Q4 2024 CapitaLand Ascendas REIT Earnings Call
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Good evening, ladies and gentlemen.
Welcome to the <unk> 24.
Without speaking off kept the line offender suite I'll clarify shop.
We thank you for joining us in precedent online today.
Oh, a debriefing lift that we saw a presentation by management on class financial and operational performance for 2024.
There will be a question and answer segment.
So for those in the audience you may raise your hand.
And I would call your name.
I'll identify you buy a company and him a microphone he brought to you by one of my colleagues.
Speaker Change: If you're attending this briefing online you can submit your questions via the Q&A function on zoom anytime during this briefing and then we will address any questions that have not been asked by the audience. After.
Speaker Change: So before we begin the session Papa let me introduce the management on the panel.
Speaker Change: First we have Mr. William T. He off clay.
Speaker Change: Okay.
Speaker Change: Second we have Ms polices, he F Eau Claire.
Michel: Next we ask Michel keeping hit off capital markets and Investor Relations.
James Cool: And finally, we have Mr. James Cool hit our portfolio management.
James Cool: Okay.
Speaker Change: And with that I will hand, the time over to keeping who will begin the presentation. Thank you.
keeping: Thanks Andrea.
Speaker Change: Happy New year, everyone I believe.
Speaker Change: Master toy during the fall has been a very interesting deal for all of us.
Speaker Change: There were uncertainties around inflation trend, Joe political tensions and changes in administration. So despite all of this we are pleased to present, a resilient set of results for FY 'twenty 'twenty fall.
Speaker Change: Fish, where an ebook Claire to start this year in.
Speaker Change: In a strong position.
Speaker Change: Okay.
Speaker Change: Okay key highlights.
Speaker Change: Distribute double income increased 2.2% to $658 $8 million dip you increased 0.3% to 15 point to all five cents.
Speaker Change: Investment properties held steady at $16.76 billion.
Speaker Change: The portfolio occupancy remain high at 92, 8% and we achieve high rental reversion of 11.6% Bondi says renewed during the year.
Speaker Change: Gary <unk> is healthy at 37, 7% and the cost of debt is stable at three 7%.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: On the sustainability front clay is now included in tumor indices that is D. FTSE.
Speaker Change: Develop index and FTSE good ASEAN index.
Speaker Change: So, let's take a closer look at details.
Speaker Change: Yeah.
Speaker Change: So for year 'twenty screening for buses of full year 2023.
Speaker Change: Gross revenue increased by two 9% to $1.5 billion and this is mainly due to the contribution from who your contribution from properties that were acquired in 2023. So the properties are the chest building in the U K does too got in Singapore.
Speaker Change: As well as the completion of MQ explore but she is a development in Sydney, Australia, and Ozal discomfort to suit property in Las Boulevard in the U S.
Speaker Change: So as a result N P. I increase my 2.6% to $1 billion and distributable income increased by two 2% to $668.8 million.
Speaker Change: Yeah.
Speaker Change: <unk> increased 0.3% to a 15.305 cents a due to the issuance of some new units fault based management piece.
Speaker Change: When we compare second half of 'twenty to any fall versus the first half of the same year 'twenty 'twenty four.
Speaker Change: Gross revenue declined two 2% and this is mainly due to the divestment of four properties in Brisbane, and Singapore as well as lower utilities income.
Speaker Change: N P. I decrease in tandem with the decrease in revenue, but partially offset by lower operating expenses.
Speaker Change: Distributable income increased two 2% to $338 million due to lower interest expense.
Speaker Change: D. P. You increase two 1% in tandem with inquiries into distributable income.
Speaker Change: So when we compare second half of 'twenty 'twenty four.
Speaker Change: The second half the year before a 2023 gross revenue.
Speaker Change: By one point or 1% to $753 million due mainly to the decommission of swelling God density.
Speaker Change: The divestment of the Pearl fault properties and this win in Singapore.
Speaker Change: Ever N P I increase by one 4% due to lower operating expenses.
Speaker Change: So distributable income increased by a higher 3.4% and this will boost that due to the lower interest expense. So deeply you increased three 2% to 7.681 cents.
Speaker Change: We adopt a semi annual distribution frequency. So for the second half period of office July to 30, <unk> December of 'twenty 'twenty four a distribution of 7.681, a sense will be made so you'll be receiving the dividend.
Speaker Change: Dennis on the 11th of March.
Speaker Change: Moving on to investments.
Speaker Change:
Speaker Change: So this year.
Speaker Change: Put more.
Speaker Change: More investments into AST and focusing on the logistics sector.
Speaker Change: We acquire Summerville logistics.
Speaker Change: Uh Huh and DHL, Indiana Logistics Center.
Speaker Change: For about $248 million at very attractive N P. I use of 7.2 to seven 4%.
Speaker Change: So these two modern properties and very strategically located properties will complement what we already have in the U S and Theyre all basically located in major.
Speaker Change: Logistics hub.
Speaker Change: Our investment strategy focuses on establish our industrial markets in the key cities.
Speaker Change: Cities, Besides sweater to see increasing demand for quality logistics assets, driven by onshoring angry shoring trends in the U S.
Speaker Change: So following these two acquisitions, our logistics footprint in the U S where spend to 20 properties in four cities they seen demand so as cancer city.
Speaker Change: Chicago, Indiana Charleston.
Speaker Change: So au am is now 570 million and the G. F. A sizable at 400, ANSI 5000 square meter.
Speaker Change: So by the way our existing U S logistics property, I mean, well the occupancy rate is 100%.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change: Continue to optimize returns are from our existing properties.
Speaker Change: <unk> repositioned ne or upgrading them. So a 3.9 million dollars' worth of AE ice were completed during the year.
Speaker Change: At Pacific Tech Center ambitious.
Speaker Change: Industrial property located in Jalan Bukit meera vicinity in Singapore.
Speaker Change: Well S. One at Chinese city, which is a business about property in China business, which is located just next to the export M. A R. T occupancy rates for both properties have increased.
Speaker Change: 289.5% and 19, 1% respectively in December.
Speaker Change: On divestments sorry.
