3Q 2025 Business Update Conference Call

Good morning, everyone. I hope everyone is well today. Thank you for attending FCT's third quarter FY 2025 business update. We have the full team here with us today, Mr. Richard Ng, Chief Executive Officer, Ms. Annie Kong, Chief Financial Officer, Ms. Pauline Lin, Head of Investment and Asset Management. Without further ado, I will now hand over the session to Richard to kick off today's briefing. Richard, please. Thanks, Judy. Good morning, everybody. I understand that you guys are having a very busy day today. Hopefully, you had some time to go through our deck. But anyway, we're going to run through quickly and we'll move on to Q&A after that. Okay, Judy, let's move on to the first slide, please. Thanks. Yeah, just a very quick summary of what has happened during the third quarter. A lot of has happened actually. If you look at the third quarter, very busy quarter for FCT. Of course, on the organic front, the team continued to work very hard to ensure that the malls

trading well. We share a little bit afterwards in terms of the traffic flow, the sales performance, and so on. But the key highlight of this quarter, of course, is the acquisition of North Point City South Wing, which has been successfully completed. And as part of this transaction, we also raised the equity fund raising of about $421 million and issued a perpetual securities amounting to about $200 million at a competitive pricing of 3.98%. So we are very happy with what has happened. And as we go through the deck, you see that with this acquisition, you start to see the flow of income from South Wing coming into the portfolio as well. And the other point that I wanted to highlight is also, you know, as expected on the market, the cost of debt continues to come down and it has reduced to 3.7% in the third quarter of 2025. Next slide, please. Okay, this is about North Point City

South Wing. I'm not going to go into detail. I'm sure if you're very familiar, of course, it helps to consolidate our position as the leading prime suburban retail space owner. And we are very happy that now, you know, we fully own both the North Wing as well as South Wing and we have shared it as part of the acquisition. There are various opportunities for us to unlock value. And we will start to do some of this work and progressively, you know, some of the lower hanging foods can be, will be producing its result along the next couple of quarters. Okay, so these are just very high level focus on the KPIs or the key main tricks that we have achieved for this quarter. Occupancy is at 99.9%. I think it, you know, it moves between 99.5, 0.7, 0.9. Sometimes it's a function of the void period and so on. So it's frictional

vacancy really because the mall is running almost 100%. Some of them are actually at 100% as we speak, right? So again, very high committed occupancy rate, a testament to the portfolio that we have, a testament to the strong demand we continue to see from the retail market, especially for prime suburban malls. The shopper numbers came in about 2.1% increase. While, you know, we did see some softening in the month of June, etc. as a result of the school holidays, but overall the quarter again was a positive quarter for us. Sales came in at 4.4%, a number that we think it's very strong given, you know, the headwinds and given some of the headline numbers coming from the overall retail sector as a whole for Singapore. Every grade leverage, you see two numbers there. As at 30th of June, our leverage number was about 42.8%, but that's because our bug securities financing

or the completion and the money came in only after the 30th of June. So if you take that into consideration, our gearing is now at 40.4%. I mentioned about cost of debt for this quarter has come down to trend down to 3.7%. Again, that would be very helpful for our bottom line as well. And another further update for outcome mode, we shared this earlier on, but this again, you know, as part of our continuous update, very happy to see that over 74% of the AES business has really been recommitted right before the completion of works. A bit on the big picture, the market GDP grew by 4.3% year on year in second quarter, 2025. Of course, you know, I am aware that overall in terms of the estimate, it has come down to between zero to 2%, but we still see very strong

growth for the quarter. And for the first half itself, the average was 4.2%. So unless something really, really significant happened in the second half or the next five months, I think we still probably at least achieved the higher end of the zero to 2%, if not more. But what's also interesting to see is that inflation numbers continue to ease down to 0.8%. And that's also something that we watch out for because that affects our retailers. It also affect our consumer sentiments. With the sales index, and this is the number that I was referring to, of course, we are just showing here the month of May. On the broader sales index wise, it actually was a flat figure. And then for

for F&B sales for May, and also is a 1.4% year on year increase. If you look at our sales number, alright, it came in about 6.2% just for the month of May. And for F&B sales, it came in about 5.6% year on year. Rental continuing its positive trajectory. If you look at the Prime Suburban Prime retail rents, it's kind of gone up to about 1.7% year on year, and a slight increase of 0.5% quarter on quarter. So again, all this point to the fact that the Prime Suburban retail malls continue to be very resilient, continue to be on a positive trajectory. And partly, as we speak, and this is something that we have shared before as well, and one of the main contributor is strong demand, but at the same time, there continues to be very limited stock that comes to the market. So this is an updated numbers that we just recently gotten from CBRE that shows all

