1H FY2025 Financial Results Webcast Briefing

recording in progress. Good morning everyone. It's a minute early but we'll just hold for a moment after I let you go stream into the call. Good morning everyone. I think we have about 30 of

attendees so just wait for probably a few more seconds before I start it. Yeah thanks everyone good morning. Thank you for joining us today at FLCT's first half 2015 financial results briefing. Again I know it's a busy period I'll keep the introductions very very short. So introducing our management team first you have En Gere our CEO in the middle flanked by Wakiel our chief financial officer. We have Jay to the left of me head of portfolio management and Jacob who hits up our

investment function. I also have two colleagues from finance Boiling and Natalie joining us today. So as usual this presentation will start with a page turn of the results presentation and followed by a facilitator Q&A. So feel free to raise your hands to ask a question or drop me a text and I'll be happy to ask it for you. Where possible I know you all have a lot of questions do try to keep it to maximum of two for each turn. Okay maybe I'll hand the time over to En Gere to run through the presentation. En Gere over to you. Thanks good morning everyone. So thanks for joining FLCT's first half of the year 2015 results. Okay it's next shot on the first half of the year 2015. First on distributions our DPU for the first half of 2025 is three Singapore cents distributable income of $130 million. This translates to an annualized DPU of 6.7% based on the closing price of $0.59. On the portfolio management front for leases committed over the three-year period from January to March this year our LNI portfolio achieved

positive rental reversions of 8.7% on the outgoing versus in-going incoming basis and probably based 33% on the average versus average basis. On capital management front our hearing for this quarter is 36.1% retrilling 12-month borrowing costs and ICR both at 3% and 4.5 times respectively. And I will now hand the time over to Wakyo to go through the financials in detail. Thanks En Gere. For first half of 2025 we observed an increase in revenue and adjusted MPI primarily due to the full contribution from Dallas, Minneapolis and four Germany logistic properties from December 2-3 and March 2-4 respectively as well as contribution from Maxtrich and Toutois South Link from October and November 2-4. However, this was partially offset by higher vacancy in ATP, 3-5-7-14 streets as well as the effect of lower average exchanges

of AUD and EUR against dollar in first half of 2025 relative to first half of 2025. We also experienced higher non-recoverable land taxes for Victoria and Queensland from January and July 2-4 respectively. Our finance cost increased by 35% due to the high interest rates and additional borrowing strength for fund through development and acquisitions. In summary, while our revenue grew by 7.5% and adjusted MPI by 1.6%, the higher finance costs and unfavorable forex have impacted our distributable income which decreased by 13.5% to $6.13 million as compared to first half of 2020 with DPO at 3 Singapore cents incorporating approximately $6.18 million in capital distribution.

Moving on to our balance sheet highlights, the value of our investment opportunities increased slightly by 0.3% as of the first March 2-5. The increase is mainly due to the completion of acquisitions of Toutois South Link on 5th November 2024, capital expenditure incurred, strongest euro and bounce the link against the SIC dollar which was partially offset by the net translation loss from a weaker AUD. NAB per unit is SIC dollar 1.08 representing a 4.4% year on year decrease primarily caused by the net forex translation loss mentioned earlier. Now moving on to the key management capital management metrics. Our consistent and prudent capital management strategy resulted in another set of fairly stable capital management metrics as of 31st March 2025 namely trading 3 month average cost of borrowing of 3% aggregate leverage of 36.1%.

This provides a debt room of SIC dollar $447 million before the 40% gearing limit is rich. Subsequent to the refinancing executed in the first half of FY25, we have SIC dollar $395 million remaining due for the mean SIC in second half FY25 and have currently over SIC dollar $690 million officially this available. We also continue to hold a triple B plus credit rating with stable outlook by Fitch. Our DPU of three Singapore cents per unit for the first half of FY25 will be distributed on 18th June 2025. I will now hand over the next segment of the presentation to Jay who will run through FLCD portfolio progress for the first half of FY25. Good morning everyone and thanks for working on. So we'll start with the leasing summary. We signed seven LNI leases during the period and as mentioned by Anthea earlier

registered a total positive rent for a version of 8.7% on an income versus that own rent basis, 33% on average versus average rent basis. Contributed mainly by deals secured in Australia as well as the German markets. On the commercial portfolio notwithstanding a challenging leasing environment I'm happy to share that we were able to execute 17 new leases during the period across the portfolio. This brings total leasing activity for the first half of 25 to over 319,000 square metres which involve 46 deals with a healthy overall average versus average reversion of 29% Looking at the occupancy review, our overall portfolio occupancy rate currently stands at 93.9%. Breaking it down by category, LNI properties vote a healthy occupancy rate of 99.6% while our commercial properties have an occupancy rate of 84.1%. On the LNI front I'm

