2023 Corporate Connect Webinar Presentation & Dialogue

Good afternoon. Thank you for joining Corporate Connect. I'm Ilene and I'm a host today. This afternoon we welcome senior management of Landis Global Commercial Read again, as well as our audience from Facebook Live. This webinar is organised by CIOs and supported by SGX Group. We will kick off today's webinar with the presentation by Mr Jeff Haoi, Market Strategies from the SGX Group on Recent Market Highlights, followed by the corporate presentation by Mr Kevin Chow, Chief Executive Officer, and we will end off with a Q&A session. Landis Global Commercial Read is established with a principal investment strategy of investing directly or indirectly in the diversified portfolio of stabilised income-producing

real estate assets located globally, which are used primarily for retail and office purposes. It's a portfolio comprising leaseholds properties in Singapore, namely JAM, an office and retail properties and 313 at Somerset prime retail properties, as well as freehold interest in Sky Complex, 3 Grid A office building in Milan. These five properties have a net, the total net-latable area of approximately 2.2 million square feet, with an appraised value of $3.6 billion as of 30 June 2022. Other investment includes development of a multifunctional event space on a site adjacent to 313 at Somerset. This afternoon, Mr Kevin Chow, CEO of Landis Global Commercial Read, will share with us the latest business update.

But before this, let's invite Mr Jeff Haoi to give us an overview on how the market performs. Over to you Jeff. Hey, thanks very much Eileen. Eileen, to keep this brief within 10 minutes, just to provide a quick overview before Kelvin speaks, Reads in Singapore, they have continued to attract more than their usual cornerstone share of investor activity. The sector represents something like still 12% of the total market capitalization of the Singapore stock market, but does still make up 20 cents in every dollar that goes to work every single day in our Singapore stock market. And that 12% contribution to total market cap and 20% contribution to turnover of the 40 trusts that are actively traded,

it is comparatively high globally because for some global perspective, you have around $2 trillion US of market value in the global REIT sector. And that represents really around 2% of total market cap. So you can see we do push well above our weight in terms of the hub, which has very much become a global hub here. REITs have been listed here since, what is it, 2002. And they have been listed in the US much longer since the 1960s. And they make up now those US REITs, something like a quarter of around the 850 REITs that are listed across the world. But they do make up 60% to 70% of the total market value of all the big global REIT indices and the whole big

global REIT sector. So the big and thus the US REITs and their relevant drivers such as interest rates and economic outlooks do have a significant impact on the overall tide of the fundamentals and evaluations of the global REIT market. That's the US. The biggest REIT in the world is Prologis, used to be America Tower Corp, but now it's Prologis, which is an industrial REIT, trades at around two times its book value, has a 40-year history. So it's been running for twice as long as our REIT sector actually is in Singapore, and it has a combined, I think, it's a current market cap around 100 billion US. So the global benchmark, which this is the biggest

component of Prologis, is the FTSE EpriNARIT Global REITs Index. And that index is actually flat in the year today, following its 24% decline in total return last year. And it's coincided obviously with this persistent, or as Neil Cascari, the FOMC voter, has termed recently, darn persistent inflation in the US. And the expectations of the Fed funds rate will remain at this 500 to 525 basis point range, right up to the 1st of November FOMC. That's the majority expectations at the moment. So I guess looking back over the almost 3.5 years, so since the end of 2019, this FTSE EpriNARIT Global REIT Index, it has declined something like 12%, while the IH SREIT

Index has been a little bit more defensive, declining 6% in total return. So overall, those 3.5 years of returns for the global benchmark and our local benchmark, they were pretty much within 5% to 10% of each other, but they do average quite a low rolling correlation coefficient. So that shows that we do have significant differentiation in the day-to-day moves of the Singapore Global REIT Hub and the big global benchmark for REITs. And that's an important point to make for portfolio managers. In Singapore, why do we have this diversification? I guess we have as many as 17 of the trusts exclusively investing in property assets outside of Singapore,

and you have 20 of the trusts investing in properties in both Singapore and outside of Singapore. And then you just have the remaining 3 REITs investing purely in Singapore. So for the region, this includes as many as 14 trusts with properties in Australia. We have 11 trusts with properties in China, 11 trusts with properties in Japan, and 9 trusts with properties in the US. Now, while Lendly's Global Commercial REIT sponsor, Lendly's Corporation is part of the what we call the Australian Institution, known as the Lendly's Group. Lendly's properties are mostly in Singapore, as Eileen mentioned, in addition to that Sky Complex in Milan. And Lendly's, I think, was founded, yeah, I do know this, because this was part of my,

before I moved to high school in Hong Kong, I had a year of high school in Australia, and that's where we all learned about the tycoon, Dick Dusseldorp, who founded Lendly's with, I think, 30 or 40 tradies back in the mid to late 1950s. And this is where this is basically this founder of this company has come from. But as I said, backed by a big classic Australian institution, but they don't actually invest in properties in Australia, mostly in Singapore, as Eileen mentioned. But more broadly, across the SREIT sector, we've got 80% of our trusts now owning and managing overseas assets from across the Asia Pacific, the US and Europe. So that really does make SREITs one

