Can you hear us? If you can, can you give us a thumbs up?

Great. Thank you for joining us today.

We know it's an early start, and we appreciate you for dialling in on time. We have the management team with us here today.

We have our Choon Siang Chong, Mei Lian our CFO, Head of Investment Jacqueline, Head of Portfolio Management Zhuan, and the IR team here with us. We have May Ping, Tammy, and myself.

We'll keep things focused today, we'll start off with key highlights by Choon Siang before moving on to the Q&A. With that, I'll pass the time over to Soon Choon Siang

you, Allison. Good morning everybody.

Thank you for joining us today. I know it's bright and early, bright and early for me too.

Feels like we've just spoken recently, and here we are back again. Today we've just announced with business updates for the first quarter 2026.

The numbers could be a little stale given that we have already spent some time talking about some of the transactions earlier, and also obviously we have reported the advanced distribution, some of you would have digested some of your numbers from there as well. Nevertheless, let's go through some of the operating numbers, and then we'll take some Q&A.

There are some exciting updates in this in this business update as well. We will walk through in the in the subsequent slides.

First quarter net property income very healthy, 300 and closed the quarter at $314 million, up 8%. Of course, this is has a lot of we've gone through a lot of changes in our portfolio, we need to dissect the numbers a little bit.

Overall, a very healthy set of financial numbers as you would have gleaned from our advance distribution anyway. Aggregate leverage 38.5%, down 0.1 percentage points from the end of 2025.

Average cost of debt has come down quite significantly from 3.2% as at 31st December 2025 to 31st March 2026. This quarter, in terms of debt market transaction, we issued $300 million fixed rate notes due in 2031, which is a 5-year note, at 2.18% on 10th of March 2026.

Portfolio occupancy 95.2%, down 1.7% quarter-on-quarter. I'll spend some time walking you through some of the reasons why the occupancy is down for this particular quarter.

I think it's mainly due to actually I don't think it's a portfolio-wide reflection. It's actually very tenant-specific.

The top three contributors to the decline in occupancy is actually a tenant in MAC in Frankfurt. We have the largest contribution, in fact contributed approximately half of the drop because because by NLA that tenant takes up quite a significant space and that contributed.

The the the rent on that tenant actually is not very significant. The contribution was about 0.8% of portfolio occupancy, the rent contribution was actually less than 0.2%.

The impact on the financial is not as significant. Then the second tenant, we have a tenant departure from Funan office, one of the one of the larger tenants that we have there.

Also the third tenant contribution is a tenant in Clarke Quay that's on the third floor, is an event organiser. Fairly large space, but as you can imagine, third floor of Clarke Quay, very little rent contribution.

The financial impact is more is is is not as significant as the drop in occupancy suggests. I want to highlight that we are very actively marketing the space.

Of course, we all know that MAC itself has some challenges in terms of leasing. We actually did improve the occupancy last quarter.

I think when we highlighted last quarter as well, there's always some in and out in terms of the the leasing momentum. We will be working quite hard to try to improve the performance of that particular asset.

Clarke Quay, a lot of it's work in progress. The team is curating the tenant mix to try to dovetail with the completion of CanningHill, getting some good traction in the leasing discussions, there could be some new names that will show up at Clarke Quay over the next few months.

Also for for Funan, the office tenant probably contributed about just slightly over 10% of that the Funan office occupancy. We are also actively marketing that space, which we think is transitional.

That office space is actually quite nice because it's fitted out, it should take us not too long to lease out that space. These are the three main So it's actually very asset- and tenant-specific.

I think overall, the portfolio is still very healthy as evidenced by the rental reversions, which is still very healthy at 4.4% for the retail portfolio. For the office portfolio, is at 6.1% rental reversion, quite in line with our guidance earlier to be trending around mid-single digits.

Tenant sales per square foot up 2.2% year-on-year, fairly healthy. This includes the March numbers as well, even after the start of the Iran war.

I think January and February numbers were very healthy, as you can see also from the national retail sales numbers. I think February, they reported a 11% increase in year-on-year sales.

Of course, there's some Chinese New Year effect. Then even if you combine the January and February sales, I think overall it was up about close to 4%, if I'm not wrong.

On in our malls, we are up about 2.2% per square foot including March numbers. Okay.

Next. Shopper traffic also very healthy, up 3.2%, quite in line with the I mean slightly better than the tenant sales.

In terms of the updates for first quarter, AEIs that we have previously announced, I think they are all work in progress. Lot One, Raffles City, Tampines Mall all progressing quite well.

Divestment of Bukit Panjang has been completed at the end of February. In terms of utilities cost, I think we have been getting a lot of questions in all of our meetings over the last one month.

I think happy to reiterate that our utilities cost energy rates are all locked in across our portfolio. For Singapore portfolio, locked in until end of 2026 at a better rate than what we locked in in 2025, actually.

This year, we are actually expecting savings from our utilities cost. For overseas properties, we are locked in as well until 2027 depending on which property and 2028 for some other properties overseas.

Next. I think we have spent some time over the last few days talking about this transaction already.

I won't go spend too much time. We can take some questions as well, but I think a lot of you have already had a session with us on this.

I think the market reaction has been fairly positive, we are quite happy with that. The placement was well oversubscribed at about I think it was about just almost 5 times subscribed, just below 5, I think.

That allowed us to upsize our placement from $600 million, so that's the key change from the last time we spoke. I think when we spoke, it was based on a $600 million equity offering.

Now we have raised $750 [million?] , and at a tighter discount than what we originally assumed, which was 2.7%.

The price that we did that at $2.30 was actually a 2.36% discount to the adjusted VWAP. All in all, very healthy demand for the offering.

As a result of that, there'll be some adjustments to the DPU accretion. Because of the largest larger equity offering, our accretion is at 1.7%.

Of course, that also means that it allows us to lower our leverage to 38.7%. I think previously we reported just slightly over 39%.

That also means that it gives us larger debt headroom for other activities that we we wish to pursue at least going forward in the future. Next.

I think this is the key update for this quarter. We want to also report that we have actually started the process for the AEI at Plaza Singapura and the Atrium.

We have been looking at this for a while. I think we are now confident to go out and announce this asset enhancement.