the way to 2028. So from now to 2028, you're looking at in total, Prime and Suburban and Downtown Core and also rest of Central Area, etc. It amounts to about 1 million square feet for the entire period. And this is barely 2% increase from existing total stock. But if you look at just Suburban itself, it's about 340 plus thousand square feet. And these are spread out across various malls, some of them, you know, it's actually very smallish scale, 40,000, 56,000, nothing significant or sizable is coming on stream for the next three years or so.

This is when you put together the story where you see limited supply, strong demand, and that is the end result of saying the actually a positive trajectory in terms of the rental for the sectors. The rate line denotes the rental for Prime and Suburban more. It's on a positive trajectory. I shared about the supply and of course, in terms of demand from the occupancy rate, the Suburban for the industry wide is coming in about 95.6%, but that's the total across Singapore. But if you look at FCT's portfolio alone, we registered 99.9%. Next slide. Yeah, we're going to move on to the financial highlights. I'm just going to hand over to Annie to share some details with you. Over to you, Annie. Thank you, Richard. Good morning, everyone. I will take you through the financial matrix for this portal. We continue to deliver a healthy financial position for this

portal with the improved firm average cost of debt. As mentioned by Richard earlier, gearing has increased to 42.8% as of the 30th June versus 38.6. This is mainly because of the acquisition of North Point City South Wing. It retained into account the repayment of borrowings, which happened where the proceeds came in just after our quarter. The gearing is about 14.4%. Cost of debt on the nine months basis is 3.8%. On a quarter basis, it is 3.7%, about 10 bits lower than the previous quarter. Average debt to maturity has also lengthened to 3.38 years as a result of the new facility that was taken for the acquisition of North Point City South Wing, as well as the loan from the newly acquired subsidiary North Jump Trust, which matures in FY2029. 76.2% of our debt has been hedged to fixed rate, and our total undrawned facility is at 780 million. Credit rating remains unchanged at BEA2.

Total borrowings stood at 2.8 billion, of which 58.2 is unsecured, 39.1 is secured with the remaining balance in MTN. The increase in secured borrowings was from the newly acquired loan from North Point City South Wing. Approximately 459 million of our debt is maturing in FY2026, and our refinancing discussion with the banks have commenced. The higher debt maturity that you can see in FY2029 is attributable to the loan that was consolidated following the acquisition of North Point City South Wing. I will now hand over to Pradeen. We'll go through the portfolio highlights. Thank you, Annie. Good morning, everyone. I'm very delighted to provide some details on the good set, on the very good set of results that Richard touched on briefly earlier. Right, so for this slide, you see that, you know, our portfolio is almost at full occupancy. In fact, that's the case for several of our malls across the, you know, the 10 retail assets that

we own. This is actually, I would say, a reflection of the fact that, you know, we have a very good quality portfolio that is well-located, that is trading very well, and also highly sought after by the retailer. Next slide, please, Anaju-Dhu. Okay, in terms of the fundamentals of retail performance, when we look at shopper traffic, we look at tenant sales, you will see that over the third quarter of this financial year, the strong performance has actually maintained, and also with the main numbers in terms of sales, it has actually been improving, right? The other point to note is that in terms of the FCT performance, and if we were to compare it to the general Singapore suburban or Singapore retail performance, it does tell a story of outperformance based on,

you know, the kind of year-on-year improvements in the sales that we have achieved. And this can be attributed to various factors. I think Richard touched on, you know, some of these strong macro factors, the government support, right, to defray the higher cost of living. And I would say also most importantly to the proactive strategies that we have actually undertaken to drive the growth beyond just organic growth, right? So we recently completed, or rather we completed the asset enhancement of companies won last year. And admittedly, this has helped to, you know, continue to drive the strong performance of our portfolio. We continue our strategy of value enhancement with the announcement of the Algangmo AEI at the start of this financial year. So this is very much part of our focus to continue to sustain the strong performance going forward. Next slide,