Speaker Change: So on divestments.
Speaker Change: Oh altogether four properties with Abbas diversity in Australia and in Singapore total amount is about 177 million they were divested at about 38% MIM to the total valuation.
Speaker Change: Is it used.
Speaker Change: Very attractive at 3% to 4%.
Speaker Change: Moving onto capital markets.
Speaker Change: Gary remains healthy at 37.7%.
Speaker Change: Yeah.
Speaker Change: For debt majority profile it continues to be very well spread out.
Speaker Change: If you were to if I can refer you to the in order as a three or four bars, you can see that about the teen or 14%.
Speaker Change: We're only come due in each of the year.
Speaker Change: Sure.
Speaker Change: This is a summary of our financial ratios just will highlight a few.
Speaker Change: I dumped here so the ICR the interest cover ratio is healthy at three six times.
Speaker Change: Fixed rate debt is high at 83%.
Speaker Change: The waiter.
Speaker Change: Barring cod is stable at three 7% despite the high interest rates environment.
Speaker Change: And we we secured very tight spreads are for some of our loans and bonds right to manage the interest expense.
Speaker Change: So the E three Moody's credit rating and maintain and this is important April bikes us with a lot more financial flexibility and strong access.
Speaker Change: Capital.
Speaker Change: Yeah.
Speaker Change:
Speaker Change: Hi, this is.
Speaker Change: This time, we added a new a sensitivity table, which is at the bottom. So this is D. I C or a certain set of a D table. So the you can see here that the ICR remains very robust.
Speaker Change: Even under stress our Sunil girl. So attempts then decrease in EBITDA, the ICR will be about three three times.
Speaker Change: And assuming a 100 basis points increase in interest rates I see our is a 2.8 times and book just numbers are clearly above the threshold of one five times.
Speaker Change: Yeah.
Speaker Change: To minimize the effects of any adverse exchange rate fluctuation, we have a high level of natural hedge of 7% for our overseas investment, which totals about almost <unk> billion dollars G. So N a b will.
Speaker Change: Will be safeguarded against any adverse exchange rate movements.
Speaker Change: Assuming hypothetically in other currencies artist overseas currencies declined by 15% altogether at this time.
Speaker Change: Impact on any V.
Speaker Change: Is 10, 3%.
Speaker Change: Yes.
Speaker Change: Okay evaluation very interesting deal.
Speaker Change: All right so.
Speaker Change: So the total valuation for our 225 properties in the fall geographies the developed market.
Speaker Change: Was $16.8 billion.
Speaker Change: On a same store basis, the valuation was stable at $16 $76 billion.
Speaker Change: So the stable portfolio valuation was mainly due to the increase for example.
Speaker Change: This offset some decrease.
Speaker Change: In the U S and in Australia.
Speaker Change: So that there was some adjustment in that have the values in U S and Australia due to the higher kept me.
Speaker Change: <unk> applied by the independent Valuers.
Speaker Change: So that if I geography, so now by segment for the business space and life Science segment.
Speaker Change: <unk> seen the valuation was stable at seven $7 billion.
Speaker Change: For the industrial and data Center segment valuation was higher by one 3% and 4.82 billion.
Speaker Change: And for the logistics property stable at $424 billion.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Occupancy.
Speaker Change: D portfolio occupancy remained high at 92.8%.
Proofs of mine were actually achieve right risk, Singapore rising to 92.5% the euro the U S. Increasing through 88, 9%, Australia also improving to 92, 5% and the U K Europe a region remain high at 99.
Speaker Change: But 3% almost a full house.
Speaker Change: Okay.
Speaker Change: So I will then.
Speaker Change: Give some color on the demand the new demand that we saw in the fourth Q.
Speaker Change: In Singapore, the largest sources of new demand by gross rental income, where the engineering sector, the electronics as well as the distribution and trading a second test.
Speaker Change: For the overseas market is D I T and data center and the lifestyle retail and a biomet.
Speaker Change: <unk> said this that we're the largest awesome demand.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Rental revisions.
A positive rental reversion.
Speaker Change: Positive rental reversion of 11, 6% was achieved for leases that were renewed in multi tenant buildings in FY two new Daney fault.
Speaker Change: So I suppose this.
Speaker Change: Met our guidance for the high single digit pause.
Speaker Change: Pause is different every operation.
Speaker Change: Okay. So the average.
Speaker Change: Rental revisions what.
Speaker Change: 11% of example.
Speaker Change: Three 1% in the U S.
Speaker Change: The 10% in Australia, and about 11% in the UK and Europe. So all the geographies are a cheap causes different every version so.
Speaker Change: So looking ahead for FY 'twenty 25.
Speaker Change: We expect rental reversion to be in the positive mid single digit range.
Speaker Change: Rail continues to be stable at three point thing yes.
Speaker Change: So this is the portfolio at the jump is to put together the lease expiries.
Speaker Change: This coming year. So this coming year, we have about 17% of our rental revenue are due for renewal in.
Speaker Change: So 80% of it will be in south pole, the balance in Australia U S UK Europe.
Speaker Change: Yeah.
Speaker Change: Oh, we have come to my last two very important flags on.
Speaker Change: Okay.
Speaker Change: Redevelopment and development plans.
Speaker Change: We bought in a new redevelopment project.
Speaker Change: Our four largest hump.
Speaker Change: Okay Calamity.
Speaker Change: This logistics property is did you relocate the ink chairman kilo.
Speaker Change: Ah well tonight to be made on Expressways right.
Speaker Change: S N D E F E N P I E.
Speaker Change: And very.
Speaker Change: Very short driving distance to the CBD part of Singapore.
Speaker Change: And secondly.
Speaker Change: So what we are going to do here is to maximize the plot ratio and by maximizing the plot ratio to two five times the G F E.
<unk>.
Speaker Change: 58.
Speaker Change: 820 square meters.
Speaker Change: The new property will also.
Speaker Change: They haven't been features soybean southern sorry high with a ramp up facility and there would be like $100 six loading bays and our palace expansion up probation for close to switch.
Speaker Change: And large floor plates.
Speaker Change: Good ceiling heights of up to 12 me tests.