happy to share that the Australian portfolio has returned to 100% occupancy. Turning to our commercial properties, ATP saw a dipping committed occupancy to 77.1% mainly due to the expiry of the remaining Google lease on the 31st of December. For information the occupancy rate for ATP would be 66.7% if we exclude the committed leases with future lease commencements. Moving on to the next slide, our lease expiry profile highlights our proactive approach to lease renewals and backfilling vacancies. At ATP we have successfully secured leases for 54% of the Google space. Additionally we have 25 leases with break options or expire in the second half of FY25 representing just 5.2% of our portfolio GRI. Looking at the information on the right of the slide, 86.2% of our portfolio leases include CPI-linked annual escalations providing

a natural hedge against inflation. Onto the top 10 tenants, our top 10 tenants account for 24.7% of our portfolio GRI with no single tenant contributing more than 5%. Our tenant base is well diversified across resilient sectors ensuring income resilience. Seven of our top 10 tenants are from the LNI portfolio and five of our top 10 tenants occupy multiple buildings across the portfolio with varying lease expirates. Looking at our portfolio tenant composition, it remains very well diversified. We continue to have a positive exposure to the resilient sectors with 66.9% of GRI contribution from our LNI tenants with the highest weighting in the 3PL transport and freight segment. Approximately 85.1% is contributed by government link core and resilient industries such as the attractive new economy sectors.

Onto our ESG highlights. I'm pleased to share that we have continued to progress forward with our ESG commitments. As of the 31st of March, our portfolios hope the total solar capacity is 15.1 megawatts. Some of our decarbonisation initiatives over the quarter included installing a 530-kilowatt system, solar system at Caroline Chisholm Centre in Australia. GRIAN certification for the portfolio has progressed from 87% last quarter to over 90% in the current quarter. During the period, ATP Block B was awarded the BCA Green Mark Gold Plus award while one of our buildings at Bly Valley Park received an enhanced EPC rating from E to B. On now and the time back to Anthea who will cover the key trends and developments. Thank you, Jay. So let me highlight the key trends affecting our operating environment. In the LNI sector, we see demand driven by strategic location preferences as companies

navigate paris impacts and accommodate reshoring initiatives. Supply chain resilience continues to prepare amount with higher inventory levels and nearshoring driving warehouse demand. Though market uncertainties may cause logistics providers to exercise caution in their real estate plans and delay expansion decisions. Demographics remain favourable, particularly in Australia, supporting continued LNI demand. E-commerce growth shows potential drug-selective demand for modern logistics solutions, despite some techniques from uncertain conditions affecting online retailers. The interest rate environment remains uncertain due to inflation and growth options, with forex volatility continuing through FY25, potentially giving inflation elevated despite economic slowdown. And finally, grid infrastructure constraints around power and land availability are influencing LNI site selection decisions with factors like

grid-connected locations and construction materials, tariffs constraining development. And these trends shape our strategic approach as we navigate the evolving market landscape. And also we should highlight we also taking deliberate steps to preserve our debt hit room for long-term growth and value creation, while remaining mindful of the concerns associated with significant DPU fluctuations. It remains our priority to pursue strategic group opportunities in the resilient LNI segment, while I think concurrently evaluating the divestment of the non-core office access to optimise our portfolio composition. And with this I end my presentation. I will hand the time over to CK. Thank you very much, and another presenter. We move now to the Q&A session. I'm aware some of you have already raised your hands. As a hygiene check, a general reminder, if you'd like to ask a question, do feel free to use the raise hand function, drop me an email, or you know how to get me over text. First off, I think we have

a question from Mervin, from JP Bapin, over to you. I just have an inter-seat that works. Thanks Nicole and to the team and congrats on back-valuing some of the Google space. Can you give us a sense in terms of how the occupancy for the property in terms of actual occupancy in cash flows will progress over the next few quarters? 66.4% at the end of the quarter, but pre-committed up to 77.1. So what would it be, let's say, at the end of third quarter, fourth quarter, and thereafter? That's my first question. My second question is, what is the first half 25 MPI yield for 357 Collins Street? Thanks.

