1H FY2024 Financial Results Webcast Briefing

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Two. One. It's just. Thanks. Hi. Good morning, everybody.

And welcome to the phrases. And commercial trust. First half. F Y 20, 24. Results webcast. On today's call. We have. A lot of questions. We have a lot of questions. We have a lot of questions. We have our CEO. Our CFO. And a J our head of portfolio management. So as usual, we'll start off with our presentation. Followed by our Q and a session. And for the Q and a session kindly keep your questions. Two questions. So let's start the presentation. Good morning, everyone. I am empty. And thank you for joining our first half F Y 24 financial results. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. I felt city has demonstrated. Resilient operating performance. Supported by a strong LNI portfolio fundamentals. FLC achieved positive portfolio rental reversions. Of 3.8% on the incoming rent versus outgoing rent basis.

And a positive 14.2% on the average of preceding lease. Versus average of new or renewed lease basis. And the total of 12.2. A square meters. Of space was leased across the whole portfolio. Portfolio occupancy remains stable at 94.3%. While the LNI segment continues to enjoy full occupancy. For another consecutive quarter. And for our balance sheet. He continues to maintain a healthy capital position. We've been aggregate liberation of 32.7%. Moving on to the pitch on well-diversified portfolio. So with the completion of the acquisition of 89.9% interest. In foreign German properties in and much. And the completion of else meal port in last December. FLC. T's portfolio comprises a total of 112. Properties with a total portfolio value at 6.8 billion. Approximately 71% of the portfolio by value. Comprises L and I assets.

On the next slide, slide seven. So just a quick recap on our recent acquisition. Of 89.9% interest in all properties in Germany. At euros, hundred billion nine point five million. Representing a discount of 5.3%. And 1.1%. To two independent valuations. Is fully funded by debt. The four assets are stabilized. Income producing. Logistic assets in key logistics markets in Germany. Assets are fully leased to quality tenants. Such as Shankar. That's a helmet. Germany. And which are all existing tenants within our FLCT portfolio. As well as new tenants in the logistics distribution. Consumer and retail product. The transaction, which was completed in and much. Is in line with the investment strategy. To increase our L and I portfolio. We did. In the existing market. The FLCT has a presence.

And the transaction further demonstrate FLCT. To tap on our sponsors pipeline. And the deal size enables the manager to execute the transaction. In the timely manner to secure additional income stream from the market. And the financials. Thanks. So for the first half. We saw your near increases in our top lines revenue and NPI. And these were mainly due to the positive brand reversions and rental escalations. Contributions from completion of else. In December, 23, and also. The full six months contribution from connection to and with the. Versus the comparative period. So these were partially offset by higher vacancies. For the commercial assets. And we saw higher property operating expenses. They need you to hire non-recoverable land taxes in Australia. And so higher utilities and R and M expenses. Finance costs were also higher.

They need you to increase the interest rate and. Actual or wings drawn for KPAX funds through developments and acquisitions. And the first half 24. So the distributable income was further impacted by higher tax expenses for Australia. And UK assets with changes in the tax regulations and tax rates. So the distributable income of 130.7. Million in first half FY 24. Includes 13.5 million capital distribution of the investment gains. And this factors in the manager taking 100% of this. And the next slide. The value of investment properties increased. 4.3% to 6.9 billion. Attributable to the acquisition of interest in for logistics properties in Germany. And the completion of. 23. So the first half. Of the acquisition of land and the progressive.

The occurrence of development costs for our fund to develop. In. Strict. Netherlands. Always increased mainly as a result of that funded acquisitions. That and the development that I mentioned earlier. So our NAV per unit as at 31st March, we continue to be rated triple B plus with a stable by SMP. Moving on to the next slide. So looking at the debt maturity chart, the debt that's maturing in June and August. This financial year 24. Facilities separately. And we have comments discussion. Banks on that's the maturity in FY 25. So aggregate leverage was 32.7%. And this deal. These are relatively big. 51 million. 40% gearing. Is each, but we continue to place emphasis on maintaining a healthy gearing level in this uncertain business environment.