government support for Singaporeans expenditure on essentials. I think everyone is generally very, you know, excited and delighted with the various supports that the government has dispensed over the course of this year. I think the policies are largely targeted to ensure that, you know, the cost of living of the average Singaporean is at a sustainable level. And admittedly, this has also helped us, helped our portfolio in terms of a good performance because of our offering and our position, which is very much targeted towards the, you know, the convenience and also the non-discretionary spending of Singaporeans. And it's also happening to note that, you know, the retailers are also self-help, right? So like, for example, supermarkets, aside from the reliance on the CDC, the various supermarket operators have actually also stacked some of the incentives

and all that. So all that builds into the, you know, the overall ecosystem for retail sales. Next slide, please. So I spoke about the Algang Mall AEI. So this is one aspect of our focus on sustainable performance with inorganic tickers, right? So for the Algang Mall AEI, I'm very happy to also share that in terms of the various targets that we are looking at, in terms of the construction progress, in terms of the leasing results, and also the cost of the kickbacks is all generally tracking to target. And we are on track to deliver on the 7% ROI that we have promised the investors when we announced the start of this AEI. On the software aspect or on the software aspect,

there's a lot of focus on ensuring that, you know, we continue to offer a good mix and a refresh mix to our shoppers living within the Algang precinct. So you see that on this slide, we have actually showcased some of the, you know, the brands and the concepts that we will be bringing to our Algang post AEI. Some of these are actually returning concepts, which have actually, you know, shown to be very popular and in high demand by the Algang population. Others are popular and trending concepts to infuse that freshness and that variety into Algang Mall post AEI. And that will help to successful performance. Okay, next slide. So this focus on ensuring the sustainability of the performance extends beyond just the asset enhancement assets, right. So one

of the key focus would be also bring new concepts, popular concepts, trending concepts to all our malls on an ongoing basis. And you see on this slide that we have showcased some of the new concepts that we have brought to our malls across the portfolio. On a year to date basis, we have 59 new to portfolio tendencies, meaning tendencies which are, you know, first time to our portfolio of malls, right. And this is a very interesting, varied mix of both F&B as well as, you know, non-F&B retail offering, right. And you see on the right hand side, these are the Akkad Ndattang, right, the upcoming new to portfolio brands that have already been committed, but which have not commenced at yet at our portfolio, within our portfolio. Next slide, please.

Another clear aspect of our strategy in order to sustain the strong performance is actually to weave our malls into the social fabric of the various communities that they serve. So there's a lot of focus on engaging and reaching, exciting the community. And this is done across our malls. There are signature events. There are also events that actually play to the, you know, the hearts of the community that has, you know, a more kind of like local flavor for the particular catchment, right. So what you see here would be this character fun walk that we've held at Waterway Point on the left hand side. There's also emphasis on art, creativity, family bonding, as seen in this colors on shores at Waterway Point. So this is a very engaging program or event that we brought to Waterway Point in collaboration with, you know, an external partner. And that helps to liven,

you know, the lifestyle within the suburban state. Next slide, please. So more examples, the Beach Party focus on CSR as well. So we've got this line friends whereby we've also embedded some CSR initiatives in the programming as well. Next slide, please. Okay, so with this, I will hand over to Richard to take us through, you know, the final wrap up of today's presentation. Thank you. Yeah, thanks, Pauline. Just a very quick roundup of what we have shared today. Again, just wanted to emphasize the fact that the demand for prime suburban retail space is too strong. I mean, the type supply, reopening of more outlets from some of the retailers, bringing in new brands, etc. So we can give you a sea of us operating performance from our end. Now, by CSR wing,

again, it's going to start contributing to towards our bottom line. And we are saying, you know, the positive results coming through that proactive capital management is something that it's ongoing. It's something that we continue to watch this space. And it's what any has shared just now, we have got some refinancing coming up for our FY2026. Again, we will try to optimize that as well. Drive enhancement growth, something that we always look at. And there's something, again, a very critical part of our business, besides forgetting growth, besides acquisition, I think AEI is another area that we put a lot of emphasis and focus on, because this actually helps to create additional value, additional income, you know, that we can add to our bottom line. So for example, we achieve 8% for our companies, one AEI and as volunteer, you know, we are on target on track to achieve about 7% for our account AEI. So if you look at, you know, the contribution from all

this AEI itself, it's ranges 7% to 8%, which is a very good return, you know, even as compared to acquiring any asset, right. So we continue to explore alternatives. We've shared about next, you know, going to AEI for FY2026. We are also looking at our other assets within the portfolio that we can, you know, start on our AEI once outcome more is done. So this is an area that I hope, you know, that I cannot over-adversize the importance of AEI contributing to our group as well. On the organic front, the team is again very focused on driving footfall, driving tenancies, because at the end of the day, we want to make sure that not only are we getting very good occupancy, but our retailers are thriving, they're doing well, and our shoppers are happy to see, you know, all the new brands that we are bringing in, all the changes that we have done as part of our AEI. Alright, with that, I'll end our presentation. Back to you,