of the world's most international REIT markets now. The average yield of the 40 SREITs, it was as high as 8.7% at the end of April. But I think a more cornerstone or a more reliable indicator would be the IAS REIT index, which is around 6.4%, because you have had a couple of REITs have declined significantly in their unit prices in recent quarters. And this obviously does impact that overall average dividend yield somewhat. So if we look at the IAS REIT index, its indicative yield is around 6.4%. Singapore REITs and property trusts, I guess they do continue to diversify in terms of asset mix over the past three years. And this has seen

diversified SREITs now make up the largest subsegment of the sector. More diversification can obviously improve a REIT's resilience to external shocks, and it can also allow it to capture growth trends across a whole multitude of segments. The 40 REITs and property trusts of the sector, they ended April with an average gearing ratio of 38%. That's 38%. That's below the regulatory limit of 50%, if your minimum interest coverage ratio is at least two and a half times. That's imposed by the MAS. So if your interest coverage ratio or ICR is below two and a half times, your maximum allowable limit is 45%. And this ICR is really used to determine

how easily your REIT can actually pay the interest on its outstanding debt. And this limit was last increased in April 2020 to provide the sector with more flexibility to manage capital during that pandemic. The 40 REITs also, all of them have gearing ratios that are within the regulatory limits, and half of them, so that's 20 of the trusts, obviously have ratios below the sector average. The three REITs with the lowest gearing ratios of the 40 at the moment, Sasser REIT, Fraser List logistics and commercial trust, and Paragon REIT, which end there, their gearing ratios are all below 30%. The aggregate leverage limit is not also considered

to be breached due to circumstances beyond the control of the manager, such as a depreciation in the asset value of the property fund, or any redemption of units payments made from the property fund as well. So that's just an important qualification. Wanted to mention as some of those gearing ratios were approaching 50% for certain REITs. Capital land, when you look at those REITs, they have five trusts now that are part of the sector. And they recently maintain that all listed funds have healthy balance sheets, well-managed debt maturity profiles, and over 75% of the debt is based on fixed interest rates. Now, those five trusts have an

average gearing ratio of 39% as of the end of March, and that ranges from, I think, capital land integrated commercial trust, which has the highest of 41%. Capital land ascender REIT is the lowest 38%. And also, just summing up, on the acquisition front, there have been five acquisitions announced this year within the sector. The combined value of those acquisitions is around 2 billion. So this is different, a little bit less, to what we saw last year, when we saw a dozen or so REITs announced acquisitions, which were basically still not as high as what we saw in the previous year when we saw 20 of the REITs announced acquisitions.

So it went from 20 to 12 to, so far this year, five acquisitions announced. Actually, not five acquisitions announced, but sorry, five acquisitions announced in total, which is much less than what we saw from 12 REITs announcing acquisitions last year, and at least 20 REITs announcing acquisitions the previous year. Some REITs have also flagged disposals might be a tool to basically provide the unit holder value that they wish to do in the coming future. So do keep an eye on that, such as when SunTech flagged, that was a possible capital management measure at their disposal. I guess the most recent to announce an acquisition, it was Capital Anna Centre's REIT,

and that's a high specification research and development facility, and it's business park as well. And they're acquiring that from Seagate Singapore International. So that will be their Singapore International headquarters, and they're purchasing it for just under $220 Singapore million. I should mention, despite the backdrop of increasing rates, SREITs are still offering a higher yield spread of between 320 basis points to 330 basis points above Singapore government 10-year bond yields. The last four years have seen the FTSE REIT index price to book ratio, which is represented by the green line on the right of the chart. Basically alternate between a 20% premium to book value, down to a 20% discount to book value,

and back to a 10% discount at present, which is, I guess, what has basically been a facilitation, the moves of these, the valuations of this consistent flows that we do have into the SREIT market. As I said, 20 cents in the dollar every day goes to work in the SREIT market and price the book, the premium or the discount that the units are trading to their book value is tends to be the key field or the key indicator used by investors from evaluation stance when they come to invest in outreach here in Singapore. So just to sum up, we do have a diverse market, obviously,

but as you can see, SREITs, they still rank highly in terms of dividend yield when you look at the index versus volatility. So still seen as high yield and low volatility plays. So far this year, on average, the 40 SREITs are down around 6% so far this year, but there have been REITs that have bucked that trend. Your five best performers have averaged something like 12% total return so far this year. That includes Kepel DC REIT, Aims A. Pack REIT, Cromwell REIT, Fraser Hospitality Trust and Fraser Centre Point Trust. So any more information you'd love to have us share, please do don't hesitate to contact us. We'd love to hear from you. Here's our QR code for the Telegram

channel as well. Okay, so thank you so much and I'm really looking forward to Kelvin's presentation Thank you Jeff, and welcome to Kevin. Yeah, okay, thank you Jeff and thank you Lynn. I would like to actually cover my presentation pretty fast, even that this is something that we have already published and announced a few weeks ago. Okay, let me go to the summary. Okay, basically, as I said, March itself, I think we have achieved a very good portfolio-committed occupancy of 99.8% with a view of around 8.3 years. Renter reversion has continued to improve to 3.3% with attendance sales up 4.6 times. Tenure retention has improved to 79.5%