So close to 76% of our borrowings are hashed to fixed rates. We continue to see an increased now boring costs in the current high level of the environment. On the training 12 months cost off. Forings. Atched up. 0.1% point. To 2.5% from the last quarter. We also provide our training. 3 months cost of that. 24, which was that 2.6%. Our way to. That majority remains. To 2 years. The next slide. I won't cover. To what to do with our portfolio. Thanks, Richard. Good morning, everyone. So starting with the occupancy review as Antia mentioned. We've maintained a healthy overall portfolio occupancy of 94.3%. At the end of March. This is underpinned by the favorable supply demand environment and resilient underlying property fundamentals.

The LNI portfolio, which contributes approximately 71% of portfolio value. Continued to achieve full occupancy. The commercial portfolio occupancy stands at 85% as at 31 March. Largely attributed to lower occupancy at Alexander Techno Park. Following the surrender of space from Google in February. And lower occupancy at Central Park. Where we have reduced our exposure to we work. So during the quarter. We work handed back two floors. But retain five floors. For its remaining seven year lease until August 31. Improved occupancy was seen at 357 Collins Street in Melbourne. With new leases signed during the quarter. This brings the occupancy of the building up to 85.7% from. 80.3% last quarter. There was also a slight increase in occupancy at both. And farm bro. In the UK. Looking at the leasing summary for the second quarter.

Of FY. 2413 lease transactions were executed. Which covers a total level area of 18,000 square meters. On the back of active leasing momentum and healthy demand. The portfolio average rental version was a positive 3.8% on an incoming. Versus outgoing rent basis. And a positive 14.2% on an average versus. For the first half of Q. FY 24. There was total leasing of approximately 143,000 square meters. Which represents about 5% of the total portfolio. Leadable area. The overall positive rental version for the first half was 10%. On an ongoing versus outgoing basis. For the first half of Q. FY 24. There was total leasing of approximately 143,000 square meters. Which represents about 5% of the total portfolio. Leadable area. For the first half of the total portfolio. The total portfolio was 5% on an average versus. On an ongoing versus outgoing basis. And 18.3%. On an average versus average basis.

Looking now at the lease expiry profile. The weighted average lease expiry was five years for the LNI portfolio. 3.1 years for the commercial portfolio. Which results in a total portfolio. Well, of 4.3 years. For the first half of the total portfolio. The total portfolio was 5% of GRI. Expiring in a single year. Just to note that 83.6% of leases include step up rent structures. Such as periodic fixed rent increments. CPI. Or index. Indexation adjustments. The FY 25 commercial expiries includes the Commonwealth of Australia. The next slide. The top 10 tenants. The total portfolio is 5% of the total portfolio. It's an existing housing. Google at ATP. Which is also captured with the FY 25 expiries. We'll be exiting. The building at the end of the lease.

In December 24. The FY 25 expiry for Google reps. The represents the remaining 218,000 square feet. Of office space. Looking on to the next slide, the top 10 tenants. The top 10. The top 10. Are a single tenant accounting for more than 5% of portfolio GRI. Reflecting a low concentration risk. The top 10 includes a mix of commercial. And Illinois tenants comprising well known brands. And a spread across the regions and sectors. Five of the tenants occupy multiple assets within the portfolio. There are a few changes in the top 10 tenants this quarter. The next slide covers the German logistics properties. As well as the inclusion of Peugeot motors. Which is the sole tenant at sales mere port. Which reached PC. The next slide covers the tenant composition. 65% of the portfolio income is generated from Illinois tenants.

While approximately 50% of the portfolio tenant base is concentrated within the higher performing. And the higher distribution. And consumer retail sectors. Just a quick update on the project at master it. Progressing is progressing well since construction commenced in December last year. During the quarter you'll see in the photos that the ground works were completed. And the installation of the steel frame is now well advanced. During the construction period. The vendor provides a coupon rate of 6% on funding draw dance. And the asset will be fully leased on completion. Practical completion is expected to be in the first quarter of FY25. And the project has been designed to meet a very good certification. I'll hand back to Anthea. Thanks Jay. So FLCD remains committed in advancing our sustainability efforts. And good progress has been made in several fronts. The ongoing enhancements to Central Park and Perth is close to completion.

