Morning, everyone. Thank you for joining in Frasers Centrepoint Trust 3Q FY26 business updates earnings briefing.

I've got here with me today the senior management team: Richard, who is our CEO; Annie, who is our CFO; as well as Pauline, our Managing Director for Investment and Asset Management. As you can see from the contents, we've got a lot to go through today.

Without further ado, I'll pass it on to Richard.

Hey, thanks, Judy. Good morning, everybody.

Let's get down to business. For this quarter, instead of jumping straight into the business updates, we also included the recent activities that happened around the REIT itself, the first one being the divestment of White Sands.

Next slide, please. Not going to go into every detail here, but just couple of quick highlights.

The property was transacted at $467 million, and the last valuation was done at $431 million. That kind of give us a net gain of approximately 32.4%, and this transaction is also at a premium to the valuation at about 8.4%.

The exit yield based on 2025 year-end NPI is about 4.6%. Some of the key rationales, you can see there.

Of course, one of the main one is actually the reduction of our gearing from 40% to 36.5%, thus giving us the level of headroom for us to again look out for opportunities in the market, which we did, and I'm going to share shortly as well. These are just some information on White Sands.

Probably most of you are familiar with this. Also, just a couple of highlights: the leasehold for this asset is gone down to about 67 years, and it's also the smallest-sized mall in our portfolio at about 150,000 square feet.

Some of those are also considerations we take into effect when we look at the divestment of this asset. Next slide.

What are the end products of this divestment? Aggregate leverage dropped to 36.5%, giving us a good headroom.

NAV actually went up because we divested at a premium. There's a slight dilution of DPU by about 1.9%, right?

Next slide, please. What did we do with the headroom that we have managed to obtain from the divestment of White Sands?

We participated with the sponsor, FPL, and our joint venture partners in this Bayshore Drive site, the one, as you can see, that is with the yellow star on the right side of this pictorial. Right, okay.

Next slide, please. Very quick run-through on some of the key details: site area was 618,000 square feet.

What we did is the tender price is about $2.1 billion, but more importantly, the total development cost for the retail portion is approximately $613 million. The GFA for the commercial portion is about 238,000, if you round that up, and the estimated NLA ranges between 160,000 to 180,000 square feet.

That's a good-sized mall if you can reach the upper limit of this NLA. Our joint venture partners are SingHaiyi, MCL, and also Sekisui House.

The target completion for this project is roughly end 2030, it takes about 4 years of construction. Next slide.

Some of the key highlights of this site. Of course, most of us, if not all of us, are familiar with the precinct itself.

This is the Bayshore precinct, an area where it has got high-density population, and also, I would say, pretty high income range for this whole precinct itself, right? This will be the only commercial site in this whole precinct, and it's in a location where it's also encompassed part of the Bedok region as well, right?

What is important is also when we look at our investment criteria, one of such is definitely looking at connectivity. This site, again, it's on a car-lite precinct, and it has a direct connection with Bedok South MRT station, and also a new bus interchange.

The population is expected to continue to grow, as you can see from this diagram. Some of those developments that you can see here actually will be coming on stream, we are expecting around 10,000 new homes that has been planned and will be developed around this mall itself.

The site itself, FPL and its partner will be actually building about 100, rather 1,280 residential units. Of course, this site is also close to other amenities.

It's going to be located next to the largest SAFRA clubhouse, which is also due to open in 2030. A lot of amenities, growing population, and very good connectivity.

Next slide, please. These are some strategic rationales.

Some of them I've mentioned before. Definitely it fits into our criteria of a prime suburban mall with very good connectivity, with a growing population.

Also, if you look at it, this also gives us a opportunity to be looking at development as a new growth driver, right? The question is always about what's next, is there malls for us to purchase, what are the opportunities available.

This will give us a new opportunity to look into, and I would say that not every developer or not every REIT in Singapore has this capability. It's just a couple of us who can partner with our sponsors to do this kind of thing, right?

In a way, that will give us an opportunity as a new source of growth. Excellent location.

That's something that I mentioned just now. Of course, the other critical part is if you get into a development of such, in a way, we are entering at a very attractive yield.

The yield on cost is approximately 5%. We divested White Sands at 4.6%, you can see that kind of arbitrage that we can make if we are able to get into a development project.

By participating from the onset, it also gives us the opportunity to shape the direction of the mall that we want it to be, how we want the mall to be positioned, etc., right? I talked about the fact that this is a very highly populated region in Singapore, and the retail space per capita in this area is actually significantly lower than the Singapore average and also most parts of Singapore as well.

Next slide. Then now turning back to the BAU, or the business as usual, in terms of some of the key highlights for this quarter.

Committed occupancy remains very strong. Again, it's over 99% with some frictional vacancy while we churn out some of the spaces.

