Good evening, welcome to CapitaLand Ascendas REIT first half 2026 results briefing. I'm Johanna from the Investor Relations team.

Thank you for joining us today in person at Capital Tower and remotely via Zoom. Please note that this briefing is recorded and will be made available on our website.

We'll start shortly with a presentation by Andrea, Director of Investor Relations, followed by questions and answers with our management team. I'm pleased to introduce the panel this evening: Mr.

William Tay, our Chief Executive Officer; on his right, Ms. Koo Lee Sze, Chief Financial Officer; Mr.

James Goh, Head of Portfolio Management for Singapore; finally, Ms. Serene Ong, Head of Investment and Portfolio Management International.

If you have any questions, please raise your hands and the microphone will be passed to you. Please try to keep to two questions each time, and if you would like to supplement with more, we will circle back to you.

For those online, you may post your questions on the chat box. With that, I'll hand over the time now to Andrea to take us through the highlights of the briefing.

Thank you, Johanna. Thank you and welcome to everyone joining us online and physically for CLAR's mid-year results briefing.

CLAR delivered a resilient set of results for the first half of 2026. Distributable income was higher by 8.6% year-on-year at $359.4 million, while the DPU remained stable at 7.482 cents.

The higher distributable income was due to the acquisitions completed in 2025 and 2026, as well as the better performance from existing properties. These two factors more than offset the impact of about $500 million of divestments completed in 2025.

On portfolio occupancy, the portfolio occupancy is 89.1%. This figure includes two new properties that were completed in the second quarter.

They are Summerville Logistics Center in the US as well as 27 IBP in Singapore. If we are to exclude these newly completed properties, the portfolio occupancy would be 90.3%, which is a similar level to the previous quarter of 90.5%.

Rental reversions remain positive. For the first half of the year, the average portfolio rental reversion is 9.9%.

This reflects continued demand for our quality properties. For the second quarter specifically, the rental reversion is 5.2%.

On capital management, the gearing declined to 39.7% from 42.0% the previous quarter. This followed the equity fundraising in the first half.

To recap, the equity fundraising was to fund acquisitions and we repaid some debt. It was a $600 million private placement as well as a $300 million preferential offering, both of which were well oversubscribed.

For the first half of 2026, the cost of debt is 3.5%. This is a similar level to the first quarter and 20 basis points lower than the first half of last year.

Our portfolio rejuvenation strategy remains key to grow and enhance the value of CLAR's portfolio. It's anchored on accretive acquisitions, selective redevelopments and developments, as well as disciplined divestments.

Year-to-date, we have executed on all three. In the first half of the year, we completed more than $1.1 billion of acquisitions.

These are nine quality properties in Singapore, the US, Europe, as well as Japan. As mentioned, we completed the redevelopment of 27 IBP, as well as the development of Summerville Logistics Center.

Lastly in July, we announced that we are divesting Kim Chuan Telecommunications Complex for about $200 million, which is two times the original purchase price as well as a 32% premium to the independent market valuation. This sale price is meaningfully above the book value and underscores our ability to unlock value from the portfolio.

On the financial performance, comparing the first half of this year against the first half of last year, gross revenue and NPI increased by 6.7% and 6.2% respectively. This is due to acquisitions completed last year as well as this year and the better performance from the Australia portfolio.

As mentioned, it has offset the impact of the divestments completed in 2025. Distributable income was 8.6% higher, and DPU remained stable at 7.482 cents after accounting for the larger unit base mainly due to the equity fundraising in the first half of this year as well as the first half of last year.

Comparing the first half of this year versus the second half of last year, similarly, gross revenue and NPI increased by 2.8% and 2.2% respectively. Similarly, acquisitions as well as the better performance of the Australia portfolio drove the increase and it offset divestments.

Distributable income increased 3.5%, but DPU was slightly lower by 0.6%, mainly due to the larger unit base. CLAR had actually declared an advance distribution of 3.75 Singapore cents on the 30th of April.

For the period from 2nd of April to 30th of June, we have declared a DPU of 3.732 cents. Unitholders can expect to receive this distribution around the 8th of September.

In addition to the properties that we have acquired in the first half of this year, we are in the process of completing the acquisitions of two logistics properties in Singapore for about a total purchase consideration of $600 million. This brings the total year-to-date acquisition value to about $1.8 billion.

