over 10 net is kind of what we're looking at. On the evergreen in SGD, there'll probably be safer. There'll probably be more like a six, six watt percent return. Okay, thank you. Let's go to Rachel. Hi. Hi, good morning. Hi, this is Rachel from Aquari. So a few questions from me. I think first, you spoke about interest cost savings. Could you give us some guidance for interest costs in FY 26?

My second question is on divestments. I think you've done one billion or so any outlook on the divestments for this year, the year, the year 26. One last question on commercial side. Any risks you see in your portfolio, I know it's stable growth, but this year, do you see any risks in your retail portfolio? And there's some office assets out for sale, which is very sizeable. That's good for CLI. And we thought about whether you would acquire them. I think we've always been consistent in terms of retail portfolio, especially in Singapore. It's supported by fairly controlled supply. Right. And we've been conscious on the trade mix. So our reversions, we think is consistent over time. Last year, it's about 7% just under 7%.

And this is consistent. And we measured the business. I think you know by now by occupancy costs. And we look at this across different trade categories. So we think that the business this year will continue to be fairly resilient. Now there's going to be RTS Link opening at the end of the year. Almost at the northern part of Singapore, but we are getting a presence there via the management contracts that we've signed in Johor. So I think the retail business should remain fairly consistent. Our office performance for the assets has also been strong also supported by relatively managed supply and all this is in contrast to China with its massive over supply. So I think any opportunities down the table, we have various vehicles that we're always looking at it. We will be the first part of call and if it makes sense, it makes sense.

In regards to interest cost savings. So in terms of absolute interest costs, this one might move up or down depending on how divestment and investment goes. The truth is I personally, and I'm sure I'll play the other bankers here too, hope that we end up borrowing more as we have more investments to do. So the absolute costs may go up. But I think in terms of basis points where it's 3.9, the year before we had 4.4, I think we can see it coming down maybe 10, 15 basis points on average. In terms of divestment target, certainly this coming year we would like to do more than we did last year, particularly for China. So there will be an effort to try and accelerate that. And we hope over the next 6 to 12 months we will be able to beat that 1 billion quite comfortably. Thank you.

Maybe we go to Joifers. Joifers from HSBC. I took question first of all. You help back share by back last year in view of sort of acquisition pipelines. How long do we expect that process to be as you evaluate large scale sort of acquisitions? And on the same token as you evaluate these process, what does that mean to your boat on strategies and smaller platform acquisitions? Does that go through B.A.U. or would that be on hot as well? Second question is more on operating platform. I think Andrew talked about buying more, exploring operating platforms.

Can I assume that the end game is eventually to exit or through an IPO for these type of platforms? And if that's the end game, where are we on your various sort of operating platforms and when can we expect potential exit? Thank you. So on the share by banks we did, obviously in 2024 we are quite active in 2025 and I think it holds same for 2026. We believe that there are a number of both organic and you know getting opportunities for us to invest behind and sponsoring new funds organically or sponsoring our roots as they grow is still priority number one for our capital allocation. Priority two is really growth for you know getting opportunities.

I think we look at a range as she can mention we've been associated with quite a number of deals in the market. And we continue to look at a number of them and I would say since there is there are opportunities in the market. We are conserving capital to a certain degree for these opportunities. In terms of timeline I think that's hard for us to pin down. We believe that there the opportunities are very readily available in the market in the different segments and including both ones that we look at. So I think from that viewpoint we are still working on the basis that there will be more organic and inorganic opportunities for us to use our capital for. We are positioning the company for growth. So actually we are seeing quite interesting opportunities.

Whether it is organic or inorganic type opportunities you could be smaller could be bigger but positions us very well and allowing us to grow the fee income on the most sustainable basis. And that's why we are conserving some of this capital to give us that optionality. So that's what I want to say. interesting things happening in the market. Yeah. I think I very quickly.

