# Mapletree Pan Asia Commercial Trust — 2Q & 1H FY25/26 Financial Results Briefing

Event: 2Q & 1H FY25/26 Financial Results Briefing & Analyst Q&A
Date: 22 October 2025
Issuer: Mapletree Pan Asia Commercial Trust (SGX:N2IU)
Provenance: automated speech recognition (asr) of the issuer's public mediacast recording
Source recording: https://mapletreepact.listedcompany.com/mediacast/FY2526/2Q-Results-Briefing.mp3
Official record: https://www.mapletreepact.com/investor-relations
Presenters: Sharon Lim (Executive Director & Chief Executive Officer), Janica Tan (Chief Financial Officer)
Words: ~8,724

Unofficial machine transcript. Prepared by SMID Research from the issuer's public mediacast recording by automated speech recognition, without a full manual check: expect mis-heard names and figures. There is no speaker attribution: the source recording carries no diarisation, so cues are shown as timestamp and text only; timestamps refer to the recording. Not a company publication. Mapletree Pan Asia Commercial Trust's own investor relations page (https://www.mapletreepact.com/investor-relations) is the authoritative record. Copyright in the briefing rests with Mapletree Pan Asia Commercial Trust; contact contact@smidresearch.com for corrections or removal.

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[00:00:00] Good evening, dear analysts and all participants. Welcome to Maple Tree Pan Asia Commercial Trust, or NPAQ's analyst briefing and live webcast. For our second quarter NPAQ from 1 April to 3 September 2025, I'm Ying and I'm delighted to hold today's results with Ying. Allow me to introduce our speakers for today. They are Ms. Sharon Lin, Chief Executive Officer of NPAQ, Ms. Janika Tan, Chief Financial Officer, and Mr. Kuo-Bing Yong, Head of Investment and Asset Management. Our speakers will continue to follow our financial results, share key business development and market insights. Following the presentation, we will open the floor for Q&A, where we invite you to ask questions. Without further ado, I will hand the floor over to Janika, our CFO. A very good evening. The performance of NPAQ across all second quarter and first half was incurred by Singapore's continued strength, strategic portfolio optimization, and proactive debt reduction, further supported by the

[00:01:04] February interest rate conditions cushioning the overseas hit. So for second quarter, the DI distributed income was $106.1 million and DPU $2.01. Which was 2.1% and 1.5% higher as compared to second quarter last year. The year-on-year increase was due to interest rate savings from lower interest rates on Hong Kong dollar and same dollar borrowing and lower loan outstanding. As we have, we paid the loans with proceeds from divestments from Maple Tree Ensign last year. And the two Japanese property fees was also partly affected by the unfavorable asset Hong Kong dollar and remaining fees. That's relating to the JGAP profits on the divestment of the two. The next slide shows contribution by different markets. NPAQ for Singapore properties,

[00:02:08] excluding Maple Tree Ensign, 2 million, the higher property. Distributable income to $113 million, DPU for 0.02 cents, were lower by 0.8% and 1.2% year-on-year. And the year-on-year decrease was mainly due to operational contributions from overseas properties and this was further dampened by the depreciating Hong Kong dollar and remaining fees. The interest rates on Hong Kong dollar and same dollar borrowings were lower year-on-year, coupled with lower outstanding

[00:03:09] borrowing. This slide shows that Singapore continued to account for more than 60% to both gross revenue and MPIs, with the two core assets accounted for more than half of the operating PCL sheet. NAB was $1.75. We have completed the divestment of ESI and ESY in Japan during the quarter and the net proceeds were used to repay on-shore borrowings. Moving on to capital management, gross outstanding borrowing, its average ratio improved from 37.9 last quarter to 37.6. Additionally, the weighted average cost of debt declined 9 basis points to 3.23% per annum. These were driven by proactive debt management efforts, further supported by favorable interest rate conditions. And in September, the ICR increased slightly to approximately

[00:04:14] three times on a 12-month trailing basis and the average term to maturity of that was 3.5 years by the end of the top FY2526. By the close of the reporting period, NCHAN has a financial flex of approximately $0.9 billion in cash and undrawn commissar facilities, ensuring sufficient liquidity for working capital and financial application. So we will continue to ensure a natural balance sheet hedge by closely aligning the debt profile remain well-distributed with no more than 24% of debt expiring in any single financial year. The outstanding borrowing in FY is in the facility in Korea, our joint venture with MITL. Facility work put in place and the refinancing will be completed by next week. You can see we did a revaluation of our property in

[00:05:18] Korea, TPG, and that was because the lender required the valuation to be not less than three months old. Hence, we did a valuation in relation to this refinancing. In conjunction with the refinancing, and the valuation for TPG was actually about 1.3% above the local currency valuation and hence we recorded a gain of 2.8 million under the share of profit of joint venture in the valuation. On risk management, to ensure a gain interest rate volatility, we continue to keep our fixed rate at above 70%. In August, we issued a 200 million seven-year green notes at 2.45% per annum. As of September, the fixed rate that