Year-to-date shopper traffic and tenant sales continue to be positive. Traffic has gone up by 2% year-on-year on a year-to-date basis, and also tenant sales at 1.8%.

Capital management: here, you see we actually stated the gearing at 40.4%, but that's because the completion of White Sands is going to take place sometime in September. If you take that into consideration, our gearing would have come down to 36.5%.

The other positive thing to note is also the cost of funding has continued to come down, we're looking at 3% for this third quarter. Hougang Mall AEI update: we'll go into a little bit more detail, but happy to say that we're on track to complete, and over 98% of the space has already been pre-committed.

NEX AEI is also progressing very well. Phase 1 achieved 87% commitment, and also 73% of those spaces at this phase is actually new to mall brands and concepts.

High level macroeconomics: GDP, we are still looking at 2% to 4% for this year. Surprisingly, Q2 actually came in pretty strong at 5.7%, but MTI has kept that estimate of 2% to 4%.

Core inflation for June came in at 1.6%, but they also maintain the inflation estimate to be around 1.5% to 2.5%, right? Hopefully, the announcement by MAS can also kind of cap the core inflation in check as well.

Retail sales for Singapore on a whole, year-to-date, is about 3.3%, and FCT came in at 1.8%. Of course, the Singapore sales figures also include the entire sales, right?

Those that happen in Orchard Road, online, etc., right? Ours is just purely our portfolio.

F&B sales, Singapore as a whole, 1.1%; for FCT, we grew at 2.1%. Rental, again, similarly, we are also on an upward trend comparing with the market as a whole for suburban prime retail rents is expected or actually grew by 1.4% year-on-year.

Next slide. In terms of supply, continue to be limited, especially if you look at significant suburban space, right?

Between 2026 to 2029, we are looking at close to about 447,000 square feet of suburban space. These are actually multiple sites, right?

The largest probably is the one in Pasir Ris, 107,000 square feet, and then you have the one in Canberra is about 130,000 square feet, right? The rest are about 100,000 square feet and so on.

It's quite fragmented. It's more you would deem as a neighborhood center rather than a pure prime suburban mall.

Limited supply is expected for the next couple of years. Next up is the financial highlights.

I'll hand over to Annie.

Thanks, Richard. Good morning, everyone.

A quick update from me on the financial highlights for this quarter. As mentioned earlier, I think gearing for this quarter stood at 40.4%, which increased slightly from last quarter.

On a pro forma basis, post White Sands divestment, the gearing would be approximately 36.5%. The interest coverage ratio remains healthy at 3.36 times.

Cost of debt for the quarter is around 3%, which is a decrease of 20 basis points from last quarter, and a 70 basis point reduction year-on-year. We expect that the full year cost of debt for this year to be around 3.2%.

Around two-thirds of our debt is fixed at quarter end, and our credit rating from Moody's remain unchanged at Baa2 stable. Next slide, please.

Yep, all refinancing in FY2026 has been completed. The next refinancing will be the first quarter of 2027, and we have commenced discussion with the banks for the refinancing.

With the refinancing that were done this year, you can see that it's well staggered, and there is no more than 30% borrowing that is due in one financial year. I think with this, I will hand over to Pauline, who will walk us through the portfolio and AEI highlights.

Thank you.

Thank you, Annie. Good morning, everyone.

I think Richard has touched on some of these key performance metrics, but I'll try to provide a little bit more flavor as I go through the slides. Right, on this slide, you see committed occupancy.

Committed occupancy for the portfolio has maintained at the high 99% for this quarter. You see that consistently over the past quarters or so, the occupancy has maintained at this good level.

The quarter-to-quarter fluctuations is largely due to tenancy churn because one area of focus for us is also constantly improving and enhancing the trade mix for our malls, and that entails, to a certain extent, some downtime. Next slide, please.

On this slide, you see that both shopper traffic as well as tenant sales have maintained upward trajectory, both on a quarter-to-quarter basis as well as year-on-year, year-to-date basis, right? In terms of shopper traffic on a year-to-date basis, we have actually increased the shopper traffic by 2%, and also tenant sales by 1.8%.

In terms of looking at the tenant sales for the quarter, we do see that it's at 0.2%, arguably, it's a little bit sluggish. Then that's due to the churn as well as the refresh that's undergoing our portfolio.

Just to give a couple of larger examples, say, for example, at Tiong Bahru Plaza, we have actually recovered the cinema space, and we are repurposing that for an indoor activity park. The other example would be at Northpoint City, whereby we're looking at repurposing again the gym space into a duplex, right, for Uniqlo.

All this is in view of the fact that we need to actually maintain the relevance of our offering, right? We've also looked at the sales productivity of our portfolio.