You can talk about optionality. I think that's the beauty of platforms. If you have platforms that are strategic in nature and are sought after, you can do a lot of things with them. You can keep them to generate more fee income vehicles down the road. As you produce vintage to vintage tree vintage for vintage five. Or you could put it together with a fee vehicle and then do something with that. And I would say the option spectrum exists with all of our platforms. The ones that we have minority investments in, the ones which are strategic commercial management and lodging management which are so intrinsic to our business today. Obviously the consideration set is different. So you can do your basic question of whether or not you can use them as part of a.

Securitization package or monetization package. The answer is absolutely yes. But obviously we take a view as to what is the best cause of outcome for us as a group. If it's something that's so intrinsic to our business. And we see a much longer horizon in the ability to generate more and more fee income vehicles downstream. Maybe we decide to keep a little bit some of it and not really sit. But the obvious the reverse is also true. We are today very much an investment house. So you can be sure that if we grow the platforms. I think some of you may be alluding to whether it's an SKS platform. It could be some of our platforms in India. If there's an opportunity for us to you know to consider strategic option to list independently because some of the values are not best captured being the listed vehicle.

Or we can give you a list of life. They can get better valuation in certain markets listing it one way or other. We will consider it and usually as a chance to unlock capital properly capitalize it so that it can compete. So all these are optionalities that we are looking at at the end of the day. You know we need to grow the platforms properly. How do we unlock value? How do we create the most value for our shareholders? Let's come to this. So relevant to Shrin's point. It's all EBITDA. To generate multiples on earnings. If the platform is an intrinsic part of that ability, then narrative to generate the maximum earnings multiple,

then that's where I think it becomes a key consideration. It was not quite ready yet still a bit of a bit of a scale. But it's a key part to the thought leadership and the ability to think about how to design products. Then I think that's better help on Shaw because we won't realize maximum value for that. Sorry. You can. Over here. You can from Seattle to questions from me. First one is on MNA. How much are you willing to push gearing up to fund MNA going forward? And what kind of IR targets or targets? Return targets do you have in mind? And also are you okay with the net-term dilution on such MNA? Second question is on China.

If you're taking all your China assets and you divest it, let's say you carve out today at book value, how much will this lower your current gearing? Okay, I guess that's me. Okay, so China assets for us are about seven and a half billion right now. If we were to carve them out, that would bring us down into a net equity position. Our net cash position. Because we actually only have debt of about five, six billion on the books. That assumes that it is all sold. I don't think to be fair it is a likely scenario for us. Probably because we look at these, a lot of these is our sponsor stakes in a number of funds.

I think your first question though in terms of how much are we willing to end, you know, we put this on a slide specifically to show how much debt headroom we're comfortable with. And I think we are comfortable spending additional six odd billion. Gets us up to a point nine type gearing. The truth is we are quite comfortable in that range, particularly now as we are divesting assets. And it's the same in the team, make efforts to lower our China exposure. We will actually get additional capital back. In the longer run, the truth is we're quite happy at this point 4.5. It's probably about right for us. But we can afford a spike up if there is a deal worth doing. And obviously with that type of headroom, as you can mention, it's very unlikely we need to raise equity. And then we would expect it will come down as we divest our stakes of the balance sheet assets.

We are putting more money behind private equity. But because of our efficiency ratio as we enhance efficiency, the truth is we don't really need much more than the 5 billion that we already have in the private funds. On average our holdings in the because of the legacy assets and the legacy funds, our holdings are more than 30% on average. In the new funds, we hold 10, 15%. So actually we could double our private funds and not require more capital there. And then similarly on the ritz over time, that stake will come down. So I would say from a dead headroom viewpoint, we're very comfortable doing anything in the 6, 8 billion dollar range even. You can remember you around when we did ascenders. We took the up to, I think, 0.83, 0.86. With a commitment to bring it back down again, and we deliver on that,

without issuing new equity. So I think we understand the playbook and we know what is important to share all this. We're going to take a few more questions because we're re-neering the 10-30-mountain. Let's start with Terrence, right? Sorry, Brendan. I signed up. Yeah, hi. Brandon from city. Just two questions. The first one is if you look at your fourth quarter, if then fees from private funds, right? There was a very nice 30 million number there. Can you guide us on what that is? And is that what we could see with more private funds who would have an exit over the next couple of years? Sorry, Brendan. Can you direct me to where you're seeing that figure?