[00:06:42] the book closure date is on 30 October 2025. With that, I will now hand over the time to be young. Okay, good evening everyone. Maybe just go to slide 19 where we can look through the occupancy. The MBC has maintained its occupancy through the period and appears to maintain 800% of occupancy properties. Occupancy has improved slightly to 99.1, while at festival wall occupancy has increased slightly as we were able to lease out another wall of office units. For the China assets, we have continued to maintain occupancy at a fairly healthy level, but that was at a little bit of expense on the rental reversion as you will see in the later slides. For Japan properties, one of the sub-tenants after the building, so that is to obtain

[00:07:43] occupancy, clinical government managed to maintain occupancy, except for one of the small retail units. Moving on to rental reversion. So for MBC rental reversion came in slightly negative. That's largely due to the fact that about 40% of those were signed before due to the rental reversion of this chunk of leases. The MBC rental reversion is slightly negative. We will continue its good performance, closing the portal with 14% positive rental reversion. Festival walk, that rental reversion came in at minus 10% widening slightly from

[00:08:45] the previous quarter. Retail sentiment remains fairly weak in Hong Kong. We can go into a bit more detail on this in later slides. For China, again, the real estate market in both Shanghai for business partners as well as office for Beijing remains very weak. The amount of supply in Shanghai pushing down rentals, the competition between that lot in Shanghai continues. Shanghai Beijing continues to be very fierce to ensure our occupancy remains at a fairly healthy number. We have moved our rentals downwards to match with market in effort to maintain our occupancy, which you'll see the team have had Japan properties, rentals largely flat. And for Pingel Gangnam, that one lease that we signed is just a small retail. And the police expiry

[00:09:52] for office and retail remains fairly healthy. Two years for retail and 2.4, giving a portfolio.

[00:10:02] Moving on to slide 23, this just gives a summary of the competition of the divestment of the two office assets in small assets, one in Tokyo in the Ekukoboro area and the other in Yokohama. The transaction that we had announced was the end of the previous. So moving on to retail, you'll see that for Vivo City, Shoppe Traffic and Tana Seer, Linspong, this is despite the fact that we had a disruption within the mall due to the AEI that Pingel's slide shows the AEI works which are completed at the mall over the last few months. So phase one was completed in first quarter. That's actually the change of layout of the foot kiosk as well as increase of the kiosk from 21 to 24. The second phase is the expansion of the basement two area by about 14,000 square feet of net lettable through conversion of cover area

[00:11:10] and complete retail. So if any of you have been to the mall, please make sure you have a video that will give you a center how it looks like.

[00:12:47] Okay, so this slide just gives you some of the new templates. So we have a new toilet, which is actually highly-built. Our basement is a very high traffic area, so it's only one set of toilets. So we can open that with that. We've relocated traffic to the toilet, more ceiling finishes, the two M&Ms have M&E and also widened the air. So we've also made a total amount of over 40 million and ROI is in excess of a campus. Some of the tenants have come back to the mall. So maybe moving on to the next slide, one of the more successful events we had over the last quarter at the mall was a collaboration with PopMart, with La Boubou Minimart come Mid-Open Fair, as well as we also done the Mid-Open Fair

[00:13:52] at level one of the mall. Okay, so moving on. So for festival walk, while shopper traffic has improved slightly year-on-year, tenant sales remain weak, largely in line with the tenant sales remain weak, that's largely attributed to higher amount of travel by Hong Kong residents due to the continued strength of the Hong Kong dollar, as well as a reduction in consumption due to the continuing economic weakness in Hong Kong. The mall has continued to try and rejuvenate its retail offerings, bringing new tenants at looking stock large, as well as a number of services like a medical center, OSIM, and then things like MS-Wrestle. Okay, if you look at the increased traffic, part of this is attributed to the events that we had done throughout the mall and that has been very popular. We've drawn

[00:14:55] being able to draw in a large number of, we have also improved, we have also improved offerings to shoppers by doing things like car park redemptions and car park offerings so that we can bring in more traffic in the evening so as to boost the F&B spending. Okay, I think that comes to the end of the presentation. Thank you, Jenneke, for the video. We are now ready to take a question. So for analysts, kindly raise your hands on the team if you'd like to ask any questions. We kindly request that you state your name and your phone before asking and for our online participants, you may submit your questions through the text-based platform. So first, shall we hear from the ladies for the change? So, Jaren-Yin from BBS. Oh, hello, hello. Yeah, good evening. Yeah,

[00:15:57] I'm just on the... Okay, maybe my first question is on interest cost. Assuming that you do a full reset based on where market rates are, what will you actually bring your interest cost down to? Yeah, just a sense if possible. So you're saying that if all my six billion loan is due for re-pricing today at today's rate, what is the prevailing rate that I'll be getting or the cost of that I'll be having? Yeah, yeah, on the other level. Yeah. Okay, we normally do have this information, but as you know, our internal policy is to keep at the above 70% fixed. So if I follow this way of doing above 70%, fixed 30%, I think it should be lower than what we have today by 50 days. Oh, so 2.7%. Thereabout, but you know the spot rate change every day. So as of today,