And almost all of the materials will be recycled from the project. And this includes all 7,700 former aluminum panels. 130 tons of polyethylene cloths and 250 tons of temporary steel structures. When we expect the first start enhancement works and the night illumination to raise central parts of value proposition to both existing and potential occupiers. In the UK, our latest development, Elsmil port, has achieved an outstanding brand certification which is the highest brand rating and the first for FLCT. And across our portfolio, the solar panels installed in our properties produce more than 11 megawatts of power at peak. And this includes the installation of solar panels at the recently completed Elsmil port. FLCT has also signed a 20 year power purchase agreement with the SP group, which includes the installation of 247 dollar panels by the end of this year that will generate solar energy at Alexandra Technopark.

And to enhance our ESG disclosures and transparency, FLCT recently published its first ESG data book, which includes ESG disclosures from financial year 2021 to financial year 2023 and additional scope 3 disclosures. And the assurance statement provided an independent external assurance. Together with its accompanying basis of preparation documents, it sets up the foundation of our carbon accounting methodology, scope and assumptions. And aligned with our group's net zero carbon goal by 2050, FLCT remains committed in advancing our sustainability efforts and these efforts affirm our commitment and progress. Looking ahead, I would like to highlight a few industry trends. First, there's an increased importance on logistics locations. As the volume of goods grow, delivery timing gets tighter and closer proximity to key transportation infrastructure.

And consumers will enable efficiencies and enhance competitiveness. And as such, logistics assets with strong connectivity to transportation networks will facilitate the efficient movement of goods, reduce plastic times and transportation costs, which is the highest cost component in the logistics companies. There's also an increased focus on ESG logistics companies are not only recognizing the importance of sustainability, but also taking actions to integrate into the operations and meet enhanced regulatory requirements. And modern properties with robust sustainability credentials will support the corporate's transition to a low carbon future and create space that promotes well being and community engagement to attract talent. And as we look at digitalization and AI, the convergence of digitalization in AI is reshaping the logistics landscape with transformative trends and smart warehousing solutions powered by AI streamline inventory management and order for human processes, enhancing operational efficiencies.

These are the key development repetitive tasks bring up human resources for strategic activities in the sector of rising labor costs, while demand driven logistics leverage AI driven forecasting to optimize inventory levels and respond to changing market demands swiftly. This includes broad political tension and a shifting economic landscape. Logistic operators are also proactively bolstering the supply chains with strategies aimed at mitigating risk and enhancing resilience, and this includes maintaining higher inventory levels and embracing just in case operations to safeguard against disruptions. In the environment of elevated construction costs, we are also observing that newly completed logistics assets will require higher random rates to offset the increased development expenses. Additionally, the higher development costs act as a deterrent for speculative development, as developers would be more cautious about investing in new projects without any precompromised in place.

And with that, I will end our presentation here. Hi, everyone, just give us one, one minute, I will just try and change our video. Video screen, one second.

Hi, everyone. Hi, everybody. I hope you can hear us. Okay, well now move on to our Q&A segment. Thanks for your patience. So for the first question, can I, I see, from a JP. Hi, good morning. Thanks for the call. Got three questions. Can we just start with the margins. I mean, it fell on a year and year basis. Can you understand which segments driving that? And how should we think about margins for a second now. Second question is regards to the back building of the Google space and the updates there.

And then terms of top up, I see is increased half and half and year and year. How should we be thinking about top ups? Should we be expecting the declining GPU and a few year basis, but moderated by top ups things? I'll take the margins question first. Generally, that it's the commercial commercial segment, partly because of the occupancy that we like to see. So because this is looking at the first half 24 versus the FY first half 23. I think if you look at the average occupancy, some that has we have seen some decline in the office occupancy, especially in the UK business jobs and also that's where some expenses have gone up as well.

So the leakages have accordingly increased the other segment on the margins that we have been impacted by. Although LNI on the top line is is is. Or rather the our expenses have been impacted by the non recoverable land tax in Australia. So, so that actually has impacted our margins as well. Do you like to take the second? Yeah, hi, man. So with with ATP and the leasing. So just to confirm those five, five leases in the quarter ATP that that was majority of renewals. There's one new tenant for some other vacancy, not the Google space. So Google space is obviously the big focus for us. The market is fairly challenging as we talked about in the past. You know, we are competing against a lot of supply, but also stay put options as well.