I don't think we didn't have any event fees, stand out event fees for the private funds in the fourth quarter. So if we did that, it's great. But no, so I would just say, though, in general, on our private funds, our private funds activity, we do have a little bit of fees, but it's very small in terms of event-driven. We're not expecting carry from any of our funds in the near term. So we wouldn't expect that. I think actually the strength of the figures that we have for the funds business is it's been largely recurring income. Both from the listed side and from the private side, we'll continue to go at sort of the same growth rate we would expect going forward. But we wouldn't expect very much in terms of event-driven from the private funds.

Okay. Maybe I'll check on my numbers later. So the full of is more on your dividends of 12 cents. So what you got in the market using your core operating partner on a different pay-out standpoint or would it be more useful to use the operating cash flow? Because if you were to look at this, by 40 million and you begin to assume it can go at 6%. The pay-out is actually close to 100%. Yeah. So our pay-out ratio is high. And actually, I'll add enough advice to the question and share buy-bangs. You know, there are different ways we can return capital to investors. I think when we look at our operating cash flow, which is the metric that we try more closely in terms of making sure that we have funds, the operating cash flow is more than 900 million,

which we have a very strong fee business that consistently generates income. And then we have all the rate dividends that come in. So we look at the operating cash flow as the more critical measure for our own internal capital management. And then we look at the operating profits as a guide to what we are willing to, or what we think is about the right level to return to shareholders. We could have used the money to send a grace sum of it for buy-backs. We have chosen to keep our dividends stable at this level. We think it is a level that we can comfortably maintain, given the trajectory we are on. Certainly at some point we hope that we grow faster and we're able to increase the dividends. But at the current pay-out ratio we're quite comfortable. Okay. We'll take a couple more questions because we do have one online question as well.

Let me go to Vijay Faz. Yeah. Hi. And thank you for the opportunity. I have two questions. Firstly, again on M&D. So if you were having on it, you have two targets. 200 billion as well as asset allocation to different geography. Suppose if a big M&D acquisition comes, that which you have 200 billion target, but doesn't fit your geography target in terms of exposure to China or US markets, how would you react to that in that kind of a situation? My second question is in terms of your private funds. Do you also mark to market your private funds on an annual basis? If so, there was a, was there a gain or losses? Was this a reason for your reduction in balance sheet exposure towards private funds to 5.3 to 5.2 billion? And also, sorry. That's my question. I lost my time.

Okay. So I'm not sure if I caught that right on the private funds reduction. Part of the reduction was two. Some of the funds are starting to come back. So for instance, as Keisho mentioned, our ACP1, our first credit fund, actually has returned capital. And that has come down and it generated a 15% return, which also helped our earnings. So we have some funds that are returning funds. We also did have a little bit of mark down from the China funds component, which also lowered the stake, the value there. So actually, there was a fair bit more movement down, but we also invested in new funds as well. So that's how we came out of the balance. I think most importantly for us is just that the capital efficiency on that improved. We were investing less into the new funds than we were previously.

If we are looking at an asset management platform, we look at the quality of the teams, whether it has a strategic difference to us to be able to raise funds. And on an ongoing basis, whether we can create new products out of that. So if you ask me, I am less sensitive to where the FUM (Funds Under Management) is from. I mean, even if let's say a certain entity has some allocation to China, that can help to strengthen our China FUM (Funds Under Management) on a fee basis, without us increasing a lot more capital allocation to China. We will look at it. And if let's say there's a fee business that we can buy in the US,

and the question that we need to ask ourselves is you buy a team in the US today, can the team and together with us actually help to the both charge the globe in the FUM (Funds Under Management)? If we are not so sure, then we may not do it. So I think the issues are complex, but just want to highlight that, we are looking for platform basis, we are looking at platforms that help to generate and drive our fee business. So we are not looking to buy a, for instance, a developer and SSA-heavy business. That's not our business model anymore. And that's what we are trying to reduce our balance, exposure on other hard assets. And we should have less stakes in the GPs.