On total basis, the sales productivity of our portfolio has continued to improve, somewhere in the region of three over percent, more than 3%. When we deep dive further, we do see that the top few trades that contribute close to 80% of our total sales have actually shown an increase, right?

The top three trades, for example, would be the likes of F&B, beauty and healthcare, as well as supermarket. Kind of that lends credibility to the fact that our portfolio being very much focused on convenience, necessities, non-discretionary, remains very resilient and robust in terms of trading performance.

Next slide, please. This slide, we look at the WALE, 1.7 years, it shows very stable cash flows.

If you look across these lease expiries in the medium term, looking out, say, over the next three years or so, we do not see any concentration risk in terms of this lease expiry. As at the end of the third quarter of this financial year, we have derisked more than 80% of the leasing stock in FY26.

We're left with 4.9% by GRI, and the bulk of these are actually in advanced documentation stages as we speak, right? Next slide, please.

I think a key focus that I alluded to earlier is that there's always a need to maintain the balance between protecting the occupancy and also updating offering, right? Refreshing the trade mix ensures that our portfolio of malls continue to be relevant to its shoppers, but of course that would entail some short-term pain in terms of downtime, right?

Over the course of FY26, we have brought in 69 new-to-portfolio tenancies, and just to highlight that these are new to portfolio, right? There would also be, for the various malls, new-to-mall brands that we are bringing in that is not included in this 69 count.

All this lends diversity to our offering. You see that it's a mix of not just F&B, but also across the different trades, lifestyle as well as fashion, right?

My take on this is that the Singapore retail market continues to remain active. Tenants are prioritizing the prime malls to actually expand their market presence.

Next slide, please. This slide shows or demonstrates our focus on driving traffic to malls and also driving the sales conversion.

A lot of hard work on the ground by the team in terms of sustaining the positive sales growth trajectory. There's a lot of focus on bring the experiential to our shoppers, right, engaging them, and then all with a view of fostering shopper loyalty as well as repeat visitation.

Next slide, please. I'll cover a little bit about the asset enhancement initiatives.

I think one of the key pillars of our growth would be enhancement growth. How do we actually extract more value from our existing portfolio?

Hougang Mall, which is at its tail end of the asset enhancement, I'm happy to share that in terms of the progress, it's actually on track in terms of project implementation as well as leasing. We're looking at completing the AEI in the last quarter of this financial year.

If you recall, when we first shared this asset enhancement initiative, we provided an indication of about 7% ROI. Happy to say that we are on track, if not looking at outperforming this ROI, right?

Through this AEI, we have transformed the mall, not just upgraded the physical real estate, we have also improved its trading potential in terms of sales, in terms of rents, and also delivering valuation uplift to the investors. Next slide, please.

Yep, in terms of the other larger AEI working on for NEX, we have actually commenced Phase 1 in May of this year after taking back the space from Isetan. The first phase is focused on unlocking value through resizing and reconfiguring this anchor space.

Happy to share that for this first phase, we have also achieved pretty healthy leasing traction, right, in terms of commitment of leases, in terms of getting our target brands to reposition this space. For this Phase 1, we have achieved 73% new-to-mall brands and concepts.

Looking positive in terms of some of the trade remixing and the value enhancement objectives that we have set ourselves to, right? Phase 2 is also on track for commencement.

We're looking at starting in the first quarter of the calendar year 2027. Right, ESG.

Thanks, Pauline. I'll go through some of the slides on the ESG part as usual, to make sure that we have a comprehensive review.

As for Frasers as a whole, we are very active in terms of the placemaking initiatives at our malls. I think from the World Water Day at Northpoint City as well as Heart for Hope, which is a signature event at the mall itself, to something for the kids in terms of introducing them to EVs, there's been a lot of initiatives on the ground, again, to continue to engage the community.

As well, shoppers from all walks of life, we've got the Silver Generation community walk at Century Square as well, and various other sports activities such as pickleball at Tiong Bahru Plaza itself. In terms of curating the experiences at our malls, there is something for everyone.

I'll next pass it on to Richard, who will go through looking ahead.

Sorry. Thanks, Judy.

Just wrapping up what we've just shared today, a lot of focus again is on some of these key pillars. Enhancement growth is something that we have spoke about at large, and we have again proven the capabilities that we have at Frasers in terms of executing, leasing up, and also bringing in concepts and also freshness into the mall, right?

We shared about Hougang Mall. We shared about NEX.

I know some of you will be wondering how come we haven't shared about Causeway Point, right? We're developing the materials.

We're developing the fly-through and so on, we just need to make sure that all the documentation are in place, MOU are signed before we can share this. But 4Q, we will be able to share the AEI, may not be the entire extent, but at least some preview of what we have in mind and what the plans that we have for Causeway Point.