Probably to add the inquiry levels have improved. I think in the last quarter, we are progressing discussions with a number of parties. So hopefully we'll be able to report something pretty soon. But it's yeah, it's going along okay at this stage, but it is a fairly challenging market. In the sense on the quantum space that during this question. So what we really focus in on, we've got we got the ability to also cater for quite a large format occupy. And there are a few of those around is fairly shallow at the end of the market. But we're certainly focusing on those discussions, which are usually a little further out. So that's more focus. Probably the second tranche that we get back and the first tranche that we now have back. We're really looking at how we can cater for some of the slightly smaller users. So you're talking, you know, maybe a half floor, potentially a whole floor user there.

So I think that's where we'll probably, you know, progress quite a few of the initial deals that we're talking about. But we still have those larger deals, which is slightly longer term that we were also focusing on. So a bit of a mixed moment. Yeah, I mean, those are total space that you in discussions for that 50,000 hundred thousand. I think it's probably a little bit. Yeah, it's a bit of a mixture, but it's wouldn't like to put a number on it just yet. But I'm encouraged by the number of groups that we're talking to at this stage. But sorry, I can't really give a clear indication. No problem. Sorry, this is on the margin. So second half guidance would be the same as first half only take your picture. It's whether given the Google impact. Thanks. Yeah, I think for the outside of. Also Singapore, it should be it should be relatively stable. So yes, it will be some impact.

But I think because the leakages on ATP is more on the comments, the comments. So if there will be something like that, I guess it's not going to be good. Thanks. And then the top up. So should be to give out it. Yeah, maybe I'll take these questions on the top ups we use the data as we have because the intention is really to keep the GPU fairly stable. And this time round, because of the different challenges that we're facing in terms of higher finance calls and as well as some vacancies in our commercial assets, as Tricia has earlier mentioned, the amount is slightly high. But it is still something that, you know, I guess, finance kind of finance costs is something that we have to weather through. But in terms of the vacancies is something that we're working on. Okay, the guidance is the guidance is fairly stable GPU for this year.

Perhaps a slightly point like we saw the question. The intention is to use divestment gains to keep our GPU fairly stable. Okay, thank you. Thank you. Thank you, my friends. So for the next one, I see a deal from DBS. Thanks. Thanks, Delphina. Hi. Hi, and team. Can you hear me clearly? Yes, yes, we can hear you. I have a hello. Hello. Yeah, thanks. And yeah, just just a few questions from me. I think firstly, with regards to valuations. I understand that valuations have went up and this was mainly due to some of the acquisitions, you know, that the capacity spent at Ellesmere. But just wondering on the same store basis, like for like, what would valuations have been? Yeah, so we have looked at our valuations and we haven't actually done an independent valuation on the same store basis portfolio as you mentioned.

Yeah, I think it's we've done an internal assessment. Obviously, we're monitoring the market pretty closely and there wouldn't be any material change. Okay. Or maybe rather looking at cap rates, has it moved especially for Australia and Europe? I think we have done on our overall portfolio basis. So we have done that internal looking at every asset, looking at applying at whatever cap rates. And we have done that on an overall basis, but on an overall basis that isn't much is still quite stable. So we haven't felt that there's a need to carry out an independent evaluation exercise this time around. Okay, okay, got it. Okay. And the next question is, you know, referring to the financials, you know, I saw that you mentioned that some, you know, non recoverable land taxes, repairs, utilities. So I think a little bit more on this as in, you know, what is the quantum like, is this one off or what should we expecting going forward?

It's probably not, sorry, as Tricia is flipping to that page. I'll just take the question first. So it is not one off. I guess there are some tax rule laws changes. For us as management, we are looking at how we can mitigate by to see how we can mitigate it. Yeah, so I think we do actually disclose the operating expenses in the interim financial statements. When you see the increase in the land and property tax that increases, I mentioned is really due to the non recoverables in the EU portfolio, because they did increase the land tax rate, non recoverable land tax rate, and also assessed underlying land value. And the others are really coming from the property and maintenance year, for example, the R&M and the energy and utilities costs. So that will probably just come down if energy costs come off.