And over time, as what Paul mentioned, we want to be able to also in an organized fashion, reduce our stake in the reach without affecting the share price of all the various reach that we have strong holdings for. I mean, why we want to do something to affect the returns to our union holders. So I hope that gives you clarity in terms of how we look at M&A. Yeah. Terrence. Hi, this Terrence from UBS. I have two big picture questions. First one. So APAC real estate is an under-allocated space and given that 2025 performance for many asset classes have been positive, especially on public equities. I guess APAC-PRE is even more under-allocated now, so then before.

Such that the rebalancing itself, I think, should see LP snocking your door. So I guess it's fair for us to expect that the organic fundraising for private funds should be better on a year and year basis for 2026, i.e. more than $5 billion. And the second question, I'll just go to it. Andrew, I mean, to us a no-star question on fundraising and distribution. The US is making all assets accessible to people for one case. For us, I think platforms like Pandora's, Dashowie, they actually have access to our dormant SRS funds and they're really distributing products from likes of Blackstone, Hamiltonian, etc.

So do you see Singapore's retail wealth channel as a blue ocean market? Andrew, you already said we already are investing quite a bit of our money into SREED so far. Yeah, he's a great question, thanks. So the short answer, and I'm looking at Alan here, is yes. We want to build on this momentum. The anecdotal evidence for 26 is that allocations to real estate will assets in general in Asia have gone up 15 to 20% for the reasons you mentioned. So if we're going to continue to punch at or above our weight in capital raising, yes, it stands to reason that if we raise 4.2 last year, that number has to go up by at least by that percentage amount.

Obviously, it's going to be incumbent on the strategies and the strategies need to make sense, which is where that product design ability to focus on the ground who are telling us what investors are looking for, what is interesting in terms of real estate, and how do we bring the underlying platforms to sink all that together, all very intrinsic to being able to successfully do so. So that's question number one. Question number two is around the wealth channels. So you hit on a very good point. Last year we made very good strides in insurance. And we've also identified high net worth as a key component of a rounded distribution platform. We've started off with decently insurance. We've identified and we've made some very strategic hires in the capital raising side of the house to be able to speak the very specific language that insurance companies use when they talk about deployment and what their specific requirements are to be able to put out product that makes sense for them.

And we've done a very significant insurance mandate that we hope to share with you in the not too distant future. Which that leaves high net worth. High net worth is a relatively young channel for us. We took a big step forward last year with Wingate, which is essentially a high net worth shop. And I think with key shots, how we can learn from how Wingate has developed that very high touch channel, as you know. It's a very different way of servicing your client, but it can be very sticky capital and your your feed cards are very different in nature. So again, it's a specific language, a specific skill set.

We've got Yvonne here who comes from that part of the world, both as a customer as well as a proponent like this. So she knows how to reach out to these folks. She knows how to target products and design products that make sense to them, including potentially reaching out to U.S. High net worth. Although I will say that that's probably a bridge to be crossed at some point in time in the future. I think the lowest hanging fruit for us in the key shock can add to that is certainly there's enough wealth in Asia. And even here in Singapore, there's plenty of it for us to use the strength of the capital and name, the brand, the comfort. It provides the the assurance of integrity, the assurance of governance that these investors look for when they make such investments.