Going through the list of these properties, you will notice that 10 of the 11 acquisitions are actually logistics and data center assets. These are asset classes that CLAR wants to continue to grow.

About half of the value of the acquisition value are properties in Singapore, because Singapore is a key market for CLAR and even as we build a globally diversified portfolio, Singapore is a geography that we continue to invest in. If we were to look back to December 2022, the Singapore portfolio value was about $10.1 billion.

As of today, currently 30th of June, it has increased by about 30% to $13.1 billion. We have continued to invest strategically in Singapore.

Since 2023, it's about $2.7 billion of acquisitions. Just in 2026 alone, we will be completing about $883 million.

Going into a bit of details about the redeveloped asset, 27 IBP, we doubled the GFA as well as the NLA. At the same time, we have also transformed the property into a modern business space asset.

It features your efficient column-free floor plates. We have also added amenities such as a sky garden and trip facilities.

The property is BCA Green Mark Platinum certified and it's going to be directly connected to the future Jurong Town Hall MRT station. It's very close to the Jurong Lake District, which is envisioned to be the largest business district outside of Singapore's central area.

The current committed occupancy is about 19%. We are in discussions with prospects and viewings are ongoing, approximately 20% of NLA is in discussions.

Summerville Logistics Center is a modern logistics asset in Charleston, South Carolina. This asset widens and diversifies our US logistics portfolio, which is mainly currently in Midwest markets.

Marketing is in full swing and similarly, viewings and lease discussions with prospects are ongoing. The current list of ongoing projects as at the end of June is five, with a total estimated cost of $507.2 million.

We are working on a couple of other redevelopments in Singapore as well as overseas, and we will be sharing more details in future quarters when the details have been finalized. Just to highlight a new asset enhancement initiative that we're doing in Australia, this AEI is at 1 to 5 Thomas Holt Drive.

This property has three buildings and we are currently doing some asset enhancement works at one of the buildings. Besides refreshing the lobby, adding new amenities, we're also making the property more suited for multi-tenanted occupancy.

The AEI is going to cost about 10 million Singapore dollars and it will be completed in the first half of next year. Moving on to capital management, as shared earlier, the gearing has come down to 39.7%, slightly higher than 6 months and 12 months ago.

It's mainly because of higher borrowings to fund investments, while our total assets have also increased to about $20.9 billion. The adjusted NAV per unit has also increased to 224 cents as of end of June.

Our financial metrics remain strong, the ICR is 3.5 times, our percentage of fixed rate debt is 70.1%, and our debt maturity profile is 2.5 years. On natural hedge, we maintain a high level of about 73% for overseas investments.

With our latest investment into the Japan data center, we want to refresh everyone's memory that CLAR's portfolio now is diversified across five developed markets. Singapore remains the majority at 65%.

Australia, the US, and UK/Europe each contributes about 9% to 12%. Japan currently is at 3%.

In terms of asset class, it remains well diversified across the three main segments, which is business space and life sciences, logistics, and industrial and data centers. I'll move into occupancy.

We'll explain a bit about the individual geographies' occupancy, starting with Singapore. The overall Singapore portfolio occupancy is 90.1%.

This includes 27 IBP, which is in the leasing up phase. If you are to exclude 27 IBP, the overall portfolio occupancy actually remains stable quarter-on-quarter at 90.6%.

For the US, similarly, the decline quarter-on-quarter was due to the addition of Summerville Logistics Center. If you are to remove this newly completed property, the portfolio occupancy actually remains stable at 85.9%, which is 20 basis points higher than the previous quarter.

This was mainly due to some new take-ups in Portland and San Diego. In Australia, the decline was due to a lease expiry at 1 to 5 Thomas Holt Drive.

This is the business space property in Macquarie Park in Sydney where we are doing the AEI. Conversion works are underway and actually we have already found commitment for 60% of the vacant space, while we continue to market 40%.

Otherwise, the logistics portfolio in Australia, the occupancy remains stable and healthy at about 92.9%. Lastly, for UK/Europe, the occupancy remains stable at 93.1%.

There is a property that we shared last quarter that we are going to be redeveloping, it has been decommissioned this quarter, meaning the third Q, and we will be sharing details in future coming quarters. If we exclude this property, the occupancy actually remains at about 98%, 99%.

On rental reversions, it remains positive across all asset classes and geographies. More importantly, we have revised the guidance to the high single-digit range.