I think for a few reasons. I think timing-wise Of course, this is not a like something that we take it quite lightly, as an enhancement.

I think it's quite a substantial asset enhancement at $116 million. I think we have always been quite deliberate in terms of the spacing of our asset enhancements, as you guys are familiar by now.

We always try to time it with a minimal or execute it in a way that has minimal impact on our cash flows. This that has already contributing that has already started contributing to our numbers since February and March.

Also that in fact gave us the uplift in terms of financial performance. That was one of the key contributors to first-quarter outperformance also, in addition to to CapitaSpring and in addition to ION acquisitions.

With Gallileo largely resolved and handed over to the tenant, we we we think that we are ready to take on another major AEI, which is Plaza Singapura, and most of you are familiar with the asset. It is an asset that has been around for a long time, and and I think if you look at the performance of Plaza Singapura on a on a per-square-foot basis in terms of rent and sales, I think there is some room that we can value-add when you compare it to some of the more neighbouring malls in downtown, even within our portfolio.

The idea is to elevate the positioning. There are some infrastructure upgrades that we are doing.

There's also a tenant refresh that we are planning. We will also be looking at probably looking at some transforming some spaces into a more immersive, experiential, entertainment concepts.

This is something that we are exploring at the higher levels so that we are able to draw the crowd to the to the top floor. That's one of the key feature and objective of this particular AEI.

The other thing that we wanted to achieve was also to dovetail with the URA's master plan. There is a plan to pedestrianise the Orchard Road stretch in front of the mall, we want to now plan for that the seamless linkage between Plaza Singapura to the Istana Park that is right in front.

We will be doing some upgrades at the front to extend the park experience indoors so that it creates a more seamless connection between nature and retail. To minimise the disruption, we do plan to carry out the AEI in phases, with the mall remaining open and operational throughout this AEI period.

Some of the pictures, I think, in the next page, artist impression. Maybe we go to the next page and show the pictures.

There'll be some improvements in terms of the facade. There'll be improvements to the drop-off point, creating a better experience, so that inside of the mall we will definitely be upgrading to make to make the space a bit more open, and also the the the look and feel and the tenant mix is starting to see significant changes at least for the first and second levels, and as well as the top level.

I think the other thing that's interesting is also we are creating some of these bridges that link across. I think we the idea is also because Plaza Singapura actually is quite a big mall.

It's about 700-over-thousand square feet. The idea is also to create better movement across various parts of the mall, we have all these link bridges.

Not only looks good from the atrium area, but also facilitates the flow, creates a bit more vibrancy to some of the the upper floors so that the overall effect on the mall is one of a little bit more exciting and vibrant across every floor and not just focus on the I mean today we know that the basement for Plaza Sing is really doing very well, the ground floor is doing well. All you want to do is also to replicate the experience in the slightly quieter areas of the mall.

Okay. In terms of the financial performance, as I touched on that, gross revenue, we are up 8%, but of course this includes the contribution from CapitaSpring, which previously was reported under JV structure.

NPI up to $314 [million]. Year-on-year, we're up about 7.9%.

This also excludes one month of Bukit Panjang because we have sold it in February, there's a lot of movements within the numbers. Next.

In terms of capital management, I think we have highlighted very healthy balance sheet now. We are at 38.5% even with the acquisition and the the couple with the equity offering.

This is not likely to change significantly. Interest coverage very healthy, 3.8 times.

I think the key takeaway from this part is that the average cost of debt has come down to 2.9% from 3.2%. Next.

Spread out maturity profile. I think we only have about $450 million of loan left for refinancing for this year, and the rest of the years, I think, fairly healthy.

Next year, we have about $1 billion out for refinancing. In terms of occupancy, I think we spent a lot of time at the beginning talking about occupancy, I won't belabour the point.

If you look at our retail, actually it's generally it's come down slightly, but I think the largest contributor to that drop was the Clarke Quay that I mentioned, the Clarke Quay tenant I mentioned, but I think the financial impact is very small. Office, largely because this is a combined look, including Germany and Australia.

We have some detail breakdown later, largely contributed by Germany. Integrated development is down slightly.

There are some vacancies in in I think this is Funan because it's contributed is included under integrated development. That's the that's the drop that I was mentioning as well in the Funan tenant.

Next. Top 10 tenants, no significant changes.

I would just add that ECB, which we have put into the footnote, will feature as a top 10 tenant going forward, but we're still in the process of handing over the last 2%, 3% of the the So we haven't included it. Once it's 100% handed over, then we will start including it probably from the next quarter or the following quarter onwards.

Next. Lease expiry profile, generally still doesn't look too dissimilar from our previous.

We have 11% up for expiry this year for retail and 5% for office. Out of that, probably 4.3% of the retail and 1.6%, which is about one-third each, has been kind of resolved in advanced negotiations.

Next. Healthy leasing activity.

Despite the the decline in occupancy, we still have a very healthy retention rate for retail is at close to 90%, for for office about 70%, and we have had quite a lot of new leases and renewed leases as well, about 339,000 square feet spread across the various trade categories, and also for office about 121,000 square feet. Next.

Retail occupancy broken down into suburban, downtown. Downtown, as I mentioned, contributed primarily by the drop in Clarke Quay.

Next. Rental reversion of 4.4% for retail, broken down into downtown and suburban.

Downtown 3.9%, suburban 5.1%. Tenant sales 2.2%, as we mentioned, broken down into suburban growth at 3% and also downtown at 1.7%.

Next. Just some of the highlights on some of the new retail concepts that we have.

Fasta, which is a Michelin-recognised casual pasta concept that just opened in Raffles City; Shiseido at Tampines Mall. I don't know whether you guys have been to Tampines Mall.

I think it's you can see there's slowly a slow upgrade on the ground floor. We have also hoarded up the Isetan space.

I think that's work in progress, we expect to probably finish that in over the next few months. I think the ground floor area has been done in phases, you generally see some of the new tenants showing up at the ground floor entrance area.

Prada at Raffles City. We also have a new tenant at IMM, BYD, which is on the third floor.

That's quite interesting because it's on the third floor and we have a massive car park at IMM, which are able to to showcase some of their cars. Fairly interesting concept there.