Yeah, I am a bit high. Thanks for the questions. So on the Google space and the price share study, this round we have also provided that we have actually for ATP we have secured 54% of the Google space. And in terms of the occupancy that you see, it is based on committed occupancy. So we have also disclosed both actual and committed occupancy. In terms of both branches, 21 is the same actual and committed is the same. Trunched to actual is about 17% committed, 75%. So in the months to come, we will see income increasing for the space that was originally released in Google. In terms of the question on the 1,000 MPI yield for 357. Yeah, generally we don't disclose MPI yield on the

on the asset basis. There should be sub-fiber based on the drop in occupancy.

We don't really disclose. Sorry, I can't really disclose that. Sorry, just back on my first question, I fully aware it will progressively increase, but I know whether Jake can answer like for third quarter, fourth quarter, or will they hit 77% by end of this financial year in terms of physical occupancy and cash flows? This is 66.4% or is it next year?

Yeah, it will be. Yeah, over the coming quarters, we'll get up to that 77%. Okay, by this time, end of financial year. Okay, great. And into the first quarter of next year. Will there be any rent free period or fill out period that we should be aware of when we get to 77% by end of September? Won't be by September. There won't be some time that it will take some time. But even if there's a period, the lease has commenced on the straight nine weeks still with the income. So what, so later when will they hit 77%? Like what time is it December or January or next year? I don't know. When will it be? Give a sentencing. Maybe I must come back to your question. Yeah, this is this for our modeling purposes, this is a cash flow. This is how quickly

we recover this because I if it's 66% for next two quarters, then obviously, this will be some earnings headwinds. Let's try and get better sense of how quickly that part will recover. Yeah, so if you can, I mean, it will be helpful for everyone else as well. Yeah, understand. But because there are different reasons, I think that different findings. So let's come back to you. Yeah, okay. All right. Thanks. And over to others. Thanks. I really appreciate that. I think next up we have very kind overview. I'll just say on the button. Thanks. Hi, morning. I just wanted to touch on DPU. It's we're seeing some, we're seeing, you know, multiple movements in DPU. We've got the more fees and cash. You're topping up the DPU as well. So just wondering how we should think about the people going forward is, you know, three cents or six cents and only come up the steady run rate in terms of DPU they are looking at. Hey, hi, very thanks for your question. So, okay, I think we won't be able to be

looking on how the DPU is going to be. But we do look to gradually reduce the level of discretionary top-ups in the coming half-year lease. I think bearing any unforeseen circumstances, I think that is also, you know, the last point of the presentation talking about us taking deliberate steps to utilize our debt-free product growth and value creation. While remaining mindful of the concerns associated with significant DPU fluctuations. So I think that is really key to us. We are not saying that DPU will be taken totally off, but it remains our priority to pursue strategic growth opportunities when we know that that debt-free room is precious to us. Right, so where should, where will, you know, what will be the level in terms of DPU

as a percentage of, you know, cash, oh sorry, management fees and cash, what will be the number they're looking at? Should we be looking at this first half as the guiding point? And yeah, I guess three cents is, you would say it's stable, right, going forward. Actually, it will be a few consistent with what we have shared in the last quarter, which is that for the whole year of FY2025, we are looking at management fees in units between 50 and 75%. I think this time around it was like 40, 40 over percent or so. For the whole year, we are looking at 50 to 75%. Yeah, yeah. Fees in units, taken in units, 50 to 75. You hit 50 to 75% units, yeah, for whole year. That's what we are looking at. Okay, understood. Got it. And just my last question would be on, I guess, key tenant risk as a result of the ongoing US-China trade wars. I mean, you've got

some of your key tenants are MS, BMW, Peugeot, some of the luxury automakers. Do you see any, are you hearing any concerns from them in terms of break leases, slow down in demand, etc.? Or is this something we should be worried about? Yeah, actually, it's a good question. Actually, we do anticipate that there could be some potential midterm reaction, but at the moment, we haven't seen any tenant coming to us, handing back keys asking for rental rebates. We do think that the impact will not be uniform. That could be diversion of goods from some more higher-heat tariff markets, super-treats that's better. And there could also be delays in decision-making. I think these are some potential outcomes that we can see, but as I think on our portfolio, we haven't seen any particular tenant directly impacted so far. So I think it's something

that we are closely monitoring. It is a global event. It is definitely significant, and we do expect that there will be impact and reactions, but at the moment, I think we are closely monitoring. Right. Do any of these tenants have leases expiring or the break leases coming up in the next two financial years? This financial year and next financial year? Sorry, you're saying is there? Do these tenants, do they have expiries or do they have break leases that are coming up in the next financial year? In this financial year and the next financial year?