[00:17:06] is this tomorrow it will change? Oh, okay, okay. Yeah, so I felt very encouraged. Maybe second question, maybe on festival walk, I think the previous guidance was that the non-anchor research should see a pattern of reversion and is that still the right thinking that we should continue to see that compression in the next one to two years and maybe some color on the ground until sentiment down. Okay, I think sentiment wise is not as bright. I think we will be very upfront about it. In terms of the efforts that we are doing, we are trying to drive more people through the mall. You can see that we have intensified our marketing interim event, I would say three times more than what we used to do. That has actually helped in terms of at least pushing people through into the mall and indirectly will translate into a

[00:18:12] spend. That's what we are doing. So if you talk about reversion, why? I think I've been saying it's a plus minus 10%. Yeah, but of it has gone through a major rental minus negative rental reversion. I think there are still pockets here and there. Hopefully if things, I mean, if the spending gets lesser overseas and especially some dilution into center, then hopefully this will be a better trend for the mall. But generally I would say that I think we are on the same page with most of the other mall operators. Okay, thanks Sharon. Yeah, maybe I can just squeeze in the last one. I think this quarter you did a review for Pinnacle. I think it's similar, I think it's because of our mind whether you are looking to divest the asset and maybe

[00:19:18] that was a financial requirement and it's under the REIT guidelines that any revaluation has to be announced. So don't do much to it. When the time comes, if there is any, we will definitely inform the market. Don't read too much into this one. This is a, it was driven by a refinancing need. It's a financial condition for me to draw down loans. Yeah, it's just administrative. Okay, and we guidelines expect all valuations to be announced. Okay, I see. Okay, then we will wait for your further good news. Yeah, thank you. Thank you, Jie. Terrence? Thanks so much, this is Terrence from JP Morgan. Yeah, hi Sharon, congrats on the results. Just wanted to ask on China, could you give us a better sense of what you're seeing in China?

[00:20:20] It seems that occupancy picked up slightly and the reversions are coming in slightly ahead of your guidance from the previous quarter. Maybe could you give us updated guidance on expectations for China? So just to give a sense, leasing activities in China generally is concentrated in the first six months of our quarter. So once you get into the latter six months, there is the go to the holidays, end of the year vacation, then after that, you've got Chinese New Year coming up. So the later six months of the year, there will be less leasing activity in general. So a lot of the work that the team does is focused on getting leases in the first six months. Hence, the first six months performance will be slightly better, will be better than the latter six months. In terms of rental reversions, we have guided that rentals are coming down. The range could be quite large

[00:21:26] depending on where which leases are being signed. And in some cases, in some cases, use the tenants' own internal requirements or the team's ability to manage the tenants, we can shrink that rental reversion. Just to give a sense, and I've mentioned this before in previous results, that Sandhills general rentals in the past used to be about five plus R&B per day. We are signing leases in the 350 range at the current moment. There are some tenants that we are able to sign at slightly higher numbers. And there are some tenants that we will sign at about 350. So the rental reversion will follow what we are able to sign in terms of the other tenants. And we are able to sign some leases north of $4. And there's actually been one or two that were actually close to $5 as well. Those are in the minority. They definitely help to bring our rental reversion slightly less negative. That's the case for Gateway as well, where in

[00:22:30] general, our leases in the past used to be about 250 R&B per month, but in general, signing leases to 150 to 180. But within that port of leases that we are signing, there are some that we are able to sign north of 200. And there was one or two leases that were actually a bit higher than that as well. Again, these are either tenants that we are able to, they had an incentive to stay at the building or they were willing to negotiate and stay at rental slightly higher. So again, that helps to moderate the negative rental reversion that you were expected if we went from say $5 plus to 350 or from the 250 down to our 150, 180.

[00:23:16] Well, thanks, Willem. Maybe also just to get a sense, since you are saying that first half you expect better numbers versus the second half. Do you expect better occupancy? So better occupancy. So momentum will be better at the beginning of the year. And there will be a low. And how much should we expect for occupancy to dip into the second half of China? Based on what we are seeing now, we are probably looking at maybe 2 to 3, 3 to 4 percent sort of change over the next few quarters depending on how successful we are in terms of obtaining tenants. Okay, that's good. And also, I just wanted to ask on NBC. I understand in the previous quarter we had mentioned about potential movement from CBD to NBC.

[00:24:21] I'm seeing that occupancy, committer, occupancy does not see their move up that much. Maybe could you give us an update on the leasing up of the Google space and also any other concerns, perhaps for the undisclosed tenant, and could they be giving up their space?

[00:24:45] If I can't disclose the tenant, I can't disclose to you whether it's in the space or not, right?