Previously, it was mid-single-digit. I'll move on to a closing.

In terms of outlook for global environment, according to the IMF, global growth in 2026 is expected to be slower than 2025. For us at CLAR, that's why our strategy remains relevant.

Our portfolio remains diversified across five developed markets and these markets have healthy fundamentals. More importantly, with our strong balance sheet, we have financial flexibility, the portfolio remains resilient, and with our clear growth strategy, we believe that CLAR is well-positioned for stable and sustainable returns.

That brings me to the end of my presentation. Before we move to the Q&A segment, I would just like to pass the time over to William for him to share a few words.

Thank you.

Hey, thanks for coming. We actually introduced Serene just now, she's taking over the international portfolio management.

We also has split the investment, international will handle investment as well as portfolio management to see end-to-end from investment to portfolio management. Singapore investment now is with Day Keng.

He will take care of investment as well as business space Singapore. This is just some of the new structure that we are embarking for the rest of the year and forward.

Just a few comments. You have heard Andrea mentioned, we have done 1.1 billion of acquisition the first half.

We are on track to do 1.8 billion. If you recall, we still have a point $600-over million two properties in Singapore to be completed, where we expect them to be completed within this month.

I think in terms of growth we're on track, and it will be income-generating asset. We have actually done about half in logistics from this as well as half here in Singapore.

It does show you that we are focused on Singapore as well as two asset classes: logistics and data center. In terms of other than two assets that will be completing, we also be seeing contributions from the new developments that will come on stream.

Geneo will slowly give us small income over time. It should start coming in in the second half of this year.

Number two, 27 IBP, we're about 19% leased up, 20% in advanced negotiation. I think year-end we probably can hit about 50%, 60%, but bearing in mind it does takes time to fill up space in the business park space, typically takes two, three years to fill up space.

This being a new project, it does give us confidence. The leases that we have signed so far, they're all new to CLAR, a mix of relocation as well as expansion.

This is actually good news. As we actually introduce new specs in IBP, we can actually capture new demand.

We are confident to be able to close those that's under negotiation. If I go back to Geneo, I think you have heard me mention as well that we have about 81% occupancy.

As of today we actually announce our TOP about 76%, we went up to 81%. We now have another 13% of space under advanced negotiation and we hope to be able to close them in the next six months.

Again, that is actually new income to be generated. Summerville Logistics, which is in the US, we have completed.

Marketing is on track. We hope to be able to start to sign new leases, and then we will be income-generating as well.

The newer developments and the redevelopments, as you can see that as we talk about a cycle of decommissioning and then a cycle that comes online with new income, that is what we try to do. We continue to look at redevelopments.

Andrea mentioned in UK, we do have one warehouse that was vacant since first Q. We have actually decommissioned.

We will start work in the next three months. That will be new project.

The other point is that the first half, I think the key is actually the enlarged units, which the numbers have shown. Despite enlarged new units, the DPU has been stable, which means that the contribution from those acquisitions are flowing in and we've got two more that's coming up within this month.

The other point is also the concerns over any lease non-renewal, which is Singtel in Kim Chuan. We have actually able to divest them at a very good premium, so that will be flushed out.

We start to see that this will be perhaps in three, 4Q this year. Okay.

The key looking at is there'll be new income coming in. The other one, big one, I suppose, before you ask, yeah, some lease renewal that will be up.

I think all of us expecting 5 Science Drive. As I mentioned, lease has been in negotiation.

We are finalizing the lease, you can say that it's signed. That's also one key renewal that we will do, which with a large rental reversion.

Some of this we are confident of doing them, which is why we have raised our guidance for rental reversion to be high single-digit. These are the few key things that I will raise, and we'll take questions.

Thank you.

We will start with Mervin from JPM.

Hi, Mervin from J.P. Morgan.

Thanks for the briefing, William and team. I thought the results were quite good, very resilient considering the headwinds from Singtel exit, FX, and the placement units.

I know you cannot talk about forward guidance in terms of the second half, maybe you can help us with the thought process for second half. I'm thinking maybe second half will be stronger.

The two acquisitions you mentioned yet to be completed, the strong reversions and the like, but obviously some of the slippage in occupancy is due to the fact you have new buildings coming in, but how you're thinking about that? Year-end, on an overall portfolio basis, you think we can get back up to the low 90s level, maybe some guidance on that?

