Mapletree Logistics Trust

Good morning. Welcome to MLT's results briefing for the fourth quarter and full year for the financial year ended March '25.

We had a full management strength here. To start off the meeting will be our CFO, Charmaine.

Over to you, please.

Hi, morning, good morning, everyone. Thank you for dialing in today.

So the 4Q FY '24, '25 results, our results continue to be impacted by the lower contribution from China, higher borrowing costs as well as some FX impact. Overall DPU is at SGD 0.01955, 11.6% lower against 4Q last year, mainly due to the same reasons I've highlighted earlier.

Operationally, our portfolio occupancy is stable while rental reversion is slightly better compared to 3Q results. WALE is slightly longer 2.8 years.

Capital management wise, our aggregate leverage has creeped up to 40.7% against 40.3% last quarter, mainly due to the valuation loss as well as some FX translation due to the weakening regional currencies against the Sing dollar. We continue to hedge our debt about 81% is in fixed rates, with a debt maturity of 3.8 years and 75% of our income have been hedged into Sing dollars for the next 12 months.

During the quarter, we completed 3 Malaysian divestments. The proceeds have been used to pardon loans.

We also announced divestment of another 3 projects, 2 in Singapore and 1 in Malaysia that will be completed in the new financial year. If I move on to the results itself.

Gross revenue is 0.8% lower, mainly due to lower contribution from China, absence of revenue contribution from divested properties as well as currency weaknesses. This is mitigated by better performance in the rest of our markets.

NPI is lower by 1.6% accordingly. In terms of borrowing costs, we had higher average.

Out of the 4% increase, about SGD 2.4 million is actually due to incremental borrowings to fund the acquisitions we completed at the beginning of the financial year. The higher average interest -- while we saw higher average interest costs when -- with the replacement of our hedges that fell off, these were offset by loan repayments and proceeds from divestments.

After taking into account DG of SGD 7.7 million, SGD 4.3 million lower than the SGD 12 million we declared last year. DI is 10.3% lower, translating to a DPU, that's 11.6% or at SGD 0.01955.

Excluding divestment gains pop-up, we are -- the adjusted DPU would have been 8.5% lower or SGD 0.01803 versus the SGD 0.0971 last year. Moving on to full year results.

The reasons behind the variances are very similar to the 4Q year-on-year. Gross revenue is SGD 6.9 million or 0.9% lower compared to last year, full year, mainly due to lower contribution from China, absence of revenue contribution from divested properties.

[Technical Difficulty]

Sorry, can we have someone switch off their background noise, on mute, please. Okay, Charmaine, please continue.

So NPI is lower by 1.5%. And year-on-year, our DG after taking into account of borrowing costs higher, mainly due to the incremental -- the interest incurred on incremental borrowings to fund the acquisition.

That's about SGD 9.3 million of the SGD 11 million increase in foreign costs, so after accounting for DG of about SGD 27 million, which is SGD 14.6 million lower than the SGD 41.6 million last year. Our DI is 9.1% or SGD 40.8 million lower year-on-year.

Translating to EPU of SGD 0.08053 for this financial year versus SGD 0.09003 last financial year. If we take away the impact of DG, adjusted DPU would have been SGD 0.07519, versus the SGD 0.08167 last year.

Moving on to quarter-on-quarter, gross revenue is 1.5% lower mainly due to the same reasons mentioned earlier. Accordingly, NPI is lower quarter-on-quarter.

Although we note that there is a slightly higher property expenses that incurred quarter-on-quarter due to one-off expenses in 4Q itself. DG is very similar to last quarter.

So DPU for this quarter is SGD0.01955, which is SGD 0.02003 last quarter. Excluding DG, it would have been SGD 0.01803 versus SGD 0.01855.

On the balance sheet as well as capital management front, our investment properties slightly lower, SGD 13.3 billion versus SGD 13.4 billion. This is mainly due to valuation losses, which Mun Leong will share a bit more about later.

In terms of the debt, we have kept it at similar levels and NAV is at SGD 1.31 versus SGD 1.34, mainly due to same reasons valuation losses as well as translation loss. Our interest rate is stable at 2.7% and interest coverage is also stable at 2.9x.

We continue to maintain a well-segmented maturity profile with a healthy average debt duration of 3.8 years. what's coming due in the new financial year is about 7% of total debt, that's SGD 374 million.

And on hand, we have available committed credit facilities of SGD 823 million. So this is more than sufficient to meet our refinancing as well as capital requirements for the next 12 months.

In terms of the hedges, we continue to hedge our interest rates as well as FX in the current volatile environment. So about 81% of our debt has been hedged into fixed rates.

The unhedged portion, about half of it is in JPY and the other half in Sing dollars. As for FX, about 75% of our amount distributable in the next 12 months has been hedged in Sing dollar.

The next slide will be the distribution details, and I will hand over to James, to bring you through the portfolio update.

In 4Q our diversified portfolio gives us a much stability. 70% of our MLT's portfolio by AUM and revenue continues to be contributed by the developed markets, i.e.

Singapore, Hong Kong, Japan, Korea and Australia. We have currently more than 900 customers, and these are evenly distributed between 3PLs and end users by gross revenue.