and we foresee our average renter to be escalated around 4% which that will be announced somewhere next year, somewhere next quarter. Gearing ratio is 39.3%, we will be the average cost of that 2.51% and interest rate coverage ratio 4.6 times and we fixed our borrowing at 61%. Next please. Basically, we continue to have a very healthy kind of least aspire profile and we have already decreased our FY2023 least to around 1.4% in terms of NLE and 3.3% in terms of GRI. Occupancy has mentioned 99.8% with focused trick sectors of FMB,

fashion and broadcasting. Next please. The retail continues to achieve a very high occupancy. The average of the two more is 99.5% and of course, both of our office buildings are fully released to the Ministry of National Development for Singapore Asset and for Milan released to the SkyTaleo which is 100% owned by Comcast. For those that don't know who is Comcast, Comcast is basically the world number one broadcasting company in the industry by revenue itself and is highly rated compared to the Italy government. Next please. So, the sales number continue to perform well and we as mentioned 4.6 times above the sales of year on year and also

we are actually on the visitation we are 2.7 times above our previous year. Next please. These are our new FMB tenants that we have introduced to the mall. These are some FMB and also some retail tenants. Next please. Okay, on our capital management basically borrowing remain unchanged. The gearing ratios we are at 39.3% and with the average that majority 2.3 years if a cost of that of 2.51% per annum interest coverage ratio maintain relatively high at 4.6 times. So, we managed to actually refinance one of the debt that is going to merchant next financial year which that will move our debt profile to another

I mean to improve on that profile by the time it matured. Of course, the new loan hasn't kicked in yet because we're trying to wait until the maturity of the loan which is in October before we sort of get it refinanced but all the all the document has signed and everything has been locked in. Of course, the purpose and the reason why not doing it now instead of later is because there's always upfront fee that is paid for loan and we want to make sure that we exhausted what upfront fee before we actually bring in the new loans so to improve on the value propositions

of the loan refinancing. So, once we do the refinancing for this loan in October, our total sustainability financing will be around 89% and the benefit of having a sustainability financing is basically to achieve some kind of saving if you achieve the targets which I think we are able to achieve the target and that means that we were able to achieve that saving and as 31st of March, 2023, we do actually have an un-drawn debt facility of around 230.4 million. Thanks, next please. This is some of the initiatives that we do on the sustainability which I will not cover too much. Next, please. I think looking forward, we continue to drive

resiliency and also sustainability returns. We will focus on asset management to enhance our current asset which I think that will certainly benefit the unit holders and of course, active capital management to make sure that we are able to be on top of the games when it comes to any kind of uncertainties and also explore any kind of AI works that will further unlock values to the unit holders. Next, please. I think for that, I will end my presentation. Happy to take any questions from the floor. Thank you, Kevin, for this insightful sharing. We've come to the Q&A session. Can I just invite everybody, an audience, to post your questions in the chat box and then

for Facebook Live audience, you can click on the link and join us in the Zoom and post your question as well. Right now, I may invite Mr. Benjamin Goh here of research and investment education from CS to moderate our Q&A. Over to you, Ben. Hi, hello, Kelvin. Long time no see. Yeah, it has been a while. I think the last time we spoke was last year in August or September, was it? Yeah, I think so. Okay, so we do have a couple of pre submitted questions as well as I see some questions coming in through the Q&A function. So I've bucketed them into a couple of

big categories. I think we're gonna first start off with the financials, then maybe the dividend or capital structure, and then maybe the outlook as well as the for looking growth for Lend-D. Okay. All right, so we have two questions that came in, you know, asking about the cash flow of the REIT. One of the questions specifically cited share investor as saying that Lend-D was or is having a negative free cash flow for most of the recent year. So would you be able to add some color to the cash flow for Lend-D? Actually, to be honest, I perhaps it's not very convenient for me to comment on any of these share and restow calculation models and also how they derive the

free cash flow. Perhaps I, we are not privy to that for sure. But to us, we always generate positive cash flow. And that's how then we can have a distribution to the unit holders on a regular basis. And so far, if you look at our distribution trend has, I think we have been always maintaining a very strong distributions. I think if let's say you do have a strong cash flow, I think that is something that is not possible to be done. I don't know where and what is the definition of the free cash flows, but happy to know more and then I can able to share.