Maybe we just move on. In terms of the office occupancy, as I mentioned, as you can see here, from Germany, the significant drop in office is actually due to Germany, from 91% to 83%.

Financial impact is, I think, not as significant as what the numbers suggest. Australia, actually, the occupancy has been healthy.

As we have mentioned a couple of times, we think that the leasing momentum is is still is picking up. Occupancy in Australia actually improved from 91.8% to 92.8%.

Singapore, we've touched on. I think generally quite healthy, slight drop due to the Funan vacancy.

The good news is that our average rent continues to inch up from last quarter, $10.95 to $11.00, 2.2%. Although, I'll just caveat that, of course, you guys are aware that we have just announced the sale of Asia Square Tower 2, which is has a slightly average higher average rent than our overall portfolio.

This number could come down, but that's probably because it's not a like-for-like comparison once we take Asia Square out of the equation. Next.

Focus and outlook. I think overall, we are still on a pretty good and healthy space in terms of outlook.

I don't think anything significant has changed from our last update. Rental reversions continue to provide the organic growth.

CapitaSpring, we are still benefiting from the contribution because it was only accrued, I mean the additional 55% was only included from 26th August onwards. This first half of the year, we are likely to see the accretion coming from CapitaSpring.

Gallileo, already our first-quarter numbers already started recognising the income, you can see it in the DPU impact as well. IMM already completed, performing well above our underwriting numbers, we are very happy with the outcome.

If you go to IMM today, you will see that the look and feel of the mall is significantly different from what it was before. That was a AEI that we're very happy with.

I think organic growth and also some of the contribution from the inorganic growth has really done well for us. Going forward, we expect this recent announcement on the divestment of Asia Square and the acquisition of Paragon to continue to build on that momentum with the 1.7% accretion.

You can also see that our capital management, Mei Lian's team, has done a very good job in terms of our interest rate management. Over the last one quarter, we have brought the interest rate down from 3% 3.2% to 2.9%.

That's actually a very significant tailwind, definitely helped to improve the bottom-line performance, and we expect this to to continue to to contribute. Because, as you can see, last year we've we have been reporting even in the second half of last year, we were still at 3.3%, 3.2% average.

This 2.9%, even if it maintains, will be a significant savings compared to last year already. I think energy rates, we've talked about it.

Okay. I think value creation strategy, I think this is the same slide.

We talked about it earlier at both when we briefed on the transaction as well as at the AGM. I won't spend too much time.

I think we remain the the the five pillars continue to drive our growth: organic, asset enhancement, unlocking value through divestments, and driving growth. We have been very consistently unlocking value every year.

In fact, we've been doing one divestment almost Oh, this year we did two divestments. Last year we did one, the year before we did one.

We have been doing one high quality and meaningful, significant, highly accretive acquisition every year for the last two years as well. Capital management of course as a important tailwind.

All right, sustainability, we're on track for most of our indicators, and I think we won't spend too much time on that. Next, we'll just probably Yep.

I think maybe we can start moving to Q&A.

Yeah. I see a few raised hands.

Wow, already.

I'm looking to have somebody other than Mervin. Unfortunately, he's still here.

Mervin, please go ahead.

Congrats Choon Siang on the excellent set of results. Just a few questions.

I think your prior cost of debt guidance was 3% to 3.1%, delivered 2.9%. Do you have an update for this year?

On the Plaza Sing AEI, I'm personally quite excited by it. At any point of time, what will be the impact on occupancy?

Is there any extra NLA you think you can activate, especially on the property with the Istana Park? In terms of the Iran war, have you seen any impact on retail sales given petrol prices seem to be high over the

next [unclear]? I'll take the easier third question, I'll let Mei Lian do the first question, and then Zhuan can talk about the Plaza Sing AEI.

In terms of retail sales in March, actually it has not We've not seen a significant impact. In fact, I think March sales is up year-on-year.

It has decelerated in the sense that the the growth rate for January, February is higher than the growth rate for March, but March is still a positive growth rate compared to last year. Surprised us as well on the upside.

I think a couple of reasons. I think the there's also some constraints in terms of flight capacity, maybe people are not travelling out as much, spending more.

I think in the first few weeks of March, there was not as big of a In terms of sentiment, I think maybe there was it has not it has not affected sentiment as much, maybe the first two weeks, and people are expecting the war to end quite soon. That could also be the reason.

In general, I think if you look at tourist numbers coming into Singapore, that has also improved year-on-year, quite healthy tourism numbers. That has kind of provided a lift, probably for some of the numbers.

I think so quite a few confluence of factors that help to drive the first-quarter numbers. I think to your specific question on whether March numbers we are down, no, they are still up compared to last year.

And

How about April, yeah?

Oh, April, I don't think I have the April numbers yet.

Yeah. Maybe

Mei Lian can take the question on interest rate guidance, and then Zhuan can take the AEI. Okay.

Earlier on, when we look at the interest rate guidance, we were saying around the three level. Given what we're seeing in the Sing dollar floating rates movement in the past two months, it has generally been trending down now, so that kind of allow us to look at the overall lower cost of debt of below 3%.

Guidance for this year, again based on the current levels, will be the high three the high 2%,

high 2%. Don't scare me.

Yeah. Depending on where the rates go lah, right now I think, yeah, there should be continued looking at year-on-year savings lah, yeah.

Are you seeing tighter credit spreads or just mainly floating?

For some of our loan facilities that are on floating rate, we have actually negotiated for tighter credit spread as well. That is around 10, 20 bps, yeah.

Mainly the cost savings is really from the floating rate movement.

I'll talk about the PS one. During the course of the whole AEI, the reason why we kind of spread it out a little bit more because the works will be done in phases across the different parts of the property.

It will largely remain open, and at any point in time, I think probably it's about 10%, 20% of the spaces that will be affected through the course of it. Nothing more.

There will be a very small period where it's a bit of overlap, where it's probably closer to 30% maximum. Most of the mall will be open, actually.

The second part will be on the NLA question. Net net, the NLA will be there about pretty much similar.

While we create additional NLA on the ground floor and some of the spaces that we manage to identify, part of the AEI will also include compliance work, where we will have and also a bit of upgrading works in terms of amenities, which will take a bit of the NLA away. Second part of it will be that as we know in Plaza Sing, right, the back end of the mall actually is quite deep, some of the spaces are pretty deep.