So most of these tenants are concentrated 85% of them are serving domestic consumption, mainly in markets like Australia, Japan, Korea, Malaysia and China. And in these sectors, which are domestic consumption sectors like, for example, F&B, fashion, consumer staples.

These are giving us much stability and less volatility in terms of demand. Occupancy-wise, in 4Q, occupancy remained fairly stable against 3Q.

Singapore, Malaysia and Vietnam occupancy dropped slightly due to transitionary vacancies, which has been backfilled in 1 quarter, the current quarter. China's occupancy went up slightly, showing some improvement.

Hong Kong, Australia and India, occupancy remained stable. In terms of rental reversions, we registered rental reversion improvement from 3Q to 5.1% in 4Q.

Excluding China, the rental reversion was positive 6.9%. In terms of lease expiry profile for coming FY or the current FY '25, it shows 32.3% expiries in the current FY.

This is a slight increase from 3Q, which we showed at 31.9%. So just to share some flavor behind this, the 0.4% increase was due to -- from last quarter was due to -- mainly from China, the short leases coming from China, where the WALE was 1 year or less.

So this fell into this FY '25. So in terms of FY '25 lease expiry profile that is 2.3%, 50% actually is due from China.

The other 22% -- 12% is from Vietnam, 10% is from Korea, these are the top 3. Sorry, back to the top 10 tenants by gross revenue.

So we have a good spread of tenants across the industries and countries that gives us a diversity, this coming from 3PLs in the top 10 and also e-commerce companies like SF Express, Hong Kong TV and also hyper-retailers in Australia.

This is Mun Leong. I will go through the -- some of the few slides quickly as they have been updated in the past.

I think the first one is actually the acquisition. I think this has been actually updated in the last few quarters.

This year, we have actually completed 3 acquisitions, Malaysia and Vietnam, right? Next.

Yes. So this is also the AEI that the team has embarked right, so 1 is in the 5A Joo Koon and the other one in Malaysia.

I'll also let James talk a bit about 5A Joo Koon, I think which we have actually so far a good commitment with James.

Yes, just to update everyone on the 5A Joo Koon status. This project is due for completion middle of next month.

We're happy to report that we have at the moment, pre-committed occupancy of 46%. And these are coming from mix of local companies, 3PL companies, FMCG companies, e-commerce and also supermarket.

And we're in the process of negotiating for more leases in the coming weeks. So occupancy and revenue is slowly growing pretty soon.

Okay. Thanks, James.

Now moving to the next slide. This is actually a divestment.

I think to date for the whole year, we have announced and completed the divestment about 14 properties, to the amount of about SGD 200 million, right? And then some of these have updated in the previous quarter as well, right?

Can we move on? Yes, on the valuation.

So I said -- next slide, please. As said, March, we have done our annual valuation as of 31st March 2025.

As you can see from the slide, the valuation of the portfolio as of 31st March 2025 is about SGD 15.3 billion and this represent a slight increase over last year at SGD 13.2 billion, right? This increase in valuation due to a few couple of factors.

First the acquisition of 3 assets and there was also CapEx and the property under development for the 5A Joo Koon. It was also offset by divestment of 10 properties and then also net fair value loss of about SGD 62 million on our investment properties.

Of this SGD 62 million net fair value loss, the majority comes from China. This is a result of the lower rental and lower occupancy.

And we've also seen some expansion of cap rates in some northern part of China. The other part of this net value loss is contributed by South Korea and Singapore, respectively.

That's all.

So just a couple of slides on our ESG progress this year. Very happy to report that I think we are making good traction on our aim to achieve carbon neutrality for Scope 1 and 2 emissions by 2030.

So respectively, for solar, we have increased our capacity both on the self-funded as well as the total solar capacity, which includes third-party install. That has increased to about 71-megawatt peak, which we believe is actually the largest among S-REIT in Singapore.

And I think we are also very happy to see that China and Hong Kong as a combined market, we have actually achieved a neutralized Scope 2 common emissions, meaning that the landlord consumption is entirely met through solar energy. As for green buildings, about half of our portfolio by GFA is already achieved green cert.

So we'll continue to press on because our target is to achieve 80% by 2030. Moving on to Green Financing.

The year -- in the year, we secured -- green and sustainable financing for about -- totaling about SGD 365 million. So that brings to a total of about SGD 1.3 billion of green and sustainable linked loans, representing about 23.8% of our total borrowing.

And green lease, we have constantly been engaging our tenants to adopt green lease provisions, meaning that increase -- it includes the green clauses in the lease for all the new as well as renewal leases. So on that front, our portfolio has -- is now about -- slightly more than half.

It is now covered by green lease from barely 1% 2 years ago. We continue to plant a tree with Mapletree, that's our slogan.

This year, we have planted more than 4,300, both on the assets as well as the community in support of the sponsors objective to plant 100,000 trees by the year 2030. Now I hand over to Jean to wrap up.

I think in terms of the outlook, this month has been a very exciting month. So with this Trump liberation day tariff, definitely, I think, globally, there is a rising concern in terms of the rising trade tensions as well as the possibility of recession globally.

So that then has resulted in a lot of the heightened business uncertainty. So coming back to this in terms of the profile of our tenant base, perhaps I can give a bit of color on that is that like what James has shared, majority of our tenants serve the local consumption market.

