2Q & 1H FY24/25 Financial Results Briefing

Good morning. Thanks for joining us this morning for MIT second quarter and first half financial year 2024-25 results briefing. MIT has released its second quarter and first half financial year 2024 and 25 results yesterday evening. We have the management team to present the key highlights of the results. Ms. Lili Li, CEO. Ms. Kuo-Gengfong, CFO. Mr. Peter Tan, Head of Investment. Ms. Serene Tam, Head of Asset Management. And Ms. Chen, Shokim, Head of Marketing. So just to start off in terms of the key highlights, if you are flipping to these slides, you'll be looking at slide five. I think for this quarter, it has been, I would say, quite non-eventful business very much as usual. We do report higher net property income. I think whether do you compare quarter on quarter or year on year, Osaka data center is key contributor, right? I think for the final details, you will probably hear it from Kingfong later.

So I think in terms of BPU, we are quite happy to be able to deliver a 3.3 cents BPU. I think this, if you look at it on a year on year basis, is a 1.5% increase. Of course, on a quarter on quarter basis, I have highlighted last quarter. I think in terms of the MPI margin, etc. is a little bit on the high side last quarter. So I think this quarter is a bit more, but it also means that I think in terms of the BPU, we do see a slight decline. Operationally, oh yeah, and maybe it's also good for me to just highlight at this point that for this quarter, we have finalized the extension with AT&T. So I think the extension is for a 17-month period. I think in terms of rental, I reckon this would be a question that you all would ask. So I'll just address first. The rental rate is, I would say, is lower close to what they have signed on initially.

If you remember, this is the second extension. So the first extension was at the premium. I think in consideration of, for all practical reasons, we think that just accepting the extension is a better move for us. I guess the other side of it, if we don't accept the extension or we hope for even higher rental rates, is the fact that you will have some downtime in trying to fill up the building. And during this period, it's probably a zero income type of situation. So I think the extension of AT&T is actually a good development for us. It gives us more breathing space for a good 17-month. But nonetheless, it's really kicking the can down the road. And we will continue to work on marketing the, exploring the various options that we can work with for San Diego. Going on to the operational performance, the average overall portfolio occupancy has actually increased, I would say, quite well, from 91.9% to 92.2%, largely due to the vendor

build lease we're commencing. But I think just like to remind that this vendor build lease comes with a one year rent fee. So at this point, we are still during the rent fee period. So there will be no DPU impact arising from this. The other point to highlight is the rental revision. We are happy to report that we have achieved a 10.7% across all property segment. This is something that we are quite happy to be able to achieve. But nonetheless, I think we also have to bear in mind that the rental revision, a large part of it comes about because we do have leases that were signed on during the COVID period. So those were at relatively lower rents. So I think going forward, we would expect that the rental revision rates to mule down a bit, so probably near the single meet digit.

The third point that we have here is really the acquisitions of the property that we have recently announced in Tokyo. So we have just completed it yesterday. In fact, it was like halfway through our board meeting that we actually completed. And the last point is really on the distribution reinvestment plan. We are quite thankful to these unit holders for taking up the option, for taking up the options to order elections to receive units. So we are able to retain about close to 17 million. So that actually helped to mitigate some of the effects towards our leverage. Okay, next I will pass on. Okay, I will go to the financial performance as well as the capital management update. Year on year, comparing the second quarter, net property income increase by 4.6% to 134.5

million, actually due to contributions from the Osaka data center which we acquired in September last year, as well as new and renewal leases across the various property clusters. These were partially offset by the non-renewal of leases from the North American portfolio and not income from the Tung Hall divestments. We also incur higher property taxes, marketing costs and higher property maintenance costs. On the borrowing costs, this increased by 3%, largely due to the higher borrowing costs in relation to the Osaka data center, partially offset by effects from the repayment of loans with the proceeds from Tung Hall divestments. The distribution declared by the JV decreased due to higher borrowing costs from replacements of interest rate hedges. So overall, our DPO increased by 1.5% or 0.05% to 3.37%. Okay, quarter on quarter, our net property income increase due to higher revenue from