Rather than taking a big anchor that doesn't generate that much rent, right, we may subdivide some of these to create higher-value spaces.

There's no impact on the Temasek office section, right?

Oh, there's largely no major impact on the commercial office side, the tower side. Most of the work in the tower side, in Phase 1 is actually more on the ground floor, where the entrance arrival is.

Excellent. Congrats on the results and recent Paragon acquisition.

Thank you.

Thanks, Mervin. Geraldine, you're up.

Hey,

hi. Choon Siang Chong, everyone.

Good morning. Maybe just back to the portfolio refresh opportunities, yeah.

Choon Siang, maybe your thoughts on partaking in further development projects with sponsor? After Hougang Central, there's still some quota to work with.

Will this be something that you are interested in or prefer to face out a little bit?

I don't know whether you're referring to the Bayshore.

Very sizable site.

I think the way we think about it is, I think firstly, we must like the location, and I think Hougang was unique in the way because it was underserved and it is in a very dense residential catchment, which we think a retail mall is very likely to succeed. Also the connectivity with the two major MRT lines and the connectivity to the interchange certainly helps.

The size precludes other significant competitors from coming in. Bayshore, I think we haven't looked at it in details to be honest, but no harm for us to look at it, but then it will come down to a matter of pricing and whether we think that catchment makes sense for us, because the other thing that Hougang makes a lot of sense for us because we don't have something in that area.

Bayshore, of course, will be quite close to Bedok Mall, but Bayshore is also it's slightly more private residential estate, the residential catchment is not as deep as say Hougang. If I'm not wrong, I think the retail component is also small.

It's like 200,000 square feet compared to Hougang, which is 300-over-thousand. Long story short, I think we will take a look.

Question is whether we will consider, I think we can consider, we have room, but we also have to look at the impact. Obviously there's no impact on DPU as what we mentioned, there'll be impact on balance sheet.

We already deployed quite a bit of capital to Hougang, already deployed capital to Paragon, and now we are deploying capital to Plaza Sing. We have our hands full probably for the near term, but let's see the details of the project.

Yeah.

Okay. Choon Siang Chong.

Maybe just one more on the tenant exit at MAC. Is it tied to the tenant geopolitical headwinds or the tenant was already thinking of an exit?

Any divestment overseas, since you have done quite a number in Singapore already?

Thanks for raising that question. I was waiting for the opportunity to answer that question.

The tenant is actually one of the airlines, and MAC is next to the airport. I think unfortunately, it's not due to any geopolitics, it's not due to any rent reasons or whatever.

It's due to the fact that they want to consolidate back at the airport, which is obviously a better location for airline. Actually that's just unfortunate in terms of the business direction that the tenant took.

That's where we are. In terms of divestment, yes, definitely we are looking at divestment.

I think in fact, we have been talking about this at the last business update, and now the Iran war obviously threw a spanner into the works because with interest rate expectations being slightly altered in the European area, it might make divestment slightly more challenging. Nevertheless, I think we are embarking on that process.

We are starting to sound out and getting a feel on the ground to see whether there is an opportunity. Yep.

Hopefully we have good news.

Okay. Choon Siang Chong, for the colour.

It's not easy lah, I don't want to also raise expectations. Obviously you guys know in this current environment in Singapore, it looks like it's a lot easier for capital market transactions, but I think the same cannot be said for the European region.

I think the number of capital market transactions that we've been observing in the market is few and far between, and not at the kind of sizes that we are looking at.

Okay. Thanks Soon Choon Siang imagine.

Best of luck.

Thank you.

Rachel.

Hi, Soon Chong and team. Can you hear me well?

Yes, we can hear you.

Great. Yes.

Maybe just a first question on reversions. Think it has moderated a little bit right first quarter.

Just wondering what's your outlook for this year, since there were some advanced negotiation on the leases that's expiring this year?

For the reversions, right, generally I think, which I mentioned earlier, for the full year, we are still looking around mid-single digit. Of course, with some of the uncertainties in the wider global uncertainties, right, we probably might be a bit cautious on it, and we will see how this trends.

For the retail, actually largely most of the reversions have been quite strong. I think it was a little bit pulled down by a very specific tenant in a unique location.

By and large, I would say the retail reversions has been okay.

Can you give more colour on this specific tenant? Right.

Oh, it's one of a larger, let's say, contributor of a tenant into F&B, and because of the location of the unit, it's actually not where the normal walkway is. That's the reason why, in that case, compared to the outgoing use, the reversion is a little bit on a down-spec on this thing.

Oh, okay. Which mall is it?

Sorry.

Bugis? At least

you didn't ask which mall is it.

Oh, which mall? It's at Hougang.

At Junction at Hougang.

Maybe I will also just add, I think while we have guided fairly healthy rental reversions, I think one mall that we moderate because I think Plaza Sing and Hougang, we are likely to go through AEI. We may have to moderate because when you do a AEI, obviously in the course of discussion and lease renewal with tenants, we also have to be mindful that they will be impacted by the renovation going forward.

We have to be a bit more flexible sometimes. Obviously this is only during the transition.

It could impact specifically for Plaza Sing and Hougang, I think. There could be some moderation in terms of rental reversion, which should not be unexpected.

I think the rest of the portfolio should be business as usual. That could be some impact because of that.

That's helpful. Just moving to the office reversions.

Now that you have sold AST2, do you expect that the reversions may trend down even more?

No, I don't think so. We can break down our reversions and contributions, I think they are quite evenly contributing.

Removing AST2 should not make a significant impact.

Got it. Then maybe just on the tenant sales side.

You mentioned that March was up year-on-year, but do you see any impact on the downtown malls? Are they impacted a little bit more from the war, post-war?

It was the reverse, right? I think our downtown did better than suburban, if I'm not wrong.

For March.

Actually, suburban did better. March, yeah.

I think downtown actually did better. If you strip out the numbers for March, I believe downtown we did better than suburban.

Interesting. Maybe just one last quick one, which is on ECB contribution.

How much are they contributing in first quarter, and how much more should we expect?

How much are they contributing? I think Mei Lian, you have the numbers?