In particular, if you look at the tenants coming out from Australia, Japan and Korea, in fact, they actually -- our tenants actually fully serve the local market. And then if we look at the trade dependent economies like Singapore, Hong Kong and Vietnam, yes, there are a handful of tenants that serve directly the U.S.

market. But majority of our tenants do serve other markets as well, meaning they are also diversified in their export market.

For example, we have a tenant in Tsing Yi, Hong Kong. They are doing some cosmetics distribution.

So besides the U.S. market, they have diversified to markets like the European Union, to China as well as to Asia.

So in that sense, for tenants that have some exposure with the export market, they are also diversified in their markets as well. Then, of course, coming back to India.

India, it is a very small portfolio in our MLT revenue base, though there are small numbers of tenants serving the U.S. market.

But I would say, overall, in a nutshell, looking at the profile of our tenants, mainly serving the consumer staples markets. We are very diversified in terms of our trade serving the consumer paper segment.

So that in the immediate short term, we think that there is a limited impact from this tariff war. But having said that, right, in the longer term, it is anybody's guess.

Nobody knows because I think if this trade war become protracted and it got worsened, it is most likely it will dampen the economic activity globally and therefore, affecting the investment sentiment as well as the business and consumer sentiment. So that would definitely have some impact.

But I think the indirect -- what we are trying to say is the indirect and contingent effect, it is very hard to gauge at this moment. So we are watching it very closely.

The situation it is still very fluid. So with that, I think what we are trying to do is, our top priority is really to continue to ensure that we stay closely with our tenants.

We understand our tenant business well. We continue to keep a close watch on the cash collection.

I think for now, in terms of the rental collection, it remains in a healthy trend, but it is still in the early stage, we shall see. The portfolio resilience, it is something that has been ongoing and the rejuvenation strategy remains intact.

Coming back to the capital management, I think Chow Mun has shared that we continue to put in the relevant appropriate hedging strategy to mitigate the borrowing costs that will continue, to exert some pressure on our distribution. And also in the current very uncertain market and volatile markets, the regional currencies will likely continue to be very volatile.

So with that, we want to be very prudent and very disciplined in our capital management, and we will also want to ensure that the use of capital is very efficient. And that including the divestment gains that we are going to retain to actually build up that financial flexibility going forward.

And over time, I think this will allow us to actually take advantage of any opportunities, of any accretive acquisitions that may come or any asset enhancements that may arise. And so I think in a nutshell, the portfolio rejuvenation strategy remains intact.

We will also continue to be selective in our divestment in particularly on assets that are outdated or old specification. And we would want to redeploy the divestment proceeds to invest into modern assets to ensure our portfolio remains resilient and catering for this long-term growth potential of our portfolio.

I think with that, I end my outlook. Maybe we can start to take questions.

Mervin, you're first again. Please go ahead.

Congrats on the strong rental reversions. Thanks also for the clarity in terms of domestic consumption mix.

Maybe can we drill down to Singapore, China, Hong Kong, Vietnam and Malaysia, like how much of those properties are export related in particular to the U.S.

Okay. I think if we look at the export market, it is about 15%, right, of which, right, if we look at the exposure, direct exposure but our tenants serve the U.S.

market, it is currently a very small percentage that we are talking about. And I would say, on a portfolio level, it is a small percentage.

Less than 5% or the 15%.

Yes, less than 5% yes.

Do you have stats for Singapore, China, Hong Kong, Vietnam, Malaysia, that's export related?

Okay. For China, actually, majority of our tenants, in fact, on a country level, more than 90% is actually serving the local markets.

We have leading e-commerce players that are actually mainly catering for consumption market.

Okay. So 10% is export -- yes.

Having said that -- no, more than 90% for local markets, serving the local market. Because if you look at the tenant profile in China, they are mainly the e-commerce leading players in our portfolio, they are catering more for the distribution of local consumer goods.

And how much of the Chinese portfolio is U.S. related?

It is very negligible. And to add on, if we look at our tenants in China, I think since the first trade war -- they have actually diversified in terms of the markets as well.

They have actually leverage into our MLT network, and they have still diversified in the presence with us in countries like Hong Kong, Vietnam, Singapore and Malaysia. So from the company perspective, even though for our portfolio, in our assets, they are mainly serving the domestic consumption.

But on the business level, they are also looking at diversification on their end, when the local consumption market was a little bit weak, and they have also diversified up in our MLT network on the countries that I've just explained.

And for Singapore, how much of the portfolio is export related?

It's about 1/4 on a country level.

And of the 25%, how much is U.S.?

Very small. Very small.

Single, low single digits?

Like I said -- single digit, low single digit.

Okay. Then for Hong Kong, how much is ports.

Hong Kong is about 20%.

Exports and of that how much is U.S.?

Also a very small number.

Vietnam exports?

Vietnam is about 30%, export market.

And most of it U.S., is it?

Vietnam, I think in terms of the contribution on the portfolio level, it's still very small. It's less than 5% on the revenue level, yes.

Yes, and the 30% export just mainly U.S.?

No. It is diversified as well.

There's only a small number of tenants they have serving the U.S. market, but most of them are pretty diversified as well.

