Q3 2025 Link Real Estate Investment Trust Earnings Call
Company highlights that operational update followed by a financial and outlook.
Christie: We will begin with Company Highlights, then Operational Updates, followed by Financial and Outlook. Lastly, we will have our Q&A session.
Lastly, we would have on Q&A session now I would like to pass the floor to ours with C O George fleet.
George Pruitt: Now I would like to pass the floor to our CEO, George Pruitt. Thank you, Christie. We appreciate everyone joining us today for what will be the last time we're doing the pre-blackout briefing. And going forward, we'll be shifting to a quarterly update instead. For further information, we share at the end of this presentation about what we have planned and the reasons that we will be making this adjustment. But let me start with some highlights and a reminder of the uncertainty that we're dealing with as we operate and the strategy that we have been pursuing these past years.
Speaker Change: Thank you Christine and we appreciate everyone joining us today for what will be the last time during the local region and going forward, we are distributing to a quarterly update instead.
Speaker Change: Further information we share at the end of this presentation.
Speaker Change: While we have planned and the reasons that we will be making this adjustment.
Speaker Change: Ill start with some highlights and a reminder of the uncertainty.
Speaker Change: But we are dealing with as we operate.
Speaker Change: And the strategy that we have been pursuing these past years.
Speaker Change: Let me give an overarching summary of the Bickford tripling.
George Pruitt: Let me give an overarching summary of the big picture of a link. continues to operate in highly uncertain times for higher or longer interest rates and uncertainty around how the global economy will fare in the face of various challenges. in the geographies where LINK operates. We are facing challenges in Hong Kong, where our retail tenants are facing significant pressure in terms of rising costs, sales leakage to online and cross-border travel. And this, together with the continuous challenge in re-energizing the economy in mainland China, is leading to significant pressure on rental reversion. At this time, we're glad that we have started our diversification effort when we did.
Speaker Change: We continue to operate in a highly uncertain times four.
Speaker Change: For higher for longer interest rates and uncertainty around how the global economy will play in the face of various challenges.
In the geographies, where a link operates.
Speaker Change: We are facing challenges in Hong Kong.
Speaker Change: Our retail tenants are facing significant pressure in terms of rising costs sales leakage through online and cross border trebled.
Speaker Change: This together with the continued challenge.
Speaker Change: Energizing the economy in mainland China.
Speaker Change: Leading to significant pressure on rental reversion.
Speaker Change: At this time, we're glad that we have started our diversification effort when we did.
Speaker Change: As the picture in Singapore and Australia.
George Pruitt: as the picture in Cinderfall in Australia. Looking ahead, we remain committed to our LINK 3.0 strategy, which builds on our capabilities and track record achieved over almost two decades, to further strengthen LINK's portfolio and to develop our real estate investment management business under LINK. Just to provide a bit more detail on the global and local context for our business in the year ahead, globally, we anticipate the growth outlook to remain mixed due to factors including the U.S. policy environment, continued challenge with mainland China's economy, and unclear interest rate cut timing. These factors combined together with evolving technology and changing consumer behaviors create an uncertain global structure and demands that we act with caution.
Speaker Change: It's more positive.
Speaker Change: Looking ahead, we remain committed to our linked to pre zero strategy, which builds on our capabilities and track record achieved.
Speaker Change: Almost two decades.
Speaker Change: To further strengthen <unk> portfolio and to develop.
Speaker Change: Real estate and investment management business under linked.
Speaker Change: Just to provide a bit more detail on.
Speaker Change: On the global and local context for our business in the year ahead.
Speaker Change: Globally, we anticipate the globe outlook to remain mixed due to practice, including in the U S.
Speaker Change: Policy environment continued challenge with mainland China economy, and unclear interest breakup timing.
Speaker Change: These factors combined together with evolving technology and changing consumer behaviors create.
Speaker Change: Created an uncertain global but blackjack and demands that we act with caution.
Speaker Change: In our key markets, Hong Kong and mainland China.
George Pruitt: In our key markets, Hong Kong and Mainland China, the outlook is less favourable. However, monetary policy loosening and the focus on boosting domestic demand are expected to stimulate economic activity, though we expect it will take some time before things will improve. Meanwhile, Singapore and Australia offer a more positive outlook, with robust economic indicators and consumption support. Despite the prevailing macro conditions, our portfolio has continued to endure. A quick reminder of the shape of our business and our diversification strategies, currently our linked REIT portfolio comprises 74% Hong Kong, 15% mainland China and 11% international, which includes Australia, Singapore and the UK.
Speaker Change: Outlook is less favorable however, monetary policy loosening and a focus on boosting domestic demand are expected to stimulate economic activity.
Speaker Change: We expect it will take some time before things will improve.
Speaker Change: Meanwhile, Singapore, and Australia offer a more positive outlook with robust economic indicators and consumption support.
Speaker Change: Despite the prevailing macro conditions, our portfolio has continued to endure.
A quick reminder of the shape of our business.
Speaker Change: Diversification strategies currently operating lease portfolio comprised of 74% Hong Kong <unk>.
Speaker Change: 18% mainland, China, and 11% International which includes Australia, Singapore and the UK.
Speaker Change: As we diversify and grow pooling three zero, we are focused on optimizing our portfolio by exploring opportunities in the APAC region, including Australia, Japan, and Singapore and.
George Pruitt: As we diversify and grow ThruLink 3.0, we are focused on optimizing our portfolio by exploring opportunities in the APEC region, including Australia, Japan, and Singapore. And at the same time, we are also committed to maintain a high bar for right acquisition and organic M&A. In line with our strategy to grow our real estate investment management, we've officially launched Linked Real Estate Partners, a private fund management business line in Cleverick. And Ronald will provide further details on this later.
Speaker Change: And at the same time, we are also committed to maintain a high bar for <unk> acquisitions.
Speaker Change: Organic M&A.
Speaker Change: In line with our strategy to grow our real estate investment management.
Speaker Change: Officially launched linked real estate partners, a private fund management business line in separate <unk>.
Speaker Change: Donald will provide further details on this later.
Speaker Change: Let me now pass the time to grab to share more on the operational update.
Greg: Let me now pass the time to Greg to share more on the operational update. Thanks George and good afternoon everyone and I'll start this afternoon with the review of our overall portfolio occupancy. Our portfolio has demonstrated solid performance with occupancy levels remaining high and our international retail assets approaching nearly full occupancy. In Hong Kong, the resilience of our non-discretionary retail portfolio is reflected with high occupancy and showcasing stability and strength in the underlying market. In Mainland China, we're pleased to report healthy occupancy rates across various asset types, underscoring the effectiveness of our Focused Leasing Initiative.
Donald: Thanks, George and good afternoon, everyone and I will stop this afternoon with a review of our overall portfolio occupancy.
Donald: Our portfolio has demonstrated solid performance with occupancy levels remained high and our international retail assets approaching nearly full occupancy.
Donald: In Hong Kong, the resilience of our non discretionary retail portfolio is reflected with high occupancy and showcasing stability and strength in the underlying markets.
Donald: In mainland China, we are pleased to report healthy occupancy rates across various asset types underscoring the effectiveness about bacon focused leasing initiatives.
Donald: In the international markets are retail assets in Australia, and Singapore achieved nearly full occupancy with robust ongoing leasing demand, while ongoing challenges and notice in the Australia and office markets.
Greg: In the international markets, our retail assets in Australia and Singapore achieve nearly full occupancy with robust ongoing leasing demand, while ongoing challenges are noted in the Australian office market. Now let's look at Hong Kong in some more detail and our retail portfolio, where the occupancy rate has remained robust at 97.1% as of December, highlighting the resilience and stability of our essential needs focused trade mix, even amidst challenging market conditions. Rental reversions for the period experienced negative low single digits for the first nine months of the period, which also impacted the unit rent per square foot, bringing it to $64.10.