But at this moment, I think I will reserve my comments on that calculation itself. Okay. All right. Let's move on to the debt level. So of course, one of the main concerns by shareholders is usually the debt load that a REIT will need to tick on for expansion, as well as for working capital needs. So the question here is, you know, vis-a-vis the current high interest rates and high inflation environment. How does LANDIs or other what the plans for the REIT to manage or reduce its current debt level? Okay. I think of course, the best way or the cleaner way to reduce the debt is really to see any opportunities for you to diverse some of the asset that has lower yield

comparatively. I think that is the best way to do it. If not, I think and there is of course the most direct way to solve straight away improve on the numbers. Of course, I mean, there are other ways that I think some of the other peers are doing is to do fundraising without acquisitions. I think that is the last things that we will do. I think that's not something that immediately what we will consider for sure, because we believe our gearing level is actually close to 40%, which is actually very close to what our peers of the same targeted sectors are doing. So I think perhaps that is the

fact of the industry, if you're holding asset that has a higher values per asset itself, I think that is when you actually require a stronger kind of gearing to sort of manage, to sort of acquire that and all those things that is perhaps that is how it works and there's the situations. So as to how to sort of manage it on the organic way, I think what we're trying to do is to of course continue to enhance the asset to see how we can unlock more values to the unit holders. For JAM, I think for those that follow us and you understand that we just acquired JAM probably somewhere in April last

year and then shortly after we do our year end closings and we recognize around 2.5% or 3% value increase on the asset itself. That is of course based on the performance of last financial year and this financial year we continue to see a positive amount of momentum in terms of the leasing profiles and also in terms of sales and also in terms of full fall. So we believe the valuations will continue to either maintain or increase. So I think we continue to work on how to solve further enhance the asset itself. I think I did share with some of the forums that for example while our office is actually fully released to Ministry of National Development,

it doesn't mean that the cash flow becomes stagnant. I think what we need to do is to have some breakthrough thinking to see how we can solve more values. I think what we do is that we solve like in the discussion with MMD to see how we can solve a subleasing arrangement. With any kind of upside, we're happy to solve shared so in any case they can solve first of all optimize their usage of the place at the same time. Maybe can bring in some relevant services to the buildings to solve for state I mean to improve on the efficiency of the building. I think that's one of the things. Of course the other thing is to see how we can solve

unlocks out of space on tenants which I think we can move some of the better house space and then convert it to a land-able space that is what we are doing. I think we have managed to convert around a thousand over square feet also for that purpose. I think more importantly is to really further unlock values to create values for the unit holders and GEM is certainly a good asset that we believe we can do so. I always give an example of Mashaé. For Mashaé, if you are one of the customers to Mashaé, you know that you need to actually bring your car to a store.

I didn't do one of these stores and then get your food and everything but I think Mashaé in GEM totally you cannot do that kind of concept. You have to place your order in a regular basis just a normal restaurant because they don't have enough space for them to do this sort of business model. I think that is how demanding on a space usage of GEM and how good GEM is for their perspective. So for 3-1-3, as we also see the improve of the tourism coming back to Singapore, I think that's when the momentum will also pick up and sales are already exceeding by I think

pre-COVID is probably close to 20% or even more. And for SEDs, I mean we do actually report something our pre-COVID level somewhere last quarter and all those things. So I think there's opportunity for us to solve a lot. I think for those that follow us, also you might actually aware that we still have 10,200 square feet of space that have yet to be deployed and that is given by the government. So as we deployed, it means higher distribution to the unit holders and also higher values on the valuation itself as we recognize the value through the cash flow method itself. So all these, if we do, you will sure be able to give us some comfort to the interest rate.

I think back then in the case to the formula of the interest rate, if let's say you are looking at interest rate that has been increased by around 3% on the year basis and let's say we have hedged around 61% then the effective increase is about 1%. Am I right to say that? But for those that also understand us, you know that we have this annual escalation built into this our list itself, almost all our lists about 3 to 4%. So if let's say you look at that perspective yourself, net net will still be a cash in flow. That means if you take a tree

to I mean you just probably take a 3% increase but minus of the impact of a effective increase of interest rate of about 1%, you have a net in flow of around 2%. And of course our borrowing is only 40% but there are still 60% that would enjoy a 3% increase. So in the case, if you look at this perspective, I think you hopefully I can give the audience here some comfort that I mean on a cash flow perspective actually is a positive cause momentum instead of well I mean the interest rate do actually increase do affect all our rates but it's the underlying performance of the portfolios

that actually give the assurance to the unit holders that the rate can able to deliver and able to give the regular cow distributions. Okay staying on the subject of interest rate and alluding to or following up with the one you mentioned about hedging the interest rate. There is a question here if let's say all the debt including perpetual securities are included into land lease. Oh you know how sensitive is the debt for land lease you know two interest rates since they're quite high now and also yeah sorry so go ahead. Yeah go ahead. Okay basically of course I think perpetual is something that of course you will have a fixed coupon so in the case that will not adjust

based on the changes of the interest rate environment and usually we will only distribute after the perpetual coupon distribution. So in the case what we have so far distributed is a reading net of the perpetual impact to that so as you can see our trend of distribution and it continues to be at that kind of positive momentum then I will say that the perpetual itself while it's one of the ways that we raise fund it's not going to affect the distribution significantly because it's a fixed component and of course perpetual do actually to certain investors is higher cost of debt but to us actually is a way to sort of manage the the acquisition as to

when we acquire a gem at the same time it actually is a good way to solve balance between debt and good tea and as to how we look at it uh perpetuates in relevance to borrowing and then how would that reflect in the gearing I think I try not to sort of confuse the audience because from the MES perspective perpetual do actually reckon is is recognized as equity so we are looking at that I mean we do not actually want to actually put it into the gearing perspective but I think if you want you can actually easily do your calculation also not to not to be but too difficult to do so but I think I just want to respect how MES calculate