And Malaysia, how much is exports related to?

10%.

10% and low single digit to U.S.

Yes.

I know Malaysia, Vietnam very small. It's small Singapore, China, Hong Kong.

I'm quite glad that South Korea, Japan and Australia, mainly you said local. So I think that gives a lot of comfort to investors.

So in terms of guidance for occupancy for China, I mean, done fantastically well, holding the low 90s actually came up. Any thoughts on whether you can sustain that?

And then for this year, I think some of the leases are coming from Vietnam as well.

Yes, I'll let James take that question.

So Mervin, China, even though we registered in 4Q a slight improvement in occupancy. We are still hopeful that it holds out around this level, reason being before the Trump tariffs came into play or was announced now.

I think people are still keeping their fingers crossed in the second half, there could be some recovery. But now with this flux or this uncertainty, everybody is waiting and watching to see whether -- indeed the recovery will happen or with more stimulus by Mr.

Xi's government to boost domestic demand also. So we are not too clear.

The clarity is not there, but we are hopeful that in terms of occupancy we'll stay firm at this level, perhaps even improving because we've been pretty aggressive to retain our existing tenants by giving out incentives as we have previously announced. And occupancy is still a prime objective in such weak market like China.

So we're hopeful to answer your question.

There's a number of Vietnam leases coming up this financial year, your thoughts on whether you can retain those tenants?

In Vietnam, yes, we have a fairly high percentage that is up for renewal in the country. So we have managed to retain quite a few, and we are confident of going forward because in terms of the renewal and replacement rates, we are hitting almost 90% in Vietnam.

So we are confident to maintain this relationship. And Vietnam, as we know, it's -- the WALE is also getting shorter, right?

It used to be 3 years in the past, now it's averaging 2 over years. And it's not surprising because of the trade uncertainty in recent years.

And the amount -- I mean the team is hopeful and slightly positive, optimistic, I would say to get things going and the demand is still there, right? So in terms of occupancy dip that you see in 4Q, going forward, actually, this is being backfilled in 1Q, so you should see a much, much better occupancy in 1Q for Vietnam.

So demand is still there. Going forward, everybody is watching.

Excellent. Let's hope that's some trade deals in the next 90 days.

Okay. Can we move on to Derek, DBS.

Thanks for the color on the exposure that you gave to us all. But my 2 questions as such.

First one, I'm looking at your guidance about divestment gains that you have retained, right? So I think it's a very prudent measure.

Is this a new guidance going forward next few years?

I think in the current business climate, it is so uncertain and fluid. I think we will want to adopt that prudency.

And then to err on the side of caution.

And maybe just a thought around it, has the management or the board think about looking at doing a share buyback, using these DG gains, you are not going to use your gearing, but you also give confidence to the market. You're trading at a very attractive price.

Your thoughts around that.

I think it is something that we are open to explore, yes. That's what I can say at this point in time.

My second and last one would be on your valuations, right? I noted that China valuations was fairly stable.

And looking at how rents have fallen over the past couple of years. I'm just wondering, could you remind us this cycle, how much has China valuations declined?

And what are valuers saying for being able to maintain valuations at this level. Just your thoughts around that would be helpful.

I'll let Mun Leong take that question.

So I think it's not true that the China valuation -- actually, we have recognized the drop, right. So I mentioned earlier, there's SGD 52 million of net value loss and the majority of this actually comes from China, right?

So when we were -- when independent value actually presented to us this valuation, they did share with that the valuation is more of a longer-term view of the China properties. But they do see that actually there are some challenges in other part of the cities.

So for these cities, right, in other parts of China, where the supply is actually quite excessive, they've actually increased cap rate for about 25 basis points, right? So as a result, our China valuation actually comes down a bit.

But of course, I think we also have to be mindful that this is what the value as a long-term valuation, right, of course, short term, we could see fluctuation in the rental, but valuation reflects long low intrinsic value.

Okay. Next, Rachel, from Macquarie.

Thanks for the color on the trade mix. I think firstly, just a follow-up on Derek's question.

Your guidance on the divestment gains. Does that mean that there will be no divestment gain moving forward or just less, in distributed.

It will be [indiscernible]. Yes, current business conditions, yes.

And then just a second is on the impact of trade war. Have you seen your tenants coming to you looking to move their setups across different countries?

Or are they -- have you seen increased demand of them looking to take out a bit more space because they need to fill up or fill front-loading of orders or any of that sort?

Okay. There are some examples, which I'll get James to share, to give you some flavor.

Yes. So in fact, there is in Vietnam and Singapore.

So in the -- some of small tenants in East and West, East I referred to in Alps and also in West in the port area, where we have a very big facility. So these tenants are doing shipping and air freighting of industrial goods and also semicon goods to the U.S.

So in the last couple of weeks, there was a suspension of orders by their end customers in the U.S., resulting in buildup of inventory. So they actually build up of inventory if we persist, it may lead to actually some short-term ad hoc-based demand, right?

So that's what we are seeing in Singapore. In Vietnam, similarly, some of our tenants in the South in particular, in the footwear and apparel industry and also in the solar distribution to the U.S.

has been affected. So the containers are, so-called stuck because of canceled or suspended orders.