These tenants, you mean these tenants affected? These tenants, yeah, these tenants. Like MS, yeah, these key tenants. Oh, I see. Actually, we don't really. We don't think that it's a specific group of tenants who are just the only ones impacted. I think this is a global kind of event. And as for our will, our expiries, I think they are all well-distosed. We are not actually identifying any specific tenants as potentially that will be impacted by tariffs. So I think that's that with how we think that this issue. Okay, thanks. I just go back to the queue. Thanks so much. Thanks. Okay, just hang on a second as I bring up the links. I believe we have team DBS next. So it's Dale followed by Derek. Dale, over to you. Hello, hello. Thank you, thank you. Hi, hi CK and NT and team.

Thanks for the presentation. I think you just have a few quick follow-ups. I think in terms of the management fees and units, am I right to assume that whatever you're receiving in units now will actually be gradually sold off in the market? Hi, hi, hi Dale. So on your first, on your this question, management fees that's received in units only for that portion, that there will be some sell offs, so as to keep to the same level as before the units were before the fees will pay in units. Yeah, so we need to say that whatever you're receiving in units now will eventually be sold off. Yes, but the amount is not a lot. Okay, okay, got it. Okay, got it, got it. Okay, and I think next question for me is, you know, just looking at DPU, you know, I think in terms of top line relatively okay, you know, I mean still still healthy and strong. In terms of

capital top ups, you know, I think it's a bit more than the previous year, but I'm just trying to reconcile the, you know, the weakness in DPU, especially, you know, that dropped year on year, even half on half. Where should we be? I mean, where is this weakness coming from other than, you know, other than the higher financing costs? Is there something that we have to account for, something that we're missing here? Yeah, yeah, Dale, quick question. So actually, mainly, I think a few factors impacting the underlying DPU. I think one is the depreciation of AUD same dollar, same dollar that's really strong while AUD has depreciated. That is one factor, and that is calculated over that six months. In the last six months, not recently, there are some periods when AUD has been funded, but we do have to look at it on the one mental basis in the last six months. So that's one. So the other impact would be management fees. I guess, compared to the first

half of 2020, where management fees was 100% paid for in units, there's some impact arising from there. The other impact would be the releasing that I think they can see, as we have explained, I think this is the impact of that Google space where both French One and French Two are now fully out of the system, fully out of the property. So although there have been some back-building, we take time to back-field because that's a lot of space that has come up. So I mean, to be exact, that's 180,000 square feet of space under French Two. So I think there is also some taxes that has also been, has increased, arising from the higher, I mean, we enjoy higher rentals in some of our Australian assets, but we also see land taxes increased. I think that is also that factor as

well. And for some of our commercial assets, we have seen some improvements in particular for our Australian member asset that is also a reduction in the occupancy. So that we have also lost some rental income arising from there. Maybe, I think that would mainly cover all the key factors that affected our DPU being totally transparently. Got it. Just a quick follow-up on on the FX, right? So you're saying that you typically do a six months forward hedging. So given that the AUD has weakened further in the past few months, we need to say that we're still expecting to see more downside from translation. We do hedge up to 12 months for a foreign source income, and we will progressively do that as well. So I think that has mitigated some of the forex impact bundle. We're not understanding that when the AUD

is in the climbing pace, it still has impact on our distributions. Okay, okay. Got it. Got it. Okay. Okay. That's all from me. Thank you. Thanks very much, Theo. I think we have Derek. Derek just unmuted you. Hey, Derek, can we go to speak? Yes, apologies. We might be having some difficulty. Can you think I'm muted?

Okay, Derek, I think I'm having some issues with your mic. I'll just mute you first. So you can get exhausted and send me your questions. I might just move on very quickly to Rachel from the Q&A. Rachel, over to you. Can you hear me? Yeah, I'm glad. Okay, great. Hi, morning and most of the leases, and I think there are also some top 10 like Siva, Wally, Commonwealth Bank, their leases are also coming up in less than two years.

Yeah, I can cover this one. So on the LNI front, we are engaging with all of those tenants in that top 10. And reasonably confident that we will renew some of them. The one which has dropped off, this one I've stood in there, it's number 10 is Tetronic. So Tetronic will vacate. That's an asset in Sydney and Eastern Creek, 42,000 square meters. And we're looking to backfill that space. The market is has only slowed down a little bit in the last couple of quarters. So inquiries for that size of unit is a little bit shallower. But what that unit does have is a benefit of splitting it was actually designed to split. And that's a lot more palatable in this in this market. So we'll we've got a bit of an inquiry on potentially splitting that unit. The Commonwealth Bank is

is it in Melbourne. That's ongoing discussions with them. They have committed to a new development on Bourke Street. So it's this part of a wider discussion. But just looking back through the top 10, I think Siva, as I mentioned, we're very much in advanced discussions with a lot of these groups in terms of potentially keeping them. Probably no others to really highlight.