the full quarter impact from the vendor-built lease. We also completed phase three of the Osaka data center in June and June 24, hence the higher revenue from Osaka data center for this quarter. These were partially offset by higher property taxes and property maintenance. Our borrowing costs increased due to higher interest costs from non-replacement of interest rate hedges upon expiry. Overall, our DPO, sorry, before that, let me clarify in terms of the NPI. Stripping out the rental amortization, our NPI is flat. Hence, if you look at the DPO, overall, it's a drop by 1.7% or 0.06% to 3.37%. Next slide, 11. Our NAV per unit decreased by 4 cents to 1.72 cents, mainly due to decline in the valuation

of financial derivatives, as well as weaker U.S. dollar. Next. Our total debt decreased by $48 million to $3 billion, mainly due to lower net translated borrowings from a weaker U.S. dollar. Our aggregate leverage ratio stands at 39.1% as of 30th September. Post completion of Tokyo acquisition, the aggregate leverage is about 40%. As Lily has mentioned, we retain $16.6 million of cash from the DRP, which we have used to pay down loans. So, as a gauge for every 10 million of cash retained, we will be able to reduce our gearing by 0.1%. So, for this term, we continue to apply DRP. In terms of that maturity profile, it is well staggered with average debt duration of 3.4 years with no refinancing risk. So, we have about 50 million of IRS due disquatter, which was not replaced, hence the lower

hedge ratio to 80.4%. And our average hedge tenure reduced slightly to 3.4 years. Our average borrowing cost is at 3.2%. I think Lily will continue with the operational performance. Okay. Yeah. Sorry, there's some downtime because we need to switch the mic. We need to pass the mic on. Okay. Now, on the operational side, good news in terms of the occupancy, we see overall an increase of occupancy for the entire portfolio. I think if you look at the breakdown between the Singapore North American and Osaka, the key contributor to the increased portfolio occupancy is really from the North America. And that one, as I explained earlier, is largely due to the commencement of the lease by vendor build.

I think maybe at this point, I can also highlight or report that for our Kalang way, we have managed to increase our committed occupancy. I think last quarter, we mentioned about 53.5% has been committed. So this quarter, we are able to increase it by one percentage point to 54.5%. It's a slow, I guess it's a slow progress, but at least there are some progression. So I think the team is working quite hard on this. And we do hope that we can at least reach maybe a 60 to 65% by end of this year. Okay, moving on. Least expiry. I think if you look at this quarter, we do have one lease that is expiring. That's the one that was previously occupied by Sisterra or Centre Square now. I think that one is in East Technology in Phoenix.

I think the re-leasing progress is currently in progress, but we think that it should be quite okay to do a backfill, considering that this is actually in Phoenix, which is one of the key data center markets in North America. But of course, I think it's not a case of immediately you have somebody who left, somebody will come in and take over as in so that there's bound to be certain level of downtime. So I think we need to be a little bit patient on that one. If we look at the rest, some of the expiry that's coming for the rest of the financial year, we do have Vanguard, who is located in Philadelphia. So I think that one takes up about 124,000 square feet, and you'll be expiring towards the end of this calendar year. So December 2024, we have started the marketing for rates. So in fact, we have engaged a broker to do the marketing. So we do hope that there'll be some progress on it as well.

First, Baliish facilities that is due for expiry that is in February 2025. In East Cornell, I think this is the one that is held under the JV. So I think in terms of the square feet, it's about 32,000. But I think this one is the, we know that they are not renewing, but I think there is no much issue in filling it out because we are currently talking to the existing tenant to see if they want to take up the additional space. Okay, I think other than that, the rest are quite small, very much business as usual. Okay, rental rates, I think there is something that we do have. We are quite happy to report average revision rate, as I said, 10.7. But if you look in terms of the range, you're talking about as high as a 26.1%. I think this 26.1% actually occurs in the light industrial building, which you see no

bars in the chart because it's only one lease, right? So to protect the confidentiality. But what I can say is this is actually one of the lease that is in our 2A Changi North. And generally it's 26% because we actually start off with a low base. Moving on, maybe just the next thing to highlight is actually our acquisition in Tokyo, which we have just completed. Maybe I'll let Peter take through this. Okay, hi. All right, so I mean, as what Lily mentioned earlier, so we just completed this acquisition yesterday in the midst of our board meeting. So our Japanese colleagues were actually helping us to close this off. So we are pleased to announce it's completed yesterday. I think the other update that we have is we have always, we have also continued to