Okay, okay, sure, sure. Okay, and maybe a last one from me before I pass it on to the others is, you know, with regards to capital distribution, just just wanted to get an idea of, you know, how much remains in your kitty. We are not able to share the exact amount, but it's still quite a lot because this is the, we haven't been distributing the divestment gains from the market street and across street sale and those were at very low tax cost base. So there was actually quite a bit of divestment gains, which at the quantum that we are doing can last us for quite a long time. Okay, I think this is as much as I can share. So this is actually our best defense for the DPU. Okay, sure. Okay, okay, that's all for me for now. Thank you. Thanks, Dale. Okay, well, the next question from Brandon. Just a quick reminder to keep your questions with two questions per turn. Thank you.

Brandon from CTEAM. Hey, hi. Morning ITN team. Can you hear me? Yes, we can hear you morning. Yeah, morning. Just two questions right. The first one, can you guide us on what is the latest effective tax rate in UK and Australia post the changes compared to the pre changes. And how does this impact your future acquisitions. So this is my first question. And the second one would be, I think earlier you mentioned last quarter that your sponsor has been more open to selling assets. Is that still the case? And if so, which countries will this be? Thanks. Yes, thanks. I will take the second question first and I will hand the time over to Tricia to take the first question on tax effective tax rate. So the first question, the second question on the last quarter we mentioned about sponsor being more open to sell assets and where would it likely be? I guess there are assets are still in the, I know there are logistics and industrial assets will be Australia, in Germany and the Netherlands.

And I think for us, it's really a question of, you know, trying to find it, make it a DPU accredive. So we actually monitoring and concurrently looking for opportunities in both third parties as well. So that hasn't changed. I guess it's really a question of when we come to some agreement on the price and the assets that we will look into for acquisition purposes. Yeah, so, Brandon, I think I just wanted to quickly mention about the UK tax, just corporate tax rates without going to effective tax rates. So the UK corporate tax rates on first in first April 23 actually increased from 19% to 25%. So that is UK corporate tax rates. And for the tax rates on the portfolio effective tax rate basis, it has gone up previously around, say, 8% down, it's gone up to about 9%. That's the portfolio basis, right?

So basically, because UK exposure is relatively low, so the portfolio basis just went up by 1% points. Is that correct? Yeah, on effective portfolio tax rates. Right. Okay, and how about Australia, because there was some tax increase as well, I think you mentioned. Yeah, so the one that I mentioned just now was on the land taxes and then there's another element on corporate tax. So in the LNI segment, pretty much, I don't think anything has changed on that part, because whatever the rules regulations that came in to them impact the LNI structure or the holding structure. But commercial sites, we are impacted because I think you're aware that the commercial assets actually are not held in the same structure, the FLT holding structure. So we saw the impact coming from the holding structure of the commercial EU assets.

So you can't really be short during the UK side. We are looking at it, so I think we are looking at it. Yeah, not just UK, but you know, it's like Australia. Okay, thanks so much. Thank you. Thank you. Thanks, Brendan. Now, we have Kylie from Bank of America. Hello. Hi, this is Don. Don, I should be taking it. Yes, yes, Don, we can hear you. Two questions. First, you guys mentioned that you did an internal valuation, there's no change, no much changes in the value. I don't know why, given that Cambridge has expanded pretty aggressively over the last six months, lots of your competitors have been very large in hand.

Why are you not looking at the impairment as well? Yeah, I can tell that one, Donald. So there's probably two aspects to this. On the LNI portfolio, we are still seeing rent growth coming through in all our markets. That is definitely slowing. It's not at the same kind of rate that we maybe have seen in the last couple of years, but there's still market rent growth coming through. So that does offset or partially offset the cap rate expansion. I think in September 23, the cap rates, they certainly were reflected off some of that market rent growth, but there's been some additional rent growth as well coming through to offset some of that. So the commercial, I think the explanation is the September valuations really took into account the market conditions, but also the upcoming vacancies that we faced in the portfolio.