So we are also targeting to obtained a green mountain core.
Speaker Change: World Class certification for the new property.
Yeah.
Speaker Change: Oh, sorry, now with the addition of largest hub.
Speaker Change: We have.
Speaker Change: 800 million well projects on.
Speaker Change: So this financial year, we will be completing about 500.
Speaker Change: All right. So they are some of you in the first row in the U S.
Speaker Change: When I spot drive and I've told one east.
Speaker Change: So on a stabilized basis dice like took to generate.
Speaker Change: Additional income of about 30 40 million per annum.
Speaker Change: So this is a ongoing process to rejuvenate and revitalize our portfolio and to generate more income stream.
Speaker Change: Okay. So this comes through the end of my presentation.
Speaker Change: We look forward to 2025, thank you very much.
Speaker Change: Sure.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Thank you keeping now as well most of the Q&A thank them enough.
Speaker Change: Briefing may I have the first question from the audience. Please okay.
ill: Ill from DBS.
Yeah.
William T.: Thanks, Andre and Hi, William and team. Thank you for the presentation.
Just a few quick questions for me I think you know with regards to do somebody's heart sounds likes I think what is the estimate the rois you're in you know then.
William T.: Is are tenants all of them.
William T.: Yeah.
William T.:
William T.: Youre expecting your cost by 8%.
William T.: No tenants as yet.
William T.: Bobby this belief that given that.
William T.: The strong demand for logistics space, you look at our portfolio as most food.
William T.: And there's strong demand out there in the logistics piece. So we believe that your best speculative you'll be picking up quite well.
William T.: Okay, Okay got it and onto your other you know one thing.
William T.: Redevelopment of him and know how.
William T.: Is that coming along I expect that to be completed this water right. So what about pre coming months natural.
William T.: Same answer to you do.
William T.: G O P Ob soon.
William T.: If it's not this month next month once.
William T.: T. O. P were you are you will come along with your fiduciary, we've got sort of occupancy.
William T.: But rest assured you will not be zero.
William T.: But also don't boil it hopes to be 100% on day, one given that she's a million square feet.
William T.: We are comfortable with what is subtle and we have very strong demand for the rest of the year.
William T.: If you remember you.
You had mentioned that the.
William T.: Overall stabilization Bureau, we project for such a Big project is between three to four years and at this point looking at our bottom line and the discussions that we have we believe that we are we will likely to do better than that.
Speaker Change: Okay. Okay got it can I take one more question.
Speaker Change: Just wanted to talk on the valuations I mean, what you're saying that there's a bit of kept Britain ones for your portfolio can you touch through debt.
Speaker Change: There'd been a change in values or has there been any cap rate expansion.
Speaker Change: Okay Alright.
Speaker Change: Okay expansion.
Speaker Change: Mainly in Australia, and U S. A we see compression here in Singapore.
Speaker Change: Ah. The reason given is that you can look at compared to <unk>.
Speaker Change: Twenty-three tree.
Speaker Change: The carrier expansion has been very very moderate a year ago receive up to 100 200 bps of expansion.
Speaker Change: But not for example, U S. Australia has fallen with 50 bps.
Speaker Change: And we believe that this is a little strong.
Speaker Change: Showing off the performance as well.
Speaker Change: Our performance will actually leave the valuation not just the cap rate.
Speaker Change: Is Singapore is the compression you probably know that last year. There was a huge number of transactions in the market.
Speaker Change: So despite us divesting to any one jumbo rule our village has gone up.
Speaker Change: <unk> always got healthy here in Singapore.
Speaker Change: This also will lead us to our I believe that you'd be at the right time I think we can consider.
Speaker Change: Divestment S. One strategy going forward make sure that this is the right time in terms of the market cap rate.
Speaker Change: And our performance is strong.
Speaker Change: And we deliver some divestment of last year.
Speaker Change: We continue to see some interest in our properties.
Speaker Change: Okay. Thank you. Thank you.
Speaker Change: Okay. Thank you Dale will move to a Derrick from DBS.
Speaker Change: Sorry, some guys sitting still deal.
Speaker Change: Two questions from me.
William T.: William I was looking at your <unk>.
William T.: They consider it so I noticed is some in U S and Australia I'm, just wondering whether you record those are sticky stubborn vacancies or is there opportunity for you to close they get towards a more higher level, maybe that is my first question.
And my second question is on rental revisions I think as you have done the team has done a great job.
William T.: And I'm just wondering whether what has been done over the past year was also because you renewed COVID-19 leases. So going forward do you reckon that there is more pressure and if you look across our countries.
William T.: Mid single digit is that it is a nice number which countries do daily two to have a.
William T.: It'd be more work so there's not much to broad thoughts around days anyway right.
William T.: Yeah.
William T.:
William T.: So youre right in terms of the occupancy challenges in the U S and Australia.
William T.: Australia, we have.
William T.: Okay U S logistics, a year a quarter ago, we had some vacancies and go back a few of them so not 100% in the two portfolios that we have in Chicago and Kansas.
William T.: Our business continues to be a challenge.
William T.: This.
William T.: Some uptick in terms of a certain assets.
William T.: But general trend.
William T.: Seeing.
Speaker Change: Negative absorption. So we are losing tenants because of the downsizing and we are not refilling them as fast.
Speaker Change: As you compare us to the general market, adding.
Speaker Change: 80% occupancy is fairly is LG and strong compared to what we see in the market.
Speaker Change: In relation to Australia.
Speaker Change: This thus far has been doing fairly well to be honest I think I have mentioned over the quarters, we have seen rental revision as well as occupancy.
Speaker Change: Primary reason is because there are some global location.
Speaker Change: Much better than where we see the challenge is the real challenges in CBD is the most one most depressing was probably more fringe office just.
Speaker Change: Given the fact that there are supply availability and central area and rentals are well below Covid I think is just encouraging for tenants to move to the central <unk>, especially would agree with <unk>.
Speaker Change: That level location neuro to amenities neuro too.
Speaker Change: Where employees are leaving especially for the for example, Macquarie is nearing a newest.
