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