In terms of Singtel, obviously Tampines, any updates on development there? Then obviously next year, some of your friends' San Francisco buildings, any updates in terms of renewal from tenants?

Thanks.

Thanks, Mervin. Just now those I have mentioned actually give you some of the snapshot of the drivers behind future earnings, right?

Mainly is the two acquisitions. I think that's huge given the fact that it's about $600-over million.

If we can close this this month, we have at least four months of income, and that's quite huge compared to the rental that we have lost in Kim Chuan. The numbers, it's in our annual report.

For less than a year, the next two acquisitions that we will be completed is more than enough to offset any dips in terms of rental loss. Occupancy, I think we will stay stable.

Main reason is because of the new assets that we have recommissioned. These are big assets.

As we add the GFA back into our base, take for example 27 IBP, we have almost doubled the entire GFA. A 20% occupancy is high compared to the old building, because it's enlarged building.

Number two, maybe just a little bit more details on that. Before we tear it down, the rental was about $3, $2.80, $3 for that area in IBP.

You are at the point low occupancy is about probably about 2.5% to 3%. Now with a new completed building, with new specs, today perhaps the market rental is about $3.50 in that area.

We are hitting mid-single-digit. Also, that's will give you a sense of why we want to do redevelopment, because it's a newer specs, newer location.

It gives us the ability. If we don't do any redevelopment, 27 IBP will be where it is, say, three years ago and be competing with other older buildings.

It does give us some ability to get a better rates. We believe that being a new building, it can attract new demand.

As I mentioned, all the leases that we have signed, they're all new demand. We have companies from engineering, health, all new to us.

Occupancy-wise, because it's a large building, as I mentioned, even 27, we hope to be able to close about 50%, 60% by the end of the year. That will still be vacancy of about 50%, which will then drag down the overall portfolio occupancy.

Portfolio occupancy will still be stable as we start to renew other leases, right? Telepark, which is in Tampines, no news yet.

We were hoping that the government can give us an indication with regards to the height limit. Because they did say it's 3Q, we're hopeful that it will come within this quarter.

Our plan there, as is obviously with a higher height limit, we will ask for higher plot ratio and hopefully a redevelopment. What else can we do with the asset will be considered.

SF, we have started marketing, I think your key concern is the one that is leased by the colorful company. I still can't say the name, but yes.

Yes, we have started marketing. We've seen good interest around in SF.

We understand that the vacancy is still high, 40% vacancy around in that area, in the Bay Area and SF. Because it's a new building, in terms of location is probably vacancy of about 13% to 15%.

This is a fairly good building, and our tenant or subtenant has actually invested substantial amount of fit-out. We've been hosting site visits.

There are actually demand. Not just one site visit, but various site visits, including some prospects have seen that space multiple times.

We believe that there are some good interest for that building.

Excellent. Look forward to a stronger second half.

Can I have the next question? E-Kang from CLSA.

Hi, William. Can you give some guidance on NPI margins by different segments?

Because there's been a little bit of volatility, just to get a sense of where you will stabilize at between the various logistics, business parks, and the other segment. Then on 27 IBP, how fast can we expect the lease-up?

Within your portfolio in Singapore, how many of your assets can be redeveloped with the potential to double the rent from $2, $3 to say $5 like you talked about? That's it.

Thanks, E-Kang, for coming in. Maybe I'll let the portfolio managers talk about the margin.

By and large, I think in terms of overall portfolio, our margin is about 70%. You're right, it does go up and down depending on occupancy and as well as cost.

In terms of cost, is still going up regardless of occupancy, but it's more or less stabilized. For example, electricity cost, what we have signed, I think you know that we're contracted right up to end second quarter next year.

The rates that we have signed, in terms of comparing to last year, is really about 9%, 10% lower. Next year's rates, we expect it to be about 30% lower.

For tenants, what we've asked do enjoy better rates than they were before. Primary reason is because of the bulk purchase that the group embarks on together with other asset classes.

The size of ours in here in Singapore did give us an edge to be able to negotiate. The contract was signed before the war, which is why the hedging formula is actually very favorable for us and will be good for our tenants, right?

Before I hand over to them, perhaps on your second question, IBP still quite challenging, to be honest. Why we proceed to redevelop 27 IBP is the primary reason is because it's going to be directly connected to the MRT station, right?