Sounds good. How about in terms of rent reversions, net effective rents, do we still see a positive for some of these renewals that you can lock it? Yeah, I think thanks, Richard, for your question. I think for the LNI, I think we do, I mean, we have been enjoying some positive rent reversions, given how strong the market rents are and supply has not been a lot. And anything quite an essential portion of the new supply is actually pretty complicated. I was specifically, I like these particular pieces, but in general, really, I think we should see some moderate levels of rent, positive rent reversions. But yeah, I think we do, I mean, we are cautious also because of the tariff war and not all that's happening. That is definitely, we are also cautious about the level of optimism that we have in terms of the level of rent

reversions. So it's something that we are watching closely. Now, I think the assets that we have are in good locations. We still see the importance of logistics supported by a lot of fundamentals like meal shortage, population growth, and the lack of new supply to our teams. And of course, the importance of location being strategic in terms of overall transportation costs will still be a major important factor. So I think with all these things, I think is how we are looking at this rent reversion. Okay, thanks. And maybe just to follow up, what is your outlook for your rent reversions now for FY 2025? And in terms of tenant incentives for your LNI portfolio, what kind of percentage is it now in the market? Well, LNI incentives haven't gone up a lot,

even if it is in Australia as compared to across the country. It's not at the level that we see the commercial assets. In terms of the rent reversions, I would specifically say for FY 25 how it would be, but we still see that it should still be positive. It's just a question of how the discussions pan out in view of the market uncertainties. Okay, got it. And then maybe just one more question on your FX impact. Just wondering how much impact are we seeing in the first half of this year from FX?

In terms of the four, maybe we just give in context, you have three currency, Aussie dollar, Euro, as well as Ponce de L'Eau. So essentially on the average rate, it's actually Aussie dollar and Euro has declined between 2% to 3%. On the other hand, Ponce de L'Eau actually has moved which is around 1%. So we would like to remind you also with this average rate is first half versus first half, which is actually if you can observe recently Euro and Ponce de L'Eau indeed have some strength. So just now the percentage that I cited is first half versus first half 2.5 and 2.4 is reached up. Okay, Ken. And you mentioned that 12 months of your FX income has been hedged. Is it rolling? So it means 12 months forward. Is it every quarter

we will see roll forward another 12 months? Is it? Previously, we have done up to 12 months. Going forward, we are likely to roll it forward. So if that gives you some

or now hedging strength. Okay, got it. Yeah. Okay. All right. Thank you so much for answering the questions. I'll move back to the queue. Thanks. Thanks, Rachel. Thanks so much, Rachel. And maybe I'll just read out the questions from our friends from PPS earlier. The first one will be relating to the ATP Google tenancy. Just wanted to have some color on who has forgotten to replace Google and the signing went to have gotten higher on. Well, that's the first question. Hi, Derek. Thanks for your question, Derek. So we have a few engineering firms. We also have 3PL, Transport and companies took out the space located by Google. REN reversions, I think we have disclosed it in page. Sorry, slide 12. Sorry? Slide 12. So you can see under Singapore commercial, that's the only one. So it's actually

on incoming versus outgoing basis, about 12.5%. So I think that is, there's some negative revenue versions coming up from ATP. But we, because we have so much space, we are still, and we are getting some good inquiries, we are still keen to see how we can back this rather than go on to the old and old. Sure. Thank you very much for the second question regards to capital distributions. We know this is directionally lower so should we take a view that management will continue to bring it lower and not higher from now on? Yes, I didn't quite hit the nail on the head. I think yes, we will look to gradually reduce the level of discretionary top ups. Yeah, you will not be higher than because we are looking gradually reduced, but you will not be sudden. And this is the guidance that we are providing

as well. Similar to our message in the last quarter, we are looking to preserve and utilise our debt hit room. And we are mindful of the concerns associated with any short drops in debt. They would like me to relay that. That's excellent. Thanks. Thank you. So moving on, I think next we have a question from Homeway from OCBC. Homeway, over to you. Hello. Okay, I just have a few questions. Iblo here. Okay, so my first question is that what's the proportion of the tenants in the portfolio who are exporting to US? What's the potential for hit debt and any changes in the leasing inquiries within the portfolio following liberation day? So that's my first question. And my second question is that within your board and management discussion, given the current climate, is there any shifts in terms of acquisition and divestment thoughts, especially by sector