Donald: Now, let's look at Hong Kong, and some more detail and at retail portfolio, where the occupancy rate has remained robust at 97, 1% as of December highlighting the resilience and stability of our essential nature flex track mix, even amidst challenging market conditions.
Donald: Rental revisions for the period experienced negative low single digits for the first nine months of the period, which also impacted the unit ramp per square foot, bringing it to $64 10.
Donald: Despite tenants out being affected by changing consumption patterns, among visitors and residents, which recorded a decline of three 3% year on year for the first nine months. This was a narrow would drop compared to the broader Hong Kong market at negative seven 6%.
Greg: Despite tenant sales being affected by changing consumption patterns among inhabitants and residents, which recorded a decline of 3.3% year-on-year for the first nine months, this was a narrower drop compared to the broader Hong Kong market at negative 7.6%. Occupancy costs have slightly come down compared to the first half of the year, indicating potential stabilisation of value conditions. And when we break it down by trade mix, both food and beverage in general retail segments outperformed the Hong Kong market, while supermarket and foodstuff saw some weaker performance for the period. In terms of the Hong Kong car park and related businesses, we observed moderate growth in parking revenues for the first nine months of the year.
Donald: Occupancy cost has slightly come down compared to the first half of the year, indicating potential stabilization at better conditions.
Donald: And when we break it down by trade mix, but food and beverage in general retail segments outperformed the Hong Kong markets, while supermarket and foodstuffs saw some weaker performance for the periods.
Donald: In terms of the Hong Kong <unk> and related businesses, we observed moderate growth in parking revenues for the first nine months of the year, while parking ticket sales experienced a decline this was balanced out by increases to parking tariffs.
Greg: While parking ticket sales experienced a decline, this was balanced out by increases to parking tariffs. We aim to stay responsive to market trends, creating plans to enhance performance and rolling out our new car park management system and ongoing enhancements to that program. Now let's shift to Mainland China, where as previously mentioned, occupancy was healthy across our various asset sites. Our retail team on the ground in China has been able to manage tenant remixing very effectively in order to secure more productive and innovative operators. We saw softer demand in specific trades such as cosmetics and jewellery, whilst sporting goods in particular and retailers featuring intellectual property designs are doing really well.
Donald: We ended sorry responsive to market trends credit plans to enhance performance and rolling out a new car Park management system and ongoing enhancements to that program.
Donald: Now, let's shift to mainland China, whereas previously mentioned occupancy was healthy across our various asset types.
Donald: Our retail team on the ground in China has been able to manage tenant remixing very effectively in order to secure more productive and innovative operators.
Donald: We saw softer demand in specific triad, such as cosmetics and jewelry, while sporting goods in particular and re titles featuring intellectual property designs and doing really well.
Donald: As for office occupancy exceeded the district average despite new supply.
Greg: As for office, our occupancy exceeded the district average despite new supply. We will continue to upgrade our facilities to enhance our customer satisfaction and also attract new tenants by carrying out fit-out works on vacant units to improve profitability. The logistics occupancy in our portfolio remains healthy at over 96% and demand for our facilities are predominantly driven by e-commerce and third-party logistics operators. and turning our attention to our international business which consists of retail and offices located predominantly in Australia and Singapore. and our Australian retail assets located in the Sydney CBD, positive leasing momentum continues from tenant demand and now sees occupancy of 99.5%.
Donald: We will continue to upgrade our facilities to enhance our customer satisfaction and also attract new tenants by carrying out fit outlooks on vacant units to improve occupancy.
Donald: The logistics occupancy in our portfolio remained healthy at over 96% and demand for our facilities are predominantly driven by E Commerce and third party logistics operators.
Donald: And turning our attention to our international business, which consists of <unk> Island offices, located predominantly in Australia and Singapore.
Donald: And our strategy to retail assets by Kennedy in the Sydney CBD positive leasing momentum continues from tenant demand.
Donald: And now see occupancy of 99, 5%.
Donald: This was supported by our active ongoing leasing efforts, which not only introduced the curation of new brands with wholesale it allowed for continued upgrading of Brookdale offerings.
Greg: This was supported by our active, ongoing leasing efforts, which has not only introduced the curation of new brands, but also has allowed for continued upgrading of retail offerings. Out of the trade categories in particular, food and beverage and apparel perform well across the three properties. Now moving on to Singapore, where our models of Jurong Points and Thompson Plaza perform very strongly, achieving occupancies now at 100% with ongoing positive leasing reversions. The ongoing enrichment of our tenant variety has been boosted through strong leaking interest from overseas retailers, including those from mainland China, and in particular food and beverage brands.
Donald: Out of the <unk> categories in particular, food and beverage and apparel performed well across the three properties.
Donald: Now moving on to Singapore, where animals are general points and Thomson Plaza performed very strongly.
Donald: <unk> occupancy is now 100%.
Donald: With ongoing positive leasing revisions.
Donald: The ongoing enrichment of that tenant variety is being boosted through strong leasing interest from overseas retailers, including those from mainland China and in particular food and beverage brands.
Donald: F&B in beauty and wellness categories were the main drivers of 10 sales growth over the period.
Greg: F&B and beauty and wellness categories were the main drivers of tenant sales growth over the period. and funding from E.ON Office, we note the further bifurcation in the Sydney office market with the fight to quality trend continuing. We've made some good progress, however, through the backfilling of vacant tenancies, in particular of 347 Kent Street in Sydney, and our retention rate on renewables remains strong. Under current market conditions, it's essential for us to continue to enhance the appeal of our office spaces through pacemaking and the provision of amenities.
Donald: And finally from me on office, we note that the <unk>.
Donald: Bifurcation in the Sydney office market with the flight to quality trend continuing.
Donald: We've made some good progress however through the back filling a vacant tenancies in particular at <unk> in Sydney and our retention rate on renewals remained strong.
Donald: Under current market conditions, it's essential for us to continue to enhance the appeal of our office spaces through pacemaking and the provision of amenities.
Chaos: I'll now pass over to chaos. Thank you. Thank.
KS: and now I'll pass over to KS. Thank you. Thank you, Greg. Good afternoon to everyone. Moving on to Capital Management, our robust financial position is well supported by a healthy balance sheet as shown by the key metrics here. As of 30th September 2024, net gearing remained low at 20.6% while the average borrowing cost remained competitive at 3.69%. Our EBITDA interest coverage stood at 4.8 times. Fixed debt ratio in the upper range of 50% to 70% is in anticipation of more gradual and shallow recovery. Supported by our A-Ratings from all three credit agencies, we have the stability and credibility to attract investors, as well as secure favorable terms for future funding needs.
Chaos: Thank you Greg good afternoon to everyone.
Chaos: Moving on to capital management.
Chaos: Robust financial position is well supported by a healthy balance sheet as shown by the key metrics here.
Chaos: As of 30 of September two zero to four.
Chaos: Net gearing remained low at 26%.
Chaos: The average borrowing costs remain competitive at $3 six 9%.
Chaos: Total EBITDA and good coverage stood at four 8%.
Chaos: <unk> ratio in the upper range of 50% to 70%.
Chaos: Anticipation of more gradual and schedule rate cuts.
Chaos: So both about a ratings from all three credit agencies, we have the stability and credibility to attract investors.
Chaos: And third secure favorable terms for future funding needs.
Chaos: Between 90, Zemba Toyota reported seven January 225 years, we've deployed over $500 million local dollars to buyback approximately 17 million units.
KS: Between 9th December 2024 and 7th January 2025, we deployed over HK$500 million to buy back approximately 17 million units. Overall, our robust financial position will enable us to effectively navigate the uncertainties in valuation. The disciplined approach to debt management with diversified sources of capital across debt instruments has helped us to achieve with a competitive average boarding cost, so it's robust credit rating. Our financial stability is reinforced through FX Management, which includes extensive hedging of non-HKD distributable income. and the currency risk of overseas assets. alongside capitalizing on lower RMB interest rates. after repaying some debt. The debt balance at or end September 2024 was reduced to HK$55.6 billion.