That actually give us an edge because where there's a good connectivity, it does attract. Just like what we have done with Geneo, even in Changi Business Park where it's OCC is near MRT station, it's always has a better leasing and more attractive.

Typically, FS-wise, in terms of how we foresee or predict occupancy is about 3 years to be able to stabilize. Based on our pipeline today, we think that we could hit about close to 50% towards the end of this year.

50% will mean that we actually filled up the old building, the size of the old building. We will start to see contribution as tenants starts to move in, right?

That will be helpful. On your question about any other redevelopment opportunity, I think the most likely one will be across the road.

I've shared before is Acer Building. Some of the vacancies that we see in our numbers is also because we start to move tenants out.

Acer, we have brought down the tenants to about 20%. We will be embarking on the redevelopment once we start to fill up 27 IBP.

Again, that building will be connected to the MRT station. We hope to be able to bring in just like Geneo, bring in more retail, F&B offering to give a good attractiveness to that node there, which is 27 IBP and Acer, 29 IBP.

That's probably the closest. The building, you can say that we have opportunities around in Science Park, but the buildings are still fairly new, right?

I think the key is that if want to be able to get higher plot ratio and with a new infrastructure that's invested by the government in relations to connectivity, then we can actually ask for higher rental. If for any building that nothing has much changes, tearing it down, giving it a new specs is tough to say, increase a $3 to $5, right?

There must be some ingredients in that.

Hi, E-Kang. On your margins question, I'll answer more generically rather than specifically by geography, cuz it really depends on the lease structure.

If it's a triple net lease and it's single-tenanted, those margins tends to be very high, typically above 90%, sometimes as high as 97%, 98%. If we talk about a multi-tenanted building, on average, it's in the 70s, can be low 70s, mid-70s thereabouts.

If we talk about data centers, data centers' margins tend to be lower on the headline numbers because of the high elec. Right, we record both the electricity revenues as well as the opex.

If you strip that out, again it normalizes again depending on whether it's a colo or if it's a core and shell. Really, our numbers by country or at the group is really a blend of these three separate components.

I would say by and large margins, particularly for multi-tenanted buildings, have more or less stabilized because previous years post-COVID with that hike in electricity, I think across the industries everyone saw their margins compressed largely again because of that higher elec revenues being recorded and at the same time higher elec expenses. We are more or less past that.

Hope that answers the questions.

We will move on to the next question. Maybe we'll have Dale first from DBS.

Thank you. Hi, William and team.

Just two quick questions from me. I think firstly, like you mentioned Geneo, right, since the very positive start, it has kind of stalled.

Just wondering what's happening there and you're saying that you have advanced negotiations with further tenants. How are asking rents now versus what you signed at the onset?

This is my first question. My second question is, with regards to your portfolio rejuvenation, now that you have done about 1.8 1.8 billion dollars in acquisitions, what should we be expecting for the rest of the year?

Should we be looking at more selective divestments or are you still pursuing acquisitions in a big way? That's all.

Thanks, Dale. Thank you for that good question on Geneo.

As mentioned just now, we haven't really improved the occupancy for about 6 months to 9 months where we first announced the completion of project. 86% committed is very real.

You probably have seen our opening and who is the tenant, our anchor tenant. They're mostly life science and pharmaceutical.

Our anchor tenant is government. They have taken the most of the space.

They will start to move in next year. During this time, while we are handling all these fit-out and handing over our sites, we still continue marketing.

I suppose your expectation is that rental should go up, which is what we have asked for, because now that we hit about 81%, typically as you look at the entire pricing strategy, we may give more rent-free as they first come in. Subsequently, when it hits stabilize, obviously we'll ask for what the market is asking.

Honestly, Geneo and our newer buildings do market in terms of rental. We like to be able to close higher than where it is.

Out of the 19% vacancy, we have 13% right now in advanced negotiation. We are hopeful that it will stabilize as in high 90s towards the end of the year.

On your question about investment and divestment, we are still focused to close the two assets that we have announced and acquired. As in Singapore, we need to go through regulatory approval.

In these two case, it's actually JTC. We are hopeful that this consent will be given to us very soon.

Even for our Kim Chuan divestments, because it's not JTC site, but we still need SLA to approve. There will still be regulations that we need to go through.

In terms of our investments, I think we still look at investments, but this is probably for us right now for second half. What I would say that our focus is more divestment.