or geography type of assets? And my third question is, with borrowing costs, financing costs, increasing, are you looking at anything that will potentially reduce costs? And similarly, maybe one to just ask on the Aussie impact. So with Australia, about 46% of portfolio, AUD borrowing is only 8% with total, and AUD having impact. Is there intention to try to hit debt with, for example, more natural borrowings in AUD? Yeah, thanks, Homeway, for your question. On the finance, first is seeing any plans to provide natural cash? Can I ask these questions to Wapion? Okay, thanks, Anteia. With regards to the Aussie dollar natural hedging, we always try to balance between natural hedge as well as possible borrowing. As you also correctly mentioned, Aussie dollar

at this point, can the cost of borrowing, that remains quiet high. Of course, in this one, I will make another monetary policy decision to see how it goes. When there is appropriate window, we always look forward to increase our natural hedge. Number two, with regards to easing of the cost of borrowings, I must head on. That will also partly offset by some of our financing activities that is going to happen for the remaining second half of this financial year, which is about $400 million. So these probably will offset each other. I think since past few quarters, we have been guided in terms of the overall cost of borrowing for this financial year. We are looking towards around 3%. At the moment, it's about 3% by the end of this year. So we will see how it goes because currently, you also can notice some of the central banks,

their musicians are fairly certain as well. They are highly, highly dependent on why is the data coming out with regards to current natural environment. So that is our answer for your two questions. Thanks, Wapiong. I think one of the questions you asked is, what's the proportion of payments exported to the US? The 3PLs that keep the above of our logistics assets, they are more domestic, so they serve these more domestic customers because of the nature of their work. I think the automotive in the EU may have some exposure, but the automotive in the EU makes up about 6%, 6% of our whole portfolio GRI. I think that it's also something that we are trying to also determine at the moment, how else are our attendance impacted by the Paris-Bets-Converity?

I think you have another question. I can't remember. We need an acquisition and direct- market. We have no plans. We don't think our investors are ready for us to go into some of the emerging markets, which you may actually at the moment say some hit wins because of the tariffs, but there's no plans. So existing markets, in terms of asset classes, still very much LNI. We have also no plans to get any more business or commercial assets if that helps. That's why I say. All right. Thanks a lot for the elaboration. Yeah, thank you. Thanks very much, Ho-Wei. Next up, I think we have Elizabeth from CLSE. Elizabeth, over to you.

Hi, this is you, Ken, actually. Given that all the payroll and all these hit-win and interest rates are only gradually easing, right? I mean, what kind of DPU decline you are comfortable with for this FY? What kind of DPU decline are you comfortable with? Yeah. We do be able to have more than 10% decline.

Because last year, we did about 6.8%. Yeah, thanks for your question. I think we can't really give you very specific level, because I think this is also something that we need to discuss with the bot, looking at how the underlying portfolio will form. But I think that's so that's why we are unable to tell you this round is 18 million. Next round, how much will be we unable to tell you that. But we do look at the underlying DPU. We do look at how much, I think if you look at how we've been guiding and actually, as how we've been giving the top-ups, we also see that the decline is gradual. But we do see that it's important for us to if you look at this round compared with the second half of 2021, the decline is

less than 10%. So I think that is what we have done. So going forward, we will also ensure that it is a gradual reduction of the level of discretionary top-ups. So something like less than 10% decline. And then because you also mentioned that capital top-ups is going to gradually decline as well. So I'm just trying to gel the two things together. Sorry, I'm not giving guidance on the underlying DPU. I think that's not something that I've shared. What I've shared is that the DPU in total with the top-up, the current one versus the second half of 2021 was less than 10%. And going forward, we will ensure that there is reduction and it's gradual. So that's how we are guiding investors. Okay, and then my second question on divestments. Are you looking at more in Australia and anything else we can expect?

Actually, other than the one that's in the news already, it's in discussion. Okay, nothing that we will only announce next, and nothing is anything that happened that has come out. But because of the cross, our commercial assets is either Australia or UK. So these are the only locations that we have. We have across ATP that's in Singapore, but at the moment, I think Singapore won't be the first of all given that we have that transparency and no forest volatility from Singapore asset. I think Australian commercial, UK commercial, these are the ones that we will consider if we are looking at divestments. Okay, and then my last question is on the Google list. Can I confirm that quarter that's not changed? It's still only 54%.