discussions with TAPCO, which is the Onshore Power Service Provider. So we remain confident that we are able to secure the power in the future when we wanted to redevelop this asset. So the IT load is probably north of 30 megawatt. So that's what we are aiming for. All right. Okay, I'll hand it over back to Lily. It's like passing baton, quite fun. Okay, the next part I will just quickly touch on is the outlook. I think for this quarter, the outlook in terms of generally for the global economy, as well as Singapore, US are actually quite positive. In fact, I think if you look at a newspaper yesterday, very positive news in respect of the industrial segment, as well as the technology segment. So I think this is something that bodes well for us. Nonetheless, we do know that we have certain challenges that we need to deal with, say,

in terms of filling up some of the spaces at Kalangwe, as well as some of the renewals that is in the North America portfolio. Then I think you can move on to the next slide. Then from what you can see here, of course, the portfolio remains large and diversified. So I think not understanding that we do have certain challenges that we need to face, the portfolio should still be able to deliver something that is quite resilient and stable. And that is something that the team here is working towards. I think financial flexibility, we have been able to make sure that our balance should remain strong. So with the DRP, this will certainly give us more flexibility that we need. I think we continue to look at the growth through the acquisitions and development. And since you're on that point, maybe in terms of the divestment,

that is something that we are still pursuing. We are in talks with some of the potential divestment transactions. But I would say at this point, there's nothing much I can report, but please be assured that we are working on that to help to rebalance our portfolio. And that will also give us some financial flexibility towards our acquisition plan. Thank you. We will now move on to the Q&A session. Can we have Mervin to ask the first question? Thanks, Melissa. And congrats to you and the team on the very good results of the AT&T extension. Mervin, can you just follow up the AT&T lease renewal or extension? The audio wasn't very good. You said the rents would be lower. The rents would be back to the pre-20% increase.

So what would you be referring to? What I meant is you would be back to the initial lease. So if you remember, this is the second extension. So for the first extension, there's about 20% premium. So I think if you are going to compare it on the year-on-year, oh, that's the background. OK, thanks, Mervin. So as I was saying, we do expect to see about a 20% drop in terms of the rental rates for AT&T. I think that is actually a very decision that we have to take on a practical basis, rather than leaving the property empty, at least by getting some rental out from it. But nonetheless, we also have to remember that the first extension was actually at the premium.

I hope that that's good. The 17-month extension, there's no rent-free period right now. Is this straight cash flow? No rent-free period. The extension is only for 17 months. If I have a rent-free period, I can not think. OK. What is the premium right-hand side of the contract? And then on the other two leases, at the Square of Phoenix, when does it expire? And what percentage of GRI does it contribute? Similarly, for Vanguard, Philadelphia, percentage of GRI. And your expectations in the rental reversions for these two leases? Thanks. OK, thanks. For Vanguard, I think it takes about 1.2% of our total portfolio revenue. And it expires in December 2024, so end of the calendar year. I think the other one we're talking about was the one at East Corner. That one will expire in February 2025.

But it's a smaller space, so about 33,000. So in terms of contribution to our portfolio, it's about 0.03%. OK, thanks very much. Look forward to more divestments and perhaps more acquisition in Japan. Jarek, can we have your question, please? Derek from DBS. Hi, morning, Melissa. Can you hear me? Yes, yes, we can hear you. Hi, Hi, Lily and team. Just two questions from me. Just follow up on most questions on your US data centers, apart from what was highlighted. Are you still sensing that your tenants are willing to renew? And are we still going to see largely your typical three to five year renewal, rather than a short term extension? Just want to get a sense around the strength of the portfolio in the US. Then my second question is about interest costs.

I think previously you talked about 3.5%. You're doing much better than that. Could you give us an update on what to expect for this year and maybe next financial year? That's all from me. I think for AT&T, at this point, they have already informed us that they are going to move out for sure. The reason why they had the extension is because they are having problem really shifting all the operation, cutting off and shifting all the operations to the Orange County. Of course, that also indicates how sticky tenants can be or how difficult it is for the tenants to just pluck off and move away. So it's not really kind of a plug and play type of business that you're talking about. So for AT&T, this is their second extension. Of course, I would also hope that they can do further extension. But the truth is they have done the extension.