As you have heard me mentioned, we have about $300 to $500 million divestment. Kim Chuan, this asset divestment came very fast when we got a good in.

We are still working on that $500 million divestments. If there is good interest, we believe that we can push the divestment up higher.

If not, at least I think we have good interest for at least about $300 to $500 million right now, which we will work on. Number one is to in terms of leverage, in terms of debt-to-EBITDA and in terms of our ratio, to be able to bring it down.

Even with the two assets to be acquired plus the divestments, I think our leverage will still about 40-ish, right? Able to bring it down, which is key for us.

Why we want to do that is we can focus on reconstitutions. When there's opportunity for development, redevelopment, we'll push ahead.

If there's interest for divestment, especially in this market, Singapore and overseas, Europe and Singapore continue to see capital flow, which we hope to be able to capture some of this capital with some of our divestment. As you have seen in our Kim Chuan, we can actually divest in a very good premium, which is good for trust.

We'll move on to Vijay. Hey,

hi, good evening, William and team. A couple of questions from me.

Maybe I can take it one by one. Firstly, in terms of US Summerville Logistics, this was a spec on your end.

How is the demand like? When can we see this building reaching full occupancy for it?

My second question is, in terms of your earlier fundraising, I recall you mentioned two acquisitions. I think one you have done is the logistics asset, if I remember.

Is there one more acquisition pending or is it not going on at this point of time? My third question is, if I notice on your financial statements, the credit loss for this year has gone up from 1 million to 3 million, not a big number, but are you seeing some increased tenant defaults or late payments?

If so, which market and what reasons? Thank you.

I'll take on the Summerville Logistics question. Essentially, I think typically when we stabilize an asset, we look at 9 to 12 months.

Given that the asset has been completed in April, is underway and market demand is still strong. We have seen, Boeing has announced that they have announced a US$1 billion manufacturing plant, and then Mercedes is also setting up their van plant, which will generate additional demand.

We're hopeful that in the coming quarters, we can announce something.

Yeah. Do you think it will be 100% occupied by a single tenant or is it multi-tenanted?

It will be multi-tenanted. Because the market demand currently in the market is probably in the smaller units.

We probably have to the warehouse.

Charleston is not a big market. We went in with the idea that there are manufacturing industrial activities.

You've heard us mention when we went during that time, typical leasing up is very short because very bullish logistics market. Having said that, we have actually expected that because it's a smaller market, we will need time after completion to be able to fill up the space.

Million square feet, half a million in the market is not huge, but each of the tenant that comes in could be 100,000, 200,000. It's likely to be a multi-tenanted facility, not a single tenant.

The key that for us is that as we look logistics, especially US and even in Europe, you have heard me mention that we want to be able to build modern warehouses. As we acquire new modern warehouses, we also want to be able to develop modern new houses.

For this is speculative, but we have picked a location or rather a city that is well connected both by the shipping route as well as road network, right? We are hopeful to be able to lease up the space.

On your second question, yes, we did say that during our EFR is two two new acquisition. We have one, which is the Tuas logistics, which is the bigger one.

The other one, actually in our use of proceeds that we have actually reallocated. We are not proceeding with that.

Primary reason is because during due diligence, we are not comfortable, we have actually decided to drop that. The two, the bigger million is this in Tuas, which hoping to complete this month.

Okay.

I'll

take the question on the ECL provision. Generally, for provision, we also look at our security deposits that we hold.

We only provide on a prudence basis, and as an all accountant, we are very prudent and we only provide if the arrears is always above the security deposit. This number is a combination of a few countries, mainly in the UK, Europe.

It's just a provision, but the team will still continuously engage the tenant, and if we need to restructure some of the payment schedules, but otherwise it will still be in control.

Can you give some color in terms of which sector and tenant?

It's mainly in the logistics.

Thank you.

Vijay, having said that, there is no clear indication in terms of whether rental default or arrears. Our cash collection is still very healthy.

As typical big number of leases that we have, we obviously have leases that may have late payment. As a process-wise, once a late payment, letter of demand, one, two months, it's quite common, right?

Nothing that has flagged out in relations to whether if you ask sector or which industry is facing a stress, I don't think that's clear indication for us that any of the tenants are in any way difficult in terms of their business. Maybe just to add on to that, as we hear about the new tariff being reintroduced, we did our round is anything of key concern to any industry?