Judy, so we can do the Q&A. Thank you. Thank you, Richard. Okay, and now we will move on to Q&A, and I do see that Melvin has a question. Melvin, please. Hey, good morning, Richard and team. Can we just have an update there, like, how much are they exactly in ARIA's contingency plans you may have if CATI actually closes? How much of the security deposits have been drawn down, and have you been paying out the rents that were in ARIA's? Then the second question I have is, any updates on AEI plans at NEX, no point in South Wing, and note the sponsor has bought Eshun Ten site as well, and what's the plans for that property? Thanks. Okay, I think there are quite a few parts to your question, Melvin. Let me try to address them, and then, Melvin, you can come in and achieve

as well. So the situation with CATI, as you're probably aware, we did a letter of demand, or whether we actually sent in a letter of demand at the beginning of this year, and they also subs. With that, they actually made an announcement as well. So at that point in time, when we did that, we had some discussions, some negotiation, and progressively, I would say that they had made payments on a monthly basis. Of course, we expected more, but in the current situation, I think they were able to pay us whatever they could, and you probably follow the news as well. They came out and said that they're going to be doing some placement, etc. So it's an ongoing discussion. By and large, if you look at it, they continue to operate in the two malls, and one of the primary reasons is because we feel that our shoppers are still going for cinema. There's still

a demand for cinema, especially there's a lot of news happening during this period, so we do not want to disrupt that. Like what I say, at the same time, CATI has continued to pay on a monthly basis the amount, various amounts, and this discussion is something that we continue to talk to them and continue to work with them. So at the moment, this is on the basis of what I've spoken about. As far as financials are concerned, we have fully provided for the amount up to today, and we continue to provide the amount going henceforth. We also did talk about this in the last quarter, that the contribution from CATI towards our overall GRI is not material, it's actually not significant, it's less than a percent. So what I would like to emphasize is it's not going to impact our bottom line for our full year results coming up in the next quarter. So that's for CATI.

For area updates for NEX and South Wing, I will leave that to Pauline to share a little bit more. But in terms of Y10, yes, FPL or business property sponsor has actually acquired, or rather has entered into a contract to acquire the portion that's owned by Golden Village operating as a cinema. And as part of the transaction, when it's completed or if it proceeds, Golden Village will continue to operate the cinema for 18 months. So as far as we're concerned, we are still evaluating all options, nothing to update at this point in time. But if anything develops further, we will come back to the market and share with the market. So maybe I'll just elaborate on the next AEI. So I think over the course of the past few months or so, we shared that we are on track to commence the AEI. We are still looking at a commencement

sometime in May or June. Essentially, now the process is in terms of getting the necessary authority approval. So we are working through that as we speak. But in terms of the target commencement, no push-up, we are still looking at May or June for the major works to start. For North Point City, South Wing, I think during the acquisition, we did mention that there is value to be extracted through single ownership. And there are many parts or several parts to that value extraction. Some of it would entail remixing some of the brands or the offering. So I would like to say that that is on an ongoing basis. As and when we see the opportunities with lease expiries and so forth, we work to extract value. And also the smallest enhancements,

reconfiguration or space, that is something that is also very much at the top of our mind as the leases come up. But in terms of the bigger asset enhancement, that would have to go to a new process. And we did share that as well in our earlier sharing. So as part of the lead-up to the AI commencement, we will have to go through various processes, including feasibility. And it's not just financial feasibility. It's also retail positioning, feasibility, to ensure that we deliver not just a quantitative outcome, but we also position the retail model to do better going forward. And that is a due process that we expect to take, you know, say, based on our past experience with major AI's, we are looking at, say, 12 to 18 months from the commencement of some of these initiatives. And it may vary from one project to the other,