This time for a longer period, about 17 months, I think the last extension was about 12 months. So I don't know. We have no indication whether they'll continue to extend. Also, Derek, to add on to your question, I mean, since we are on these top 10 tenants' lines, so actually, if you look at the top 10 tenants' lines, we are actually quite confident that most of them will continue to renew at least on a five-year or longer basis. Of course, for the other, some of the smaller tenants, there may be the renewals at a shorter list term or shorter renewals. But for the top 10 tenants that you see here, we are quite confident they'll continue to list with us if they have for the facility they have with us in the US. Yeah, except for AT&T. Got it. OK, sorry. Just one for the AT&T, I said right. Do you have the asset power that currently is

that is contracted? Is there upside to that? Or is it too sensitive? OK, the current on-site power is low. OK. Yeah, it's low. But for this asset, we actually see other alternative use beside data center. So that's what we will continue to pursue as well. Because San Diego Market, we actually see there are other good users, just similarly like the other one that we have in Brandwood. OK, got it. Sorry, interest cost. Yeah, I think that's a key question. OK. Our interest rate is 3.2%. We are 80.4% hedge. So with the, sorry. Can you hear me? Can, can, can. OK. So we are 80.4% hedged. With the interest rate cut coming,

we will then benefit from the unhedged portion, 19.6%, or about 600 million of our loans. So I think you went on mute again. OK. OK, maybe I need to restart. About 80.4% of our loans are hedged. So the remaining unhedged portion will be able to benefit from the interest rate cards for every 100-bit cut. We will have that savings of 6 million per annum. But having said that, we do have IRS coming due this year. Every year, we will have IRS coming due. And all these were largely locked in during low interest rate period. So for like this year, as I mentioned, last quarter, we have about 350, 400 million that's coming due. So some of it we may or may not replace, which then bear higher interest rate of maybe 300 to 350

beats. That will have an impact of 11 to 12 million per annum. But the thing is that two-thirds of this will be at the JV level. So you may not be able to see it at the boring coastline, but you'll see this impact at the distribution declared by the JV. But all in all, I think by end of this year, we expect interest rates at the group level to be around slightly below 3.3%. Slightly lower than last quarter indicative of lower than 3.4%. OK. OK. Sounds good. OK. So I mean, all this interest rate is over relative, right? Because our JPY debt that we drew for the Tokyo acquisitions is cheaper. I mean, much cheaper than 3.2%. Yeah. So on average, this will then help to bring down the average interest rate. OK. OK. Got it. Got it. OK. Thank you. That's all for me. Yeah. OK. We have Brendan from CT to ask the next question.

Hi. Morning. Can you hear me? Yes, we can. Is it good? Yeah, it's good. The volume is good. OK. Thanks. Just going back to the AT&T, right? Any reason why I think given the kind of vacancies we are seeing in the market, they are still pushing down that rent by 20%. Would you actually have negotiated for a better rate? That's my first question. And do we have any updates on the William Street occupancy compared to a couple of quarters ago? That's my second one. And third one, can you let us know what the hedges and both US hedges and the debt that's due in FY26 as well and FY25 hedges and debt for US? Thanks. Let me address the AT&T rental first.

I mean, of course, I can insist and charge them an arm and a leg. But I think it's really us also trying to balance what we can get out of it vis-a-vis them just biting the bullet and shift everything out. So I think at certain point of time, we need to be very practical about this. So do we want to force the hands so much that they decided that there's no point for me to continue this? I just pick up and go. After all, this is really the second extension. So when it comes to a second extension, their job or their move to the Orange County would have more or less have started, right? And probably it's just in the midst of completion. So I don't think we want to push the envelope too far out. So I think it's really taking a very practical approach towards this, weighing between us being able to charge a higher premium or a higher rental vis-a-vis