Speaker Change: Ecosystem, we see healthy.
Speaker Change: Demand in that location.
Speaker Change: Ah the surprising bit is Austria logistics.
Speaker Change: We now have to be good unit.
Speaker Change: <unk> that the filling back filling is not fast enough.
Speaker Change: But if we look at out of market.
Speaker Change: It's probably not is fine.
Speaker Change: The market is softening to a level that is critical I think is just transitioned.
Speaker Change: And we do see some rfps as well as the <unk>.
Speaker Change: Insurers to acquire.
Speaker Change: Oss. So I think this is just transition.
Speaker Change: With regards to rental revisions.
Speaker Change: We have guided mid single digit.
Speaker Change: Uh huh.
Speaker Change: Key reasons, such you have put in you mentioned a few times.
Speaker Change: That's why you see post Covid, we do enjoy strong rental revision low base.
Speaker Change: That's showing up in our numbers.
Speaker Change: But over time, we have improved our assets also helps us to get in the rental revisions.
Speaker Change: And if you look at across the board not just in Singapore in U S.
Speaker Change: We were still trying to do in U S. So I guess those were helpful for us why mid single digit is.
Speaker Change: Not just.
Speaker Change: The number that we feel that we can deliver by being there is a number that where the market rents.
Speaker Change: We've been asked whether we continuously under rented.
Speaker Change: In our portfolio.
Speaker Change: We still believe so.
Speaker Change: Everybody the Singapore when occupancy is.
Speaker Change: Is fairly high.
Speaker Change: High right now.
Speaker Change: That will allow us to be able to push printer.
Speaker Change: So I wouldn't go into detail, which countries give us which require more what I think is all across that we still need to pay attention to leasing efforts.
Speaker Change: Spending on network.
Speaker Change: As well as improving our facility.
Speaker Change: More so in the U S. Given our February you improve our facility you give confidence to our tenants that our assets are well managed as compared to many other landlords who may be tight on their budgets and their capex.
Speaker Change: We do see that.
Speaker Change: As landlord here Claire.
Speaker Change: Is here to stay and have the capacity and the balance sheet to be able to improve.
Speaker Change: Yes says.
Speaker Change: You also heard us mentioned above.
Speaker Change: Alright, boxing, which helps tenants to make additional faster.
Speaker Change: There's a lot of movement out there do they show maybe slower but at least where it is white box the Nordic and move in almost as soon as the one two and they're helpful for them to make a decision.
Speaker Change: So we will continue all of this effort, we will make sure that where we need to do a IV to the EI wherever you need to be the strategy in terms of getting on networks out talking to different parties, we will do that as well.
Speaker Change: If there's any redevelop fortunate this especially in locations or countries that we believed it.
Speaker Change: You would be helpful to introduce a new assay, we will do that to make sure that we can we can we position our portfolio over time.
Speaker Change: Okay. Thank you.
Speaker Change: Thank you Barry can I have the next question. Please okay P J I H b.
Speaker Change: Okay.
Speaker Change: Yeah, Hi.
Speaker Change: Congrats on the deal ended up recently, so I think I have three questions. My first question is in terms of chunky business back.
Speaker Change: Maybe you can give some color in terms of where the occupancies are well.
Speaker Change: Valuation trends.
Speaker Change: Have you seen it bottomed are you still expect some impact from Congo Digital district as it did in in the last quarter you guided.
Speaker Change: Government is open for Repurposing some older asset in that area is there any progress on that front.
Speaker Change: Yeah.
Rajiv: Thanks Rajiv.
Rajiv: Suddenly we saw spot.
Rajiv: We are very pleased to say that we have crossed the 80%.
Rajiv: Year ago, you're about 76%.
Rajiv: And we have actually improve our overall occupancy across the various buildings that we own.
Rajiv: And maybe you were quite a different story as you go around China beauty parlor.
Rajiv: But we believe that while we are please in terms of our response is to open up new channels New industries.
Rajiv: You have seen that we have brought in aviation engineering, we continue to work on education, and we brought education.
Rajiv: <unk> into the science part.
Rajiv: We also are exploring medical.
Rajiv: So these are.
Rajiv: Adjacent industries that we believe can be.
Rajiv: The house in the business building.
Rajiv: Without requiring too much of a change of use kind of application.
Rajiv: They allow us to be able to bring in new industry, which are not the traditional business user, but having said that we do see demand coming up or interest not demand interest coming out from similar treats like semiconductor design.
Rajiv: Such companies.
Rajiv: Question, then is whether we.
Rajiv: Can meet their needs and how much of this.
Speaker Change: Uh huh.
Speaker Change: Changes to our business building.
Speaker Change: As required.
Some companies media.
Speaker Change: Zion assemblies on require some kind of a light manufacturing.
Speaker Change: These are just boundaries that we hope to be able to obtain from the government.
Speaker Change: In relation to just to add on just how your ASO valuation.
Speaker Change: Across the board in terms of Dsos part in Singapore, the valuation has been quite strong.
Speaker Change: Driven by the transactions that we see in the market I think you probably know we showed a few ones that has been driving coverage.
Speaker Change: In a market that was transacted last year.
Speaker Change: So overall business pop is healthy in terms of value and in terms of occupancy I think that's done fairly well to push occupancy.
Speaker Change: Competition with regards to Pogo are we believe that there are offerings is very different I think Paul.
Speaker Change: Congo as one district that we do see that is able to grow it probably would be helpful for the entire country.
Speaker Change: <unk> always be costs.
Speaker Change: They are also not doing too much speculative demand is off I get it.
Speaker Change: And just a one off if you remember about 20 years ago. When you first thought that the government is a need to do.
Speaker Change: To see the Biopolymers and thus how brought a rig or brought about a demand in other industries.
Speaker Change: But it was important for us is to be able to tap on other industries beyond just a normal business.
Speaker Change: If I allow me to just go on to other other parks that either IBP continue believe that we.
Speaker Change: The infrastructure investments of Dr. Marty.
Speaker Change: We believe that there will be a turnaround.
And we are going to as I mentioned other than doing some IBP. We are waiting for a portion of the redevelop the two buildings that we have put in the India market.