There's there's enough for us to do here without, you know, thinking further a few at this point in time. Yeah, I can sorry if I can add to that on the wealth side, it's a really good question. And with everyone inside the tent, I think that gives us the ability to go understand and create the right kind of product. But the thing that I find really interesting is given our reads. The familiarity with the wealth channel of our brand is very, very high. Right. So while every global alternatives or private capital firm is trying to move from institutional investors to wealth. For us that path is I think a lot easier because the reads have done a great job of attracting that wealth capital.

Secondly, in our home market here, the, you know, this is this is a big wealth hub. If you look at the numbers over from 2018 to 2030, the the wealth channel grows from 800 billion of assets to 1.5 trillion of assets in Singapore. Going on with the SGD strength to be able to offer products in that. I think it's very important. Something that we're very, very focused on. The, the second thing is when we do that, it's the question that got us earlier from joy. We do that with platforms where unlike a private equity firm, we are not investing in these platforms and then putting them up for sale in three or five years. Right. We're an aligned investor. Even in our reads, we own 15, 20%.

We bring that down, but we own a big cornerstone stake for a long period of time. So that in the wealth channel as well as in the insurance channel gives investors a clear alignment, which is very different from a traditional GP, which is putting up 1%. Really go to go La. Hello. Hi. Good afternoon. Good afternoon. Thank you. And team. I've got only two questions, right. Grace. So the first one is on the next China Sea Read, which you haven't spoken about much. Is it the Raffles City portfolio? And if it is, I mean, the same question.

And if it is what, what are the most occupancy of the, of the office building, the office part of it. And that's the first question. Second one is you don't have a real data center operating platform in the way that may I use the word capital has. So would you be interested in one? And would that help? And you talks about your operating platforms that help you design your projects. Will that help you be more focused in your, what your data center strategies? Those are just two questions. Thank you. Yes. We are planning to launch our second seaweed. This year probably is late, same quarter, believe that quarter. We had one infrastructure seaweed launch, two assets, and then we are looking to launch another one.

One of the assets that we have followed in our prospectus is a Raffles City that Raffles City shouldn't. It has a more, it has a, ask it service department, and it has an office. So it's really the office in terms of occupancy. I think it's a high, it handle coming to 90%. So it stabilizes. Good luck just to add. Okay. Go back to seaweed and the question on why this is good for us in China. The initial class of seaweed approvals was restricted to certain asset classes, which excluded office. This batch of seaweeds, the Chinese regulators, the CSRC has now relaxed that requirement to allow for commercial assets, which if you think about our portfolio and our legacy funds and this whole China for China pivot, opens up the aperture for us to.

Accelerate that pace of pivoting from our legacy US dollar product to China for China, including public private, including public vehicles, including private vehicles. So I don't want to put the car before the horse and get overly excited, but the pieces are in place. As you always are on us on how quickly can we pivot this China. Get the momentum going and to us, this is a very sizable and meaningful development that the regulator has done, which allows us the opportunity to do so. If I even add the Chinese regulators. What is the valuation versus your book? Also for the first seaweed, we had an IPO price of 5.7, Raming B per unit and it's now trading at 6.9.

The price of one naf is 1.21. I think the first quarter results, we are 3% above underwriting. So it's doing well. I just wanted to add to Andrew's point, I think the regulators are aware that liquidity is available in the market and through a recognized and trusted wheat product. I think a lot of liquidity can flow back into the real estate. As we can tell in the last few years, there has been a departure of say foreign buyers from the market as affected transactions, transactions are much lower than before. But with the last three years and this infrost seaweed becoming more and more known into the market, the ability of CSRC to introduce a commercial seaweed, which opens up the mandate to include office, hospitality and retail.

My definition, integrated assets, really opens up for us our entire portfolio to be able to see the be seaweed. Given that the trading that the BUs are also tight or tighter than the private market, it really represents a huge opportunity for us. And it depends on these assets and good operations. The awareness about the office market and China is challenging. I don't think I find many offices in China are readable. Why RFO's decision is able to go in is one is a mixed development. Second is the good location. It has a benefit from Hong Kong tourists. And also because we are a Singapore brand name, there's a bit of a glass. So we are able to host the HQ's of Chinese tech companies and American tech companies and they're happy to be with us.