As I've mentioned previously, majority of our tenants here in Singapore, take for example, our lease renewal to the rest of second half of the year is about less than 10% to be done. Out of 10% is about 500-over leases.

Main one, I think I mentioned to you, Shopee is one key one. The rest, I think we will be able to see the leases being renewed, but payment-wise, I don't think there's any key concerns.

Yeah.

Thanks, Vijay.

Thank you. Then we'll have the next question from Rachel.

Hello, thanks for the presentation, William and team. Maybe just housekeeping questions on the remaining properties, like 5 Toh Guan, could you give us some update?

27 IBP, you said $5. Is it above your underwriting?

When is income coming through and all those details? Then my second question is on interest guidance.

Are you changing your interest cost guidance? I think you have done some refinancing, right?

The remaining debt, what currency are they in?

Yeah. Thanks, Rachel, for bringing up 5 Toh Guan.

We're going to hit full occupancy quite soon. Yeah.

I think it's good for us. As you've heard that it's another project that we are past the $1 rental.

This has gone up to above $2. We are hopeful to be able to close I think by the end of the year full occupancy.

Perhaps not full occupancy, I think there's still one canteen. Still trying to find a canteen operator.

Okay. Yes, I think we're on track.

We're happy with our investment in 5 Toh Guan. Similarly towards Clementi Loop logistics hub that we have taken on new construction.

Interest is there, we are talking to some interested prospects. We are hopeful that if all turns out well, we may be able to get some pre-commitment.

Again, if you know our commit to any occupancy, even if any statistics that you see, it will still be zero until we get TOP. I think for logistics it's quite clear.

While we think that has stabilized here in Singapore, it's no longer that bullish, but good assets, I think we can command that kind of rental. Being in Jurong East or in Clementi, right?

27 IBP, we believe income will start to come in towards perhaps towards second half. Just like Geneo, it takes about a year.

We believe that slowly as company starts to move in, rental perhaps three to six three six, six to 12 months down the road. Underwriting, I think it's above our underwriting.

Frankly speaking, even when we did our redevelopment, I don't think we would expect that we can hit $5. Geneo, when asking me, is it $5?

Even Geneo, last time you asked me, is it $5 or $6? Again, I've mentioned that yes, cross beyond that $5, $6 even for Geneo.

It's above our underwriting. Interest cost guidance, you want to take?

That cost will still be expect around the 3.5% that we have year-to-date. As for the refi for this year, it's mainly the Sing dollar.

Refi is done. I think you saw about 160 million.

Thank you. Sounds good.

5 Toh Guan is going to hit 100%. Same question like Close.

Close. To find a canteen operator.

Okay. Just same question like income, when is it coming through, when should we expect?

Yeah. I think it's already in, those that leases, because this was completed last year.

Will start to come in already.

Thank you.

Thank you, Rachel. Then we'll move to Xuan from Goldman.

Hi. I just want to ask on the divestment that you're planning.

Where are these assets? What is the current NPI yield on the asset?

I'm asking because typical NPI yield of industrial, 5% to 7%, is above the cost of debt. The loss of income that we can expect divestment, will they actually end up offsetting the additional income from the newly completed acquisitions and developments?

Yeah.

Thanks, Xuan. Good question.

The divestments, we work actually in all countries. We think we're hopeful in perhaps more in Singapore and Europe.

Last year, we have divested in all countries: US, Australia. We do work in all countries.

What we think there's some interest, as earlier mentioned about capital flow, mainly we think that Singapore and Europe will be the ones that we can close some. In terms of yield, good question.

Yes, I think even for Kim Chuan, based on our divestment value, is about 5%. It has to be fully leased.

Assets that we typically has a mix of occupancy. If we do any of this, chances are like what we have done last year, you'll see that there may be one or two that is with good occupancy, but the rest of the assets maybe 30%, 40%, 50% occupancy.

In terms of actual impact or NPI loss, it will still be there, but it will correspond to a redevelopment that we have to ramp up. Right.

That will probably give you a sense that for redevelopment, if we ramp up, even for our 27 IBP right now, if for leases that we even for 50%, be about, say, 3%, 4%. As you've leased up with higher rental, I think yield is one, but in terms of NPI contribution, it's very different from where it is before it was redeveloped.

That's actually the kicker. Also when we have able to get higher plot ratio, there's another new income that will contribute.