I have the numbers, but more on the top line, because in my mind we have to net off the funding cost also.

Can we get back to you on this? Yeah.

Because we have to net off funding costs and also provide for tax lah, yeah.

Yeah.

I

think the contribution at the top line is probably about 1.5 to 2 million a month, if I'm not wrong. I'm trying to digest the DPU slide and flow down the bottom line, but we need to do some work around that.

Also it's also been about 1.5 to 2 months, it's not a full contribution. We can come back to you.

Okay. Thanks Rachel.

Can we move on to Youxiang, please?

Hi Soon Chong, can you hear me?

Yes, yes.

Just on the Plaza Sing AEI, the amount seems quite big, and then how confident are we in securing that 6% to 7% ROI? Also does this also mean that any AEI plans for Paragon will be shelved back because of this?

Because when I look at Atrium going down and then Plaza Sing occupancy could also be impacted a little bit in terms of performance. It does seem like we are in a quite uncertain period, and then quite a few major assets could be seeing a little bit of downtime.

That's the first question. Then second is on your retail.

Suburban seems to be leading downtown. Do you expect this trend to continue in terms of our reversions, yeah, and also tenant sales?

Maybe I'll take the first question and then Zhuan can take the second one. In terms of the expected return from Plaza Sing, I think you guys are familiar, we normally don't undertake AEI without a calculation on the financial return, and we have put down here that we are targeting about 6% to 7%.

Question is whether we are confident of achieving. I think we're putting it onto the slide.

We would have put it there if we are not confident of achieving. That's one.

Secondly, of course, but nobody knows. This AEI will take 1.5 years.

It's also based on a certain assumption. Based on our track record, if you look at some of the past AEIs in Singapore like Raffles City we've done, IMM we have done, I think it's safe to say we have firstly met our underwriting, and secondly, not just meeting underwriting, I think part of the AEI, the objective is also to transform the mall, to make it relevant and to make it fit for the current taste and environment and shopping behaviour and the new consumer.

All of that is also taken into consideration when we plan an AEI. I think there's no argument that Plaza Singapura has been without AEI for a while, and I think it will definitely be helpful to rejuvenate that space.

Also, as what we mentioned, it's also really to dovetail with we have been very deliberate about this. It's not just about, okay, improving the tenant mix and then make it better facade.

It's also we want to also think a few years ahead, what will happen to this mall when the pedestrianisation of the road in front comes up. We want to be positioned when that happens.

It will transform the area, and we want to be there and ready when it happens. I think our portfolio is large.

I think we can definitely cushion if there is a bit of downtime. Of course, when we try to do any AEI, we will try to minimise the impact to our cash flow, which is why it will be done in phases so that the downtime doesn't stretch beyond 10% to 20% of the tenants or malls.

Hopefully that answers your question in terms of whether we are confident.

Can I also check if the construction cost has been locked in?

Yes.

Even if construction cost escalates from now on, your target ROI 6% to 7% is still Comfortable. Okay.

Okay. I think we have also been deliberately trying to upgrade slowly the various assets.

I think you have seen that Raffles City was upgraded. Now we're moving on to Plaza Singapura.

Then the question in people's mind is, okay, is Paragon next and Some people may think, okay, since like what you mentioned, if we are doing Plaza Sing, doesn't mean we have no capacity to do Paragon. I don't think that's the case.

I don't want to pre-jump the conclusion that we are not doing anything. I think, like what we mentioned, it's only been about 4 days since we announced.

We want to go in, take a thorough look at what they have done. There's already a AEI in place.

No harm, and no skin off our nose to take a look at what they have planned, and we will see whether the plan involves any and how can do in phases, whatever they have planned or whatever we want to look at with fresh eyes. Obviously for us, we have to look at it from a portfolio-wide perspective and whether it makes sense for us both on the asset level as well as the portfolio level in terms of cash flows.

All of that will all have to be taken into consideration. In any case, I think Plaza Sing starts third quarter of this year.

Paragon completion will only be third quarter of this year, probably. By the time we take over, it's not like we're going to do AEI on day one.

We will definitely have to review the performance, the tenant mix, and then by the time if and when we do take a decision to do anything, it probably be possibly one year down the road. We are not sure.

I think that's not pre-conclude that it will or will not happen. I don't think I can answer that question right now.

The second question is on the retail, the performance between suburban and downtown, do you, yeah.

For tenant sales, right, I would say that actually between downtown and suburban, if I just look back the past few quarters, right, sometimes it will be downtown, sometimes suburban. Actually the two of them are really quite closely matched, and I would expect that to kind of go forward in this year also.

Of course, naturally, given some of these uncertainties in this few months, right, probably the suburban side we will probably see a bit more resilience because, with all these higher cost, operating cost, and worries over inflation, stuff like that, discretionary spending on luxe items will probably be a little bit held back for a while, while day-to-day, people still have to spend. I would say that's the kind of trend that we foresee for the going forward.

I think the related question to this was actually on the reversion side of things. By and large, I would say both downtown and suburban, generally we look at sustainable kind of reversion levels that we go to our tenants.

Of course with downtown, as I think Soon Chong kind of mentioned earlier, when we do some of these AEI works, right, some of these impact shorter extensions and stuff that we may do to retain a tenant in the near term to kind of time our AEIs a bit better may distort some of these reversion numbers that we may see.

Okay. Thanks.

It's just that I noticed your tenant sales have been quite soft in the past few quarters, and then reversions have been going up, just a little bit concerned on occupancy cost. Yeah.

I think on occupancy cost, year-on-year we are quite stable, actually. This time round, we're around 17.4%, which I believe is 0.1% lower than the previous year.

Downtown occupancy cost is higher than the suburban. Suburban, we are looking at high 16s, which is quite actually in line in the market and actually quite sustainable.

I think the other thing we just want to add that actually 2% 2.2% sales compared to rental reversion of 6%, actually not that out of line because actually 6% rental reversion, because it's average over 3 years, actually it's quite in line with a 2% sales growth, I wouldn't actually say that it's not in line. Oh,

okay. Thanks.

The last one is, do you disclose ION tenant sales? I think in the past quarters, there was one small footnote.