depending on the complexity, and also the sources of value that we are seeking to extract. So, Mabhi, I hope I have given you some perspective on your answer. Sir, in terms of the, you shouldn't attend, is there a possibility to, like, remove the road, or is it possible giving discussions with the authorities? I think it's something that it's probably need to, again, work with the authorities. I mean, it depends on what is going to be done, what is going to be proposed for the site. I mean, as of now, it is just a proposal to acquire the Golden Village portion of the building. So, there are possibilities, depending on what is the approval like, and what is going to be built, how much is going to be built. And I suppose the engagement of the authorities will have to

continue. I mean, if there's a plan for that. The idea will be getting rid of the road, the junction 8. Possibly, as one, but of course, we have to be mindful that we do have access, ingress, egress into North Point City, North Wing, from that site. Our delivery is also, for the North Wing, is also done at that corner. So, I guess it's not as simple as just removing the road, but I think there are also some other considerations that has to be considered. Okay, excellent. Thanks. Thanks, Mervin, for your question. Next up, we've got Geridyn from DBS. Geridyn, can you unmute yourself to ask the questions, please? Thanks.

Yeah, Geridyn, I mean, we are not even talking about extension anymore at this point in time. Like what I said, the sponsor is in the process, and hopefully, it goes through to acquire the portion that's owned by Gudan Village, and then they'll continue to operate in months. These are public information anyway. So, at this point in time, I think we are just exploring various possibilities. That could be one option, potentially, but I'm not saying that there is something that we are looking at today. There's something that we're going to do. There's something that we're going to be fix, you know, of doing. So, we are just exploring various possibilities at this point in time. Okay, maybe just on the retail sales 4%, I believe there will be some upside from Campanese 1, as well as South Wing. So, are you able to give us a more organic number if you look at the

right? The total contribution of D1 is not that significant because it's a smallish asset considered in the whole portfolio that we have. Again, for South Wing, again, because you put in the base for both this year and last year, so again, it's about the whole portfolio actually saw an uplift in sales. So, Jared, maybe if I can add on to that, right, if we were to strip out some of that,

or rather, you know, if we exclude the new acquisition as well as the, you know, the upside from the asset enhancement, we're still looking at positive growth for the rest of our portfolio on a year-on-year basis. And we also monitor the general market very closely. So, in terms of, you know, the performance of our portfolio over the past months or so, it is generally ahead of the overall retail market, right, as benchmarked by the retail sales index. Okay, thanks, Pauline. Yeah, it's very healthy and more to come with the SGA 60. I can just please in one more for the cafe space. What is the ongoing plans now? Is there any plans to reposition that they understand at a very high level, so there's some difficulty there? Yeah, I think that for us, I mean, what's happening now, we have to review, you know,

the entire mix that we have in our assets. Of course, certain trades are also facing challenges, cinema being one of them. They have not really fully recovered since the pandemic. But a bigger question for us is also going forward. Do we see that there's a need for us to continue having cinema in some of our malls? Currently, we have five of them. So, the question is, do we need all five of them to have cinemas? Maybe not all. So, some of those we can look at opportunity to repurpose the space. And definitely, I think we are looking at currently at those two occupied by cafe for us to look at opportunity to repurpose, bringing new tenants, bringing new trades that we believe could be a better traffic generator than what cinema could offer today. So, those works are ongoing. It takes a little bit longer because of the complexity of converting a cinema space. Right. I mean, if you know the way the cinema space is being structured, so there are tiering

level steps and so on that is being built up. So, it's a little bit more work involved, complete more structural work involved, and also technical requirements, etc., that we need to go through. But by and large, I think we are looking at it as an opportunity because cinema typically, you know, they take very big space. They are located on higher floors. They don't pay you very high rent. So, for us, it's about finding a good opportunity to repurpose the space, bringing in tenants, like what I said, that could be a better traffic generator. And of course, we also hope that as part of the work, we get an uplift in terms of value and also rental income from the space that we are working on. But it's going to take a while for the work to be to be put in place because there's a lot of technical requirements, technical studies that have to be explored and we've got to go through our consultants.