Chaos: Overall, our robust financial position will enable us to effectively navigate the uncertainties in evaluations.
Chaos: Okay.
Chaos: The disciplined approach to debt management with diversified sources of capital across debt instruments.
Us search.
Chaos: Paper Coca tea beverage borne costs, so it's robust credit ratios.
Chaos: Our financial stability is reinforced through FX management.
Chaos: Which includes extensive hedging of non Hong Kong dollar distributable income.
Chaos: And the currency of overseas assets.
Chaos: Alongside capitalizing on lower RMB interest rates.
Chaos: After repaying some debt.
Chaos: The debt balance as of end September.
Chaos: September two zero to four plus.
Chaos: It was reduced to 50 560 <unk>.
Chaos: And we have been proactively managing our maturity profile.
Ronald: and we have been proactively managing our maturity profile. I now pass the time to Ronald to cover other updates.
Chaos: I'll now pass the time to rollout the cover other updates. Thank you. Thank you for asking good afternoon, everyone.
Ronald: Thank you. Thank you, Kaz. Good afternoon, everyone. We have made significant progress in developing our real estate investment management business through the launch of our new business line, Link Real Estate Partners. which focuses on serving third-party private and institutional sectors. It will leverage on links to robust operational skills, deep knowledge, and scale in Asia, and provide proven track record to identify and execute compelling real estate investment strategies and match them with capital across the risk spectrum. It will also help accelerate our diversification and create new income from co-investing and managing assets for new farmers. We have spent much of 2024 assembling a fund management team, led by John Saunders, our Group Chief Investment Officer, along with several new hires, including Head of Australia Investments, Head of Research, Portfolio Director, and a Product Strategist.
Chaos: We have made significant progress in developing our real estate investment management business through the launch of a new business line link real estate partners.
Chaos: Which focuses on serving third party private institutional capital.
Chaos: It will leverage on Lincoln robust operate shinall skills deep knowledge and scale in Asia.
Chaos: And provide track record and proven track record to identify execute compelling gross state investment strategies and matched them with capital across the respective.
It will also help accelerate our diversification and create new income from co investing and matching assets put new bonds.
John Saunders: We have spent much of 2020 full assembling a fund management team led by John Saunders Chief Investment Officer.
John Saunders: Along with several new hires including head of Australia investments head of research.
John Saunders: <unk> added product strategies.
John Saunders: While we are unable to disclose too many details at this juncture, we expect 2025 to be a busy will both fund.
Ronald: While we're unable to disclose too many details at this juncture, we expect 2025 to be a busy for both fundraising and investment. Before we move on to Q&A session, I would like to discuss our new approach to providing operational updates in between our interim and final results. We always strive to continually improve our engagement with investors and as part of that, to provide robust, transparent information on a timely manner. Starting with the operational update after our next final results, we will be able to provide our Q1 and Q3 operational updates approximately one and a half months earlier than we currently do, as we will transition to providing quarterly operational updates announcements instead of pre-blackout briefings.
John Saunders: Fundraising and investments.
John Saunders: Okay.
John Saunders: So we move on to Q&A session I would like to discuss a new approach to providing operational updates in between our interim and final results.
John Saunders: We always strive to continuously improve our engagement with investors and as part of that to provide robust transparent information on a timely manner.
John Saunders: Starting with the operational update after our next final results.
John Saunders: We will be able to provide our Q1 and Q3 operational updates approximately one and half months earlier than we currently do as we will transition to providing quarterly operational updates announcements and settled pre blackout briefings.
John Saunders: We plan to provide Q1 update in February in Q3 in August.
Ronald: We plan to provide Q1 update in February and Q3 in August. This change, made after feedback from the investment community, will allow us more time to engage with investors and analysts prior to any blackout period. At the timing of our quarterly update, the results will be distributed more evenly throughout the year. To facilitate this, we will upload the quarterly operational updates to the Stock Exchange and our corporate website, ensuring timely access to essential information. This will enable stakeholders to access our performance more effectively and make well-informed investment decisions.
John Saunders: This change made after the feedback from the investment community will allow us more time to engage with investors and analysts prior to any blackout period.
John Saunders: At the timing of our quarterly update and results will be distributed more evenly throughout the year.
John Saunders: To facilitate this we will upload the quarterly operational updates to the stock exchange and our corporate website, ensuring timely access to essential information.
John Saunders: This will enable stakeholders to access our performance more effectively and make well informed investment decisions.
John Saunders: I'll now pass over to Christy for Q&A session. Thank you.
Christie: I'll now pass over to Christy for Q&A session. Thank you, Arnold. So let's move on to the follow-up Q&A. Please submit your questions using the Q&A function. We got a few questions already. Let's see if we can start now. So quite some questions on the retail sales in Hong Kong. So let's start with... Cindy from Citi. So how's the retail sales trend in the first few of Canada's year 2025? Any green shots for early signs of recovery? I'll take that question. Thank you, Cindy. So just looking at the period after December, we've seen an improvement and we've just spoken to a negative 3.3 total sales position.
Christy: And I'll close out.
Speaker Change: Our outbound Q&A amongst neotype cancer using makena anytime soon.
Christy: We got a few questions to high level.
Now some.
Christy: Some questions on the retail staffing Hong Kong.
Speaker Change: Let's start with Allen.
Christy: Damian.
Christy: So how do we have sales trend in <unk>, Canada, <unk> and clean shop floor and signs of recovery.
Christy: That's question <unk>.
Christy: And so we're looking at.
Christy: I guess the period up to December we've seen.
Christy: And improvements in.
Christy: We've just spoken to a negative $3 three.
Christy: Total SaaS position and just to remind you that at the end of the first quarter of the financing that was negative $5 nine and then at the first half was negative $4 <unk>. So a gradual improvement over the period.
Greg: And just to remind you that at the end of the first quarter of the financial year, that was negative 5.9. And then at the first half, it was negative 4.3. So a gradual improvement over the period. And we've seen that across the three major categories that we report to. So as it's December, food and beverage was flat year on year. And that was an improvement from negative 1.5% for the first quarter. Supermarkets, we're seeing some gradual improvement. And I think that's largely off a lower base. So supermarkets were negative 5.9% in the first quarter, negative 5.2% at the first half, and negative 3.9% Q3.
Christy: And we've seen that across the three major categories that we report to.
Christy: So as it.
Christy: The standard that food and beverage was flat year on year.
Christy: And that was an improvement from negative one 5% for the first quarter.
Christy: Supermarkets were seeing some gradual improvement and I think thats largely off a lower base.
Christy: Substitute markets were negative five 9% in the first quarter negative five 2% at the first half and negative three 9% in Q3 in general retailers also improved significantly as.
Greg: And general retailers also improved significantly. So as we move into the last quarter of this financial year, we are seeing that trend continuing. But I will say that there is a lag from this improvement in sales and flowing through into rental reversions. The other associated metric to the sales is our footfall, which we've seen ongoing improvement over the last few months. And in particular, we've seen more of a dramatic improvement on weekend footfall. And that, I think, is associated with some of the stabilisation of the northbound linkage. So some green shoots, but still somewhere to go.
Christy: As we move into <unk>.
Christy: The last quarter of this financial year, we are saying that trend continuing.
Christy: But I will say that there is a lag from this improvement in sales and flowing through into the rental reversion.
Christy: The other associated metrics to the styles is applicable, which we have seen ongoing improvements.
Christy: For the last few months.
Christy: Particularly seen.
Christy: More of a dramatic improvement on weekend portfolio things that I think is associated with some of the stabilization of the north them linkage.
Christy: So at some green shoots.
Christy: Got it.
Christy: Thanks.
Christy: So another question I think that also continued to build a company that we disposed of the recycle capital given high for longer rate outlook.