face with the option of, or face with the possibility of leaving of an empty building that gives me nothing. OK? So I hope that addressed the AT&T question. Yes, that's good. That's good. Thanks. So the other two questions? The other question is 250 William occupancy. I don't think there's a lot of move. I think that's actually quite similar. I think for 250 William, I think as we all know, it's in Atlanta. And Atlanta at this point, in terms of the downtown, it is not easy to get any more data centers to be established because of the power constraint that they have there. But we are currently working with the Georgia powers. And hopefully, we are able to bring in more power, in which

case then the 250 Williams will be able to see some level of uptick. I will leave King Kong to hand it over to Hijou. So USD, IRS coming due in FY25, as well as FY26 and 7. I think dollar equivalent. We have about 500 to 550 million of USD IRS coming due next FY and the year after maybe 600 to 650 million. And also 1 to 3 is JV. The JV for next year, maybe half half. The year after is largely the Singapore side. I mean, it's MIT group level. OK. And is it correct to just assume that the head? I can't just assume that the debt tranche is exactly the same as the hedge tranche.

So I should divide it by 80% to get the exact debt tranche due because of your 80% fixed. Is it correct? No, no. OK. So I think when you look at the debt maturity profile, it's very different compared to our interest rate profile. I mean, interest rate hedge profile because we manage our refinancing risk as well as the interest rate risk separately. So in terms of the debt profile, we don't see much higher margin that the banks are charging. I think our risk is more on the base rates part. So you can't compare with the slide on that maturity profile. OK. I think we can take this off line. It is way too detailed. Yeah. OK. Thanks. Thanks. Thank you. Thank you.

Maybe suffice to just remind that in terms of the hedge tenure, it's about 3.4 years. So we do have certain level of protection. OK. OK. Got it. Thanks. We have Jonathan from UOB to ask the next question. Yeah. Good morning and congrats on very good results. My first question relates to slide 24 on the rental reversion. And for flattered factory, the rental reversion is quite strong, 13%. And it's quite kind of a broad base within the factory space, 102 leases sign. Could you discuss some of the positive catalysts within the flattered factory space? And would this 13% reversion be sustainable? On the other hand, for high tech, we have a new leases sign at 248, which is quite low.

So could you discuss dynamics within these two segments? Thank you. I think for the flattered factories, we have to recognize that this is actually one of the lower cost space that we have in Singapore. And I think you also recognize that the flattered factories are the ones that were quite hard to hit during the COVID period as well. So a lot of the leases that were contracted during that period were at lower rental rates. So now that this was signed like then about three years ago. So now that we have three years has passed, generally you do see the uptick there. So that actually explains for the, I think, close to 13% rental revisions. Whether this is sustainable, I would say that we are probably not going to see a similar trending going forward. There will still be a positive rental revision,

but I don't think you'll be in a double digit. And for the new leases for high tech building? Maybe I'll just take this question. So this is a project that was presented for high tech buildings, as you know, it's a mixed bag of properties of different ages, specifications. So this particular block of high tech buildings, actually the one at Topayo, where we did an asset enhancement initiative. So if you recall, within the caster, there are two blocks of satisfactory. And a number of the leases that were signed for this quarter where it's about $2. So you see it brings down the average. Sometimes for high tech buildings, this number is skewed. So it's also affected by the fact that there are only 13 leases signed during the quarter.

OK, OK, thank you, thank you, Melissa. And if I can follow up on DRP, what's the current discount that you're offering now? And would you consider having a higher discount to reward unit holders, and then also to improve the sort of acceptance rate? Thank you. Hey, hi, hi. For this round, the discount that we're looking at will be at 2% discount to adjust the reward, which is the same as last quarter.

The thing with the take-up rate, right, it really depends on the share price at that point of subscription. So for example, last quarter, the take-up rate was very good, was mainly because during the subscription period, our share price rallied. So that gives us that discount of about 6%. I mean, 6% to 7%, yeah. So even by giving that 3%, I mean, additional discount, it may or may not help. It all really depends on the market. OK, OK, thank you, thank you, Lily. And thank you, Management Team, thank you very much. Hi, can we have Joy from HSBC to ask the next question? Sure, thank you. Morning, Lily and team. Just a few questions from me. First of all, just on the Vanguard leases, can we get a sense as to, in terms of the impact to P&L, should we expect something similar to the AT&T leases

we have dealt through in the past? And also, what's the plan on the asset itself? Second question, I think earlier on, you mentioned that you were doing a power study on the portfolio. Is there any update on where we are, opportunities? And then last one, just going back to interest rate swaps, the base rate that you're loghting for the next few years, is it very different? So basically, the revert to current market, is it of the same quantum, or is it actually on a diminishing sort of quantum? Thank you. OK, one at a time. So for the Vanguard, I think just now I said that the contribution is about 1.2% to the overall portfolio. So I guess that will be the financial impact that you see on the portfolio. Whether is it going to be the same as the AT&T,