So in the majority of our assets, it's been reasonably stable from an occupancy point of view during that period. ATP, obviously the big one, that was very much taken into account by the valuer back in September. They assumed that Google would be exiting. So that's probably the main reason why it's reasonably stable at this stage. It's more like a timing issue, if I'm not mistaken, that in September you guys really did a big valuation reset, and this has accounted for a big part of the class. It's timing up in September, I think was a very fair value in terms of what we were expecting in the next 12 months, and we gave good visibility of the value in terms of some of the exiting tenants, but also, as I mentioned, that rent growth is still continuing. So that does help those LNI asset valuations. What is the under renting at this point for your LNI portfolio?

I think maybe I'll take that question. So I think in terms of how much is under renting, but of course it all depends when the leases come for renewals and what will be the prevailing market rents. But assuming all the leases today are renewed at today's market rent, I think the under rentedness for our LNI portfolio will be somewhat in the mid-teens in terms of percentages. Thank you. I'm not very one quick to follow up with Commonwealth of Australia. Any update on this renewal? It's progressing positively. I would hope to be able to tell you something more, but that's sort of where it is at the moment. Thank you. Yeah, thank you. Thanks, Don. Okay, thank you, Donald. I have a question from Reverend again, Lisa Amiuk, and I asked a question. Reverend from JP Morgan.

Yes, sorry. On terms of the borrowing costs, any guidance for the rest of you understand the few expires in the second half of this financial year? I think previously I guess that the overall cost of borrowing is on the financial year FY24, basically, if you're going to be able to represent it, that hasn't changed. This is despite that may be delaying and used to be maybe cutting. Yeah, at that time, sorry Tricia, I think at that time we have not in that fat rates were cut and we were just talking about if all the refinance at existing rates, and I think that that hasn't changed. Yeah, because again, the maturity is really due then August, right? So on the financial year basis, it's not that that that past year is that that, especially given that we are 76% actually.

Is there a big difference between the money interest rate hedges you have in place versus the total loans being refinance? What do you mean by the difference? Which difference are you referring to? In terms of total quantum, because some rates they may not have much refinancing, but they have a lot of IRS expiring. So actually, it goes in tandem because we put in the hedges that are in line with the tenor of the loans.

Okay, thanks very much. Thank you. Thank you. I see Dale, you have a question again. Please, unmute yourself.

Hi, Hi, Hi, Delphine. Thanks. Just just a follow up question. And I think, you know, previously you did mention that you've been seeing some opportunities, you know, especially Singapore, Japan around the region. Just just wondering if this continues to be the case. And, you know, this market, you know, looking interesting. I think in terms of LNI or even data centers. Yeah, I guess I think there are still opportunities we are pursuing. Unfortunately, they're taking a bit longer to, to, to, to, they're taking quite long. So, so we are still looking at opportunities and I think there's been still good opportunities in the logistics and data centers opportunities. So I think it's a question of really being able to arrive at a price that both seller and buyer are happy with and also to be able to, you know, close it.

So I think this is, yeah, it's taking a while, I must say, but yeah, it continues to be interesting in, and I think there's still three industry markets in Europe. Europe, which is I'm talking about Germany and the Netherlands and Japan and Singapore. Okay, okay, got it, got it. Okay, that's all from me for now. Thank you. Thank you. Thanks, Dale. I see a Terrence. David Maldon, you have a question. Thanks. Again, I just wanted to ask on the electronic news. She's coming to you in less than a year's time. Could you share on what's the update on electronic. Sure. So, yeah, TTI. We've got two facilities in Eastern Creek in Sydney with TTI. They will be exiting both those facilities they're consolidating into a new very large warehouse within Sydney.

So we've got good visibility of them exiting leasing campaigns, well advanced, and we're talking to a number of groups on both those facilities. It's obviously the first deal in New South Wales for quite a while. So we're interested to see where we land in terms of our rental reversion on those ones, given the rain growth we've seen in Sydney. So we should be quite confident of positive reversion from the new leaseless side. I hope so.