Ronald: Thank you. So another question is, will you consider any disposal to recycle capital given high for longer rate outlook? I'll take that. So, obviously, we always look at optimising our portfolio and we're always constantly reviewing acquisitions as well as disposals. And so, yes, if there is the right deal in the market, if there's the right price, we will consider recycling. I think right now we're still looking for those opportunities and we're constantly assessing those recycle Thanks, Ronald. So next question is from Sam of Dresdes. Could you share a bit more color on China side, sales and reversions?
Christy: Okay.
I'll take that.
Christy: Obviously, we always look at optimizing.
Christy: Portfolio and we're always constantly reviewing.
Christy: Acquisitions as well as disposals.
Christy: And so yes.
Christy: If there was a right deal in the market. We are at the right price, we will consider recycling I think.
Christy: Right now we're still looking for.
Christy: For those opportunities and we're constantly.
Christy: Youre assessing.
Mark: Those recycle opportunities. Thanks, Mark next question, Thanks, Tom some of Kathy.
Speaker Change: Could you shed a bit more color on China, south and detention.
Mark: Yes.
Mark: Yeah.
Mark: China from a retail state managed side from a retail perspective.
Ronald: Yes, sir. I'm afraid we can't really say much about that at this moment. As you can understand, we are under regulatory restrictions to say anything about the funding. And then the next question is from Goldman, Simon. Did I say you can? Can you provide some targets or milestone you're setting out for your linked real estate investment? I'll say that the answer is the same. Okay, and then will be from UBAS, Mark Lund. What is the rental reversion guidance for next year? Yeah, so I touched on that in the previous question. So we're anticipating slightly negative reversion for Hong Kong, fairly flat for Mainland and positive for Singapore and Australia.
Mark: Stabilizing the biggest challenges environment in Beijing in particular, our truck launch on asset way with doing some ongoing asset enhancements and tenant remixing.
Mark: When we reported the half first half result, we spoke to the fact that it was the negative revision for the mainline business that if you excluded some crunch on it would be slightly positive that is still the case.
Pleasingly, there is quite a lot of tenant activity in the mainland market.
Mark: So the markets of Shanghai, Guangzhou, and Shenzhen for us continued to be pretty stable.
Mark: Beijing is where a lot of efficacy is.
Mark: And the slot it in occupancy from the first half to this reporting period, we think will.
Mark: Signs of improvement as we get to the end of this financial year. So.
Mark: Probably the most pleasing thing with regards to mainland retail east very good underlying tenant activity and tenant demand.
Mark: But that is offset somewhat by significant increases of supply new supply in markets like Beijing and Guangzhou in particular.
Speaker Change: And then another question Tommy China business as well.
Speaker Change: Getting one telecom <unk> data on secondhand half look like now and then when we will be activating <unk> globally.
Speaker Change: After the ethical Hudson, so tentatively progressing well building off the success that we had for the first phase.
Speaker Change: On August one site a few weeks ago with privacy is good leasing momentum is very strong.
Speaker Change: So as we move through into the new financial year.
Speaker Change: We're fairly confident that we will have the lion's share of that project is completed.
Speaker Change: With very satisfied with the ongoing leasing demand.
Speaker Change: That property is very well positioned assets that are very strong catchments.
Speaker Change: Again, the major issue with Bulgaria with ICD to increased competition.
Speaker Change: Getting well ahead of that new competition is important.
Speaker Change: We can put this project.
Speaker Change: And then you mentioned it.
Speaker Change: Principal asset management.
Speaker Change: And Kenny.
Speaker Change: This test and IBM, apparently rising trend and should we be tradable coffee taken on traction in Panama.
Speaker Change: So it just the general trend on leasing reversion for Hong Kong.
Speaker Change: We mentioned during the prepared remarks.
Speaker Change: We have seen a deterioration from the first half to the third quarter. So.
Speaker Change: Very very slightly negative leasing reversion for Hong Kong.
And as we've discussed many times the composition of activity in any given year, usually type is also in the back half of <unk>.
Speaker Change: Actual year.
Speaker Change: So we reported plus 7% at the first half as I said very very low single digit reversion as at December.
Speaker Change: And that trend will continue through until the end of this financial year.
Speaker Change: And I think the concept of negative diversity is something that.
Speaker Change: We should be prepared for this new financial year that would be embarking on shortly.
Speaker Change: Very moderate.
Speaker Change: Negative revision. Thank you and the next question it sounds like some.
Speaker Change: Kathy.
Kathy: Ask any update on capital raising for the fax business.
Speaker Change: Yeah.
Speaker Change: So I'm afraid, we can't really say much about that at this moment.
Speaker Change: Against that we under regulatory restrictions to say anything about the timing.
Speaker Change: And then next question just kind of a government Diane.
Speaker Change: And can.
Speaker Change: Can I extend Mccann can give her back with some tactical milestones setting out for you on these real estate spend.
Speaker Change: I will say I will say that the answer is the same thing.
Speaker Change: Okay and then.
Speaker Change: One.
Speaker Change: We'll see you.
Speaker Change: Back Mike Lang.
Speaker Change: What is the rental results and guidance for next year, Yeah. So I think touched on that in the previous question. So we're anticipating slightly negative, but I think the Hong Kong.
Speaker Change: Fairly flat for nine months and positive Singapore and Australia.
Speaker Change: The main focus I would point to that and we've said on numerous occasions now is preserving occupancy across our portfolio and I think the numbers that we expect them to again today illustrate that.
Ronald: The main focus I will point to though, and we've said it on numerous occasions now, is preserving occupancy across our portfolios. And I think the numbers that we've spoken to again today illustrate that. What we are experiencing is that the reversion on new deals or replacement tenants is significantly worse than the reversion for us in retaining tenants. Pleasingly, our retention rate, I should say, remains at our long-term averages in the high 70% range as of December. So a big part of our strategy is retaining our existing tenants. We do an analysis that we call right tenant, right location.
Speaker Change: What we are experiencing is that reversion.
Speaker Change: On new deals or replacement tenants is significantly worse than the reversion for us in refining tenants.
Speaker Change: Pleasingly our.
Speaker Change: The revision of our retention rate I should say.
Speaker Change: Reminded out long term averages in the high 70% range as of December.
Speaker Change: So a big part of that strategy is retaining our existing tenants, we do an analysis that equal right tenant right location.
Speaker Change: And a large proportion of our portfolio saves us having pleasingly, the right tenants and the right locations.
Ronald: And a large proportion of our portfolio sees us having pleasingly the right tenants in the right locations. So we'll be working with our tenants to retain them. Another strategy that we're working through is endeavouring for our tenants to invest in upgrading their facilities. And if that means that we forego some reversion in return for some capital investment by those retailers to improve their environments, that's something we'll be treating on a case-by-case situation as well. So a long-winded answer to a very simple question, but yeah, there is some pressure on reversion. But we anticipate that that will be offset by preserving occupancy here in Hong Kong.
Speaker Change: So we'll be working without tends to retain them. Another strategy that we're working seriously in February for our tenants to invest in upgrading their facilities.
Speaker Change: And if that means that we forgo.
Speaker Change: Some reversion in return for some capital investment by those titles to encourage their environments.
Speaker Change: Something will be trading on a case by case situation as well.
Speaker Change: Alone weighted assets order a super question, but yes, there is some pressure on revision, but we anticipate that that will be offset by preserving occupancy here in Hong Kong.
Speaker Change: Question for Jason. Thank you morning, count and any guidance on how FX financing costs will be in second half of the financial year 2005, and that is also down from the average to 690%.
Carl: Next question will be from Debbie Morgan Powell. Any guidance on how average financing costs will be in the second half of the financial year, year 2.5, and will it further go down from the average 2.69%? or stay home? I think the third option that you didn't mention is will it go up marginally? And I think, Carl, the answer is yes. We have fixed 66.4 so there's about one-third that's not fixed and if you look at our maturity profile. This coming financial year, there's about $12 billion of refinancing. Clearly, today, Hypo is already at $3.8-$3.9, without ABC at $3.7, it's unlikely that you can beat that, because a lot of these will hatch from when rates are much lower and stocks are much cheaper.