I can outrightly say no, because AT&T is a much bigger space that we were talking about. So I guess if you look at the top 10, AT&T is actually one of the top 10 tenants. I think that one is the San Diego is about a 3% contribution. So comparatively, the impact naturally will be much lower. But nonetheless, this is something that the team, again, is working very hard on. Hopefully, we are able to deliver some good news. Sorry, Lily, what I meant is in terms of the impact and the void period, we should be quite similar as to how you backfilled the other AT&T leases. Is it the Tanees one? Yeah, you probably can expect that. I mean, at the end of the day, we are trying to fill up a whole building. So I'm not cutting out into smaller spaces. So you're talking about one whole building.

OK, thank you. Then on the power study, it is still ongoing. I think the point about power study is not as speedy as I thought it would be. In fact, I was chasing the team, why does it take so long? But the truth of the fact is to do that power study, we need to work with a consultant. We need to work with the power supplier. And as you would understand at this point, the utility's supplier actually very busy and perhaps quite swamped with requests. But this is something that we have gone underway. I believe that a typical time that is needed is at least a six to nine months type of period. So we do have some that is coming to a conclusion soon. So once we have any news on that, we will be quite happy to share with you guys.

Joy on your questions on comparing the base rates for the interest rate swaps that we're looking at the next two years, FY25 and FY26. Correct. So earlier I mentioned for those coming to you in this FY, the 300 to 350 beats higher, you have to bear in mind that the full year impact will be next year. So there's always this lack effect. So for FY25, the existing hedge versus the new rate potentially, we are looking at maybe 100 to 150 beats higher for FY25 and FY26. Because those were looking not as low as compared to those, we look in for those IRS duties FY. But you will still see the impact of the higher interest. And this is versus today's rate. So meaning if let's say rate gets cut, we will see probably 2550 basis points that go.

That fair? OK, yes and no. Because when you see the interest rate cut, that is more for the short term rates, i.e. more the overnight rates. But if you look at the long term, let's say three years or five year rates, potentially it remains stable at current rate or it may go even higher when interest rate normalize. Usually it's a steeper curve. I see. Got it. Thank you. We have Rachel from Macquarie to ask the next question. Funny really Antin, just a few questions from me. I think firstly, can I just confirm that is Konya asset? Is it the one that you're referring to with the Phoenix asset? Is that right? No. The one at Phoenix is the one that's really vacated by Centre Square, which they have vacated in the early part of September.

OK, got it. And can I know what's the percentage of GRI for the Phoenix asset and what do you intend to do with the Phoenix asset? Phoenix asset is about 0.3% of GRI. So we are looking to, we are in the process of doing the marketing. I think of course, as I've mentioned just now, Phoenix is actually one of the key data center market in North America. So it is something that will probably make time for us to find attendance. And also what kind of reversions do you expect for the backfilling of both the Phoenix and the Vanguard assets? I think for the Phoenix one, we think that we should probably be able to maintain about the same rates that we can get.

For the Vanguard one, because it was originally a kind of a specific use for Vanguard themselves, so as you can see from the valuation drop over the years, we actually think that the rental rates will actually be quite low because we may not be able to find a replacement tenant who uses the facility like Vanguard. OK, got it. So negative for Vanguard, that's right. Yeah, that's correct. OK, and I do see that there are also some expiries on the data center portfolio in FY25 and 26. Any cause of concern that we should be, or any risk over that? I think if you look at it, the larger ones perhaps will be the ones that is in the hyperscaler facilities. And I don't think there is much risk in that one because for these hyperscalers, they are looking to stay for long.