AEI is a key component of our growth strategy. The next one is of course looking at acquisition and divestment, and we shared about the success that we have achieved in our bid for the Bayshore site.

That gives us another new growth opportunity in terms of growing our portfolio through development. As I mentioned, right, it's going to be one area that is a key differentiator for us as well because not every REIT in Singapore has the capabilities to do so.

We are very happy that we are able to partner with a couple of our partners together with sponsor to win this site. Organic growth, this is where again the team works very hard on the ground looking at how we can continue to grow revenue, how can we continue to look at cost mitigation, right?

This is an ongoing process for retail mall. It is something that we need to continue to be very focused, continue to be very sharp, and work very hard on this particular growth strategy.

Capital management: cost of fund has come down to 3%, and as what Annie pointed out just now, we're expecting to close the year, the full year, this FY at about 3.2%, right, average cost of fund. The leverage has come down to about 36.5%, like what I mentioned, it gives us the headroom, which also provide us the opportunity to participate in the development itself.

With that, I will end our presentation and let's move on to Q&A because I've seen a lot of hands have really come up. Judy, back to you.

Thanks, Richard. First up in the Q&A section, we have Terence.

Can you unmute yourself to ask your question, please? Morning, Terence.

Hey, thanks, Richard and team. Congrats on a very, very busy quarter.

Really done well in terms of the sale and also the development opportunity. I just want to ask on Bayshore.

I wanted to understand a little bit more. I think working through some of the numbers, we are sort of for this $613 million, we're getting almost 3,500 per square foot on NLA.

To get a 5% yield on cost, it sort of suggests that the stabilized rent for the mall will be above $20. If we compare this against your existing malls across the FCT portfolio, it does seem elevated.

I wanted to understand a little bit more as to what are the assumptions going into this, and can this 5% yield on cost be achieved in the first leasing cycle? Secondly, on Causeway Point, could you share on the NLA for Metro and what are some of the thoughts behind Metro?

When could we see that space return? Thanks.

Right. Terence, you've been looking at computation of the rent itself.

Over more than $20, that is quite sharp, but I don't think this is something that we're targeting, a little bit more conservative than that. In terms of how we work on the return itself, there are couple of key features of a mall that we need to recognize as well, right?

Firstly, this mall, it's not a very large mall, 160,000, 180,000 square feet. The tendency is when the mall of this size, you work on per square foot, it tends to sound a little bit higher than normal as compared to your NEX or Northpoint City.

That's the first point. Secondly is in terms of rent itself, don't forget within the revenue portion, there are also other revenue, right?

Rent is only one portion, but we also have other revenue that we can achieve to make up the entire revenue before you offset your cost to get the NPI. The next point is also how the mall is going to be structured, right?

If you notice, generally for retail mall, as you go higher and higher, the rent kind of comes down, right, because rental is always against gravity. Right, but for this particular development, we are looking at only two levels: basement 1, level 1.

Significantly, every part of the mall is going to be pretty much a prime space. With that, and with proper planning, we believe that we could possibly get a pretty strong rental rates.

Also, if you look at it, today is 2026. You're looking at 4 years down the road, there's also this escalation growth that we're looking at from where we are today.

That's how we arrived at our estimated 5% yield, right? I hope that gives you some color as to how we work around this development, this investment.

Of course, at some point in time when we have the plans in place, the development plans in place, and so on, we probably can come back and share this with you guys and also with our investors. The second point, it's about Causeway Point AEI and in particular, your question is around Metro.

I'll share a little bit more, then maybe perhaps Pauline can jump in as well. The news came out on Metro is nothing surprising for us because we've been engaging them for a very long time.

We kind of agreed in principle that keeping the department store as is, in the current state, is not something that we as landlord would want to do. Probably as an operator, they came to conclusion that perhaps there are other ways in which they can be more productive, they can be more efficient, right?

They announced the business restructuring, and that's something that we have been aware for a while. We've been engaging with them, and we see there could be opportunity for us to continue to work with them with their differentiated approach of breaking up a department store into multiple concepts.

Some of the concepts are interesting and will be relevant. This is an ongoing discussion we have with Metro as we plan our AEI.

As we shared, we are looking at turning Causeway Point not just as a dominant mall in the north area, but also more like a regional mall. We hope to bring in interesting concepts, interesting mini anchors rather than having a very large anchor as what we have today.

That will bring a variety, will bring in more interesting concepts as well. That is where we are for Causeway Point.

I'm not sure whether, Pauline, you'd like to add on anything as well.

Maybe just a couple of points. I think in terms of timing, it's pretty much aligned with our plans for the commencement of AEI and the recovery of this space.

Also, this is something that has been at the back of our minds when we undertake the space planning as well as the trade remixing for Causeway Point. Just to give assurance that, whilst this is news, but it didn't come as a surprise to us.