[00:24:52] Okay, I shall not be here. So the Google spaces currently still in negotiation, there are at least two tenants looking at it. The one tenant that we were expecting, we were negotiating very hard to move from a CBD out, decided to stay put even though the rental is more than double of what our rental at NBC is. I mean, each company has their own metrics for evaluating such moves. In some cases, it's whether the tenant's staff wants to move or whether they are willing to spend paybacks. So we had another tenant that was looking at the space and decided to stay put simply because they had to incur a very large capital expenditure amount. In general, the leasing for NBC has been going slowly, well, but slowly. We have signed up a few tenants over the past quarter. That's why you'll see that the rent,

[00:25:55] occupancy number has creeped up a little bit despite the fact that we had one or two nonrenewals in the quarter. Leases are in negotiation. We have quite a few that are now currently in documentation space. We won't include those into our numbers until we get the leases signed. Given that this is coming into the end of the year, we are hoping to get them done before the 31st of December, but then if not, it's going to be into the next financial quarter before the end. In terms of, let's say, occupancies, I mean, now we are at 93. Is there a possibility that we can take over 95 by, let's say, the end of the year? My leasing team's bonus will depend entirely on that, but I think this is going to be a bit of a stretch simply because leasing demand has been fairly slow the whole of this FY. While I will look for them to cross 95 or cross 97, I think that's something

[00:26:58] that we may only see maybe next FY or maybe only the next FY or later. Okay. Thanks. Maybe a final question for me. Can I ask about Vivo? Could you share on how much of, I guess, for the Phase 2, we're only seeing about a month class of contributions, but I noticed that FPI margins are extremely high this quarter. If I'm not wrong, it's like 85%. Could you share on whether there's anything happening on the FPI side for people? Second. Okay. The contribution is already a portion of Phase 1. The contribution has really started even before this quarter, and only the Phase 2 is for this quarter. In total, 43. It's about over 40 million, and in terms of the ROI, it's in excess of 10. That will be minimum or incremental MPI.

[00:28:07] It's actually pushing the most of the Vivo's numbers, actually the rental reversion. I think most of our assets are trading around the 70ish MPI level. If you're comparing year on year, we find this utility, the rates are lower now, because of the lower rate, so there's also quite a big. Performance is under the operations and maintenance, the utility expenses associated for different,

[00:29:05] that's definitely interest. I think that's very encouraging that finally we see a big bar, that's a combination of the efforts of lower rate, the diversities that we have done. So those are the two big items. Unfortunately, China and Hong Kong continues, I think.

[00:29:57] But comparing to last year, there's still no interesting challenges to remain. China, it is what it is. I think overall, we are pushing the market a bit. It's pushing us through. We'll continue to see if there is any relevant diversities we will consider. Our position will continue to consider. In our very healthy gearing levels, I think we are

[00:30:51] in one of the better shapes in terms of utility, but we'll be very careful as to how we deploy. So we expect interest to help us along the way. Coming up for you as to where our challenges, Hong Kong, China, choose to fly. We will especially continue to fly. We are completed improving the traffic of the... Okay, thanks, Chiranthokal, I have one. Next, we have Jonathan. Jonathan,

[00:31:56] you may unmute yourself. Yeah, good evening, management team. My first question relates to Hong Kong. Recently, there has been some concern over commercial real estate in Hong Kong. So capital values, I think for officers, has dropped a lot. So my question is whether the same is happening for retail property, and does that mean that there will be some attrition to your valuation for festival walk come end of the financial year? Our second question relates to Japan properties. What is the outlook like to push occupancy higher than compared to the current 73%? And are you kind of looking at selling the three properties at cheaper, I think cheaper prefecture? Those are my two questions. Thank you. Okay, thank you for your question. I'll handle the Hong Kong one.

[00:32:57] In terms of Hong Kong valuation, I think it's... valuation typically fits in rentals that you have signed. And with this negative regular reversion, definitely that will translate into lower numbers valuation. But the magnitude is not like you see a 10% drop. I think you see from historical, because 7% is only a subset of the renewal. Okay, so there's still existing uses. And typically, if you see for the last two years, we're talking in order of a low single digit changes. Okay, that's from property. This is on the basis of number one, that the valuers did not change major cap rates. But last year, they did some 10-20 bits change in cap rates. So if they don't change cap rates, not that I know of today, that they are changing cap rates, then it will be

[00:34:02] whatever type of leases that are lower, that will translate into lower value, but not in the same magnitude as the rental reversion numbers that you see that we have published, because it's a smaller subset. Okay, so that's one. So in terms of office, I think you're right. I think there's a lot of noise out there in terms of office softness. So it's the same methodology that the valuers would take depending on the stock leases. Okay, so we are not expecting like a double digit kind of changes, but on very low single digits, there is a high possibility.

[00:34:40] How is the office component? Okay, thank you. These are not extremely small, they're about 200,000 square feet, about 200,000 square feet. But if you look at it in terms of valuation, the office valuation is about 10% of the total valuation for festival work. By size, there are about one third of retail. And then one, yeah, but by value, the retail per square foot is higher than the office per square foot, because the rent per square foot is lower for the office.

[00:35:16] So on Japan, to be 100% candid, and this is information that we have disclosed before, occupancy in Japan is not going to improve anytime soon. The master lease at Fujitsu will expire at the end of this financial year. When that happens, the occupancy at Japan properties will fall by another 15%, 20% authority. So portfolio wise, occupancy is not going to recover anytime soon. But just to give a sense in terms of leasing progress, for the non-makalari properties, leasing generally is quite strong. The office market in the Tokyo 18-watt is over the last year and continues to be strong. Most of the spaces that we have coming up,

[00:36:29] if there's any you are looking at, is a district that has very different performance. In general, vacancies within that, they're pleasing are north of 20. And in some cases, and our building's inclusive, vacancies are actually much higher than that. There are some green shoots, even though we have some tenants that have departed the building, we are seeing a lot more leasing inquiries this year as opposed to last year. Hence, if you look at the amount of leases that we have signed in the first half of this financial year for the makalari properties, it's about 50% more than what we assigned in the previous person. I think for Japan, I think we all have history highlighted, but I think just to add, it's noting that makalari is weak.