Let me add on. I think what you see is also we have not really captured the short term renewal by AT&T in San Diego because this is at 30th of September. So if you remove that, then quite a big chunk of the lease renewal will move away. I see. OK, I've got it. OK, thank you. And then my next question is on the digital acquisition power. I think just did you mention that you already got the power or you are still in the process of getting the power? We have not got the power because that will take quite a bit more time, but we are actually quite confident with our engagement with Tap call now that we will secure the power. OK, got it. OK, that's all for me. Thank you so much. Thank you. Hi, we have time to ask the next question. Hey, good morning. Can I just clarify on Phoenix? When is the lease ending?

That lease ended early September this year. OK, got it. Second question is on cash contribution from occupancy. Brandwood, is it still under brand free or is it 100%? And also, Kalang, what was the cash occupancy that's contributing this quarter? For Brandwood, there is a one year rent free from June. So you will see cash contribution from 1st June FY25. OK, Kalang. For Kalang? I think for Kalang, you'll probably be looking at above the 50% level. So probably around a 52%, 53% level. OK, got it. Just one last question on your Singapore data center.

Any lease expiry that has came through and what was actually be version of your Singapore visa? I think for Singapore data center, we have not hit any expiry yet. But that's long time ago. Any for the recent coming? Any coming? Yes, we do have one that is coming up. That will be from the STT side. I think if you look at the STT lease, the renewal for the data center confirmed will be, I'm quite sure that they will renew. The only thing is if you recall back, for those with the history long enough, if you recall back, the rental from STT, there's actually two components to it. One is the base building and the other one is actually on the data center, CDOT works that we have done for them. So I think come next year, when the lease is due for renewal, that data center works, rental will actually fall off.

So I think if you look at in terms of the impact, it's about 50% of the rental from STT. I think it will be 50% though. That's about the proportion of the data center works, except that there will be some offsetting effect by the escalation from the base build works as well. So that we are still discussing with the tenant and there'll be some uplift, but you will be offset by the drop in the data center works. And what's the expectation on reversion? I guess some of the peers have recorded really strong reversion for Singapore. But for this deal, there is some, because it's only base building, so, and we actually have agreed to some form of rental cap for the renewal.

Yeah, so I think we will just have to push up to the maximum of the rental cap, but I would say it's decent enough, but it won't be very high double digit also. Okay, got it, thank you. We have a deal from DBS to ask the next question. Yeah, thank you, thank you. Hi, Lili and team. Just two quick questions for me. I think firstly, I just wanted to ask about the business parks in Singapore. I saw Q on Q, your occupancy, a slight update, but reversions were negative. So just wanted to understand, what should we be expecting for business park segment? And in terms of the new demand, which sectors are they coming from? I think for the business park, we have been pushing up the occupancy a little bit by a bit,

but I think in terms of revision, we do see a slight decline, but I think that is something that is still quite flexible. I mean, at the end of the day, your decline is not as huge, right? In terms of the demand that we're seeing, maybe Kim, you can take that too. Can you hear me, this is Kim? Yeah, yeah. Okay, for the business park, as you know, we have actually, the buildings are located in the first gen business park. So one in international business park and one in Changi business park. Now, international business park has certain demands that is actually more from the manufacturing companies that are located in Twas. So we are able to get some firms that have some HQ functions and they're located to our strategy. Whereas, technology, again, it's more location demand

that is from the logistics sites from the Changi North area and then the aviation kind of industry, but they're smaller demand. So we don't see the last time those technology companies that is in Changi business park. I hope that answered your question. Okay, yeah, got it, got it. But just a quick follow up on this, then in terms of, I think looking ahead for both segments, international business park and Changi, right? I don't know, should we be expecting to see occupancy continue creeping up with demand for some of these smaller spaces still coming in?

Yes, and I would say maybe because the smaller demands, right, they do have a lot of choices now in the market. So it may be take a certain targeted groups to be there. We are trying to see actually the larger space that will have a bigger impact on the occupancy. Okay, got it, sounds good. Okay, and- Sorry, maybe I just, let me just elaborate a little bit on the revisions for the business park. I think for this quarter, there's actually a range fee that was given to two of the new leases at the business park level. So that actually accounted for the deep in terms of the revision. Okay, got it, got it, thanks, Liddy. Okay, and moving on to my next question, going back to talking about this power studies, right, for your portfolio. I know it's still early days,

but just wondering if this power studies, if let's say you do ascertain that certain parts of your portfolio has a upside to power load, would it actually affect your portfolio valuations? Would it actually add to your valuation?