Speaker Change: All our stakeholders.
Speaker Change: So I think that option that you Didnt mentioned is really go up much.
Speaker Change: And I think it's called the unsafe yes, we.
Speaker Change: We have fixed.
Speaker Change: <unk> 66 for <unk>.
Speaker Change: About one third fixed and if you look at our maturity profile.
Speaker Change: This coming financial year, it's about 12 political refinancing.
Speaker Change: Clearly today, Hi boys are already at 3839.
Speaker Change: Our ABC at $3 seven it's unlikely that.
Speaker Change: You can beat that does a lot of detail attached locally when Richard Shaw in Salzburg cheaper. So we do expect volume closely in spot market earnings.
Carl: So, we do expect borrowing costs to inch up marginally this coming year. Thank you. And next question is also from Karl. Any comments on when the stock name becomes eligible for stock comments? Um I think when you look at the announcement on various topics around StockConnect, there is a lot of discussion around these StockConnect issues. Since February this year, there's already a conclusion to implement it as soon as possible, and our sense is hopefully somewhere next month we get more announcements on how fast CFRC is willing to make clearer announcements. But my sense is, so far, the regulators have been very supportive and progressively have been trying to accelerate the implementation.
Speaker Change: This coming year.
Speaker Change: And next question for Taco Bell cow any color on when the stock named accounts.
Speaker Change: <unk> stock comment.
Speaker Change: Yeah.
Speaker Change: I think when you look at the announce Linda.
David I'll take that Scott.
Speaker Change: There is a lot of discussion about the stock or the issues.
Speaker Change: Same February this year.
Speaker Change: So included in that.
Speaker Change: To conclude Monday as soon as possible.
Our sense is.
Hopefully somewhere next month, when we get more announcements on the sulfur.
Speaker Change: Help us get us Steve is leading to make create a revenue bump I think.
Speaker Change: So far the regulators have been very.
Speaker Change: Supportive and progress Cvs business trends with the <unk> implementation.
Speaker Change: The investment conference.
Phil Collins: During the investment conference happening in Hong Kong this week, the financial secretary also said the same. He said it's coming, it's a matter of when, not a if, and so obviously we're still waiting for the time, but it should be more than that. And just to add to that, obviously we've been through quite a bit of IR from China, and we know there's demand, and we are ready to capture those when it comes. Thank you. Next question is from Phil Collins. Will we consider the increased borrowing from mainland China to lower average financing cost? And what's the financing cost outlook for FY25 and FY26?
Speaker Change: State and local this week.
Speaker Change: But Israel Secretary also safe to say that.
Speaker Change: This is probably the lead of wins in auto.
Speaker Change: So okay.
Speaker Change: Who is the wisdom of the tonnes.
Speaker Change: This would be lower and just to add to that because we've been through quite a bit of IR in China.
Speaker Change: We know that a few months now.
Speaker Change: We're ready to capture those milestones.
Speaker Change: In Cana.
Speaker Change: Next question is on cell count.
Speaker Change: Well, we can say that the increased borrowings on mainland, China, and lower average financing cost and debt financing plus outlook for them.
Speaker Change: FY <unk> and logistics, so I think I'll take the first question.
Speaker Change: I'll just answer it will be the same there'll be a marginally higher finance.
Phil Collins: So I think I'll take the first question, the second I'll just answer and it will be the same. There will be a marginally higher financing cost. On taking advantage of the RMB... lower financing costs. In reality what we are doing is actually to use RMB borrowing to hedge against the RMB assets and there's no intention to overhedge as that's not part of our business to take hedging risks. So we will continue to hedge and each of these hedges does have their maturity profile and as it expires we will continue to hedge and so far hedging RMB we have paid a premium to help reduce our financing costs and today we are already in the almost fully hedged against our RMB so just waiting for hedges to expire and then we'll renew.
Speaker Change: Zinc costs.
Speaker Change: Taking advantage of the RMB.
Speaker Change: Lower financing costs.
Speaker Change: In reality, what we are doing is actually.
Speaker Change: Produce RMB borrowing hedge gains.
Speaker Change: <unk> and its no intention over hedge because it's a parallel with specific categories.
Speaker Change: So we will continue to hedge.
Speaker Change: Each of these stages does appear maturity profile.
Speaker Change: Expire we will continue to pitch in so far.
Speaker Change: Hedging RMB.
Speaker Change: Premium.
Speaker Change: Reduced operating and political and today, we are already almost fully hedged against RMB. So we're just waiting book hedges expire and then we will begin.
Speaker Change: Okay.
The address the same questions with adding the M&A or acquisition.
Phil Collins: So there are actually a few questions regarding the M&A or acquisition. So in general, they're asking how the progress is and then how the M&A environment in Asia, whether it's for the fund or for Ling? I think I'll just answer that in general terms. I think in certain markets, in particular Australia, we've seen price correction and there's been a bit more activity there where the buyer and sellers, you know, bid-ask spread has narrowed. And we've also seen funding costs starting to drop in Australia. So that market remains interesting for us and we still spend quite a bit of time looking at that market.
In January asking how that will go ahead, and then how the M&A environment in Asia.
Speaker Change: On a final for me.
Just answer that in general terms I think in certain markets in particular, Australia, we're seeing.
Speaker Change: Rice correction MSP.
Speaker Change: And that's been a bit more activity that with the buyer and sellers.
Speaker Change: <unk> been off spreads narrowed now with <unk>.
<unk> seen funding costs, despite a drop in Australia, so that market remains interesting for us and we still spend quite a bit of time looking at that market.
Speaker Change: And so.
Speaker Change: We will continue to look at that the other markets.
Grant: And so, you know, we will continue to look at that. The other markets, Singapore is still, you know, pricing is still pretty tight. So is Japan. And I guess our focus is probably at the moment in Australia, let me name. Thank you. And then next question is about the Mainland China operations. The question is about CentralWall, so how the cell is doing, is it bypassing, exceeding the level of pre-COVID already? The sales in general and football in general at Central Walk is progressing very, very well and is our best performer across Mainland, is probably our best performer across all of our shopping centres.
Speaker Change: Singapore is too.
Speaker Change: Pricing is still pretty tight.
Speaker Change: All right.
Speaker Change: So as Japan.
Speaker Change: And I guess I'll focus probably at the moment in Australia.
Speaker Change: Thank you.
Speaker Change: Next question.
Speaker Change: Mainland China operations.
The question is about California law.
Speaker Change: So on Hawthorne Sal.
Speaker Change: It's doing is it.
Speaker Change: I think local health authority.
Speaker Change: The sales in general and portfolio in general with Central work is progressing very very well.
Speaker Change: And southwest performed across mainland.
Speaker Change: It's probably our best performer across the whole national incentives.
Speaker Change: <unk>.
Speaker Change: We are also in the process of some fairly significant tenant optimization work. This February was seen.
Grant: We are also in the process of some fairly significant tenant optimization work there. So we're seeing ongoing better quality demand from retailers for Central Walk. So a lot of the strategies that we've executed on over the last few years are really starting to pay some significant dividends. So good continued sales growth, good continued NPI growth, and now we're focused on really managing our costs, not just on a project like Central Walk, but doing what we can to preserve or at least enhance, at least preserve our operating margins on a portfolio. Thank you, Grant. So, a bit more questions on the operations.
Speaker Change: Ongoing better quality demand from retailers the central work. So a lot of the strategies that we've executed on over the last few years are really starting to pay some significant dividends.
Speaker Change: Good continued sales growth with continued continues NPI growth.
Speaker Change: And now we're focused on.
Speaker Change: Managing our costs not just on a project by Central walk with doing what we can to pursue or at least can have enhanced at least preserve our operating margins on a portfolio of assets.
Speaker Change: Yeah.
Speaker Change: I think more question, some downspacing and stack.