It's 54%. Yeah, currently back to you. Okay, thanks. That's it from me. Thanks very much, you can't call the question. I think Nick, when you have recent over from HFC over to you. Hi, and team, good morning. Just maybe just following up on the capital recycling, just trying to understand the strategy over here. Is there a preference to pair any divestments with, we say, a potential acquisition? And then maybe just falling on the acquisition side, understand that there's still the strategy to increase the LNI exposure. Within the LNI, is there a preference for, let's say, data centers? And how is the tariffs actually changing how you look at LNI acquisitions? That's the first question. And then maybe secondly, I think, and you talked about the possible diversion of goods from tariff hit markets. Have you seen more such demand for your assets from your leasing discussions?

Thank you. Hi, I think I answered your second question. The first question is very long. So, second question, diversion of goods from tariff markets. I think it is something that actually may, may, may, may, may see that at the moment, like I mentioned earlier, we have not seen any direct impact from our tenants arising from this tariff. I think it has come quite quickly and a lot of the customers are still assessing the situation. And as I mentioned, also, quite a number of our, actually, our TPLs, yeah, yeah, customers, especially very much domestic. Yeah, on the first question, the return is likely any pairing between acquisition and divestment? Thank you. Right. That will be, I think that will be ideal because divestments to pair with acquisitions will also mean that we will be best able to utilize our

proceeds. So I think that's also something that we are working and looking at. So as to transform the portfolio. So we are not, we're not trying to keep aggregate leverage very low. I think what we are trying to do is to have an efficient capital management strategy in place. But at the same time, I think we are also balancing that with the need to transform the portfolio with acquisitions of LNI assets and also looking at divesting some product of forming assets. So when we say product of forming, we are looking at assets when we think that, you know, the chances of us being able to bring it to, to improve their returns to much higher level, the pre pandemic levels, will be a bit deep, then that's when we will consider those assets for the initially for divestments. Sorry, your question was going on. Have I missed any part of your question?

Yeah, just just trying to get a sense of the preferences for like data centers or the traditional. Yeah, I think we look at data centers as part of LNI. So it all depends on what are the opportunities like, you know, panic, credit, location, pricing, you know, how much more can we value can we derive from that asset. So I think we do take into quite a number of factors in your account. When we look at source, whether logistics or data center is there any particular preference, I would say no, there's no particular preference. It all depends on the individual as the very soft issue. Okay, is any of the sorry, for the two asset classes, is any of them looking a little bit more attractive right now compared to the other one? I think you mean, quickly data centers and logistics, right? Yes, yes, yes.

Right, right. Okay, I think we, like I mentioned, we assess both on the same. I mean, we were assessed both equally to see which one we believe at the very soft which I will say that we were only specifically just chasing data center deals, or that we are only specifically chasing those six weeks. Okay, Ken, thanks for the color. Thank you. Yeah, thank you so much. We do still have a bit more time and a number of hands. So I'll just move back right now to Mervin from JPM. Can I be over to you? All right, thanks. Can we go to slide 42? The debt maturity profile. Let's take a second to put it back up. It's true. I see the last slide in our presentation.

Yeah, this case was the interest rate for the 209 million for the GBP for refinancing as well as the SING dollar 160. And then what's the interest rate on the 138 and 279 million due next year in terms of euro? Thanks for the question, Mervin. Number one, usually we do share individual currency. If not, I think the bankers will see, we are not going to know how much the price for refinancing. But on the serious note, I think maybe I will just take this opportunity to provide some colors. Number one, if you look at the past quarter, we are on average, our cost of borrowing remains at about 3%, so notwithstanding, we have executed about 300 million refinancing. At this point of time, our cost of borrowing is still about 3%. So we also mentioned the remaining second half of the

years after we executed by end of the year, we are looking forward to about 3%. This is number one. Number two, you also can see in terms of our debt maturity, typically we are about two to three years. Therefore, you can also deduce that for this, pound sterling is the third one, we secured and you can see from the benchmark, definitely it is at the lower side. Therefore, lead to about mid 3% guidance that we provided. The mid 3% guidance, is it based on the current sub-cuff? Yes, at this point of time, I think only is the one who asked the finance question. It depends largely how the curve moves. At this point, a lot of central bank is like they want to see how the impact on this, but we got the mid 3% is based on prevailing central bank's guidance as well as the spot rate as well as the curve. So once you know, you see how it goes next

quarter, we will see hopefully it's relatively downward slope curve, then you will see a different guidance from us. But at this point, let me know, right? Thank you. Then in terms of next year, based on current sub-curve, would the buying cost to increase from mid 3? That will, if you based on the current sub-curve as well as the, it will edge up a little bit again, as I mentioned, if you look at how we have done in the first half of the financial years, we also benefit from some of the lowering interest rates from different currencies. So there will be some offsetting effect, but at the moment, it's quite hard to guide in that. No, no, I just need your guide. Do you want to edge out a little bit as we refinance?