And RFO's decision is ML there. They are also able to be there previously one of the Chinese tech companies HQ's with their also and then after the Amazon came in. So it is fairly resilient among other office assets. Go on your data center question. It's a really good question. Thanks for that. So I would say in the few months I've been here, I think data centers is a great example of somewhere that capital and focus is on execution. But does a bad job of promotion. So we have 800 megawatts in existing operating or under construction assets. We understand customer needs and demands really really well. So we are now looking across that universe as data centers itself has evolved from a niche real estate asset class to a deep operating capability asset class.

We're looking at that with customers and with investors. You'll see us in the next few months form that into an operating construct and focused on very specific markets. So if I take India as an example, we are delivered and are delivering nearly 240 megawatts of capacity. That I think puts us in the top five in the market in India. Small size but we're also delivering in India the first ever liquid cooling direct to chip cooling asset in the country. If you're going to put in an NVIDIA GB300, you can't have air cooling. You have direct to chip cooling. So we're going very specific in that because the scale with these customers is massive and we'll pick our spots through an operating platform.

And you'll see us grow it in that form or not. Rather than trying to be all things to all people in data centers, we'll pick specific markets where we have strength and go very, very significant, very large there. Sorry, Goula just wanted to add a couple of points for the commercial series just to be complete. There are a couple of things that are going well for the commercial, commercial series number one. It took us two years to prepare for the first IPO. For the second one is slightly due to six months. The regulators are picking up the pace and allowing for a more expedited process. There's number one. Number two. In the first infraery, there was only retail. As I explained, the mandate has opened up. That's really good for us. And the third, the regulators are picking up all the pain points from the first three years.

And for the commercial series, one of the key breakthroughs is that there is no more reinvestment application. This came up in the past year's analyst questions. So the commercial series does not require sponsors who inject assets to reinvest back into China. So that's really a big breakup. And the important thing is, you know, we are very focused in making sure that the first series product is well received. So the second one will be well received. You want the vehicle to create well to be of significant size. Then you can really be a vehicle to take out many of the assets that we have in China, pricing that is attractive.

So that's why we are very focused. I mean, some of these things requires us to invest time energy resources to build up all these platforms and optionality. And you know, after that, you can execute. Because if you don't lay out this foundation, then you always help ransom by the market. So I thought you just to clarify that point. Let's take a question online from Derek Chang. I think, yeah, the question is, thank you for sharing some guidance on core pet me growth. MSD, I think it means mid-single digit. Will you formalize such guidance in the form of forward-looking disclosures and view of what MAS or SGX is seeking and today's share prize reaction? So we do have, I think on the summary slide, sort of the guidance of the expectation that we think this sort of run rate for us is fairly sustainable.

On two aspects, one is we would expect fund management revenue growth to continue to be double digit, similar to this year. But we are still investing in the future. And for us, that means recruitment, it means in the case of a lodging platform or marketing more advertising costs. So because of that, even though the revenue growth may be stronger, particularly for the funds, we do think sort of a mid-single digit growth for the core printing pet me is a reasonable way forward. Barring any catalyst events, whether it is extremely good fundraising from the team or MNA or other transactions that may skew that number. But otherwise, at least in the near term, that's a realistic growth number. Going forward, we hope to accelerate that.

The goal has, as you have most of you know, has always been to get to a more double digit growth rate and a double digit ROE target. But at least for the near term, we think our current run rate is about right. Okay, thank you. I think we've more than crossed the 10th of the mark. I think we'll end today's session. Thank you very much for joining us this morning and for your continued support as we shape the future CLI. There is actually refreshment, sir, for friends who are actually here. And if you have got any further questions, please feel free to reach out to the investor relations team. Or better still, just speak to them directly. Okay? On behalf of Capital N Investment, we wish everyone good health, prosperity and happiness. Thank you and have a good day.