We have actually been looking at this option as part of our overall planning for the asset enhancement.

Thank you so much. That's all I have for now.

Thanks, Terence. Next up, we've got Yew Kiang from CLSA.

Hi, Richard and team. Good results.

Just quickly, recently there's this RTS impact report, right, $290 million net retail spending leakage. Has the team done any similar report, and how does it compare with their findings?

That's mainly the question I'm trying to figure out. Also, can you share the tenant sales performance for the last two years for CWP and also Northpoint?

The the report, yes, we are very much aware of that, and I don't think it's a significant deviation to what we have shared before, right? We we spoke about engaging our own consultant to to look at that.

CBRE was was brought in. What they have shared with with us is also quite in line in terms of the projection 2% to 4% increase in in in sales leakage, to speak, right?

Nothing new. Even some of the surveys that they have shown about what are the trades that is more going to be more significantly affected, and if you if you had a chance to look through the report is also they they made a point that probably those in the northern region, the the shoppers are already pretty much used to that.

They, in fact, they don't see that that leakage to be more significant in the north than than other parts of Singapore. Again, this is something that we are, aware of that.

We are cognizant of that fact, right, as we did our own studies and also worked with our consultants. By and large, again, but having said that, we we continue to watch this space, watch the market.

As we plan our AEI, we are taking note of what are some of the trades that we think, we would like to reduce, what are the areas that we want to emphasize more going forward. This also talk about, this this, besides looking at it from a leakage or impact perspective, there are also a lot of opportunities.

That's where we think, we want to leverage on those opportunities as we expand our mall to make it into a regional-sized mall, having the ability to to capture more than just Woodlands catchment market. We want to extend it to potentially other parts of Singapore because this is going to be a major transportation hub, as we spoke, right?

Woodlands is an interchange station, right, and where you can expect people from other parts of Singapore who wants to go to RTS would come to this station to to change to the train that takes them into the TEL line that takes them into RTS. It's going to be more busy, getting more people coming around.

Also, not just Singapore, Singaporeans, right? We're expecting tourists who wants to go RTS or go to JB may also be using this route and also using this as a transportation hub to stop and and and transit.

Similarly, people coming from JB, right, they are also going to be coming in because of this convenience and this this ease of connectivity. From a total perspective, the the report doesn't seems to suggest anything different than what we have seen, what we have been aware of.

Even if you if you're looking at potential potential impact, for example, I mean if our occupancy is on the average about 16%, and in fact, our two assets in the north is slightly below 16%. Either impact of 2% to to the sales leakage or 4% to sales leakage, we are still within 16.5%, 16.6%, that kind of range, which is actually still very, very healthy, right?

That's how we look at it. On the sales for the two malls, I would say they have continued to grow.

I can't give you the specific number, but they have been growing, right? Despite the fact that every weekend is is congested, right, every school holidays, every holiday is massive jam, but the sales at our two northern malls have continued to grow.

Thanks. Second question is on Bayshore, just housekeeping.

Will this be consolidated, equity accounted? Then, also related to Bayshore, can you give the construction cost and the land cost split of that $613 million?

At the moment, we can't provide that information as yet because while we have an estimated cost that is kind of capped it, but we are still working through the cost with the partner, right? One of the partners is actually a construction company.

This is not available at this point in time, and even our $613 million is an estimate as of now, right? We will probably be able to update once we lock in the cost with all the scheme in place, right?

That would be probably at a better time to do so. In terms of how we accounted, maybe Annie, you want to check in on that.

Yew Kiang, it will be accounted for as equity accounting because it's a JV.

Thanks. I'll jump back to the queue.

Thanks. Thank you, Yew Kiang.

Next up, we've got Geraldine from Jefferies. Morning, Geraldine.

Hey, morning. Very happy to see Bayshore come true.

Let me just first round on Bayshore. 5% yield on development, I see that you have an NLA range there.

Does it matter whether you're on the lower bound or the upper bound of that range? Does that affect your 5% assumption?

It's more on the average, I would say, and we are confident of getting that 5%, yeah. Average NLA.

So 170,000 will be the underwriting. Richard, I think you've been quite balanced when it comes to income disruption.

Would you be keen to pay out some of the dividend gains from White Sands? You have about 30 $30 million buffer there,

yeah. How we look at this gains is, of course, this a possibility that we can explore when we can deploy this because, as you probably are aware, that we are going into a period of time where we expect impact to our normal operating income because the AEI at NEX, that's going to swing into Phase 2 next year.

Then we have AEI at Causeway Point coming on stream, right, for FY27, '28. This is where we would leverage on all our capabilities to again kind of top up some of those impact that may come on stream.