the gearing ratio so I think we are not changing that number as it is to confuse the audience okay and I assume you know typically perpetual debt have a what you call a buyback right buyback option so I'm kind of like guessing that we interest rates drops you can refinance at a low rate I don't know yes I think yeah but of course it's depending on when is the the maturity of the the perpetual itself and of course the other way is to fix it is to see how we can as I mentioned is to do a clean cut ways to solve like maybe look at your asset portfolio and see

which asset I mean it's good to solve unlock values or recycle cash to solve like balance it out and that's I mean everything is possible uh for example even the the gem asset that we acquire actually make our office and the retail we can solve like break into two pieces and then we probably sell the piece and then maintain the retail or we can even sell the retail and maintain the office I mean depend on what makes very good sense for us but I mean the most important thing is to see how how's the best way to address any kind of issue that we have but most importantly is to max out the

values that you can actually have by holding the asset before you consider this diverse I think that's the objective of what we are trying to do so uh while while borrower lenders still consider us as a very strong having a very strong uh portfolios I think that is something that we can actually solve take a back seat at this moment but continue to enhance the value of the asset once the asset is actually maxed the value that's where we actually feel like we can actually divest the asset I mean but everything is possible I think that everything has a solutions to it I think our asset is strong I think we believe that there is always a way for us to deal with that so

we are not at that kind of desperate situation yeah okay I mean certainly uh gem is quite a good property indeed it is yeah all right uh okay so um let me see one question one last question very specifically about debt um or other couple of questions actually so what is the adjusted interest coverage ratio for the wheat uh you know and would management be able to add some color on how they plan to increase this ratio I think you've already spoken quite a fair bit yeah yeah I think I think I have spoken quite a fair bit about it and again is that this adjusted

ICR while again is something that people you know I think what it actually means to the to the audience or rather to people here is that that is a formula that include even your your upfront fee that you pay and all those things so irrelevant but it might not be totally irrelevant per se so but of course most importantly is to see how's the underlying performer of your asset you continue to generate very good returns and all those things I think that's when I think investor can seek comfort to eat and also to be honest the only things that I feel that I see the adjusted ICR is relevant is that whether it kept you on how much you can solve a gear up

I think for at this moment I think it kept to 45% because our ICR is at two two times but it doesn't matter because as long as you maintain a discipline that you will never go up to that level I think that is just a just a I mean just a target that you don't I mean you are there but you don't need to actually solve worry about it too much I mean that's the that's the only things that I think is relevant but other than that the calculation itself actually is I would say it actually doesn't really measure your ability to sort of pay up your interest rate

when it comes to the stress issue and all those things because it actually input other thing else in the formula which actually to the banks is not relevant so the more I would say that the more the the rightful ICR that the the the investor should look at is the interest coverage ratios to the banks that's when the bank seek reference to and the the bank stick to make sure that you are healthy enough to pay my interest I think the 4.6 time is the to us is the relevant number and that's how how we solve that make sure that we able to fulfill that governance

other than that yeah I think that is a good formula like there's a good number that people stick reference to but I think that probably the way that government or rather MES try to so sort of kept your exposure with all things that is added in but the all things that is added in whether it's relevant or not I think again I don't know on comments but but it will actually include upfront in that you already paid so I mean the question is back to you guys whether it's relevant so uh while res Kelvin just how I just my attention was kind of split because I was

looking up the um lumbar terminal so you may be happy to learn that lumbar things that the default risk for land use global commercial read stands at 0.4 percent one of the highest or one of the lowest uh default risk and Roomba has ranked you as uh second highest in terms of their proprietary um thank you so much yeah I think that that really give uh I think the audience here some yeah some good comfort and understanding I think hopefully you you believe in boom but I believe in blue but you got the mineral on and you should look at it tell all your investors yeah yeah

I think it's a good point I think yeah yeah thanks for that thanks for the tips okay so again can't be a door friends out there obviously blooper has boy's own system but this is one of the screening that we as shares do as well so obviously for companies like high flux and all that yeah we kind of yeah there was it was already on the radar before it happened but anyway uh so good stuff um so moving from interest coverage ratio to one last question about the financials before we move on um so again coming back to the context of rising interest rates which

I think uh could be actually be moderating but let's say interest rates would continue rising in the next 12 months um how do you think the uh valuations as well as the market capitalization rates uh that you're using would change honestly I would think that uh uh as long as our performance of the asset continue to be positive the roman terms of uh rent reversion continue to be positive I think that can be uh managed and dealt with to be honest now we are actually us already raised the rate so close to the target rates how much more they can raise I mean that that is the

questions that we have to frankly ask ourselves and don't be eluted by all the all the negativities and believe that that is something that is going forward to you I mean more importantly is that whether the portfolios will continue to able to perform to be honest we are just just at the start of how we feel that the rental reversion can continue to pick up uh for example when we thought about the sales uh of the more has increased by 20 percent so what may translate to you on the ops cost ops cost means uh how much uh how much of the renter render that the the tenants pay