I hope I answered that question. Even for this, it's about 5%, right?

Yeah. That's assume that I can lease out 100% to a single tenant.

I guess when you do your budgeting for second half, when you account for these two impact, is second half DPU likely to be better than first half? I guess that's what I'm trying to understand.

Okay. From divestments, if you look at it, even we work and announce, it takes time before it completed.

Whatever NPI will still stay. For example, even Kim Chuan, we're expecting to complete in 4Q, right?

Having said that, it's vacant, right? If it's income-contributing, it will be income contributing in the second half.

Then

one last question. Any major redevelopments or assets that you online other than what has been announced?

Hawleys Lane, which is in the UK. That was vacated or vacant since 1Q.

That's the only one, right? Yeah.

Are there any more questions from the audience in the room, physically here today? Hi.

Joy, HSBC. William, just on Japan, we've seen quite a bit of movement in the cost of funds, right?

Is there any risk on valuation assets, and also what's your thought on the market going forward?

Interest does affect cap rates, we believe that there will be some expansion in cap rate, yes, on the general. This is a new asset, it's a 15 years lease.

I think in terms of valuation goes back down to what is the certainty of income. I think the impact will be very immaterial.

That's one. Generally, in terms of the market, as I mentioned, it's almost three, four years ago when we're looking at investments, when interest rate goes up, our price expectation is based on expanded cap rate.

If you ask us today, while we haven't seen real transactions that has shown that the cap rate even for us, if there's any opportunities that come across our desk, we will be asking for higher cap rate, right? Interest has gone up to about 3% compared to where it was.

These acquisitions we have done earlier, we have locked in our rates, everything has been locked in in terms of NPI contribution and in terms of accretion is in, right. For next acquisition, we did this about 4.3%, if you remember.

We do expect that any buyer will take guidance from this, right? This is a huge transaction in the Japan market.

Having said that, one other asset class we think that is getting a little more challenging is logistics. While we say that the cap rate has expanded, but because there is rental escalation, which we don't see in the last two decades, right?

I think companies or investors are still prepared to buy logistics at where kind of cap rate it was. Perhaps even below 4%, some are still prepared to do.

In terms of data center, I think it has normalized to above 4%, I think that's actually where the market will be asking. Answer your question?

Yeah. Would you be holding back on Japan or you'll continue to?

We are still looking at investments opportunities, but I think it's getting further away from where we can close. Then

do you have any update on the UK data center?

I let her say lah. There's nothing to say.

For the UK data center, I think the challenge is still on the planning because it's taking a long time for the UK power network to give us confirmation. That being said, I think to be made, probably in the next quarter or next six months we should have something to announce.

You're still confident that you're going to get some indication, right? Because

we already have 25 megawatt and we're asking for more. Question is when the power be coming in.

Because that's upstream implication on the upgrading of infrastructure, which is very much dependent on the grid. That being said, because we already have the 25 megawatt, we can do something cleverly on the site so that we prove to accommodate the incoming power.

I see. You're comfortable doing even without an upgrade of the power?

I also have mentioned this previously. 60 megawatt is there.

We are uncertain when the 35 will come, right? Waiting and waiting, which is a decisions that we have to take at certain point in time, right?

We have to take a decision whether we want to go ahead to redevelop whatever existings we have. 25 today is still very attractive, to be honest.

Even is still very attractive. We have, if you remember, the main thing is we have our plans already for a single big site, right?

Now the change is that we are looking into two-phase, right? The two-phase will means that first phase 25, whatever the government can give today, we will take.

The other remaining, we will take some time. We know that it will take some time, but instead of waiting for that some time to be able to confirm in terms of our marketing, we have actually started to look at the two-phase.

Yeah.

We are almost on the hour, we just have time for one last question from Mervin. Thank you.

I was just looking at the 5 Science Drive acquisition slides. The in-place rents at the point in time was percent below market rents.

On renewal, are we within that ballpark? That's question one.

Question one. Yes.

Second question, when would these new rents kick in? Was it be end of this year or more next year?

Thanks.

Why did we increase our guidance to high single-digit? I think we are doing better than what we have expected.

That's one. It's renewal is in November, right?

November. New income will start to come next year.

Looks like James will give us a nice Christmas

present. We're at 7:00.

Thank you everyone online as well as those who came down physically. Thank you everyone once again and have a good evening.