This amount of income that we have generated will be considered as part of the pool as well.

Thanks, Richard.

Thanks, Geraldine. Can we have Rachel from Macquarie?

Unmute yourself to ask questions, please. Thanks.

Morning, Rachel. Hi.

Good

morning, Richard and team. Can you hear me?

Yes.

Yes,

loud and clear.

Great. Thank you.

Maybe following on from Geraldine's question, you do have quite a bit of AEI that's happening next year, actually: Causeway Point, NEX, and then yeah. They are quite huge as well.

I'm just wondering how are you going to think about capital top-ups and how much left in your divestment gains, and you still have your Bayshore development ongoing also, right? That would be cash as well spent.

Can you give us some guidance on this?

For Bayshore development, the interest cost will be capitalized, there is not significant impact to the overall DI perspective, right? We don't need to be too concerned with topping up that portion.

Certainly in terms of AEI, when we have two major AEI that's ongoing, that's where we will look at again trying not to impact our investors' income during this period. AMTs will be used.

If it's not enough, then that's where we could then look into this income. We have, based on our estimates, we have more than enough for us to ride, to speak, the next two years of disruption.

I suppose the message to investors is don't be overly concerned with all the works in place. We have our strategy in place, and of course this over 30 over million comes in pretty handy as part of the overall planning that we have going forward.

By and large, don't need to worry about whether there's going to be a significant impact to the DI. The

remaining divestment gains that you do still have

[unclear] We may consider using part of this income to kind of support the impact or kind of smooth out, mitigate the impact as a result of those AEI works that's going to take place.

Then

just to go back one point to Geraldine. Sorry, my bad.

I think the 5% is based on the lower bound of 160,000 square feet. I just been reminded on that.

Do you have an amount of the remaining divestment gains that you have in your books?

We do have divestment gains from previous divestment. Probably it's not something that I have off the top of my head, but if you look back on some of this divestment, I think you could probably add up the numbers.

It's quite significant. I'm not even looking at past divestment gain.

I think with White Sands, I believe and what we think we can generate over the next two years in terms of the performance of our mall, we are more than comfortable that we don't have to look beyond White Sands' capital gains.

Oh, okay. Thanks.

Thanks for that. My next question is on NEX ROI.

I think you have committed quite a good

87%.

Is it still 7% or is it higher than 7%?

We are only in Phase 1, right, there's a lot more work to go. Of course, if you ask me as of now, the numbers are coming pretty good, strong numbers, but we still have a long way to go.

I'm hopeful that like what we have done with Tampines 1, and also Pauline alluded to the fact that Hougang, we are expecting to come in above what we have estimated, and likewise for NEX, I'm hopeful that we will do likewise. At least I think 7% is where our lower bound expectation.

One last one, just housekeeping. Interest cost this year very good, 3.2%.

Any guidance for next year? If you look at the debt that's expiring, your Singapore debt has it all been repriced currently?

Annie, you want to take that?

Rachel, I think you can see from our expiry profile that we only have $100 million refinancing to be done in FY2027. With that in mind, and the current SORA rate, I think our guidance wouldn't be too different from what we have given.

Flattish next year.

Yeah.

Got it. All right, thank you so much.

Thanks, Rachel. Next, can we have Tabitha from DBS to unmute yourself to ask questions?

Morning, Tabitha.

Hi. Good morning, Richard and team.

My first question is on the NEX AEI. Can you walk us through the phasing of the works over the 2.5 years until of the fourth quarter 2028?

Will the income disruption in FY27 actually be more minimal given that the additional square feet is through conversion of GFA from the car park? Okay.

Pauline, you want to take the question? The first part, the walkthrough over 2.5 years?

Yeah. Phase 1, I think I mentioned earlier, it would be completing towards the end of this calendar year.

Phase 2 will start at the beginning of 2027, and it should take place over the course of maybe the next 14 to 16 months or so. In short, that is the phasing.

Phase 2 would be quite extensive because it entailed the decanting of the car park GFA to actually create a new trading floor area on what we call the northern part of the mall, which is closer to where H&M is. Sorry, I didn't quite catch your question on the car park, the second question that you have.

Oh, I wanted to ask on the income disruption in FY27.

Given the nature of the works, there will be definitely some disruption. Essentially the way we plan the AEI is that it happens in stages, and as far as possible, depending on the micro phasing, we will actually delay the recovery of certain spaces.

Although one phase looks quite big, but within each phase, there are micro phases. It's either a case whereby we recover the space for the works later or we try and bring back the post-AEI spaces earlier.

This is how we actually manage the staging of the AEI. As you are aware, the mall also continues to operate, a large part of the revenue would still be forthcoming over the duration of the AEI.