to you divide by the overall sales so if the sales number increase doesn't that's been the base increase that's been you have the flexibility or abilities to increase your renter uh because the operation of the tenants actually has been improved I mean that's how we are looking at it so we are looking at easily I mean you based about 20 based on the 20 percent of increased uh compared to a pre-covid number that means that you have probably a bandwidth to increase so that is just the start of how we recognize the positive momentum of the rental reversions if you are you are so so worried and so concerned about the interest rate environment and I think of course you might

actually miss the opportunities but I if you believe the interest rate already reached to a peak or is going to the peak I think that's where you should start to see what is the best time for you to pick up the stock and say okay maybe it's a good time for me to just go out with it because of the positive momentum and uh on the retail scene I mean all the audience here I believe are from Singapore it's so easy to go and see whether your asset or our asset is healthy or not I mean by just visiting the asset so it's more than what I tell you you can go and experience yourself that's

what the beauty of us bringing the Singapore asset to the portfolio is to make sure that we are transparent to the investors and investors are able to continue to solve have a close contact or stay on pause to what our performance of the asset is so I believe our asset is continue to perform well and I think while interest rate continue to be a challenge but I will say that I think the upside is limited so in the case as long as we continue to stay a positive car rental reversion update I think that is something that the audience or investor should stay comfort about it so maybe I also look at maybe share if you want a quarter to quarter car rental

reversion if the first quarter is one percent we recorded one percent uh rental reversion I think second quarter we record around two percent or two point one percent I mean that at this quarter on quarter yes no that is actually your your two date so in that case so in the case if you look at or the third quarter we move from two point something to three point three percent the incrementer is actually more than three percent of what I mean because you need to make for the previous shop I mean shop for the two quarters so in the case the actual rental reversion of the quarter itself I would say probably is four to six percent or even higher so

so look at it and seek comfort of the performer the portfolio is more important than you focus on the interest rate at itself actually to be honest if you I mean there of course read that it's lower gear yeah read that's lower gear but I think is that what makes the best use of your money that you invested in is how you run uh if a get uh get as a fund but it still continue to perform you know you have been lowered yet but you're I say it's not performing so what right I mean doesn't mean that you got your I mean you've got a positive distribution just probably

at this moment you feel that that's worried but the thing is the asset is not going to perform anyway right so it's look at the performer that I said this is the focus that the audience should look at and stay stay in touch with the powers of the asset and that is why our asset is in Singapore it's easy for you to seek reference to okay so for our friends out there possibly we have another 0.5 upside to the us fed funds rate that's one of the presidents of the regional fair mentioned in the news article but it's 0.5 I will go the course of the next few months and

we do expect interest rates to fall starting from 2 to 4 so this could very possibly be peak inflation and peak interest rates yeah yeah yeah thanks Ben for sharing that yeah also you know education yeah all right it's better than work from me I mean that would be true right because you are more of a third party yeah it's powerful job so I educate uh okay thanks David all right so a lot of interest around this topic so what is the dividend strategy how is your dividend strategy impacted by the high inflation and perhaps the again the gearing so maybe you could add some

color to that yeah very funny is that actually I mean some of the insta investors are very comforting to tell us that as long as your dividend policy don't drop out we are more than happy but most of the grids they expect to drop and all those things I think what we while we cannot give them a forward statement or we cannot share something that is non-public but what we do actually as I share with you is that we believe the ops cost will come in come in place nicely for us to solve like uh manage the rental reversions going forward I mean that's what you believe it you should stay momentum and also if that's it the rental

reversion you feel that is a bit too much for you to understand look at our inbuilt rental reversion on the annual basis again that is also one of the way that you can see comfort so with that and you look at the interest rate effective increase of the interest rate because we have hash 60% but we that also give you some understanding that a actually the situation is not that bad luck I mean it's always I always tell people is I mean it's good when you come to a crisis two things you need to manage is the top line your top line is it still performing if it's not

how how do you address that top line because top line is a survivor number if you top line is not performing even you call to manage your cause your interest cause expenses cause cut down all those things actually that is uh it just probably prolong your your sustainability of survivor or those things but it doesn't actually help your underlying ability to survive so top line is a survivor number so that's how I'm trying to emphasize look at the top line whether you still be able to survive nicely perform well and all those things that is key I think of course when you come to this sort of issues look at a balance sheet whether your balance sheet can be will be compromised

and that's where the valuations become important and I think uh as the asset will perform I think the valuation is less of concern well again I do want to say because I'm from the read itself but uh I think you you look at uh maybe other peers that have really reported their annual reports I reported the annual results in December and March I think did they actually drop any values in the Singapore asset I think probably the answer is no and some even increase so I think that hopefully also give you some comfort to uh the valuations itself and the stronger the balance sheet that we have so if less it this two are being addressed so I would say that our

distributions better your question our distribution will continue to to maintain a good momentum I don't want to make a forward statement here because if not MES will kind of look for me but I think we will continue to be able to have a very good kind of momentum I of course we do actually want to see uh a kind of positive uh how distribution momentum but of course there are also things that we need to solve cultivate and involve and uh for example to unlock the 10,200 square feet of space that we might not to conserve some kind for that purpose and all those things so I think all these uh being