So these containers are parking up in our logistics parks for some of these tenants who were affected. So there's certainly some immediate impact, right?

You'll be -- everybody is watching in the midterm. What after 90 days pause, what actually happens.

So in terms of shifting of the supply chain and relocation of new sourcing and all that, I think it's too early from some of the tenants to say because they are also waiting the hit HQ to advice and HQ is basically adopting the wait-and-see so-called attitude as well. So everybody is watching at the moment.

Just wondering, would you be able to share how many percent of your leases are now short-term leases?

I think looking at our WALE.

The WALE -- our average rule is 2.6 years based on gross revenue. So in terms of short-term leases, in certain markets, for example, like in China, if we define as less than 1 year, short-term leases are actually about slightly less than 20% of our China leases.

But overall, other countries is more than insignificant only in China or if you define as short term as anything less than 1 year. So anything 1 year and more is considered as normal lease.

And insignificant means about less than 1% or 1% kind...

I correct myself. Anything less than 1 year in China, in particular, close to 50%.

Close to 15%, 1-5.

17%. 1-7, so it's less.

Yes. And maybe just slipping 1 more.

I saw that your Singapore assets valuation actually fell, cap rates actually expanded. I'm just wondering, are you seeing stress level in your Singapore portfolio, rents coming off or demand not so strong?

Is that the reason for it?

Mun Leong here. Yes, so maybe let me share a bit of color on Singapore portfolio, right?

The Singapore portfolio actually, as you understand, there's always land tenure, 30-years tenant tenure. So in our Singapore portfolio, we actually look at that in 3 main categories.

We have a Grade A asset. We also have a non Grade A too they are less than 20 years.

So for our Grade A assets, actually, the valuation is still holding up. In fact, we see some slight improvement.

However, for the -- less than 20 years due to the amortization of the value you will always -- you always drop, right, as we move nearer to the end of the land line. So as a result, net-net, I would say that the profile is slightly below, but it's relatively stable.

But the cap rates have actually remained stable for the Singapore portfolio. It's just that I think this time around, a lot of the hit is coming up from the less than the 20, the shortening land lease.

And it just got worse as the year goes by. We have assets that are less than 10 years.

So less than 10 years, a valuer will take a view that it will cut. If you do at a straight year amortization easily, we are talking about 10% or more kind of a reduction year-on-year.

If you talk about CapEx, it is stable, yes.

Next we have Derek Chang, Morgan Stanley.

Just a couple of follow-ups because my line was pretty bad. Just want to follow up on Jean's comments.

You mentioned U.S. exposure for China tenants.

Was it single low digit. Did I catch that correctly?

Yes, that's right.

Okay, cool. And then on the expiries that James was talking about for, was it 15% in FY '26 comes from China of that 32%?

5-0.

50% of the -- so half of the...

FY '25, this is due for 50% of the 33% you see that coming from China.

Yes, half of what you are seeing there. Half of it is coming from China.

Okay. Understood.

And I guess for this -- for the China expiries, what would be your outlook? Is it going to be the same short-term renewals?

And what's the outlook in terms of rent reversions over there? Because I noticed that there's been some slight narrowing of the negative rent reversions in China this quarter?

So in terms of rent reversion, yes, you're right, it improved slightly. It's less negative.

And outlook is that barring any drastic changes to the policies that may impact kind of overall in terms of secondary or knock-on effect on the tariffs. We believe this -- we can maintain around this level or even improve in the next few quarters, but we are more guiding towards the -- at the same level for China rent reversion around the minus 9% level.

And what's your next question or the follow-up?

Is it going to be short-term renewals as well, like less than a year or so for these Chinese expiries?

At the moment, we see this as the current trend trending still.

Yes. Although I think there are a small number of leases, they are starting to take up a longer lease.

But I think with this trade war happening this month, we will have to monitor it closely. And right now, it is still pretty uncertain.

But before this trade war, actually, we are starting to see some tenants taking a longer-term view. So I think now we are just hoping that we will continue that kind of negative high single-digit reversion.

So what Jean has mentioned, we are still watching for signs whether the tenants are locking in, doing this for longer term. We are watching this very closely there.

A few cases, but we are not quite sure whether this is trending going forward.

I guess you said that this negative high single 9% will maintain for foreseeable future. But where would that narrow down to flat?

Because these are -- you're renewing on a 1 year basis, right? So next year, they renew and it's again negative 9%.

So that wouldn't imply a rent reversion of, let's say, over a 3-year cycle, we're talking about 27%, 30% negative reversion.

We are hopeful that within the next 4 quarters, hopeful, barring any shocks that you hear in the global trade.

Okay. So assuming no further upheaval, I suppose the next 4 quarters, you could see it come down to 0 is the hope.

Yes, correct.

[Operator Instructions] We have Dale.

Just actually one question for me. I think I just wanted to ask, with all this trade tension and tariffs, how has that actually changed your strategy on portfolio rejuvenation.

I think, I mean, in terms of acquisition divestments, are you changing your focus, especially given that you are quite ASEAN focused at this point in time?

Yes. I think at this point in time, I think if you look at the ASEAN focus.

We are actually still very small. I think if you look at India, Malaysia, Vietnam, it is still a very small portion of our portfolio.