Speaker Change: Wide range why the occupancy is up to our sales, while Hong Kong and China.
Greg: So, why the occupancy drop to one year for Hong Kong and China? It's a phasing thing. So, as we gear up to the end of the year, we anticipate that those occupancy numbers will get back to what they were around the half year. So, it's a phasing and timing thing more than anything else. And then, another question from Sam again. So, what it takes for Hong Kong inversion to return to positive in your view with Cotala mainland visitors? We're not really impacted by Mayday Visitors. We're obviously servicing on-commerce for their daily needs. I think the main issue that we need to see is the stabilisation and growth in margin for our retailers.
Speaker Change: I think so.
Speaker Change: As we gear up to the end of the year.
Speaker Change: We anticipate that those.
Speaker Change: The occupancy numbers will get back to what they were around the half year.
Speaker Change: So, it's a phasing and timing thing more than anything else.
Speaker Change: And then final question.
Speaker Change: Sam again so.
Speaker Change: What it takes for Hong Kong with Pershing should return to positive in <unk>.
Speaker Change: The catalog.
Speaker Change: Mainland peer banks.
Speaker Change: We're not really impacted by that as it is with obviously servicing Hong Kong has been a daily needs.
Speaker Change: I think the 90 issue that we need to see is the stabilization and growth in margin throughout <unk>.
<unk> operating margins have been under pressure.
Greg: So their operating margins have been under pressure with increased costs, and then that puts pressure on our negotiations with them. So I think the main thing that we need is continued growth in sales, which we're starting to see the benefit of. Our purpose is to provide football for our retailers so they can capitalise and execute that in sales, and then hopefully start to see some improvement in the bottom line for the retailers, not just the top line, and that then will allow us to see some growth in our revenues. I will say, though, that our portfolio occupancy cost is stable at 18.1%.
Speaker Change: <unk> costs.
Speaker Change: And that puts pressure on and negotiations with them. So I think the 19 that we need this continued growth in sales, which we're starting to see the benefit.
Speaker Change: Our purpose is to provide football Gregory titles that I can capitalize and execute on that in the styles and then hopefully it's exciting to see some improvement in the bottom line for the retailers not just the top line and that then will allow us to see some some growth in our revenues I will say, though that app.
Speaker Change: Portfolio occupancy cost is stable at 38, 1%.
Speaker Change: SaaS entities are very very strong.
Greg: Our sales densities are very, very strong. So we're facing into what is a very challenging market in a very strong position, and our continued focus on the non-discretionary trades, particularly food and beverage, places us in a reasonably strong position in relative terms. And then another question is regarding whether our company would consider to help bringing in some brands from mainland China into Hong Kong, and so as to help the consumption in Hong Kong. Sure, absolutely. And we are seeing that. So pleasingly, the new leasing transactions that we do, approximately one third of those are to retailers new to the Lync portfolio.
Speaker Change: So.
Speaker Change: We're facing into what is a very challenging market and very in a very strong position.
Speaker Change: And our continued focus on the non discretionary tribes, particularly food and beverage places us in a reasonably strong position in relative terms.
Speaker Change: And then another question another way that our company will continue bringing in.
Speaker Change: Some brands from mainland China, Hong Kong and has that helped the consumption in Hong Kong.
Speaker Change: Absolutely and we are seeing that.
Speaker Change: So.
Speaker Change: Pleasingly.
Speaker Change: The new leasing transactions that we do approximately one third of those two retailers and use of the portfolio.
Speaker Change: So we're bringing in.
Speaker Change: 100, 150, new retailers to our portfolio every year, we're seeing an increasing number of lilac businesses predominantly.
Greg: So we're bringing in 100, 150 new retailers to our portfolio every year. We're seeing an increasing number of mainland businesses, predominantly food and beverage. The move into Hong Kong by Luckin Coffee, for example, has been well documented. We've secured a number of locations with them. The first of those is opened at Cheung Kwan O, and it's I'm hopeful that our portfolio is incredibly well suited to support the introduction of new mainland brands. The other thing I will say is that we've seen a significant increase of demand from mainland retailers to our Singapore portfolio as well.
Speaker Change: Predominantly food and beverage.
Speaker Change: Moving to Hong Kong Biomarker coffee for example has been well documented.
Speaker Change: We've secured a number of <unk>.
Speaker Change: Locations with them the first Andaz resorts under two in Colorado and is performing really really well.
Speaker Change: So, yes, we're hustling Apple.
Speaker Change: Our portfolio is incredibly well suited to support the introduction of <unk> 99 brands.
Speaker Change: The thing I will cite we've seen a significant increase demand from land that retailers have to our Singapore portfolio as well so.
Speaker Change: I think a lot of the very good innovation and market positioning for my elaborate pilots.
Greg: So I think a lot of the very good innovation and market positioning from mainland retailers is seeing them spread their wings more broadly across Asia Pacific, and we're well positioned to be able to support them to grow in our portfolios, whether it be in mainland Hong Kong, Singapore, or even Australia over time. So that's a big part of our strategy is to harness the strength of our portfolio and grow our retailers as they look to expand across the region. Thank you. Another question is regarding the recent public housing rent increase. What will be the impact on Lync?
Speaker Change: These statements spread their wings multiple laid across Asia Pacific and were well positioned to be able to support them to grow in our portfolios whether it be in mainland Hong Kong, Singapore, even Australia over time, so that's a big part of our strategy is to harness the strength of our portfolio and growth now ray titles as they look to expand across the region.
And I think <unk> question regarding that Vincent public housing nice increase.
Speaker Change: What we're able to impact online.
Speaker Change: I think there is a.
Speaker Change: Maybe David is also positive in the increase to the minimum wage again more recently a slot to box. So again, we're not servicing the discretionary spending patents.
Greg: I think there's a negative there, but there's also a positive in the increase to the minimum wage again more recently of 5.25%, so again we're not servicing the discretionary spending patterns of our population, we're servicing their daily needs. So I don't think that that would be a significant impact to us. I think if we look at minimum wage going up, which would increase our cost. For those who want to help us to find a shopping center, especially a front-line community security center. As Greg said, they will typically spend at our shopping center. So that increase in income will help our tenants sell.
Speaker Change: A population with servicing that dining needs.
Speaker Change: So I.
Speaker Change: <unk>.
Speaker Change: That would be a significant impact for us, but it will be.
Speaker Change: The minimum wage goes up.
Speaker Change: T cell costs.
Speaker Change: And for those.
Speaker Change: So folks to help us through the shopping center, especially a frontline appeals fielding.
Speaker Change: Yes, Thats website, they were typically spend at our shopping center.
Speaker Change: That increase in income.
Speaker Change: We'll help alternatives sales.
Speaker Change: The rental increase for those who may not know.
Josh: The rental increase for those who may not know, most of the public housing rental for each unit is less than $1,000 to $200 a month. For those who park their car, our car parks will probably be charging $2,000 for car park fix. But I think on a relative terms, you can see that the amount of the rent that they're paying, albeit to that segment of the community, it may have a certain impact, but to a large extent is still affordable. on the spending, I think we'll be all set by the end of the working. Thank you, Josh.
Speaker Change: Most of the profit closing lento for each new that is let's say 1000 of our goal is to Delever. The total dollars of London.
Speaker Change: So for those who are pop because of those compounds with both of these charges without similar.
Speaker Change: <unk> four <unk>.
Speaker Change: So, but I think on a relative certainty.
Speaker Change: <unk>.
Speaker Change: The bulk of the rents that they are paid albeit towards that.
Speaker Change: That segment of the community.
Speaker Change: Lately.
Speaker Change: So it could impact us to a large extent.
Speaker Change: Reportable.
Speaker Change: On the spending I think it will be offset by lease.
Speaker Change: Which increase.
Speaker Change: Thank you Tom.
Speaker Change: At the time limit we have the last two questions. One is can be paths. One is the shortcomings of concern DHL area in Hong Kong as of December and now should we expect that the bill sudden increase.