said I think the performance good the distribution should shouldn't be too too of a disruption uh due to should be too disturbing to to the investors okay so um putting on my head as the analyst here I'm just looking up the data that we have the 12 months uh new for then these stands at 7.4 or 3 7 percent uh the indicative 12 months yield is closer to eight so take it as take it as what you will uh yeah um okay so uh again you know reads normally pay between six to nine percent distribution you know anything more than nine percent would be I guess

too good to be true anything less than six maybe uh think what savings more of a better idea like that anyway so this is kind of like within the normal range I think like yes yes okay uh all right um and and again uh Kelvin um so we have not come to the end of the question yet but you know we always get a lot of questions on financials because obviously uh we take away a huge portfolio uh and um you know we are Singapore restaurants so we can look into the details okay so moving on let's talk about the outlook as well as growth so a lot of questions about your

orchard road three one three the ten thousand two hundred uh is live nation on or not on you know what's happening there give us some color is Beyonce coming

okay the ten thousand two hundred I think we are actually on a planning phase I mean when it comes to uh when when something become more real we're happy to share with uh the investors and probably make a proper announcement so that uh investors know what is going on and how we stop unlock the values I think now is that we've with the as we just came up from COVID we tried not to have too much disruption of the traffic the flows and all these I think that is all into consideration but I think it will not be too long for us to come up with your plans to solve how to unlock

that values give us some time because we just want to make sure that we have to clear the authorities of the plan before we can solve big uh announcement or plan something that can be uh uh I mean something that we can solve deliver I mean it's still just giving you a plan that I mean at the end of the day will change right so I think that's one okay for the live nation uh the the empty greenfield space that we are talking about I mean I believe at this moment I know you tell everyone but everyone know that live nation is an anchor tenants uh for the space okay I think

what we are doing is really first uh of is kind in Asia or in a world that having uh entertaining and multifunctional space in the meat of a world shopping belt itself is really at the center of the whole shopping but so it's very interesting but again uh it also means something that is a breakthrough to uh to the Singapore uh in terms of getting the torture approvals and all those things it's a different ball games uh to be honest and there's something that we need to solve clear a lot of different uh I mean authorities to make sure that things are improper for us to solve

both ahead so we are actually close to the starting line actually I think once we we solve uh I think we are anticipated I mean we will be able to get it clear by probably beginning of uh second half of next year uh so this year second half of this year which is probably uh quite soon yeah quite soon yeah I think with that they probably take around 12 months or 18 months to to solve deliver I think that's how it's supposed to work because we want them to be a more or rather the government actually want it to be more elaborate kind of structures that can house and also be

safe for for people that go to the place it's not like a container and that's that's it it's a very elaborate how design and all the things of course I can't share too much but suddenly is a huge investment okay then then you talk about the investment sum basically I think the beauty of us collaborating with live nation is that we actually invest no money to that construction the live nation is going to pay for the construction work at the same time once it's done and run and they were going to pay us a regular car of uh uh renter with some I mean with also a profit sharing kind of mechanism so I think I still want

a question is asking how much the yield of the live nation partnership I would say it would be easily be a double digit kind of yield once it started once it start off so it's a good win-win for us is that live nation pay for it and live nation continue to pay us rent I think what we need to do is continue to be a faithful uh owners to the land and foresee that take them on on the performer and all those things and not forgetting the synergies that we can generate from the site to 313 given that I mean there's a lot of collaboration and also we have this dennis app that we can solve input

and also let the maybe even have exclusive sales of to the members for whatever live performance that live nation have I think that's the beauty of yeah I think the last point I want to try to elaborate to a lot of different investors is that I mean people like live nation basically they are event organizers so they I mean most of the time they just go to a venue and then they maybe lease out a space of five days or three days for the events and then they they go away so but the the venue itself become empty let's say no one leaves the space but but now live nation invest in it

and they also event organizer they will make sure that they run as much program as possible and generate as much revenue as possible to solve keep keep them going and make sure that the investment is is a right investment so for that that can itself not nation become a they they not only we are only but they are the tenants that pay for it and then at the same time they generate events I think they will generate a lot of events that is going to have a benefit for 313 being around that and benefit the tenants at the same time make the place very interesting I think that is the

the formulas that we're trying to work with five nations and yeah and of course to live nation is a good location to them is imagine you are so near to the train station middle or chirrup so easy for them to be recognized by the world I mean being in the in the world shopping but I think it's a it's a win-win to a boat but I think to us and to our investors is a is is is is less of a capital investment but more of the the new new play that we are talking about well I mean certainly uh probably making fuller use of my high deluxe membership so

you know at 313 down pop over for the watch Taylor Swift

I think it might provide a maybe more uh more different kind of cuisine for people for different places okay okay so um um all right next uh okay so we talked about a specific piece of property in um in our chirrup now on an aggregate basis so uh we've got a couple of questions things like power play shopping mall is it going to be injected into the week going forward uh or more of a general Singapore strategy uh what is your growth why your growth plans for Singapore property over the next uh three years how do you intend to compete with uh maple tree capital land so and so forth of course I mean uh to us I think the good thing is that we

our sponsors do have a lot of pipelines and of course pipelines in Singapore itself I mean including all those that we have partnership with and all those things actually added up actually easily to be around probably another eight billion or so to be able to solve like consider it to be the the read asset for sure and uh of course don't be worried about our name uh global commercial read I think we are also uh concerned and also want to hear from the investor why it's the best asset that we need to put into the portfolio to sort of give them the confidence of our read so I think what we have here from a lot of investors that they prefer more