We are talking about just around 10% to 11%. So in terms of the strategy, in terms of the country mix, it hasn't changed.

It hasn't changed. It remains intact.

And who knows that with the current kind of cooperation that Beijing is looking at to collaborate with the trading partners in the region, in Asia and in ASEAN. Well, I mean, nobody -- it's anybody's guess that maybe there might be more intra regional trade flows that come more in this part of the world.

So I think it is still something that it is uncertain. And for now, the strategy remains the same.

In terms of where we are looking at to acquire.

And in terms of divestments, right? I mean, I'm not sure if you have any potential property line up for sale.

Are some of these buyers walking away at this point in time. And follow-up to that also is in terms of your AEI's redevelopment, are you taking a step back now and then reconsidering some of this?

Or you're still powering ahead?

Okay. For divestments, we have identified a lease of lower specification assets that we think it is not suitable for us.

And really, it is about the ability to execute in the current business environment. So if we look at the current kind of climate, those that we have signed, we didn't hear any sign that they are backing out.

They are still proceeding with the deal, which are just pending the completion. So there are 4 that we have announced, and we did not hear any feedback that they're going to withdraw.

So that remains. But as to the new acquisitions going forward, I think in the current heightened uncertainty, we think some of the buyers or potential investors may be also adopting a more cautious look.

So the pace of divestment may be slower this year. So that is what I think we foresee the pace will be slower this year.

So same goes for your acquisition plans and redevelopment side should also slow down?

The acquisition will very much take the pace of how fast we can execute in terms of our divestment similarly with AEI as well. I mean on the back, I mean, we are still evaluating opportunities for asset redevelopment to see whether there's any more untapped potential within our portfolio, which we are still evaluating it and it's still ongoing, and we're just trying to seek some kind of in-principle clearance.

Particularly, I think we have some time back mentioned about foreclosure in Singapore. That is still ongoing.

It is still work in progress.

Joy?

Just a few questions. First, in terms of shorter-term renewals, I know this is pretty much China at the moment, but do you see this actually spreading across the region given what's going on?

And if you can just share a little bit of the tenant sentiment as you do your leasing. Does that affect any other region, for example, your 51 Benoi?

Currently, we don't see much trend immediately, right, like with Singapore 51 you mentioned, now it's called 5A Joo Koon. It's still averaging about 3 years and some would even lease it as 4 and 5 years.

In other countries, like Vietnam, I mentioned, since last year, the tenants and prospects have taken a more cautious view. So the leases could be between 2 to 3 years instead of 3 to 5 years.

So in terms of -- yes, they are more cautious for sure. In terms of green for finance expansion, especially big expansion spaces in markets like, for example, even in Hong Kong, where the demand, as you know, is a bit soft, currently.

And in -- so decision-making time, no change, right? But in terms of cautious, in terms of the big business expansion and consolidation and relocation, we don't see any change at the moment because it's still the same metrics that our tenants take before they take on strategic moves to change their leases or to move distribution centers because, in fact, there's a lot of investment costs required.

So one thing...

Sorry, just think the liberation date, right? Have you actually signed or renewed tenants?

And did anyone come up to you and say, I need a bit more time?

Currently, no.

No. Actually, if you look at our -- the 5A Joo Koon, formerly 51 Benoi, the 46% was substantially secured this month since the liberation date.

The tenants -- yes, so I think for Singapore, we feel that the tenants are still adopting that usual business and usual stance for now because I think really, it is very hard to predict what's going to come next year.

And also, if I can just ask for Vietnam as well because this year, you got quite a bit of Vietnam leases up due. How -- have you been business as usual in Vietnam?

Or you foresee certain sort of shorter renewal leases?

Vietnam, I think some of the tenants are -- like, for example, in the furniture business or the apparel business, we have seed them out in the past really, over the years. And -- but in terms of -- and we even pre-terminated some of the so-called lower end businesses or tenants who are -- I mean, tenants in those business place, which seem to be more risky and then through them with even higher rentals.

So to answer you, to that's a proactive moves, that action that the local team is taking in Vietnam. And to answer your question whether there's any change in behavior.

At the moment, we do not see yet, but like I mentioned, in Vietnam, the consumption demand is still fairly high, right, and no doubt, that 30% of our business in Vietnam is exposed to global trade, of which about less than 10% is the U.S. But given the exposure to U.S.

trade may be what you call it, replaced by trade to intra-Asia and also to E.U. So the tenants themselves are changing their own business strategy.

In terms of renewals and new leases, at the moment, we still see a fairly active leasing inquiries, and we're confident based on our track record in renewing and replacing our tenants in Vietnam, that this high occupancy in Vietnam will carry on. We've been hitting almost 100% every quarter in the last few years, except for this quarter in one property.

But that is going to be fill up, as I mentioned.

Okay. And then 2 more sort of follow-up.

One is in terms of tenant breakdown, the 13% IT Electronics, is there any concentration in one specific geography?

Industry, specifically?

The electronic IT and possibly, if you can talk -- no particular countries.

There's quite a lot of specified across countries.

Okay. And then in your top 10 tenants, I noticed that JD dropped off.

Any background to that? And also, do we expect any further changes this year in your top 10 tenants?