[00:37:34] Early this year, we have already shared with the market, reduced the valuation as much as we can. So as you can see from slide six, the contribution for all the entire portfolio in Japan is 5%. If not, what is that?

[00:38:04] So Japan, we're actively trying to reach into the portfolio. On top of that, we are also digested to. Okay. And that is in view of potential issues that we see coming.

[00:38:25] I may have a quick follow up for Vivo City with phase two coming up in the second half of the financial year. Would the phase two contribute even higher rental reversions, meaning rental reversions, hitting high teens or even 20%? Okay. So we separate our calculation. Renewals or leases that goes into rental reversions. asset enhancement works, which is like the basement tool, which we class it as asset enhancement. We will give guidance in terms of what we spend and the return on investment. So we don't double count a number into the rental reversions. So for example, how do we, is this all the leases that we trash to create this new area? It's us, let's say, the lease line was let's say $10. Okay. And the new lease line is $11. That is a $1 upside. So we times the area and we divide by the cost. That's an example.

[00:39:28] But that, we do not double count. We separate into two buckets. So there is easier for people to follow our numbers. Rental reversions are purely premium works. Anything asset enhancement are removed and guided by ROI. Okay. Got it. Thank you. Welcome. Thank you, Jonathan. Rachel, can you unmute yourself and ask away? Hello. Hi. Good evening. Can you say yes. Okay. Thank you. Thanks for delivering on the interest cost savings. I just want to clarify a little bit. Are you expecting the interest cost, average cost of debt will drop to about 2.7% by end of this year? Is that your newest guidance? No. No, no, no. Okay. Okay. Okay. Okay. I just now that if my entire $6 million we price to day three, that is about that.

[00:40:30] Cost of debt that we will be looking at. But not all my debt is going to be repriced tomorrow or end of this year. My term to maturity is 3.5 year. My fixed rate term to maturity is about 2.4 years. So it will not be this financial year or next financial year. It will be a gradual. Okay. It will not be just one year. I think, yeah, she was giving that number to answer your question everything was done today. Yeah. Ah, okay. Okay. Got it. Got it. So we should still expect it to drop that further for this year. I think 3.23 is more or less about the level that we will be looking at for this financial year. Even there is any savings plus minus a bit. Okay. Because we do not have the savings from Hong Kong, Hong Kong dollar borrowing anymore. The rate should have been in sometime in August or September, August. So come next quarter, you will not be benefiting

[00:41:36] from the low interest rate from the Hong Kong dollar borrowing. I think last quarter, everybody was very encouraged with seeing Hong Kong dollar crashing in terms of interest costs. I think it has since rebound quite a bit. Overall, I would say that interest environment is definitely very encouraging. We have suffered a lot of years with higher interest and I think it is a little bit of a catch up right now. Similar to interest cost. Sorry, similar to utility cost. That is also, we suffered 10 million right now. So we are seeing a slight reduction over time. The other thing that we are not seeing that we have suffered previously and have not seen. So I was actually beginning of the year, I was a little bit more optimistic. But right now, I think the Hong Kong dollar continues to be stronger than like before. So this was the three factors that were negatively affecting us. Two are showing positive signs. Forex is not 100% on our side yet.

[00:42:45] Okay, got it. Yeah, maybe just passing out a little bit in terms of the high ball. Where it is now, next year's hedges that's rolling off normal savings or still got some savings. High ball, floating high ball is about 3.5% today. So in terms of Hong Kong dollar, I have about 650 million Sing dollar or 3.9 million, a billion Hong Kong dollar, a notional amount of interest rates to up in place. So about 80%, about 80-90% of those interest rates to up are currently above the floating high ball now. So on this way, on this report, there will be a positive. For interest rates to up wise, I have about 1.5 billion on this. So about 83% is actually above the floating now.

[00:43:46] So all these interest rates to up will slowly mature, roll off and when we say, then we can have a enjoying a lower rate, keep the rates remain low like now. Okay, yeah, so I think all the high interest rates swap. The highest one actually got got roll off in September, October already. Then we do have some 3% for Sing dollar, which will progressively roll off until March, 20th, 27th. Okay, got it. Okay, thank you so much. That's very clear. Then my second question is on acquisitions. Are you very keen now, ready to push the button?

[00:44:32] I think we have capacity to do so. But it all started to be aligned, right? Price has to be right and asset has to be right. So I think when we are ready, we will share with the market, but I don't think there's anything for us to share at this moment. Okay, Ken. All right. Thanks so much. And yeah, congrats on the good result. Thank you. Thank you, Rachel. You came from CSLA. Thank you for waiting.