Speaker Change: Thank you. My second question is in terms of U K, Ireland garden any updates in terms of pulp capacity or redevelopment plans have you formulated any kicks equivalents for nothing has changed really Paulo is there.
Speaker Change: We have been working on the customer. So I think we mentioned that we prefer to be on a build to suit.
Speaker Change: Orangeman and to be a speculative.
Speaker Change: So we are concurrently working with the authorities of the planning permission has been there really has the schemes as approved.
Speaker Change: We are talking to some prospects to refine the design.
Speaker Change: At the right time, we will announce those sure.
The capex and the customers.
Speaker Change: Any idea of what kind of contribute maybe by mid of this year.
Speaker Change: Hopefully this year I would say is mid December this year.
Speaker Change: One last follow up.
Speaker Change: In terms of acquisitions I think have done a lot of the developments that you also bring it forward, but is this something the way, which we should expect forward in terms of expecting yields by forward parties in data was a pension lesser completed acquisitions.
Speaker Change: Yeah.
Speaker Change: Well it seems like it's not a surprise to you right.
Speaker Change: Yes, so last year, we have been fairly quiet on investment front.
Speaker Change: But acquisitions or development as one erode or we want to be able to leverage on given the fact that we can introduce modest specs in to our portfolio.
Speaker Change: As well as the you on cost is more attractive.
Speaker Change: Straight up investment of our of our income producing asset.
Speaker Change: Just now I think you're being mentioned from a spot.
Speaker Change: We don't have good footing for this year.
Speaker Change: Just riding on your question just allow me to just executing alita.
Speaker Change: Do you see actually gave us a strong comp.
Speaker Change: Understanding our portfolio. We believed our portfolio is very well managed and is attractive continues to be attractive for tenants yes.
Speaker Change: Shown in our occupancy or rental reversion. So organically. We believe that this is the base that we can deliver.
Speaker Change: We have this base. So let me say this is the foundation.
Speaker Change: We have this desert.
Speaker Change: He foundation I think we can push the envelope and to built up capacity for redevelopment and repositioning of assets, which is why we wanted to introduce two new development our largest hub.
Speaker Change: This is just not a simple development of untapped plot ratio. The plot ratio is one six of the play you can check it up we went to two to two <unk> in the us for higher power ratio of 2.5. So we still got to do all the analysis wrapping all of this to be able to get additional plot ratio.
Speaker Change: Beyond the.
Speaker Change: Master plan approved.
Speaker Change: We introduced these high morale you want to have a.
Speaker Change: Constant flow of redevelopment.
Speaker Change: During this time, while investments tougher environment.
Speaker Change: We are refreshing our portfolio repositioning our portfolio.
Speaker Change: So I would say perhaps in the next two to three years, we'll be looking at.
Speaker Change: If time.
Speaker Change: And players good to know.
Speaker Change: We will be talking to about $1 5 billion of for redevelopment.
Speaker Change: And as return on the asset so keeping mentioned we have about 800 million announced today for this year in terms of development. We will have 500 mainland So sprint project a genial.
Speaker Change: 05541.
Speaker Change: Some of you about 500 million will be turned on for income this year.
Speaker Change: So we believe on a recurring basis, we can develop a one 5 billion, we should be able to achieve completed our $1 billion.
Speaker Change: The next three years. So this will give us based on our view on costs.
Speaker Change: A good bump in terms of revenue.
Speaker Change: Perhaps between 2% to 4%. So this is our second strategy in our key strategy given our strong base with more development work and to push out our need to do repositioning of our asset.
Then to therapies.
Speaker Change: In order to make sure that we.
Speaker Change: Have a stronger balance sheet as benefits strong leverage is 37.
Speaker Change: Healthy all in costs.
Speaker Change: And we are itchy right.
Speaker Change: This upfront is to solar.
Speaker Change: Solar mentioned it about diverse movement do.
We probably want to do more about divestment, so that we can actually oh.
Speaker Change: Our balance sheet for any acquisitions that may come along the way.
Speaker Change: So I think given our strong foundation, we can push of envelope.
Speaker Change: To be more aggressive in terms of development redevelopment.
Speaker Change: Well as preparing for acquisition that means.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: Thank you Vijay and thank you for them.
Speaker Change: Well first move to AGL from Mccamey, then we move to the Derrick from Morgan Stanley and then finally, we move to Jai.
Speaker Change: Thank you very much.
Speaker Change: Thank you and happy new year billion and team.
And maybe just a quick question in terms of interest rates I think you have kept interest rate may be flat this year.
Speaker Change: What's your outlook for FY 'twenty.
Speaker Change: Short answer or you want her to answer.
Speaker Change: Uh huh.
Speaker Change: No Sir not question of our interest rate.
Speaker Change: Is it.
Speaker Change: Yeah. So.
Speaker Change: Three five to 3.7, that's why we have done well.
Speaker Change: We believe given the rates today.
Speaker Change: The small increment, but likely to be below four.
Speaker Change: For the end of the year.
Speaker Change: If there's any any bright spot.
Speaker Change: And a question about whether we see that risk.
Speaker Change: We need to go into prediction, but if you look at where we are today.
Speaker Change: It's quite clear.
Speaker Change: The lowest that we have compared to what is available.
Speaker Change: Refi Lewis.
Speaker Change: We are going to pay more.
Speaker Change: High interest.
Speaker Change: So I think in terms of heightened recognizing intra is granted I think we believe that we all rental reversion occupancy and our fundamentals in terms of performance of the asset.
Speaker Change: You will be able to withstand these interests.
Speaker Change: And we have shown in our since this year, we don't have additional new investments to show up revenue. It was really more organic than anything and we can improve our GPU. So it does show that by doing the right things controlling costs and our forecast is also helpful.
Speaker Change: Fence a positive for us.
Speaker Change: Utility rate, let's just curious as.
Speaker Change: We have factory hedged in these come down are.
Speaker Change: We have done all our needs to improve or increase our service charges.
Speaker Change: We also look at all cost effect I think this is one aspect that we are working on two mirrored our performance continues strong.