Greg: So due to the time limit, we have the last two questions. One is from DBS. What is the short-term lead as percentage of area in Hong Kong as of December? And should we expect that to go further increase? That's actually fairly stable. So it's an insignificant number in terms of our overall portfolio. And I can also say that the number of tenants on holdover has reduced quite significantly from the first half to this period. So for the most part, leasing transactions in Hong Kong are on a normalised basis of a three-year cycle. We don't see that short-term or holdover leases being an issue to call out.
Speaker Change: FX actually fairly stable so its an insignificant number in terms of our overall portfolio.
Speaker Change: And.
Speaker Change: And also say that the number.
Speaker Change: Tenants on holdover has reduced quite significantly from the first half to these periods. So.
Speaker Change: For the most past.
Speaker Change: Leasing transactions in Hong Kong or on a normalized basis or a three year cycle.
Speaker Change: We don't see that short term, although the leases.
Speaker Change: An issue to call out.
Speaker Change: So that we have.
Speaker Change: A few times, we are announcing results will internally by our results we spoke about on the new tenants that we have signed.
Greg: We have, in the past few times, announced results, both interim and final results, we talked about how many new tenants that we have signed. And, well, not every tenant has a queue, but the ability for our colleagues to replace tenants, as some YouTubers have paid for various reasons, has allowed us to keep that occupancy strong, albeit also, sometimes, we need to subsidize some new tenants, especially if we want to change the mix, but the strong occupancy has continued to grow. Thank you. So, last question is from William. Despite the slight negative rental reversions, can we keep the overall rest of the meal planted?
Speaker Change: Well not every center has appealed but.
Speaker Change: The ability for the I'll call it two week phase et cetera.
Speaker Change: We need to repeat for various reasons.
Speaker Change: So allow us to keep that occupancy strong, albeit ultimately, sometimes so we need to to subsidize that we use.
Speaker Change: New tenants, especially rewarding to change the mix.
Speaker Change: The strong occupancy.
Speaker Change: That's what the teams are now.
Speaker Change: So last question it sounds like mainly in despite the slight negative blanka retentions cannot kick that ultimate resting Neal vantage.
Speaker Change: I think theres a lag could feedback.
Greg: Well, I think there's a lack of feedback and we have only roughly a third of the lease expiring each year. So if you look at the downtrend, it will take several years to get our P&L and certainly the last year, this year has been challenging. We expect 2025-26 financial year also will be challenging in the discussion with our tenants. Greg mentioned that some of that is the retail market is stabilizing. But I think the positive impact will take a little bit of time to come back into our portfolio. Again, because it's one third expiring each year, even the upside will take a little bit of time to run in.
Speaker Change: We have only roughly a third of the lease expiring each year.
Speaker Change: So if you look at a downtrend it will take several years to hit the P&L and certainly in the last this year has been challenging.
Speaker Change: We expect 2025 26 financial year also will be challenges in the discussions with tenants.
Speaker Change: Greg mentioned that some of that is for the state of the retail market is stabilizing.
Speaker Change: But I think the positive impact we took a little bit.
Speaker Change: Time to come back into the room to grow our portfolio again, because one third of inspiring and chip <unk> upside, we will take a little bit tough time to run in.
Speaker Change: I think we will see hopefully.
Speaker Change: Some challenge to our top line as well.
Christie: So I think we'll see probably some challenge to our top line as a result of the leasing activities that we've done from about the current year, 2024 to about late 2025-26, with a negative impact on both the downside and the future. So here comes the end of our update, so thanks for joining us today and look forward to seeing you again in our final results in May. Thank you. Today, we are pleased to have our Group CEO, Mr. George Hongchoi, DEFO, Mr. Pao-Shong Oon, CEO, Mr. Greg Chow, and CPPO, Mr. Rod and Ronald Lam to be here with us to provide this update on our business.
Speaker Change: The result of the activities that.
Speaker Change: The leasing activities that we've done.
Speaker Change: About.
Speaker Change: The year 2004 through about <unk> late 'twenty five 'twenty six.
Speaker Change: Is that going to be an easy path.
Speaker Change: And both the <unk> and the <unk>.
Speaker Change: Future upsell.
Speaker Change: Yes, Dan.
Speaker Change: So thanks for joining us today and authority of Daniel again, and our finding ways that they may make thank you Vicki okay. Thanks.
Speaker Change: Hey, Anthony <unk>, our co CEO, Mr. Jos <unk> CFO, Mr. Prashant womb CLO, Mr. Blackhawk entity to the elements and one of our plants have been here with us to provide an update on our estimates we.
Speaker Change: I'll begin with company highlights and operational update followed by financial and outlook. Lastly, we will have <unk> session now I would like to pass the floor to Alan Let me see I'll touch base.
George Pruitt: We'll begin with company highlights, then operational updates, followed by financial and outlook. Lastly, we will have our Q&A session. Now, I would like to pass the floor to our Group CEO, George, please. Thank you, Christie. We appreciate everyone joining us today for what will be the last time we're doing the pre-blackout briefing. And going forward, we'll be shifting to a quarterly update instead. For further information, we share at the end of this presentation about what we have planned and the reasons that we will be making this adjustment. Let me start with some highlights and a reminder of the uncertainty that we are dealing with as we operate and the strategy that we have been pursuing these past years.
Thank you Christie.
Speaker Change: We appreciate everyone joining us today.
Speaker Change: Or what will be the last time with doing the local region.
Speaker Change: And going forward, we will be shifting to a quarterly update instead and further the ratio of risk share at the end of this presentation that about what we have planned and the reason is that we will be making this adjustment.
Speaker Change: So let me start with some highlights and a reminder of the uncertainty.
Speaker Change: There will be a data where because we operate.
Speaker Change: And the strategy that we have been pursuing these past years.
Speaker Change: Let me give an overarching summary of the big picture for link.
George Pruitt: Let me give an overarching summary of the big picture of a link. continues to operate in the highly uncertain times for higher or longer interest rates and uncertainties around how the global economy will fare in the face of various challenges. in the geographies where Link operates. We are facing challenges in Hong Kong, where our retail tenants are facing significant pressure in terms of rising costs, sales leakage to online and cross-border travel, and this together with the continued challenge in re-energizing the economy in mainland China is leading to significant pressure on rental reversion. At this time, we're glad that we have started our diversification effort.
Speaker Change: We continue to operate in a highly uncertain times four.
Speaker Change: For higher for longer interest rates and uncertainty around how the global economy will trade at the face of those challenges.
Speaker Change: And the geographies, where a link offerings.
Speaker Change: We are facing challenges in Hong Kong.
Speaker Change: Our retail tenants are facing significant pressure in terms of rising cost sales leakage to online and cross border trebled.
Speaker Change: This together with the continuous challenge.
Speaker Change: Energizing the economy in mainland China.
Speaker Change: Leading to a significant pressure on rental reversion.
Speaker Change: At this time, we're glad that we have started our diversification effort when we did.
As the picture in Singapore and Australia.
George Pruitt: as the picture in Singapore and Australia. Looking ahead, we remain committed to our LINK 3.0 strategy, which builds on our capabilities and track record achieved over almost two decades, to further strengthen LINK's portfolio and to develop our real estate investment management business under LINK. Just to provide a bit more detail on the global and local context for our business in the year ahead. Globally, we anticipate the growth outlook to remain mixed due to factors including the U.S. policy environment, continued challenge with mainland China economy, and unclear interest rate cut timing. These factors combined together with evolving technology and changing consumer behaviors create an uncertain global structure and demands that we act with caution.
Speaker Change: It's more positive.
Speaker Change: Looking ahead, we remain committed to our latest pre zero strategy, which builds on our capabilities and Craig record achieved.
Speaker Change: Almost two decades.
Speaker Change: To further strengthen <unk> portfolio and to develop.
Speaker Change: Real estate and investment management business under link.