Thanks, Jeredi, for your questions. The next one, we've got Vijay from RHP Research. Vijay, can you unmute yourself and ask your questions, please? Thank you. Yeah, hi. Good morning. Thanks for the call. A couple of questions. Firstly, on the next, is there any update on the income transparency and on the same model, in terms of AEI, what are your plans? Is there a plan to increase the GFA? Is that possible? And what sort of K-PEX we should expect for this? Yeah, okay, Vijay. So, a very quick, straight answer for the income transparency, again, is something that's ongoing. It depends on both parties or the parties in this whole entire ownership that has to agree on any changes in terms of structuring. So, it's nothing that has been concluded. It's an ongoing process that we engage and we re-engage and every time we have opportunity, we will speak to them about this. So, in summary,

there isn't an update on that. For the next AEI, I believe we did share some numbers previously. I think we're looking at potentially being able to kind of work on about 60,000 square feet of GFA, 50% of which is going to be for retail, 50% of which is going to be commercial use. The plan is in a very advanced stage, as what Pauline has mentioned, because we are right at the end of finalizing some approval from different agencies, because in order to go through such massive AEI, you need to go through different agencies. You go through URA, you go through NEA, you go through LTA. So, we need to go through the process to make sure that we get the approval or agreement for us to proceed. At some point in time, we will be able to come back and share ideas on what we are developing, what kind of space that we are creating, where is it going to be created. But by and large, I think we did indicate that the overall key effects of between 80 to 100 million in the past, we are keeping it to that amount. And again, just to also reinforce

the funding for this, K-PEX will be coming from the joint venture company that owns the asset. So, we do not need to permit any additional equity from FCT itself. Got it. Thanks. My next question is in terms of debt, is there an updated guidance in terms of what debt cost you are looking at for FY25 and 26? Also, FY26, you have about 16% of the loans. If you have to refinance these loans based on the current market rates, what kind of cost savings or cost you would be looking at?

Yeah, I'll take the questions. Yeah, for FY25 guidance, it's going to be around 3.8% because there's only one quarter left and 76% of debt has been hitched. So, for FY26, I think our guidance for debt is about mid 3% that has taken into consideration the repricing of the loan.

Got it. And you will be maintaining the hedge ratio at current level, 75, 76%? Yeah, we will monitor and see what is the interest rate and put in place hit when there's opportunity, but by and large, it should be around the 70s kind of region. Okay, so mid 3.5, mid 3% for next. Okay, thank you. My last question is in terms of divestments, is there any still potential divestments which you are looking at in your portfolio? I think earlier you mentioned that central plaza office could be considered if it is optimized. Is that something which you are looking at? Again, I did not say specifically that that's an asset that's been identified. I mean, the question came out, we say we're still working through our portfolio. Central Plaza, we mean, it's an integral part of Tiamaru Plaza. We believe that owning the asset at this point in time, it's important. It's beneficial for us because there are still opportunity, I believe, to unlock some GFP. So, I'd rather keep that space with us.

And at the same time, you're right. I mean, if you look at occupancy, it's not fully occupied. There's still room for us to improve the performance of central plaza. So, we continue to work on that asset. Divestment is something, again, it's just the acquisition. Sometimes it's about opportunity. We do look at portfolio every year to assess in terms of wholesale analysis to determine whether is there any assets that we think that is really optimal, something that we don't think we want to keep in a longer term. But having said, we also need to look at the market. Is there a market for us? Even if we choose to divest, is there an opportunity for us to do so? Is there demand from the market to acquire retail more assets? Because typically the quantum is higher. And so those are the various variables that we need to look at. We need to consider before we talk about that. But of course, today, somebody comes in and say, look, I prepared to offer you X amount. We

look at that opportunity as well. Okay. Thanks, Rich. Now, just from a gearing perspective, you are at 40.4%, which is slightly higher than your normal range. So, are you comfortable with this range for now? I mean, is there a need to lower it? I think it's a question that today we have managed to do a couple of things, you know, to bring it from 42.0, something to down to 40.04. We continue again to explore if there's possibility to bring it down. Ideally, we would like our viewing to be below 40%. Okay, got it. Thank you. That's all I have. Thanks, Vijay, for your questions. Next up, we've got Raison from HSBC. Raison, can you unmute yourself, please? Thank you. Hi, Richard and Mehtuan team. Maybe just a few quick follow-ups. Firstly, on the gearing side, so I understand that ideally it should be below 40%. Just wondering, in terms of your discussions with your reviewers, are you expecting some variation uplift

for your entire portfolio? That's the first question. Okay, if I put it in a very general perspective, our income or NPI has grown, right? Our assets are performing better. And as we started the conversations with the valuers, one thing that we have established is there is unlikely any change in the cap rate. Right, so even if the cap rate remains the same, and if your income, the bottom line has improved, the trajectory of our income has improved, you know, the potential for our mentoring version is also positive, as I've shared some of the data points with you. So I believe, from that perspective, we should see some positive growth on valuation side, but it's still what we've progressed. I see, I see. That's good to hear. And maybe just a quick follow-up on the interest cost guidance, which is 3.8% for this year, because I do recall that for the proceeds from the perpetual securities, they haven't been used to pay down