Maybe I missed that, yeah. Oh

no, it's included. Last time, we used to show a footnote as in we strip out the ION sales first because it was not like-for-like.

Now ION, we have owned it for a full year already, there's no need to strip out the impact of ION anymore. ION is in 2025 and 2026 numbers now.

This includes the total sales from ION as well.

Okay. Choon Siang Chong.

Thanks, Siang. Can we go on to Brandon, please?

Hey. Morning, Choon Siang.

Just touching on a bit on occupancy, right? Could you sort of guide us a bit on the forward occupancy for the different retail, office, right?

Because when I look at this quarter's numbers, it's kind of quite low. In fact, it's a 4-year low, right, whether you look at retail, office, or portfolio.

Is that something that you can sort of guide us, or is that something that we should be concerned about?

No, I think I spent some time trying to address this point because I expect this to be a issue and to be raised, which is why I think I have addressed it right from the get-go. It's actually unique to three specific assets that we have and very unique to three specific tenants.

The financial impact is quite small because these are all low-rent spaces. More than half of it is due to Germany, which doesn't affect our Singapore performance.

I won't take this as a read-through on the portfolio, to answer your question directly. No, because at the end of the day, you look at rental reversion, it's still healthy, which means that we still have the negotiating leverage to negotiate for higher rents.

It's unique to MAC, Germany, and unique to Clarke Quay. Clarke Quay, of course, is work in progress until CanningHill gets completed end of this year.

Also

if you look at it on a portfolio standpoint, right, should we sort of expect that 95.2% to sort of head back to your usual 96% to 98% kind of range?

No, I think we can expect improve. If you're asking whether this is the new steady state, no, the answer is no.

I think we can expect this number to improve for the simple reason, let's say, for example, today we were to sell MAC, immediately improves and normalises it at a higher level. I would say that as a non-core asset, we shouldn't even use that as a contributor to look at normalised occupancy.

Even if we were not doing through it, we do expect some of this vacancies are very transitory, frictional. We do think that the 95.2% is not a reflection of what we are able to achieve with the current portfolio.

Are you comfortable to share the occupancy of those three unique assets?

Yes, we can. I think MAC, now we are just trending somewhere above 70-over-percent, 72%.

Clarke Quay, 80 84%. Funan office was 100%.

I think one of the towers now had one vacancy. What is Funan office?

87%.

87%.

We are quite confident of leasing out that space, so that's a very transitional vacancy. MAC could take us a bit longer, but I think we will work hard to try to replace or work at divesting at some point.

Those are the three assets that probably contributed to this quarter's movement, one of which we are quite confident of releasing quite soon, hopefully.

I don't think will actually affect the financial because those are very low-rent spaces anyway, although they are quite large, and hence it contributes to the drop.

Got it. My last

Financial performance is not being impacted lah. That's the bottom line.

Hey, great. Can you talk a bit on Bugis Junction?

Historically, if you look at CICT, right, when you guys sort of amalgamate your assets and other assets, right, these assets tend to get divested. Could we sort of expect the same for Bugis Plus, or there should be a wider plan for it given that you really own Bugis Junction?

Sorry, what are you saying about Bugis Plus? I didn't quite catch your drift.

You're saying that Oh,

yeah, historically, if you look at CMT, CICT, right, you guys tend to amalgamate the performance of certain assets under other assets, right? Then after that, subsequently, we see you selling those assets, right?

Should we expect the same for Bugis Plus? Is it a non-core asset, in your view?

I think the short answer is no. We have also shown that we can sell assets that are not in the other category.

It doesn't indicate anything.

There was a period of time when there's only so much space and there's only so many buildings you can squeeze into it. Some of the smaller assets tend to be parked under others.

Yeah. It's good to know that it's core lah, okay.

We shouldn't be

We love the Bugis.

It's actually a very vibrant area and coming up very nicely. In fact, I see it as a high-growth area going forward.

I'll just end with one last question, right. If there are opportunities, right, to acquire something that's pretty decent, is CICT sort of open to raising equity more than once a year?

We try not to. I've been reminded by investors to try not to do that, we will try not to do that.

Great. Hey, thanks a lot.

Good weekend. Thanks.

Thanks.

Thanks, Brandon. Can we move on to Vijay, please?

Hi. Morning, Choon Siang and team.

Three questions from me, maybe I'll take one by one. Firstly, in terms of the Funan, can you give some color in terms of the tenant who exited, what was the reasons, and how much downtime to expect for this property?

This kind of tough question, I leave it to Yi Zhuan,

you mean the tenant,

yeah, Funan.

For Funan, the tenant is Adidas moving. Actually, it's more of an issue of them trying to consolidate some of the space in terms of the efficiency and their corporate planning.

That was the reason for the move.

How long do

we expect to backfill it? Typically I would say that if we start from scratch because, okay, for Adidas, right, it's about 28,000 square feet of space.

If that's a few ways we can do it. If you subdivide, then naturally the downtime is a bit shorter, at least for part of the space.

For tenants usually of this kind of size, we start to look for space, typically they will be looking at it around 6 to 9 months ahead of time because they have to plan their move from their previous space. We are already starting talking to some interest along the way, and it's really down to how it converts as well as how the negotiations with the other options are that they have, right.

It's hard to say for sure, but I would say probably half a year.

Got it. My second question is just sharing with Soon Chong.

You think from a Clarke Quay perspective, it does look like the impact seems to be structural for some time. The asset went a major upgrade after COVID, but still seems to be having a lot more of tenant churn over the last 1, 2 years.

Maybe what's your thought on this asset, and would you be willing to divest it? Are you seeing tenant sales improve since last year?

I think Clarke Quay, I won't say it's structural because we have not seen it in its stabilised state. There's definitely a structural difference between the construct of Clarke Quay and some of the other malls lah, for sure.

Definitely slightly different positioning, and of course it's not a natural mall per se. Of course now currently is impacted by CanningHill.

I know we have been saying that for the last few quarters, but that is the reality, a major construction. We do expect the vibrancy of the whole area will change once you have this few hundred residential units being filled up and two hotel blocks being completed.

Hotels generally creates a round-the-clock footfall. We do expect and this is right across the road from them, definitely there will be some improvements.