Okay, we only need to know what is the guidance based on. So do they swap curve or are you expecting more rate cuts? Then if the swap curve changes, then we can make a session. Fortunately, you can see the FY26, we also provided about starting one and half is in new lower, you can take that notes accordingly. As a plan to like, first thing rates have dropped a lot, are we going to take more single dollar debt over time? Would that be the plan? We will, again, I have to answer consistently with what response to how we look at the cost of borrowing as a natural hedge, as well as a longer term. If I look at single dollar, it's cheaper if I start moving all of the single dollar, then I will use all the natural hedge. So we will see how it goes. Like I said, there will be a few central main major decision in coming weeks to come with that we want it. We will keep it as a dynamic instead of

at the moment of time as well as a fixed rate that we want to keep. So we try to maintain the balance over a few capital management metrics. No, I know you're very experienced here for did a fantastic job in the branching cost at Magic. So I know you would be on top of it. On the Aussie cap race for logistics, what was it at this point in time?

Cap race for Aussie logistics, Sydney, Melbourne. Yes, around five and a half. It really depends which parts are treated. Okay, so five and a half on average. The difference between Sydney and Melbourne? Melbourne is often here. Yeah.

High fives. Until you have bought in Singapore, logistic properties, are we looking to do that as well, given comments about

tax transparency in Singapore? Would that still be, I mean, that seems to be a preference. By the way, apologies, maybe I could be your last question. Yeah. Yeah. Yeah. So this question, okay, so on the existing market, sorry, when I mentioned that we would look to buy an existing market, Singapore is an existing market because we already have a logistic in Singapore. So yeah, the answer to you, yes, I think that it would be good for us to actually buy more in Singapore. Still, 40 plus years, you're comfortable with 50.

Thanks very much, Mabib. Moving on to Rachel, back to you from the query. Hey, hi. Yeah, sorry, just to follow up on the least expiryist question. I do have two, because they're in a different market, we focus more a little bit on Australia just now, like DSV and also Fluhr. Any see-through to that, or would they be looking to downsize? Yeah, so with DSV, they do have a number of facilities across the portfolio, one of which is in the Netherlands. And they expire later this year, that's probably the largest one, and they will likely vacate. Benlow is probably one of the strongest markets in the Netherlands, so we've got a marketing campaign underway. I think that one will go okay. And then with Fluhr, they're a farm business part, they occupy a number of different tendencies in the park. They have downsized in the past. So I think we're certainly talking to them in terms of

that footprint in the park, but it is their headquarters for their global operation. So we're hopeful that they certainly will stay in at least part of the space going forward. We are still in discussion with Fluhr, so what's the talking to them? Yeah, I mean, as Jay mentioned, we think they will soon be in the next phase because it's their global headquarters. Okay, thanks for the color. I do note that the reversion for this quarter in Germany is pretty flat tissue, so that's why. Should we see that for the least renewals for the DSV and also Fluhr in the UK? Yeah. So the renewals, so those deals in Germany were exercising options. So the positive with that was there was a forward exercise of those options, so it showed those tenants are committed to those spaces and staying journey for five years beyond their current expiring. But with an exercise or an option,

it's generally a CPI type adjustment. It's not an open market kind of review, hence it probably capped it slightly. With the UK, it's slightly different structures, so it would be more of a sort of open market review come lease expiry.

Okay, and is the Fluhr lease under rented or close to market? I mean, Fluhr, it's far more than mine, but if you look at some of the reverses we've done in the past, it would actually be generally quite positive. And in fact, the deals that we've shown this quarter do have a positive reversion for the UK, that's the southeast and Bratnell, which includes Farnborough. So we haven't seen significant sort of drops in rents in the UK, but obviously there are the other challenges in the UK in terms of deck to inquiry. Okay, got it. Thanks. So we may have to pick this offline. No problem. Okay, I'm so sorry everyone, we have run out of time. Thanks very much for this session, and if you have any further questions for us, if you could drop me a note and just give me a call. No, I just want to say thanks everyone for joining this call. I think we also try to be given as much information as possible where we can in the deck. But if there's

anything that you would like to clarify, we're always happy. Thanks everyone.