Thank you. And maybe, could you share on the, is there any updated reversion guidance for this FY? I think we already shared. Terrence earlier, I think we've already shared that I think there was a question earlier about the under-rentedness of our portfolio, which we shared that if everything were to revert to market rents today for the entire portfolio, for L&I sector, we are talking about the mid-team kind of percentage under-rentedness. But I think for the existing, for that, I mean, not that we have a lot of pieces up for expiry this year. I don't think we wanted to, we want to give exact percentages, guidance, because we are still progressing on those negotiations. And we don't want to be too specific about those leases. Okay, thanks. That's all I have for now. Thank you. Thanks Terrence.

Thanks Terrence. I see another question from Brandon from Citi. Please unmute yourself and ask a question. Yeah, just to follow up on your valuation comment, right? Can I just confirm that you mentioned that your September 2023 valuations have already factored in the vacancies. Does it also include the UK ones? Because I just want to confirm, right, because your sponsor is guiding for a UK development, and you're not. Terrence, are we seeing a bit of a contrasting outlook here? Yeah, I think, here, I think it's very asset specific. Let's put it this way. I don't think that there is any generic major trends. I think in terms of vacancies that we have guided the valuables when we carry out the September valuations, there isn't anything that has changed in terms of there are no new tenants that has surrendered leases

or no sudden exercise or break options. So everything is within whatever we have anticipated things to be. And therefore, this time round, whether it be our internal vales or even a quick check with external valuables on how revaluation would likely be, there is no any significant material changes. That's why we said, well, what we have a million check. Jay, anything you want to add on? Yeah, as you say, I think the really important thing here is the asset specifics. So, you know, we've got business parts with multiple tenants that does reduce our exposure somewhat to maybe a single tenant expiry or a very large vacancy, which has perhaps impacted some of those other assets within the group. So, yes, the value is back in September. They had very realistic assumptions when it came to leasing out of the vacancy.

We have progressed some leasing since September, which has supported occupancy somewhat as well. But on the whole, I think the adjustments they were making in the valuations were quite reflective of where the market currently is. Okay, okay. Thanks for that. Just one last one, right? I just wanted to get your sense on your capital allocation for the rest of the year. So you have about 800 million debt pay boom, right? And when we look at your current stock price, it's trading at the account discount and account view. And if you were to compare it to incremental acquisitions or even drawing out additional debts, say, for 40% to fund capital gains, where exactly do you prioritize these few things in the order of importance? Oh, I think, yeah, I think maybe I'll take this question. So I think in terms of where we will prioritize, I guess we will also be looking, we will be prioritizing and actually utilizing our debt headroom to fund for DPNU or creative acquisitions in the L&I sector.

So I think that is one priority that we are focusing on. Other portfolio level priorities would be of course driving up the occupancies in our commercial assets and managing costs as well as looking into some of the, I guess, tax, how we can be a bit more tax efficient in the way we hold some of these assets. I guess that was also another priority. And I think in terms of the distributions of divestment gains to support and defend the DPU to keep it relatively stable. I think that is also another priority. I think these are the few things that we are looking at if that answers your question. So basically, it's not a priority list. Maybe not yet. Not yet in our plans.

And I guess it's really because we currently don't have the mandate to do so. That's why we say not yet. Oh, okay. Yeah, no problem. Okay, thanks. Thanks, Brendan. I see one more hand from Mervyn from JP Morgan. Yeah, I mean, I asked a question. We can't hear you. I mean, myself. For the FY25 refinancing $544 million. Can we get a sense of the currency mix for that. And timing. First half waited, second half waited. Actually second half waited. I would say second half waited. Actually, usually on the last line of the currency mix. You know, a slight quality two.

Mix of currencies. Yep. This on the comment on mid teens, under rented for the LNI portfolio. Are you able to give us split in Australia and Europe? No, we can't give you the split. We actually look at it on the entire portfolio. So I don't have the number. Oh, would Australia be generally more under rented? Would that be a right comment? I think I think Mervyn Lee got more opportunity to unlock any under rented this in Australia, just because we got more leases coming up. Europe's very stable. Okay. Thanks very much. Thank you. Okay, it's got no further questions. I will end our briefing today. And if you have any questions, you can keep your free to email us.

Thank you very much. Thanks for joining us today. Thank you everyone for joining. Thanks for your time. Thank you. Thank you.