Speaker Change: We said any uncertainty of our interest rate movement.
Speaker Change: Okay. Thank you and then my next question is a follow up from Vijay I think you've spoken a lot about Oh Guinea redevelopment divestments are but what about acquisitions are you putting that in a pause I mean lassi is done small acquisitions and boosting U S logistics or what's your.
Speaker Change: Thoughts for this year is that still the same or are you looking at bigger acquisitions. This year.
Speaker Change:
Speaker Change: Definitely we hope to be able to do more investments and acquisitions, but given where the market is today.
Speaker Change: Regardless of where we are in terms of our ability to raise funds or our ability to to get launched.
Speaker Change: This is not an issue really for us, but what was out there in the market seems to be still quiet.
Speaker Change: There's still a lot of uncertainty.
Speaker Change: If you asked me two months ago three months ago, we thought that this year will be a good year for us the reason our investments.
Speaker Change: At this point in time.
Speaker Change: We believe that this market will continue to be there except that we may not be a position to acquire in terms of big portfolio.
Speaker Change: The small ones that comes alone for example, we had opportunity to acquire DHL facility.
Speaker Change: At above 7%.
Speaker Change: Which is very rare.
Speaker Change: And we will continue to Hahn.
Speaker Change: Deep and wide to make sure that we can solve for a good acquisition targets for the trust.
Speaker Change: But I think right in front of us where thats more fortunate these development.
Speaker Change: We still like to be able to deploy capital in development because we can then looked at.
Speaker Change: The type of facility the city. So you wanted the tile facilities as well as the tenants that we can bring in instead of just buying a portfolio or that's it.
Speaker Change: We then can determine exactly what kind of specs.
Speaker Change: Whereas the location and we can then look at development to supplement the existing portfolio.
Speaker Change: While we may see that development give us higher you, obviously, because if you do development that comes higher risk.
Speaker Change: But what I've been trying to do is to be prudent.
Speaker Change: Look at the developers that we work with.
Speaker Change: The locations that we are in and studied the market to make sure that all these reso well mitigated.
Speaker Change: And if you look at your portrait, albeit at the projects that we have announced other millions Singapore.
Speaker Change: We are.
Speaker Change: We want to be able to do more here in Singapore as well as U S, where there's a lot more opportunities and hope you hope to be able to more than two pieces.
Speaker Change: Hum in terms of packet acquisitions are you still looking at U S lungs.
Speaker Change: Or would you be looking at some parties in Singapore.
Speaker Change: We are open for business to be honest, Singapore U S. Europe.
Speaker Change: I still think that Australia is tougher for us.
Speaker Change: Given where interest cost is in the cat risk is treating you look at our numbers, we are part of five or 6%.
Speaker Change: In total kept brief Australia portfolio. So I think for acquisition in those market continued challenging.
Speaker Change: But U S. Given it's a large market continued trade between 4% to 7%. We believe we still can find use in.
Speaker Change: Unwell Kent.
Speaker Change: Europe becomes more interesting right now we do see some development opportunities and we hope to be able to do something in Europe.
Speaker Change: Okay and my last question is any updates on your plans for the single data Center.
Speaker Change: For FY 'twenty, if they in fact do you need to do any top up with the potential loss of income.
Speaker Change: Yeah.
Speaker Change:
Speaker Change: I think maybe you could address the singtel.
Speaker Change: And a question about Singtel.
Speaker Change: Three data center with us.
Speaker Change: Mention their expiry is between this year to 2030.
Speaker Change: I'll be I'll, just tell you right now.
Speaker Change: In a matter of one or two months.
Speaker Change: The Singtel DC in Tampa and is expired.
Speaker Change: So but.
Speaker Change: Having said that I think.
Speaker Change: Is probably not too many.
Speaker Change: The underlying land users com was sure.
Speaker Change: So we are very excited with this opportunity.
Speaker Change: To explore.
Speaker Change: Developing it or redevelop in the commercial property.
Speaker Change: If you know location location location is temporary.
Speaker Change: So it's exciting for us to relocate our plans there.
Speaker Change: Obviously, including <unk>.
Other options like divestments, or just finding a new tenant.
But since the underlying asset is commercial.
Speaker Change: We will definitely look into.
Speaker Change: In two hours.
Speaker Change: Options to extract more value from them.
Speaker Change: Do you need to top up any if you choose to do a redevelopment do you need to do any income pop up to cover some of the ecommerce.
Speaker Change: We will think about that.
Speaker Change: Honestly.
Speaker Change: In terms of where we are we have done and done a top to be honest. So we just want to be very clean in terms of our GPU.
Speaker Change: We will approach that and see where it goes.
Speaker Change: But having said that the impact of the incomes.
Speaker Change: Great.
Speaker Change: 3% my number one tenant 3% even with the loss of that one building sing Tel is still top 10 on our list.
Speaker Change: So we believe that we should be able to two two.
Speaker Change: Explore trying to push out performance to see whether we can cover those.
Speaker Change: Okay. Thank you so much.
Speaker Change: Thank you Mr. Derek from August.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Thank you Phil.
Speaker Change: Hello.
Speaker Change: So just a couple of follow up questions on the UK Vichy redevelopment opportunity are we still looking at about 60 megawatts in terms of capacity is 60 megawatts and that's.
Speaker Change: And youre in the midst, securing where you haven't gotten that debt secured yet.
Speaker Change: Technically we have that power is the timing of delivery that we are still uncertain.
And we stay in the a commitment before we can move on to development.
Speaker Change: So given.
Speaker Change: Oh, how data center, what Youll hear a mixed power is phasing because whilst they deliver the asset.
Speaker Change: The operator will need to face or they were not executing deal. One. So there is flexibility for both party what the I mean, the delivery on the supply side, where the government got to make sure. The network is delivered on site.
Speaker Change: Well as customers' business plan.
Speaker Change: But the contractual agreement is there yet.
Speaker Change: <unk> megawatt alright, okay great.
Speaker Change: And I guess on the the tenant profile.
Speaker Change: Has this changed the way you approach potential tenants.
Are you looking at Hyperscale is for EPS or.