Good question. JD dropped off because of consolidation in China, right?

So we have consolidated. And in terms of some space that was released, and we replaced with somebody else and also rent, effective rents have dropped.

So they are no longer in our top 10. That's one of the reason.

And in terms of the outlook for the top 10, I think very much most of these players, except one of the hypermart Australian companies, a tenant, right, their lease is expiring. So we're in the process of replacing them.

So one of the hypermart companies in Australia, their lease is expiring. So they're moving to their own facility and will be -- so their name will be taken out from the top 10 by the end of the year.

Okay. There's another expiry in your top 10 that's secured.

Sorry, don't understand your question.

Hong Kong TV.

That's renewed.

It has been renewed.

Terence?

So without really taking into account any tariff impact. I'm just wondering if the pressure for FY '26, it actually sounds quite similar year-on-year.

So if you just hear me out, well, there be some effect from dilution from divestments. The FX for EM Asia has weakened further.

I think China weakness continues, and we also have this issue of 0 capital distributions, if I understand it, right? So it sounds like the order of magnitude for headline DPU decline will perhaps be similar to the 11% we saw for FY '25 end.

Would this be the right intuition, because I observed, I guess, consensus has been quite flat year-on-year thus far.

Sorry, I think it will not be quite appropriate for us to comment on the magnitude of DPU because this is, I think, quite sensitive. You make up your -- you have your model to work on, yes.

Suffice to see the pressures that I alluded to are still quite pertinent for FY '26, quite similar before even...

And for the factor you mentioned are appropriate, yes.

Okay. Got it.

And the last one I forgot to ask, if I missed it, what was the guidance on borrowing costs for FY '26?

Okay. Terence, I think we have always guided about SGD 17 million increase, out of which effect -- some of it is coming up from the taking up the interest to P&L after the interest incurred on the 5A Joo Koon post-completion, so that would add about SGD 7 million to our interest cost.

And then, of course, we have hedges that are falling off. So those will be replaced with higher rates.

So I mean if you look at some of the hedges that are falling off in the new financial year, for JP wise, we're locking at about less than 0.5%. Those will be released higher than for the other currencies, those are also locked in a less than 1%.

So those would also naturally even if you have to replace the cheaper CN while borrowing, those would still be higher, too. So higher volume costs will continue to impact our DPU.

And then I think the latest would be -- there will be some impact coming on from the JPY borrowing costs that has been exceptionally low for like the past many, many years, which allow us to keep our interest cost at 2.7% that would also -- depending on how fast BOJ increase the rate, so that would also impact our borrowing costs.

Okay. So any guidance on the target number like we should think about, on a blended portfolio basis?

I think we're looking at -- okay, based on whatever we see now, excluding whatever shocks that we can have from all this volatile market, we're looking at still SGD 17 million.

I think we have Vijay.

I have 3 quick follow-up questions. My first question is, can I know how much divestment gains you have currently in your kitty and the guidance is you don't plan to distribute divestment gains moving forward.

Is that right?

That's right. I think based on what we have in the bank is about SGD 19 million, those that have been completed.

My second question is in terms of -- correct me if I got this right. You said about 50% of your renewals for this year is coming from China.

And if I extrapolate it with your revenue, which is about 17%, 18%, China, it looks like 80 to 90 percentage of your China portfolio is up for renewal this year. How do we sync this with 1 year WALE for China or less than 20% of the portfolio 1 year WALE.

I mean, am I right in saying that almost all the leases in China are up for renewal this year?

No. I think interpretation is incorrect.

In terms of the WALE, right, we mentioned there is 1.4 years, right, on average as of 31st March this year. So all of the lease expiries in China in FY '25, 50% of them are due.

And I guess the probably discrepancies between NLA and GRA. Okay, 50%, okay.

My last question is...

No, NLA is very close.

The 1.4 year actually is, say similar for -- I mean NLA and GRA.

Gross revenue.

No, I think you're talking about GSA or I think. Okay.

Anyway, it is similar by NLA and by revenue 1.4 years.

I mean the China revenue is 17%, 18%. And you are seeing 16% percentage of your expiry is up for renewal.

I'm just trying to sync up these 2 numbers with your WALE, but probably I can take this offline, if this is a different topic. My last question is in terms of 5A Joo Koon site.

I mean the lease secured so far seems to be slightly below the what, bucket, would I be right in saying that 46% seems to be slightly low compared to demand at this point of time. And in terms of ROI for the site and rental expectations, how is this compared to what you have initially planned for this site?

You are saying that it's below, what sense, if I may ask.

Generally, I think compared to logistics demand, I would have expected occupancy somewhere closer to 80% by -- closer to completion date.

No. I think if we look at our track record in terms of AEI, I think this is one of the better ones that we are able to secure pre-commitment ahead of TOP.

Typically, in the past, we are saying that generally, the leasing pickup, the momentum will come in usually between 6 months after TOP. But this time around we are seeing actually substantially precommitted ahead of TOP.

And if we look at our large AEI project in Singapore that was 76 Pioneer, we didn't have such high pre-commitment rate ahead of TOP. Yes.

So I hope that answers your question.

In terms of ROIs and rents, is this tracking your initial expectation?

I think in terms of the rent, it is within our feasibility studies. So I think it is in line with what we are expecting.