debt at the end of the third quarter, right? So just wondering, the cost of the debt that you are going to repay for this $200 million in the perps, and if there's going to be any potential savings in the interest cost due to the overall blend of interest costs. Yeah, 3.5%. I've taken that into account with the repayment of the perps proceeds, because I mean, if you can see the first three-quarter interest rate is high, so even if it's at 3.5%, if you blend it for the four-year basis, it will be around the 3.8%. So that has really taken into account the repayment of the perps. I see. Okay, got it. Yeah, thanks. Thanks for that. And maybe just a few questions. Basically, on the AEI, I understand that you do have quite a few AEI opportunities. So typically, there has been usually just one AEI, and then if that's completed, you will be followed by another

AEI. Given that we do see that based on the draft master plan, there is a lot of new rezoning to residential at North Point City. How does that actually change how you think about the timeline of implementing AEI? Like, would you be open to doing like two or maybe more AEI concurrency? I think that is definitely something we would consider, given the timeline, the opportunity, etc. But one thing we also have to be mindful is we do not want to stretch ourselves too much. And it very much also depending on the various scale of AEI. So if it is something not too big, we could definitely squeeze in another one. The timing, like what you clearly pointed out, is also important. So it's the opportunity for us perhaps to even stage out. So maybe some AEI, we can stitch it to make sure that the overall impact to a bottom line, which is crucial,

is not that significant. Having said that, we are always mindful that next AEI is going to be quite a huge AEI project, quite significant, and so on. So whatever that we're going to put in place has to make sense in terms of timing, in terms of the overall management of the bottom line, etc. During course, all of this has to be considered in totality. I see, got it. And maybe just one final question. Sorry, just back to Kette. Since you guys actually escalated it from being a demand letter to a statutory demand, just wondering what's the top process behind this. And if it allows you to actually terminate the lease ahead of the expiry, which I think you shared earlier, was 2028.

Yeah, Pauline, you want to take this? Yeah, I think based on earlier, when Richard spoke about Kette, he did mention that one of the considerations that we had was also the, you know, to a certain extent, the sustainability of the business of one of our retailers, and also to meet the needs of our shoppers. So why did we then escalate the letter of demand to a statutory demand? I think that that is part of the legal process, because we also have this fiduciary obligation. We need to balance this fiduciary obligation to preserve our legal rights as well. But as much as possible, and in fact, we've been doing this over the course of, you know, since the earlier situation actually started, we have been actually working very, very closely with the operator in terms of their cash flows, you know, their ability to sustain the business, because we also don't want a situation where we disrupt them, and we take away, you know,

one form of retail offering to the to the shoppers. Yeah. So, yeah. So like, does it allow you to terminate the lease? Yes, we can terminate the lease, but it's a function of the alternative use for the space. I see. Okay, got it. Yeah. Thank you so much, Richard and Tim for sharing. Thank you. Okay, thanks, Raison. We've got the questions from Derek DBS. Derek, can you unmute yourself to ask a question? Thank you. Thanks, Judy. Can you hear me? Yes, all good. Hi, Richard and Tim. Hey, good morning. I just wanted to have a few follow-up questions. I hope you can give us some guidance on your reversion this quarter. Usually, I don't, I know you don't do it, but are you pacing in line compared to first half, or are you stronger? Okay, I would say, as I mentioned, you know, during the first half, sharing that we came in at a pretty strong reversion. And I also alluded to the fact that

I foresee the full year is going to end between what we achieved last year, which is 7.7 to 9. And I think we are still on track to do that. Okay, okay, sounds good. Sounds good. And maybe the second question that I wanted to get a sense on is on your margins, right? Is there any opportunity for you to achieve some form of margin expansion in the second half? The reason being where utilities rates versus what contractor is there an opportunity for you to capture some savings or that has already been done? For utilities, I think we have pretty much locked in all the way to NFY2026 except for water for one or two of the assets. The rest are all locked in. I see. Okay, okay. So, so stable. Okay. Yeah. I think Richard on YouTube, we do see the rates coming down based on the locking rate for NFY2026. I see. Okay, no problem. Yeah, thanks for that.