[00:45:04] Sharon, congrats on the good result. Just two quick follow up. One is after the 200 million senior green note issued recently, right? So your guidance for full year cost of that is still about 3.2%, is it? Even after that 2.45 coming in? Yes, actually 2.45 is a seven year note. If you compare to my borrowing and if I was 6 years, it is higher. Okay, so it doesn't change much. It doesn't change much, correct? And yes, the guidance for the year is about the interest cost of interest will be more or less the same as what we have today. Okay, so first half and second half should be about the same. Right. So you can, what was your last update of your report on that?

[00:46:06] Quite a while back. Yeah, I know. Yeah, because I think you're an outlier. Yeah, yeah. Because I didn't hear you very clearly, but yeah. I thought my IR had a typo, you know. Yeah, secondly, I'm just a follow up on acquisitions, but I know your share price has been moving up. That's good. But clearly you wouldn't touch equity unless it's above one time. But is that the right way to think about it? I think just some of your peers are a bit more garangla. Okay, generally, I think investors are very careful. Investors will look at what are you using the equity for? Yeah, so I think that should be the guiding principle of any form of equity. If you're talking about us going to the market for equity, if the reasons have to be strong enough to convince people to cross the line. Okay, that means it's great simply the acquisition has to be rock

[00:47:12] solid. Okay, okay. Okay, that's it from me. Thanks. Thank you, you can. Brendan, can we unmute yourself? Hey, you think Sharon, can you hear me? Yes, yeah, yeah, yeah, yeah, yeah, yeah, great. Just want to go back to your Hong Kong and China MPI margin. It seems to be hitting the sort of COVID post COVID kind of low, right? So as you continue to adjust rents for occupancy, right? Where should we see the number trending? Should you see the number trending? Yeah. In terms of margins? Yeah, MPI margins for Hong Kong, which is at the world and China.

[00:48:11] The truth of the matter is as our rentals start to drop, MPI margins will definitely have to

[00:48:21] were definitely worsened, right? So if you see where China is now, a lot of the costs there are largely fixed. So there is very little ability for us to reduce the cost on that front. But as our rentals come downwards, the operating margin and kind of will certainly were definitely worsened. For festival walk, we have a little bit more leavers. Rentals really are falling in terms of MPI numbers is not falling that much. A few percentage points a year. For Hong Kong, we do have the same benefit as in Singapore where utility rates have come down a little, not as much as Singapore, but at least they have come down a little bit. And the team has been aggressively cutting costs on things like cleaning, security, utilities consumption. So the worsening of MPI margin will not be as a bit more fixed. In China, there are some people who are negative,

[00:49:31] no margin to talk about that. But I think what we are saying here is there will be a margin. But I think China will be, the margin will be lower, less than Hong Kong. Can you assume maybe like China at 80%? Like today is like 81% right?

[00:49:59] Actually, any office property, nor 80 is a very decent number. Not that easy. Okay, it's like retail, he thinks 95 and above is a very, very decent number. All we can get you is it will definitely China being weak, will continue to be weak in a near term until we see some light interchanging. But now we don't see anything as of now. Talking in terms of one year ahead, we just have to say that it will be. Okay, and second question. Hanging on your tenants your best bet in terms of riding through the rough period. Okay, and just touching a bit on tenant sales in Hong Kong, right? So if you look at your your this quarter, it was down like 2%, right? But if you look at the Hong Kong, I don't know. Yeah, yeah, yeah, yeah, yeah, yeah, yeah,

[00:51:05] yeah, about minus two minus two. But if I look at the Hong Kong Island, like for July, August, right, was up about 2.8%. So is it is this something to happen in September? Or is it just just your your a bit weaker than your peers? So, okay, we have worked with a little bit to try and understand this a little bit better. And what we understand is that the improvement in tenant sales in Hong Kong, the last quarter was driven largely by tourism centric events. So a number of concerts that were ongoing as well as a few events that they ran over the last that were in the, I think was in July and August. So that's improved tenant, that's improved retail sales in Hong Kong in general. But festival as a mall, it's more of a local catchment. Okay, thank you. Maybe just

[00:52:38] please one last one. I think I didn't catch your answer for the question that Jonathan was asking about the Japan divestments, right? So you're looking to sell your asset in the 18 watts. Is that what I'm hearing? We are looking to rationalize the whole Japan portfolio. If there are opportunities to divest three Macquarie assets, one or three, that's something that we'll certainly look at. That market is a little bit weak at the current moment. For the remaining assets in the in the Tokyo 18 watts, we'll take a measured approach to it. I mean, if there's opportunity to do something we will. But you know, we definitely, there's a limited amount that we can do in terms of reducing the size of the portfolio because currently that's the backward performing part of the of the Japan portfolio. Got it. Hey, thank you very much. Thank you, thank you. Thank you, Brendan. Now we have Derek from a moment. Hi, evening. Yeah, most of my questions

[00:53:42] were already asked. Just maybe just one from from me on the occupancy costs for Vivo and Festival Walk. Could you share those figures? So occupancy costs for Vivo and Festival Walk both are around the 20 plus minus range. Okay, that doesn't seem to have changed over the last couple of quarters, even with you know, the rental reversions trending up for Vivo and trending down for Festival Walk. Festival Walk, rental, drop sales, drop sales, all same.