Yep, and also just to add, not forgetting that Phase 1 will complete year-end, right? The uplift in Phase 1 will also help to defray some of the impact, to speak, on the subsequent works that's going to take place.

That's how we do it, right? We do it like what Pauline mentioned.

We do it in small stages. When it's done, it will trade, and then we move, and then so some of those uplift that we have achieved will help to defray some of the impact, right?

That's how we do our AEI.

Maybe just to add on also, you've correctly pointed out that Phase 2 works involves decanting the GFA from the car park. The car park will still remain intact, but the space or the GFA that's attributed to the car park is deemed to be GFA, right?

Essentially what I wanted to say is that for Phase 2 works, we're actually creating new retail spaces, right? In a way, it's not decommissioning existing commercial space for the works.

We're actually building new commercial space.

I hope that gives you a little bit more perspective.

For those of you who frequent NEX, don't worry, the car park is going to be there. We are not demolishing the car park in any way.

In fact, we are adding more lots as part of the AEI, right? It's a decanting terminology, but it's not a physical decanting.

It's actually a theoretical decanting because the car park is actually residing on GFA that can be redeployed.

Thank you, Richard and Pauline. Then my next question is on the Bayshore development.

The cost is likely to be phased over the 4-year construction period. Will it be relatively even or bulk of the capital in the middle stages?

I think there are two portions to that. Of course, the land will be pretty much upfront.

Once we receive the deal from URA, we have to pay. Then, but for the construction costs itself will be over stages.

We haven't really seen the S-curve yet, but typically you could expect a slower upfront, and as you progress, then it catches up faster as you build, right, because the initial phase is about excavation and so on, and also piling works, you tend to speed up towards the later phases.

Thank you, Richard. That's all for me.

Thanks, Tabitha. Next up, we've got Derek from Morgan Stanley.

Morning, Derek.

Morning. I just want to follow up on that Bayshore upfront land payment, given that it will probably take place within the next quarter or so.

How would that impact, I guess, the full-year DPU? In a false sense, really that line in the sand where you won't cross, if you can use divestment proceeds, change up the MFU proportions, just to safeguard that number given all these moving parts in place, yeah, especially for the land, the upfront land cost.

Because we divested White Sands, right, we are expecting the money to come in. As I alluded to just now, we are targeting completion by end September, meaning the money is going to come in, and we can redeploy the fund towards payment of the land.

Effectively, it's not going to affect the DI in any significant way at all.

That's just one to

final,

and I guess you've alluded to, I guess, the relatively attractive yield on cost at 5%. If you stick that up against, I guess, the divestment of White Sands at 4.7%, the AEI at 7%, is it really that attractive, the premium of 50 75 bps over Metro malls really that attractive for a new build?

I think when we look at it, we are looking at it holistically, right? First and foremost, White Sands, as I mentioned, is 4.6%, you have about 40 bps gap here.

You're getting a 99-, okay, by the time you complete, maybe 95-year leasehold as opposed to a 67-year leasehold that's remaining at White Sands. Again, there's value that you need to consider there as well.

Secondly, this will be the only mall in the entire Bayshore precinct, right? Again, it's going to give you that dominance.

It's going to give you that resilience that you would expect from a suburban mall. AEI 7%, I've been talking about that AEI is a fantastic return, but nobody seems to be looking at it or batting an eyelid on that.

I don't understand why that is fantastic, and you're right. AEI gives you very, very good return, and that's why we continue to do this work despite this disruption, despite this heavy, hard work to do AEI.

We believe that this is where we can really create good value with our skill set. AEI is something that I think it's above all acquisition that we have today.

Coming back to this 5%, if you look at White Sands 4.6%, but you also look at some of the other investment at 4.3%, buying a suburban mall is getting increasingly more and more competitive. Being able to get in at 5% as what we look at it today based on our FS, of course, we hope we can even surpass that when it ultimately comes to fruition, right?

At a 40 bps gap for White Sands, that's really a very good arbitrage. If you look at the market that is trading or some acquisitions being done at 4.3%, that then again gives you even a higher point of differentiation.

Plus, a brand new mall that has got direct connectivity to train station, bus interchange, the only dominant mall in a growing catchment. I think all this has to view in collectively.

Richard, if I may add on, I think from total returns perspective, it makes sense also because when the mall stabilizes, that's where you also reap the revaluation gains, right? You get some of that development gains as well.

Yep.

Great, thank you. Thanks.

Both helpful.

Thanks, Derek. Next up, we've got Brandon from Citi.

Morning, Brandon.

Hey, morning. Hey, thanks, Judy.

Hey, thanks, Richard. A couple of questions.

I just want to get your sense on your long-term view of FCT, right? If you look at, you've been doing a lot of things, but if you were to look at like your post-COVID DPU growth trajectory, right, it's been kind of flattish.