Speaker Change: I guess, mostly smaller small attendant synergies so the customers that we've been talking to hasn't changed there continue to be on the table to discuss with us.
Speaker Change: Given that location.
Speaker Change: Power.
Speaker Change: This is not your Mega scale data center customers.
Speaker Change: So we believe that the cloud players or wherever their needs above 60 megawatt continued to be our target market and they are still there on the table for us to discuss.
Speaker Change: And just want us whether on the divestments that you mentioned I think it shouldn't suggest its more U S centric.
Speaker Change: Or did I get it wrong no in terms of divestment, we will explore all countries.
Speaker Change: The U S Europe, Australia and Singapore.
Singapore as I mentioned just now.
Speaker Change: The cap rate compression in valuation and strong performance of S. S very well differ somewhat.
Speaker Change: Trigger lock and divestment in Australia and Singapore.
Speaker Change: Is that a number that you have in mind or quantum.
Speaker Change: Divestments this year.
Speaker Change: So last year with Liberal Andover, Midland I think typically there's about a size that we have been delivering.
Speaker Change: But if we were to be able to propel our balance sheet.
Speaker Change: In terms of reducing our leverage.
Speaker Change: Perhaps we need to look a bit bigger than that may be three $400 million.
Speaker Change: Test prep for I guess, the U K or in the all in all the countries.
Speaker Change: Countries that we're in or any projects that we received.
Speaker Change: It received interesting.
Speaker Change: Thank you.
Speaker Change: Thank you Darren now unless agile.
Speaker Change: Okay. Thanks, and just a few follow up.
Speaker Change: What do you mean might mention about defend them and could you just shed a little bit about how we should think about return them or how you think about return.
Speaker Change: The profile of these demand and then and you know we see most of your development leaseback bench.
Speaker Change: Is that still the model going forward.
Speaker Change:
Speaker Change: The returns you probably also have seen that we have announced returns above seven.
Speaker Change: So that's where you want to be able to look that.
Speaker Change: To give us ability to.
Speaker Change: Not just introduce modern specs model facility.
Speaker Change: But we want to be able to.
Speaker Change: Deploy capital city is or assets in terms of redevelopment that we can get the kind of returns.
Speaker Change: Why it's always because.
Speaker Change: We need those numbers no.
Speaker Change: Not just to make the numbers work in terms of returns, but just to make our numbers.
Speaker Change: But we want to be very certain that we can deliver dose primary reason because they are speculative in nature.
Speaker Change: And is not expected lithium.
Speaker Change: Risks that we're taking that we are delivering a 16 four 7% or more.
Speaker Change: But if you look at even our portfolio is not too far away.
Speaker Change: Given that our portfolio is probably a five 6% overall.
Speaker Change: 50 to 100 bps increase to be able to deliver.
Speaker Change: <unk> is still fairly comfortable.
Speaker Change: Our risk that we take.
Speaker Change: Ah the profile hasn't changed.
Speaker Change: We are introducing our logistics.
Speaker Change: U S. We have introduced logistics. So if you think that going forward is likely to be continued to be logistics.
Speaker Change: Probably not far from there.
Speaker Change: Okay. So that it will be where we are heating.
Speaker Change: The of course of course, the other development includes the UK the UK data center overall.
Speaker Change: Where do you want to be able to develop so it's likely to be more logistics and data centers.
Speaker Change: My second question is.
Speaker Change: On the 10, there's one slides on attendance the amount right.
Speaker Change: And it's very interesting that Singapore manufacturing is almost half of that amount.
Speaker Change: And I think D. C is about half of your overseas demand.
Speaker Change: Effect of your expiring leases or this is actually a shift.
Not surprised that you got it almost erle soldiers.
Speaker Change: Yeah, just to Echo what we didn't see I think which is your point that it really depends on the type of assets leave leases expiring in the financial year and the concentration. So it just so happened.
Speaker Change: But the bulk of expiries happen to be in those industries.
Speaker Change: So there is not something that is no we don't see at.
Speaker Change: At the macro Steve in the demand from our tenants.
Speaker Change: And then just lastly on Singapore particular developments, we've seen a lot of you know.
A sort of a foreign investment into the country, but we've not heard about build to suit for a long time.
Speaker Change: And I have talked to.
Speaker Change: And you talked about the relevant in a lot of it is redevelopment.
Speaker Change: No.
Speaker Change: If government willing to relocate the underlying layers and.
Speaker Change: Redevelop instead of doing actual build to suit or.
Speaker Change: Where are these projects going.
Speaker Change: So let me sort of understand built to suit is.
Speaker Change: His solution right and what we're seeing right now while we are doing redevelopment.
Speaker Change: Uh huh.
Speaker Change: If there is a customer in mind that we can do that development for just so at Taco Bell U K D. C. Our preference is to work with a customer that we can build to suit for the customer.
Speaker Change: But youre right in Singapore.
Claire: Claire has built up.
Claire: Brand named to be able to build to suit for customers.
But in today's context, we haven't that's why I say I haven't shared that as well.
Claire: We do hear a lot of foreign.
Claire: Foreign investments.
Contracting to be on their own.
Claire: Which likely not to be the market there is open for us.
Claire: I suppose when it comes to build to suit.
Claire: Our cost against their cost.
Claire: If we can get a better cost of funding directly slower.
Claire: Or if they can.
Claire: Given our Ria stick also your smaller part of the entire investment and we need to have a better control and.
Claire: And given the fact that some of the investments, especially if you will see some of the investments are in Fabs.
Claire: Semicon industries are they're very specialized.
Claire: Are we should we may also not want to get into unless we have a very long lease in those assets.
Claire: So it could be also be a preference of the manufacturers' investors square preferred to be on their own.
Claire: Where we are building today, if you look at our announced projects.
Claire: I'll still fairly.
Speaker Change: Uh huh.
Speaker Change: Industries that we feel comfortable to define tenants logistics.
Speaker Change: There is strong demand out there on the occupancy overall in Singapore is still Hello.
Speaker Change: And we believe that the two locations that we have introduced.
Speaker Change: Talk one Andrew wrong is very.