Whether the improvements will be enough will be one of your questions as well once it becomes stabilised. We are confident that there would definitely be improvements once that happens.

The challenge with the leasing discussion now is also nobody will commit until they have seen the hotel being completed. That's the reality.

If I were a tenant, no point for me to take the risk today. I might as well wait until 6 months later when the hotel is completed.

A lot of the tenant churn is also because a lot of our tenants within Clarke Quay, some of the movements at the margins is also due to us bringing in shorter leases coming in to fill up the space, create the footfall and vibrancy to that area. We are doing a lot of things.

We have a team that is very focused on marketing the asset. If you go to Clarke Quay, there are a lot of marketing activities going on every weekend.

We have now askers coming in on every Wednesday. We have just done a cycling crit competition making use of Clarke Quay's natural outdoor routes to create a kind of a cycling circuit.

We are also just every time that there's major sporting events, we have organised live shows and all that. We are making a conscious effort.

It's not a natural place where there's natural footfall, we need to create a more destinational effect to bring in the crowd while CanningHill is being completed lah. After completion of CanningHill, we do expect it to have more natural footfall.

We are making very good efforts. To your second question on whether we will be open to divesting, I think we have demonstrated our willingness to divest anything, I think, if and necessary.

I would say that we have just divested two assets, and one of which is fairly large and performing well as well. I think the question to that is anything is possible, including Clarke Quay.

Please don't interpret it as we are divesting Clarke Quay.

It's

a question.

Tell me if someone pays premium, yes. I think that's what you are alluding to.

You hit the nail on the head lah. I think it's always a matter of pricing, right?

I think the yield is still decent for Clarke Quay based on the current book value.

Okay. My last question, I think in terms of energy rates, you mentioned that this year it's lower than last year.

Maybe how low is it for this year compared to last year? If it normalises, if you have to go for open market and purchase a contract for next year, should we have to expect a jump in terms of electricity cost and DPU impact going down?

Oh, no. Thanks for the question, actually.

Also want to take this opportunity to highlight that next year actually we do expect utilities cost to come down further. The reason is because although it's not been locked in, we have achieved a better formula.

The formula for utilities cost is always a function of certain input prices. Of course oil price and gas prices are key component of it.

Even at today's price, if we were to enter into the contract, we are still achieving savings because of the better formula that we have achieved with our supplier. We do expect savings next year as well compared to this year.

You're not impacted by external environment, or even at this higher price, you can still achieve savings?

Yes. No, we are impacted, but what we are saying is that at the same price, at the same input price next year, we will achieve savings because of a better formula.

Got it. Thank you.

Even though prices have gone up, you will still achieve savings. It takes a very significant increase in the price of oil for us not to achieve savings for next year, and we are not anywhere close to that.

Is it based on the management contract you have signed with CLI?

No, it's based on our contract with our utilities provider.

Oh, okay. All right, thank you.

That's all from me.

Yeah. Because one thing is that we procure energy as a group, we do have quite a bit of negotiating power.

For example, CICT, plus the whole of CLI group, we are procuring energy as a bulk contract. As you can imagine, given our size, we do have some negotiating leverage, we are able to lock in a better formula for next year.

Choon you. Thank you,

Vijay. Can we go to Piyush?

Hi, this is actually Derek from Morgan Stanley. I just assumed another identity.

By accident. No, I just want to ask a couple of questions on the cost of debt outlook.

I think, Mei Lian, it seems like you're alluding to about 10 to 20 basis points savings from the current 2.9%. Does that take into account, I presume, the debt paid down from using proceeds from the equity raise, and when you take on fresh debt for Paragon, is that all taken into account already?

No, depending on the fixed-float assumption for the Paragon debt, we believe lah that there is some room in terms of floating rate, because we continue to see the movement over the past months, where floating rate has actually even gone below 1%. If this kind of continue, there could be even more savings lah from that angle, yeah.

We haven't taken into account the Paragon debt yet, yeah, because it will depend on the actual fixing structure.

Is there a rough number, will we be looking at 2.5%, 2.6%? Also assuming you'll be in lieu of the equity coming in, you'll pay down debt first, right, with the equity raise proceeds?

Yes, we will

pay down.

We assume that for interest rate for Paragon debt is about 2.6% to 2.7%, yeah. That could kind of lower the average, yeah, based on this assumption as well.

That number actually looks high also compared to what you recently raised at 2.18%, right? Could that number also be a lower number?

We will try to do better. The 2.18% was raised when the fixed benchmark was actually lower than current.

Today, if we were to raise the bonds again, it may require slightly higher margin. It all depends on first, the timing, second, the tenor that we want to lock in, and how much is going to be fixed and float lah.

Generally, we try to keep on the overall basis at least 70% of our debt portfolio on fixed basis lah.

Understood. If you were to raise fresh debt right now fixed, what would be the number?

Probably looking at the secondary trades, close to say 2.4%, 2.5%.

Got it. Thank you.

Just last question if I may. I think I've got some investors queries on the equity raise, why raise at the lower end of the pricing range, given the robust book?

Yeah.

Good question. Actually, I wouldn't say that this is the low end of the range.

The low end of the range is 2.7%. You're right.

Could we have raised it at say 2%? Possibly, but then the quality of the book could be different.

Typically, in an equity raise, you guys will be familiar, there will be three main types of investors. The first group is what we call the real estate long-only investors.

These are the buy-and-hold investors, right, because they like the assets, they are real estate specialists, they are long-only, they buy because they want to achieve the yield that we provide and the growth that we provide going forward. Then there's the hedge funds, and then there is a generalist, who may or may not buy and hold depending on the valuation, depending on the momentum, and depending on the market conditions.

We typically try to allocate a larger part of the book to long-only real estate because these are the investors that will stay with us and grow with us. Even with the decision, we also are able to bring everybody up from say 2.7% discount to 2.36% discount, which was the final price that we did at.

If you look at all of the equity raise done in the last 20 I don't know, last 5 years, this is probably the tightest. I don't know whether I can think of a tighter.

I don't think we can say that this is not a tight discount. I think we probably have been spoiling investors a little bit because we went out with a very tight low end in the first place.

Most equity offerings will not go out with a 2.7% as a very low end. They typically will go out with 3.5%, 4%.