Right, obviously you've been doing a lot of things. Just wanted to ask, when you're looking at all these acquisitions and your AEIs, do you actually factor in on a forward basis what that growth trajectory looks like?

Yeah.

You're absolutely right, Brandon. Actually, I think we are, in a way, kind of building up for the future growth because we've been doing so many things.

In a way, there's a bit of disruption to our actual bottom line that we are able to generate. Like every time there's a disruption, whether when we buy something, there's negative carry, or when we do an AEI, we need to stabilize it before we get a full uplift.

Sometimes it's between different periods. You're right in the sense that we are actually building up something.

At the same time, if you look at the last year or two, we have started to show growth in our DPU, and I am confident to say that this year you can expect further growth from what you received last year. We are looking at growth.

Of course, the trajectory is not as high as what some investors were looking at. That's because we are still doing a lot of work.

This is going to give you a continuous growth for now, and then most of them may be backloaded, to speak, when most of these works are done, hopefully, and stabilized. That's when I think we're positioning FCT to be on a longer-term perspective, right?

It's not something that you expect the DPU to fall off the cliff. You don't expect the DPU to turn negative, right?

We are looking at a growth, a slower growth now perhaps, but that will probably be able to escalate as we complete more and more of this big, large, significant AEI.

Can. Can.

Just going back to this amount that you can top up, right, does the retained amount of $4.6 million in the first half count towards that pool? Do you intend to sort of give that out in the second half?

Annie, you want to answer that?

I think $4.6 million also count into the pool. We have the flexibility of how much to release if we decide to in the second half.

Okay. Maybe if I can just squeeze in one more since there's still some time,

right?

When I look at your White Sands sale, right, and then obviously with your recent acquisition, where does Hougang Mall now stand? Because if you look at your historical divestments, right, it's been at the 150,000 to 180,000 square feet kind of NLA.

Is this still a space that you're looking to compete?

I think we're looking at a couple of dimensions. Size is, of course, one measure, but also we look at how much space that's going to come out in that location as well, right?

Size is one, how strong the mall is going to be, what's the catchment market that's going to be as well, right? For Hougang, when we look at overall perspective, and we shared this before as well, when we were looking at AEI, we knew that site is going to come out, right?

Nonetheless, we felt that it's timely for us to do the AEI works regardless of whether our sponsor were able to win the site or not, because we believe that Hougang catchment market will continue to grow and can accommodate a size of about probably about 400,000 to 500,000 square feet retail offerings in that location. It is not a case of, oh, because it's 150,000, 160,000 square feet, we will sell, but it depends on, firstly, whether we have optimized the asset, we have opportunity to redeploy it to something better.

In this case, when we look at White Sands and Bayshore, we believe we are redeploying it into something better for the longer term. How we coexist, just like how we worked with White Sands, right, when Pasir Ris Mall was being developed, there's a lot of concerns by investors that White Sands will be significantly affected because of PRM.

We have demonstrated our ability to actually coexist with PRM. In fact, we continued to do better collectively.

Our theory back then was also that this area can actually take on a size of about 400,000 square feet. Likewise, we'll be doing the same for Hougang.

At some point in time, if somebody else comes in and tell us, okay, I'm interested in Hougang, I can offer you this kind of price, will you be interested, we will have to evaluate it. Then if there's opportunity for us to redeploy the capital more meaningfully and we are optimize the value, yes, there is something that we would definitely consider.

That has been our strategy all this while. As we grow, we also look at reconstituting our portfolio all the time.

Okay. Hey, great.

Hey, thanks so much. Thanks, Richard.

That's it. Thank you.

I think we have one final question, perhaps from Wilson, Jefferies. Morning, Wilson.

Hi, morning. Morning, Judy.

Morning, Richard. Just quick question on Bayshore, not sure if it's really covered earlier.

How much of debt are you looking to take on for the Bayshore in terms of the upfront land payment, and in terms of gearing, accounting for both the paydown debt from proceeds from White Sands, then incremental debt for the Bayshore land, where do you see gearing landing at?

I think we are looking at probably after paying off the land portion, this financial year-end is probably landing about 37%-ish, slightly above 37% gearing. If that's the question you're asking?

Yeah.

Today we pro forma it with the sale of White Sands, we bring it down to 36.5%, right? That should go up to slightly over 37% with the payment of upfront land cost.

We still have quite a good headroom, actually.

All right, got it. Thank you.

Thanks, Wilson,

yeah. Thank you, Wilson, and all who have asked questions.

I think we have come to the end of the FCT 3Q FY26 business updates briefing. Thank you for joining, and if there are further questions, please feel free to follow up with me.

Wishing everyone a great day ahead. Thank you so much.

Thanks. Bye.

Thank you.

Bye-bye. Thanks.