I think the short answer is yes. If we can secure more power, yeah, it should improve the portfolio valuation. I guess that would then filter through in terms of the rental rates that we're able to fetch for the building. Of course, with the power study, it also means that our option, if we are able to have some visibility in terms of the uptake or in terms of how much power we can actually get hold of, our options with respect to the building will be much wider in the sense that we can consider either it will help in our releasing of the building, or we can even consider a redevelopment if the numbers make sense. And as a very large result, even in terms of the sales of the property, that power study result will help. Yeah, and we probably will be able to, we will basically open up the tenants base for us.

Okay, actually I'm referring more to, I mean, if the power study shows that there is a potential, even before you actually manage to lease out or get the additional power, what would this potential uplift actually help with valuation? No, I doubt if it's just potential, it will increase the valuation because something must be confirmed. Okay, okay, got it, got it. Okay, and just quick follow on this, right? So like you say, if let's say there is potential, you can do extension or redevelopment, how do you see yourselves doing some of this? Would it be together with a partner? Are you able to undertake it yourself? How should we be expecting any potential major AEI or redevelopment? I think the options are on the table. We are able to do it ourselves or we can find a partner, we could be a co-law operator or end user. So all these options are on the table because essentially we do have the skill sets

and the resource to do it. If I may remind, we have also done due to Suits for Data Center before. Of course, then you're at Singapore, but there is no, I reckon that it is not difficult for us to transfer the knowledge over there as well, right? Okay, got it, that's clear. Okay, yep, that's all from me, thank you. Your conscious of the time, so can we take the last question from Yu-Kiang from CRC? Hi, thank you, thank you for making me the last one. Just maybe two questions and one suggestion. One is, can you briefly talk about the demand in US data centers? I know some of the data centers might be pretty old, so it might not be AI capable, but what are the type of industries that you are seeing on the demand side? That's the first question. Second is on Kalang Way, why is the occupancy taking so long to fill up? And then as a suggestion,

I think your US data centers have a lot of leases. Maybe next time a slide with a summary of each of the lease expiries and what's going on there would be helpful. That's it from me. All right, I will take the first. Slightly easier question. As the question was asked, I was pointing to the... Yeah, so for the first question,

the SOFR Enterprise Data Centers, we'll probably have to find alternative users. You can actually see that from the releasing of the brand new property to vendor-built medical center. So that's one. For the core location leases that expire, we actually remain confident that we should be able to find another core location operator to take over the space. I mean, for people who have been following us for quite some time, we do have two, I would say chapter 11 filing earlier from our core location operators, but essentially most of our leases do not get rejected and another operator has to continue to operate the facilities. So we remain positive in that sense. And then for the cloud and hyperscale providers, we are confident that they will continue to renew.

I guess I was also asking, other than healthcare, what other kind of sectors can pick up those space? I mean, it can be anything. It can be anything, even for tech providers, doing for their backroom officers or training and so on. It can always... There are a lot of options. So ultimately, we actually think that North American market is pretty deep and wide. So that actually gives us the comfort that we are able to manage the portfolio and the properties. Okay. And Kalam? Kalam? Kalam, I will leave it to another smart person. Hello, this is Kim. For Kalam, the occupancy is creeping up slower than we like. The reason is because there is a lot of supply

of high tech spaces that is in the market right now. The largest competition is TSX that has about one million over square feet. And Alexandria Techno Park, as you know, Google has almost close to more than 300 over 1,000 square feet. So that added to the supply situation and it compete for the similar type of customers. So for us, the team has actually did smaller deals the last quarter, basically in also the electronics, the IT sector traits. We are in the discussions with... I mentioned before, we are hoping that we could sign another big user soon, at least a floor that will move up the space, but the competition is steep. So just bear with us a while.

Okay, thanks. All right, thank you so much. Thanks for joining us today. You know where to reach us if you have further questions. Thank you.