We're fairly confident of doing that and we are able to negotiate, because we also want to protect our own downside, and we're able to lock in a underwriting by the bank at 2.7% because our last equity offering was done at 2.7%. Despite that very tight low end, we were able to tighten it further to 2.36%.

I think the other consideration is we also upsized. It's actually very challenging to upsize an equity offering by 25% and still tighten the discount.

Usually you have to choose between the two: price or quantity. I think that's a very standard trade-off.

You want a better price, you have to sacrifice some quantity; you want a better quantity, you sacrifice on price. We are able to achieve both.

I would not actually fully agree with the statement that we are not achieving a tight discount. I think the third thing I will also add is that I think could we have squeezed to say 2.2%, 2.1%?

Possibly, but I think we also want to watch the after-market performance. We want to make sure that the momentum is maintained.

To ensure a strong market performance, you also have to allocate and price accordingly lah. I think if you look at the post-market performance, I think we do think that we did the right thing and there is definitely some strong market outperformance following the EFR.

Hi, morning. Just one question on full-year DPU growth.

Because of the upsized equity issuance and Asia Square 2 that will come in before Paragon acquisitions, are the growth levers that you mentioned sufficient to offset this? Or what are the other mitigating factors on the capital management front such that full-year you're still expecting DPU growth, right?

Thanks.

Can you summarize the question again?

Equity issuance was upsized, so that will drive dilution. Asia Square 2 loss of income second quarter, these two will actually come in before your Paragon acquisition.

Right? Full-year, what are the mitigating factors, and are we still forecasting DPU growth?

Thanks.

I get what you're saying now. Firstly, there are two potential things that there are quite a few things, right?

One is Asia Square divestment is unlikely to close before, actually. Asia Square divestment is likely to close after Paragon acquisition because the buyer for Asia Square also needs the EGM and their process takes a bit longer.

We are expecting to close probably at least 1 to 2 months before that, 2 months. Quite counterintuitive, but actually that is better for accretion because before they close, we will have to do a bit of a bridge loan.

If we borrow for 1 to 2 months bridging to bridge the gap, funding gap, before we divest Asia Square, that cost of funding is actually lower than the asset yield, because you're still earning NPI as long as AST2 is not been sold, right? The asset yield of 3% is still higher than the funding cost.

Bridging loan, we'll be borrowing on floating, which as Mei Lian mentioned, is today still very low at about the float SORA is about 1% today. Adding a spread, you are probably saving a good 1% on the funding cost.

Actually it's more accretive, fairly counterintuitive. Of course you will take a bit of a stretch on the balance sheet for that 1, 2 months, but I think that's okay as long as there's certainty on closing.

That's one. That part of the equation shouldn't affect accretion, but it can only improve accretion.

Second part, I think what you're driving at is also the equity offering being done before the closing of Paragon, that will be dilutive. Of course, we will pay down debt in between.

We are buying $3.9 billion. Typically, equity offering makes up a larger proportion of any transaction, but in our case, the equity offering $750 million is only about probably 18% of the acquisition size, the dilution impact is actually very small and it's only for about maybe about 2 months, and we're not suffering that dilution because we pay down debt.

Based on my calculation, plus the accretion that we will get from $2.5 billion, 2 months of bridging loan, actually the net net is positive. We will actually not suffer any dilution.

If anything, we will still be fully benefiting from that 1.7% accretion for the year.

Got it, thank you.

Thanks, Shen. We have Mervin, who seems like the last one to go.

Mervin, please.

Just a question on the retail margins. It fell Q-on-Q and year-on-year.

What's causing that given you have some interest cost savings?

Interest cost savings will not affect retail margin because

Electricity cost.

Oh. Why did margin go down?

Why did margin go down, do you know? Let me think.

Was there a change in the portfolio constitution? We sold out BPP, but that's for 1 month.

I think the reason is the top line came down slightly on a year-on-year basis because we started the AEI. For example, I think Tampines, because we did the AEI, I think the margin for Tampines came down because of the top line dropped slightly.

That's one of the key reasons, I think. The other reason, of course, is also Clarke Quay.

Clarke Quay, the margins came down because of the significant drop in occupancy compared to last year. These two assets were the contributor to the margin compression.

Any updates on Junction 8 given the change of more commercial?

You mean like redevelopment plans?

Redevelopment plans or will you take on the office component?

Oh, well, I don't think that will happen anytime soon. If anything, discussion with many, many stakeholders.

We don't have the clarity now. Junction 8 is doing very well in the meantime.

Sorry, the short answer is no, we don't have anything to provide at this point, no updates to provide for Junction 8.

Just back on the office portfolio, we hosted IOI Properties a couple of days ago, and they said that they could push Asia Square Tower 2 rents towards 13 bucks. Is that something you can do on average across your whole portfolio?

Across our portfolio, that's a tough question because our portfolio obviously have different, varying locations and age of building. Obviously, I think IOI building obviously is newer than ours.

Asia Square, if you compare it to some of our portfolio, is also slightly higher, right? I mentioned earlier in my presentation that average rent for Asia Square 2 is really higher than our rest of our portfolio.

I think selectively, possible. We are seeing some of the renewals done at those levels for some of our spaces, but I won't say that we can do it for the entire portfolio because there are also big anchor spaces in some of our portfolio.

In terms of portfolio allocation, how you think about mix between retail and office, we now have a bit more retail.

No, I don't think it was deliberate. I think it's a consequence of some of the opportunistic decisions that we made.

I don't think if you ask us whether, oh, did we design it to be this way, no. We are not deliberately trying to sell office to buy retail.

I think we are quite happy with both asset classes. I think increasingly, the differentiation is not as important.

I think what is important for us, given that much both the office and the retail component, is what is the most and best construct for our portfolio that will deliver the most stable and highest growth DPU for our unitholders. I think because we are already so big, the stability is there.

The question is how to drive the growth. I think people are more focused on underlying financial performance than the marginal movement between retail and office.

Excellent. Look forward to continued strong results and hopefully high share prices.

Thank you.

Thanks, Mervin. Looks like we have no more questions.

I guess we'll end the session here. Thank you for your time.

Have a good Friday and a good weekend.

Thank you.

Bye.

Thank you. Thank you.