Okay. Next, we have Brandon.

I just want to talk a bit on your China again, right? Can you share about the reversion and occupancy split by Tier 1 and Tier 2 cities for this quarter as well as the guidance going forward by the tiers.

James here. So reversion rate for 4Q Tier 1 was 0.3% positive.

Tier 2 was negative 10.8%. So this compared with 3Q was Tier 1 was negative 3.1% and Tier 2 was negative 10.5%.

And the guidance going forward, like I mentioned before, it should be, overall China, we should still see hovering around this minus 9% or so, negative reversion. Bear in mind that the market vacancy in places like Shanghai has gone up quite a bit of new completions in places like Songjiang and Qingpu and Jiading 4Q last year and 1Q this year.

In some markets in the north of China, like around Beijing and Tianjin, the vacancy rate is close to 25% and above, 25% to 28% in the north. But south, market demand is still stable, right?

So market vacancy is in the low single digits.

But for you guys, we should continue to see that 90% range maintained as an outperforming the market. Is it correct to say that?

In terms of occupancy, yes.

And my second question is more back on the export markets. I know the clarity on that is much better given what you said.

But have you been able to track for your tenants, right? How much of them actually sourced their materials and any of their parts of the products from the U.S.

instead of just exporting. Are you able to share anything on that?

Yes. We had tried to engage some of the bigger tenants, particularly in 2 of our properties located in the port and airport that is Lingang and Ouluo because most of these tenants are doing global trade and they are doing import export and they are logistics companies and distributors.

So yes, a majority of them are doing global kind of trade in and out. And specifically to your question, importing from U.S., yes, there was 1 particular tenant possibly is impacted, but it is not a major tenant.

So this is sourcing from the U.S. So in the big picture, MLT portfolio sourcing from the U.S.

is limited at the moment, exposure for imports. So the majority of them are still producing locally or even sourcing from Malaysia, even some from Vietnam.

Okay. Next is Jonathan.

First question relates to 5A Joo Koon Circle, could you share how much of the development costs already paid? And then how much more to be paid in FY '26?

And in your slide, you've given GFA. Could you give us the NLA for the property?

The second question relates to the occupancy. You mentioned 3 countries where you have transitional vacancy and already backfilled.

Sorry, I missed the name of the 3 countries. And can you share the source of demand for backfilling in the 3 sectors where the new tenants came from?

Okay. I'll take the last question and the second last question.

So the backfilling is in countries like in Singapore, and Vietnam, all right? These are local companies.

All right. And the other one, the other country this year.

Last, we're building one more country which I mentioned, Singapore, Vietnam, and Malaysia. Malaysia, there was a date.

So we are in the process of negotiating one of the prospects to backfill the space in 1Q. So these are all local companies.

So these were in relation to your last question. So with regards to 5A Joo Koon, in terms of the annually you're asking, so it's -- annually is about 850,000 square feet compared to the GFA is 887,000 square feet.

And how much have you paid?

On the 5A Joo Koon, our COP in May, so as of 31st March, it's about 94% completed. But I think in terms of payment, after taking off the retention so maybe about 85%.

8-5?

Yes, payments. So that we can...

Okay, then next year is 15%.

Yes 10% to 15%, yes. About that.

Okay. Krishna?

Just a couple of questions. First of all, you earlier used to give that constant currency change in revenue in PI.

This time, you haven't given so how should we see like FX, not a big kind of impact this time around in the future as well? That's the first question.

FX.

Yes, you used to give the constant currency revenue and NPI.

On constant currency, the impact on NPI.

Okay. We will look for it.

Any -- can you read out the second question?

The second one is on the Singapore dollar base rates. That has fallen quite significantly, but I don't think you commented of any kind of sort of advantage from that in terms of financing, or swapping it into other currencies and stuff.

So is it like the margins have expanded? Or are you not kind of getting any benefit from that?

Okay. So I mean if we look at the SORA, some of the interest rate and some of the currencies have actually pull back specifically on this SORA, that would explain some of the savings that we had on 4Q versus 3Q.

If you look at 4Q versus 3Q results, foreign costs have actually come off slightly mainly because of the lower SORA that we benefited from in 4Q itself. So yes, you are right.

Moving forward, if SORA continues to come off, we should have some benefit, but they are offsetting factors as well, like I mentioned earlier...

What are the offsetting factors?

So I mentioned earlier. So in terms of our unhedged loans, about 50% is in JPY, and 50% is in SORA.

JPY, we expect that to increase. So that may be offset by some of the SORA, lower SORA, so it also really depends on Fed, the floating rates move across to different currencies.

Yes. So I mean, we can take it offline on the constant currency one.

And I just have a small one. In your slide that you show your exposure mix where you have given 85% domestic consumption, there is some -- the segment called other which is 8%.

So I just happen to check the earlier years as well, this used to be something around 2%. I mean why you sort of have it -- what does it present, if you can give some color, this others, 8% on Slide 15?

We'll come back to you offline as well. Can we do that?

We need to brush off?

Can.

I think we have likely covered all the questions, including those that are online, from online audience. Thanks very much for joining this call.

Any other follow-up questions, please send through via e-mail or call me. Thank you.

Bye.