So last one is on how we can't write. I understand that the pre-leasing is really strong. I mean, I think you're just in the midway to the AEI, right? Could you let us know whether are you above your underwriting assumptions and what kind of your own costs you think you can achieve? Okay, we shared, you know, the whole project is estimated to come in at about 7%. You know, of course, happy to say that, you know, we are still pretty much on track or slightly above underwriting at this point in time. Okay, so the underwriting is conservative. That's all we can see. I'm trying to find positives from the numbers. Yeah, yeah. I think you always, of course, have a little bit of a built-in conservativeness into the projection. But at the same time, we are also mindful because there are certain tenet that we think, you know, it's important. Tenet that we want to have in the mall, right? So as we progress through the negotiations, there will be some ups and downs, but we are confident of at least achieving the target that

we have shared. And I think the other function of return would be the kickbacks as well, right? Until the project is completed, we cannot fully anticipate whether there could be surprises, you know, whether there's variations and so forth. So it's not exactly being conservative. I thought it's also taking a more practical approach to what we indicate to our investors. Got it, got it, got it. So just one last one, I may have missed this, but for Cathay, right? Did you all do a provision for that or is that something that we should look out for in a second? No, whatever it's up to date has been fully provided for and we'll continue to provide. And I mentioned this now is that the actual fact is that the overall impact of the bottom line is it's very immature, very small, it's less than a percent of our total GRI. So we don't see that impacting our Fourier numbers at all. Okay, so no negative surprises. So that's good, that's good. Okay, that's all from me. Yeah, thank you. Thank you. Thanks, Terry, for your questions.

Thanks up with Joel from DBS. Can you unmute yourself please? Thank you. Good morning, can you hear me? Yeah, good morning. Yes. Yes, thanks Richard and Tim for the presentation. I just had two questions regarding debt. So the first question is just wondering how does the funding market look currently on a cost perspective, comparing say bond insurance versus bank loans. And my second question is understand you use some secured bank loans. Just wondering from a credit rating agency angle, is there a limit to this? And like I understand you want to keep your investment rate rating. Those are my two questions. Yeah, hi Joel. In terms of the loans and the bond, there is still some slight difference between the two pricing, but the bond market has been very, very active. I think the other differentiating point is that you have a slightly longer tenure if you tap into the capital market for the bonds out of things. So if you were to compare

against just the margin alone, I think there is some slight advantage in the bond versus loan at the moment. Okay, the second question is on the secured borrowings. Yeah, our secured borrowings has increased to 36%. From a rating perspective, I think there is a direct impact to the rating. The rating, what model has really taken into account the parameters of our secured borrowings.

Okay, thanks for that. I'm just wondering, so for say if you're looking at the bond market, will you be looking to issue more? I know you have like maybe 3% currently in bonds. Yeah, I mean we will continue to watch the market and then if there's an opportunity at an attractive rate compared to a loan, we will do that. Okay, yeah, that's all from me. Thank you. Thanks Joel for your question. So we have come to the end of the Q&A, but I'll hand it over to Richard for his concluding remarks. Richard, please. Yeah, thanks everyone for joining us this morning and I think the questions that we have is also around some of the areas of perhaps some issues, some concerns that you guys have and we hope that we have answered and given you more clarity. So maybe I just very quickly summarized a couple of things. Cathay, we spoke about it. Again, wanted to re-emphasize that it's not going to impact our bottom line because it's not material. We continue to engage the operator. We continue to look at other opportunities or

possibilities for us to repurpose the space in terms of the market performance, something that we have shared in the results has been very positive. We are getting good traction in terms of our demand for space, 99.9%. We see strong sales pick up as well for our portfolio and again bottom line is it's part of our portfolio being the main provider for basic essentials, necessities, products. So we are not so much impacted by the market volatility, etc. We saw traffic also increase in our more so all this pretty much in positive direction that the most are operating at financing. It's coming down even though we would have liked it to be faster but again the fact that we have to wait for refinancing to come in, we have certain proportion of our rates are fixed. But we are happy to see that these rates are trending downwards and I hope

seriously that we will continue to trend that way. Again, as what Derek was asking, we don't expect any shock for the next couple of months unless some unforeseen circumstances come up. But other than that, I think we probably will be ending the year in a good position. We thank you once again for joining us this morning. Thank you. Thank you everyone for joining us again this morning. We've come to the end of FCT's 3Q25 Business Update. Any other questions, feel free to reach out to all of us. Thank you. Have a nice day ahead.