Singapore asset of course they understand that Singapore asset is more stable I think from the global perspective and also they do see that I think the Singapore retail probably are stronger and more resilient uh to to to the now the business environment around the area around the regions and even further the region so I think our focus was uh will be more on Singapore of course uh has to be conducive and make sure that uh we sort of like acquire at the right time or you could also be acquired at stages that's what we do on as in jam so that in the case people get familiar with the asset that we have I mean comfortable cash flow that we try to acquire

at different stages to sort of make it 100% so we we can actually also do so so uh I would say that in the near terms or even short terms why we will probably if I say anything that we will consider acquiring will be anything in Singapore and of course retail since continue to be positive and I think that's what we we should actually stay focused in so that in the case to sort of capitalize the the positive momentum to that to that perspective so I think some some of the audience mentioned about PLQ and 313 PLQ and pathway I think yeah I mean they are still

something that we can strongly consider but it has to be something that it has to be something that has a positive accretion that we saw before we can bring it to to to the retail so a lot of things need to sort of fall in place but this is this other tool asset that we feel I think so far has been mentioned by a lot of investors and uh and also a lot of investors continue like that and believe that at the right time you should bring it into the portfolio. Okay good uh there is a specific question about the assets in Italy uh so how is the renewal of the tenant assets coming

along ahead of the brick plus and uh how is and I believe the exit is maybe office so how is that affected by the uh hybrid water arrangements? Okay so far the asset I mean the the brick cross is in 202 stakes and uh of course we didn't hear anything from from skype italia itself but uh I think but everything is contractual I think any changes we make sure that I mean they they will have to inform us earlier because uh contractually they need to notify us uh earlier let's say they want to break it but as I mentioned I think there are a lot of uh a lot of things that they need to

sort of consider because the brick cross itself means that brick of three buildings is not optional one but two buildings so even with the change of the working style or hybrid working environment it doesn't mean that you allow them to solve brick one and then extend two and all those things so these are things that uh is something that uh they have to be in a total considerations I think the beauty of our site is that it actually uh going to have a I think two by two to six or somewhere around that there will be a Olympic uh car of events and all things that

we hold around hold around that and you will of course make the place strongly relevant but of course our three buildings is also recently being guarded uh got uh these big gold certifications which actually is getting important to a lot of uh tenants uh in Italy they start to move our older buildings which is less uh which they cannot get green certifications to the newer buildings and also we have a very strong efficient flow plate so if that's it that's going to trigger actually it's not going to be a big issue for us but the thing is that of course we we so but we hear anything

I think we continue to stay positive on that I think the last thing I want to mention is that recently there's two new development actually they have been developed for a year or so and it's anchored by one of these very strong uh engineering company which is cost part one and two and the the rate that they actually command command is around around three 320 per square meter per annum euro dollars uh but currently we are actually charging sky around 180 square meter per annum so I think there's also a rental differential which actually so hold them back on any change I would think so

and I think also that that that location is very well connected with the train and the metro station metro station and all things it's very convenient so I believe the location is good so if I say there's any change of a plan of sky I think we would not have very strong concern about filling it up but at this moment we didn't hear anything and and also you've actually break they have to break three buildings so all this has is not our consideration it's more on sky considerations how do you want to manage that okay okay um all right so uh ladies and gentlemen we have run out of time now is 33 minutes past one uh from my perspective gonna leave you with

one either one other item so you have a bunch of research analysts in Singapore uh DBS bank UBK here at Phillips uh so and so forth they have all they are covering land these global commercial REE um do encourage you to go and uh you know take a look at this research reports and I think you'll get a much fuller picture on financials uh already uh you can see just for one glancing consensus is actually actually quite good thank you all right uh yeah so uh Calvin you should get yourself a global terminal for our friends out there get a free research report yes yes good idea yeah all right so thank you very much Calvin for joining us um

pass the time over to believe always fun to speak to you sure thanks man thank you uh Kevin and Ben for the lively Q&A um as a north lander well Duransa is always a go-to place for me as well so just keep up the vibes and of course the traffic has always been very encouraging over the weekend so it's a matter of like getting the right tenants and the vibes together um okay we've come to the end of the copper connect session if any of you have any additional questions feel free to contact their IR department uh and also of course through CS we always welcome any

questions that investors may have in case you miss any part of the today's session you can rewatch the webinar on CS YouTube channel so copper connect is a monthly webinar to visit our website and get updates on the upcoming investor education programs and initiative um and i also want to urge uh audience over here if you have any companies that you may have in mind that you want us to feature do type in the chat box uh now so that we can also reach out to the companies as well to be featured the next upcoming copper connect session will be featuring first week on the 27th of June

so thank you once again and have a nice day bye everyone bye bye always a pleasure thanks man