[00:54:24] The other way around, you know, but actually Vivo's rent is moving up faster, faster and slightly faster. But actually, when we looked at what have we done to achieve very high rental reversions, actually changing out certain trades and weeding out a lot of all the the older term tenants who had maybe not innovated or have all the brand has started accelerating. So new players come in and that's how we got all the rental reversions. But I think back to your question is numerator minus denominator minus everything the same concept. And if the plot, what are thoughts about content? Fair enough. Thanks for that Sharon. And earlier on, you know, we talked about, we talked about Hong Kong sales being bought by

[00:55:26] visitorship. I think in a number of so watches and jewelry was very strong. I saw 16, 17 percent up for overall Hong Kong. Just wondering if it's for Festival Walk is also due to your tenant makes. Is this something you could do on that front? Increase the watches representation, you know, change it up a bit to get more of that sales uplift? Is it something that could be done?

[00:55:54] Watch and jewelry. I mean, that's strong.

[00:55:59] Of course, you know, gold is going up, right? Gold is more, more, more value than diamond. Yeah. Right now, everybody's like grabbing gold. I mean, all my jewelry, I always say, better to buy gold and buy diamond right now. So if anything that you see jewelry moving up is a lot of it is linked to gold prices. Okay, we have seen that about two, three times already. Two, three times, especially in Hong Kong when you see a pop, you see a movement in that. But if you talk about watches, I think if you talk about luxury watches, then I think we have to take a different view. Okay. Now, the luxury watches are also in a way tightening their strategy to be located only in malls that have, let's say, your Gucci and your father's and so on, so forth. So they are really looking at the way they distribute. Okay. This is what I'm speaking of for example, like gold. Yeah. So we are typically a mid-ish, a message mall as opposed to a luxury

[00:57:01] mall. Okay. First of all, it's still one notch above diversity in terms of the treatment. So if we say that you want all the watch players, okay, we can get the mid-range, okay, but it's the lux that people that are driving the big numbers, okay, or your higher-end brands. They need your PPE, so maybe your Rolexes, okay. But those will typically not want to go into message malls. They want to go full lux malls. Okay. So I think that will be a forward change that we are seeing. Yeah. So, Jory, very clear. Gold. Okay. No, thanks for that. Thanks for the color sharing the little questions I have. Thank you. Thank you, Jory. We have a couple more analytics questions. Next, we have a video from Aishw

[00:58:21] I have to thank maybe the government for also issuing the vouchers.

[00:58:29] I cannot deny that. I won't be able to tell you exactly, but definitely fair price. Did say that there's a lot of the NG60 vouchers. Yeah. Definitely a bit of that. That would say that also the Popmark event, the Laboogoo and all the crybabies that we have done will also boost some of this traffic and hopefully translate to sales. So if you ask me, I think I have government to thank for giving the vouchers and they will translate to spend. That means there was a feedback from the price itself. Okay. But with all this news about FNB, Tenant Makes, FNB players struggling a bit, do you see that something in your mall? Have you been rejigging some of the Tenant Makes in your portfolio and probably can you give some color? What I like that I cannot get is good meal, no food, good vegetarian and good Indian restaurant.

[00:59:30] That three of my missing gaps, which my team tells me that we've been searching. There is no two good operator that really can pay and either one shop type or whatever. But on that basis, if we talk about one shop type, we have tried here. So right now, this year we brought in Yang Ming. Okay. It's actually, they upgraded a little bit. They used to be a very nice, in Hokkien we call it Zun Ta, right? But they have a very, very nice offering that they have the lobsters and drinks to accompany. So we tried and I think it's quite successful. They managed to up their presentation, we okay in the mall. So I think those are the things that we also try to do, bring in new offerings. There's a bit of a lot of Chinese, a couple of Chinese players now doing all the Mala and all the swan and the lob,

[01:00:35] which is the sour and the spicy. So like I said, where's my trip makes gap in terms of FNB? I guess name you three. Merenga food, vegetarian, Indian. That has always been my own barbed that I want to complete. So those are the little gaps that I cannot fill. Okay. It will not be a lot. Maybe one, two, one, two restaurants of such. Singaporeans love Japanese food. Singaporeans love not the spicy and the sour. Okay. But we don't, not to forget, we also have subset of Halar. We need to cater to people who need Halar food at all. So we also cater to that in our treatment in terms of FNB. Those are my three gaps, which I am still waiting to find operators. Got it. Got it. Thank you. My second question is that in terms of your portfolio mix with acquisitions and divestments, probably if you look at three to five year point of time, where do you look impact to be in terms of geography, portfolio mix and income mix?