Speaker Change: Very prime location.
Speaker Change: And in our largest hub, we have power to even.
Speaker Change: To be able to find a coastal attendance.
Speaker Change: So that actually opens up the opportunity for us to be a solution provider for some of these industries.
Speaker Change: Sure.
Speaker Change: Thank you Joey.
Speaker Change: Any questions from the floor.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Yeah, Hi, sorry to this largest hot right I noticed the thing that the decommissioning is only and this year. So it continues to degenerate incurred this year.
Speaker Change: Yes. It is.
Speaker Change: So as we announced today.
Speaker Change: Next thing is to what would be attendance.
Speaker Change: To move them out and then once the tenders are out there, we can decommission and start of construction.
Speaker Change: So typically it give us we require about five six months to be able to attendance.
Speaker Change: Which is why end of the year is the production plan.
Speaker Change: Okay. Okay. Thanks, Thanks for that and then other for lot. This back to the sing Tel data centers right.
Speaker Change: I mean I get it that they are saying that is.
Speaker Change: And Vanessa and very small in an MLP there but.
Speaker Change: Is it in data centers and something that is really hot right. Now and then you know demand is really strong as of late August level supply.
Speaker Change: Wouldn't you want to keep it as high as the data center.
Speaker Change: Uh huh.
Speaker Change: Timing is probably not on our site.
Speaker Change:
Speaker Change: <unk> for data centre number why I mentioned, it is additional or new power.
Speaker Change: We will have to what we've.
Speaker Change: The Knicks Cfe.
Speaker Change: Yeah.
Speaker Change: Operator swing given additional power.
Speaker Change: The first special Cfe accessory lender power.
Speaker Change: Which we have actually saw one of our warehouses to one of the Cfe Awards.
Speaker Change: So if the government were to open up soon it could be an era that we wonder what we've.
Speaker Change: But we are not seeing that this is close.
Speaker Change: Rightly pointed out it could be a site potentially to be reuse data center by given the effect. The underlying land use is called Moshe. We also do not want to just who we owned it a we want to be able to explore and at least the pop on the commercial side. There is no other restrictions.
Speaker Change: Right.
Speaker Change: So it doesn't mean that given that it is a existing data center you continue to be able to use it as a data center with the yeah. So in terms of any of these redevelopment I think is open to us where do you want to develop as existing data center by to develop as a redevelopment of the existing data are really well as a data center.
Speaker Change: Now you have to what we operator, okay. So there's really no speculative element of our choice was a dry well asking you redevelop into their center for customer its not possible right now here in Europe.
Here in this country.
Speaker Change: So we go where we operate.
Speaker Change: But that's one way.
Speaker Change: But each of the site has underlying let users is industrial commercial and we can explore other are the facilities.
Speaker Change: That's Uh huh, there's other users for this.
Speaker Change: Okay. Okay got it thank you.
Dan: Hey, Thank you Dan if there are no questions from the audience, perhaps you can just move to the two questions online.
Amazon dollar I saw I think they had a final two questions.
Speaker Change: The first one is what is our head of development redevelopment and the dealer development capital.
Dan: Yeah.
Dan: Yeah I'll take this question. So currently we are using about 5% of our development.
Dan: Once genealogy the T O P that were dropped about three points less than 4%.
Dan: Definitely enough.
Development opportunities.
Dan: Yeah.
Dan: Yeah.
Dan: Thank you.
Speaker Change: Hello, We go to the final question, which is how does classy that you're hurting our SBA as competition to Singapore business path and logistics assets and they'll clammy looking for a redevelopment opportunity in jaw.
Dan:
Speaker Change: Thank you for that question.
Speaker Change: I think we look at it as both yes, you see there is some competition I think it's probably healthy for us as well.
Speaker Change: Opens up new opportunities for new <unk>.
Speaker Change: Singapore continues to be a high cost of investment for many investors.
Speaker Change: F D iceweb, considering self-poised the destination of their manufacturing.
If we can't have access into J S.
Speaker Change: I think we can then looked at investments not just typically in your tier one in the industry is probably a top three or five in industries.
Speaker Change: I believe the ETB, you'll probably get more than that.
Speaker Change: And <unk> deliver all the LTI targets in our posture is at a peak day, we're delivering 22 billion of investment in Singapore, I think with this additional resource of <unk> I think that will be beneficial for the country as well as Joe Hall.
Speaker Change: Logistics are there.
Speaker Change: <unk> is uncertain and.
Speaker Change: Why I say that is because if the challenging with seamless I think.
Speaker Change: Companies or investors, who look at weather logistics will be in and Joe Hall will be alternative Singapore.
Speaker Change: We do not know whether the the movement of course will be seamless.
Speaker Change: It is so it just allow.
Speaker Change: Maybe a re classification of ore or in terms of the trip flows of their cargo flows.
Speaker Change: In the past we have seen some of those that has been stalled out in Joe Hall.
Speaker Change: Has been cargos that is not time sensitive.
Speaker Change: So it has happened in the past I think you continue to be so less time sensitive will be in further location.
Speaker Change: But Singapore is small as we have mentioned previously we like last mile location.
Speaker Change: I think if that happens being up over because I'm, a loss small and because of access to parts I think it will continue to be a prime location for logistics and we think that actually be helpful for us.
Speaker Change: <unk>.
Speaker Change: We have better asset we can capture all this demand that can they can stay in Singapore. So.
Speaker Change: So I think there is a possibility and competition. So we will still continue more into and see where this bring us too.
Speaker Change: Yeah.
Okay with.
Speaker Change: With that we have come to the end of the billing. Thank you for joining US online is now cynically maybe show a good evening.
Speaker Change: Thank you happy.
Speaker Change: Happy new year and washed a retro Tang.
Speaker Change: The remaining <unk> staff asset managers property managers and our leasing staff.
Speaker Change: We'll deliver this a beautiful set of operational metrics. Thank you.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Thank you everyone happy Pat take a lead and so if you need to rush off to some way anglophilia stomach. We got one we have also some user kombucha and probiotics Honey Lemon Inc. So please take us the balance of the ESCO final gut health.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [noise].