[01:01:38] Our geography will change. I think if you talk about Asia, you can't skip all these five. Okay. I don't see how a South DB 18 in terms of allocations, what I can guide is Singapore will continue to be major. Right now, MPI's contribution is in order about 60, about 60%, there about. Yeah. So two guidance, Singapore will be our core and markets are likely to change in the near future. I'm likely to expand into new markets in the near future. Okay. Probably where would your next acquisition be if you divest Japan assets? You know, acquisition is not for me to time yet. I mean, we are always on search. Okay. Ideally, it has to be, we will always look at a few factors. Number one, hopefully, that accretion has to be there. If not, the quality of the type of asset is a different class

[01:02:43] than we will consider. Yeah. So accretion majority will drive the decision. So if you take that point of view that accretion is where we are after, it doesn't give you a goal. Then you know, if you look at where assets and borrowing costs are, you know, there's only a couple of areas right now that will look a little bit more interesting. Okay. So what we like is certain parts of Korea in terms of offices, but that doesn't, that's one area is pocket. Yeah. We will not, we will not touch Hong Kong office. China obviously not a time to touch today. Okay. And Singapore, I think retail is something that is still interesting. Office plus minus, not sure. Okay. What we, for my office outlook, we are saying that as a matter of strategy, we try to gravitate more into the CBD where possible.

[01:03:44] Okay. I think we've done some analysis and it's quite clear that office valuation and volatility is always lesser when it's gravitated into the CBD. Okay. So I think that generally share with you our top question. Thank you. That's very clear. Thank you. That's all I have. Thank you, BJ. Just a couple more questions. First from Tanshin. Tanshin, over to you. Hi, good evening. Just one question on Pinnacle Gangnam, right? Given your current balance share and full cost of capital, do you think it makes sense to acquire the balance?

[01:04:28] What I haven't really thought about it is actually, it doesn't give us any issues. It doesn't have major impact. It's 200 over mill our share. We haven't given it real serious thoughts because if we talk about investment or investment, anything that is very impactful, something that we will stare very hard into. Plus, on the other side, it doesn't give us any problem. So we don't really stare at it also too hard. Usually, it's very challenging as I said, that's when you start staring at it very hard. So it has been doing what it's supposed to do. I think that's a question that we have not doubled into as to whether we will look at

[01:05:20] it. I guess overall, South Korea is like 1% of portfolio, right? But if you think Mongolian, this is a country that you will want to grow instead of just… And it's actually quite competitive. The pocket that we want to be in is actually quite competitive. I mean, if it comes and it makes sense, we will propose that. But if not, I think it doesn't come every day in terms of deals on the table on good areas. And we have a very good feedback. Thank you. Thank you. Thank you. Hi, last but not least, we have Terrence. Terrence from UBS. Quick one. Sorry if I missed this. Do you mind sharing more on MBCs prospects, both in terms of rents and occupancies?

[01:06:16] Rent. Prospects are good. Okay, never mind. We are looking at the tenants that we are currently seeing include a whole bunch of tenants who, like we mentioned, the past looking to move out from CBD into a good cloud of business park. We also have tenants, we also have one or two smaller new set ups in terms of spaces. And there were a few that were moving from industrial buildings looking to upgrade their spaces into a better class location like MBC. So, their rental expectations and the sort of numbers that they are looking at, of course, vary depending on what they are used to be paying. The CBD tenants can generally usually don't quibble with us on our rental numbers. So, we get close, we usually get close to what our asking rentals are.

[01:07:17] A tenant who moves from an industrial area used to pay $2, $3 in terms of rentals. We get first offers at $5, so it is a range of tenants and sometimes it just takes a bit of time for them to understand the market and for us to get them to where we think it's a super current for us before we sign them up. But, you know, the price of leasing is certainly a lot slower than we would like. We can cross 95 by this effort, we will be very happy, but I think realistically, even on a committer basis, I think that would be slightly challenging. Thank you. Okay. Thank you. I think we have an approach in the end of the briefing. So, just last one from Mervin.

[01:08:17] Yes, there is. Mervin, one question from you. Yeah, this one, can we just click on the gov tag again? Are they vacating MBC?

[01:08:33] Not that I know of. Are you hearing something that I'm not hearing? Well, I mean, there's press reports that they may be moving to Pongo-Joo-Joo district. Oh, sorry. You got that with us?

[01:08:49] Apparently, you may be based on the directory.

[01:08:55] I mean, in general, there are a number of government agencies that we know are looking at Pongo-Joo district. The guys who are with us, we do know that some of them have been asked to move some of their operations there. So, they are moving some of the operations there. We are in negotiation with them for the rest of the spaces. And it's still in negotiation. When it comes to the conclusion, we are able to put it into our results. We'll be there. So, I can say it's a partial accident.

[01:09:38] I don't know what you're talking about, Mervin. No, no, we are aware of that. I think we have some constraints talking about the land and the whole thing, if you understand. You can talk to me.

[01:09:54] Anyway, we look forward to some heavy fundraising on the Singapore retail exposure.

[01:10:04] Just to close off, last final question from Derek, DBS. What is our hedging rate in terms of currency this half, the financial year and the rate for the next half? Currency-wise, we cash on the fall, rolling fall for the B.C. Then we enter into many, many, many forward contracts. So, all I can tell you is most of our contracts are in the money at this moment. Okay. Thank you so much, everybody, for your time. And I apologize for taking out your different time and your family time. So, if you have any further questions, feel free to reach out to us. We'll be happy to take them off. Again, thank you and have a good evening ahead. Thank you.