Speaker Change: Just to provide a bit more detail on.
Speaker Change: While the global and local context for all puts us in the year ahead.
Speaker Change: Globally, we anticipate the globe outlook to remain mixed.
Speaker Change: Due to practice, including the U S.
Speaker Change: Policy environment continued challenge with mainland China economy, and unclear interest breakup timing.
Speaker Change: These factors combined together with evolving technology and changing consumer behaviors create.
Speaker Change: Created uncertain global collect July and demands that we act with caution.
Speaker Change: In our key markets, let alone in mainland China.
George Pruitt: In our key markets, Hong Kong and Mainland China, the outlook is less favourable. However, monetary policy loosening and the focus on boosting domestic demand are expected to stimulate economic activity, so we expect it will take some time before things will improve. Meanwhile, Singapore and Australia offer a more positive outlook, with robust economic indicators and consumption support. Despite the prevailing macro conditions, our portfolio has continued to endure. A quick reminder of the shape of our business and our diversification strategy, currently our linked REIT portfolio comprises 74% Hong Kong, 15% mainland China, and 11% international, which includes Australia, Singapore, and the UK.
Speaker Change: Although this less favorable however, monetary policy loosening and the focus on boosting domestic demand are expected to stimulate economic activity.
Speaker Change: We expect it will take some time before things will improve.
Speaker Change: Meanwhile, Singapore, and Australia offer a more positive outlook with robust economic indicators and consumption and support.
Speaker Change: Despite the prevailing macro conditions, our portfolio has continued to undo.
Speaker Change: A quick reminder of the shape of our business.
Speaker Change: Diversification strategies currently.
Speaker Change: Lease portfolio comprises 74% halls.
Speaker Change: 15% mainland, China, and 11% International which includes Australia, Singapore and the UK.
Speaker Change: As we diversify and grow pooling three zero, we are focused on optimizing our portfolio by exploring opportunities in the Asia region.
George Pruitt: As we diversify and grow ThruLink 3.0, we are focused on optimizing our portfolio by exploring opportunities in the APAC regions, including Australia, Japan, and Singapore. And at the same time, we are also committed to maintain a high bar for right acquisition and organic M&A. In line with our strategy to grow our real estate investment management, we've officially launched Link Real Estate Partners, a private fund management business line in Trevor. And Ronald will provide further details on this later. Let me now pass the time to Greg to share more on the operational update. Thanks, Georgian. Good afternoon, everyone, and I'll start this afternoon with the review of our overall portfolio occupancy.
Speaker Change: Including Australia, Japan and Singapore.
Speaker Change: At the same time, we are also committed to maintain a high bar for <unk> and <unk> organic M&A.
Speaker Change: In line with our strategy to grow our real estate investment management.
Speaker Change: Officially launched linked real estate partners.
Simona: Private fund management business line, a separate Simona will provide further details on this later.
Simona: Let me now pass the time to grab to share more on the operational update.
Speaker Change: Thanks, George and good afternoon, everyone and I will stop this afternoon with a review of our overall portfolio occupancy.
Speaker Change: Our portfolio has demonstrated solid performance with occupancy levels remaining high and our international retail assets approaching nearly full occupancy.
Greg: Our portfolio has demonstrated solid performance with occupancy levels remaining high and our international retail assets approaching nearly full occupancy. In Hong Kong, the resilience of our non-discretionary retail portfolio is reflected with high occupancy and showcasing stability and strength in the underlying market. In Mainland China, we're pleased to report healthy occupancy rates across various asset types, underscoring the effectiveness of our Focused Leasing Initiative. In the international markets, our retail assets in Australia and Singapore achieve nearly full occupancy with robust ongoing leasing demands, while ongoing challenges are noted in the Australian office market. Now let's look at Hong Kong in some more detail and our Retail Portfolio, where the occupancy rate has remained robust at 97.1% as of December, highlighting the resilience and stability of our essential needs focused trade mix, even amidst challenging market conditions.
In Hong Kong, the resilience of our non discretionary retail portfolio is reflected with high occupancy and showcasing stability and strength in the underlying markets.
Speaker Change: In mainland China, we are pleased to report healthy occupancy rates across various asset types underscoring the effectiveness of our stated focus leasing initiatives.
Speaker Change: In the international markets are retail assets in Australia, and CFO achieved nearly full occupancy with robust ongoing leasing demand, while ongoing challenges and notice in the Australian office markets.
Speaker Change: Now, let's look at Hong Kong, and some more detail and our retail portfolio, where the occupancy rate has remained robust at 97, 1% as of December highlighting the resilience and stability of our essential nature, but let's try it mix, even amidst challenging market conditions.
Speaker Change: Rachel revisions for the period experienced negative low single digits for the <unk>.
Greg: Rental reversions for the period experienced negative low single digits for the first nine months of the period, which also impacted the unit rent per square foot, bringing it to $64.10. Despite tenant sales being affected by changing consumption patterns among visitors and residents, which recorded a decline of 3.3% year-on-year for the first nine months, this was a narrower drop compared to the broader Hong Kong market at negative 7.6%. Occupancy costs have slightly come down compared to the first half of the year, indicating potential stabilisation at batting conditions. And when we break it down by trade mix, both food and beverage in general retail segments outperformed the Hong Kong market, while supermarkets and foodstuffs saw some weaker performance for the period.
Speaker Change: First nine months of the period, which also impacted the unit ramp per square foot, bringing it to $64 10.
Speaker Change: Despite tenants out being affected by changing consumption patterns, among visitors and residents, which recorded a decline of three 3% year on year for the first nine months.
Speaker Change: This was a narrow would drop compared to the broader Hong Kong market at negative seven 6%.
Speaker Change: Occupancy costs are slightly come down compared to the first half of the year, indicating potential stabilization at setting conditions.
Speaker Change: And when we break it down by trade mix, but food and beverage in general retail segments outperformed the Hong Kong markets, while supermarket and foodstuffs saw some weaker performance for the periods.
Speaker Change: In terms of the Hong Kong <unk> and related businesses, we observed moderate growth in parking revenues for the first nine months of the year, while parking ticket sales experienced a decline this was balanced out by increases to pocket tariffs.
Greg: In terms of the Hong Kong car park and related businesses, we observed moderate growth in parking revenues for the first nine months of the year. While parking ticket sales experienced a decline, this was balanced out by increases to parking tariffs. We aim to stay responsive to market trends, creating plans to enhance performance and rolling out our new car park management system and ongoing enhancements to that program. Now let's shift to Mainland China, where as previously mentioned, occupancy was healthy across our various asset types. Our retail team on the ground in China has been able to manage tenant remixing very effectively in order to secure more productive and innovative operators.
Speaker Change: We ended sorry responsive to market trends credit plans to enhance performance and rolling out a new car Park management system and ongoing enhancements to that program.
Speaker Change: Now, let's shift to mainland China, whereas previously mentioned occupancy was healthy across our various asset types.
Speaker Change: Our retail team on the ground in China has been able to manage tenant remixing very effectively in order to secure more productive and innovative arthritis.
Speaker Change: We saw softer demand in specific triad, such as cosmetics and jewelry, while sporting goods in particular and re titles featuring intellectual property designs and doing really well.
Greg: We saw softer demand in specific trades such as cosmetics and jewellery, while sporting goods in particular and retailers featuring intellectual property designs are doing really well. As for office, our occupancy exceeded the district average despite new supply. We will continue to upgrade our facilities to enhance our customer satisfaction and also attract new tenants by carrying out fit-out works on vacant units to improve profitability. The logistics occupancy in our portfolio remains healthy at over 96% and demand for our facilities are predominantly driven by e-commerce and third-party logistics operators. and turning our attention to our international business which consists of retail and offices located predominantly in Australia and Singapore.
Speaker Change: As for office occupancy exceeded the district average despite new supply.
Speaker Change: We will continue to upgrade our facilities to enhance our customer satisfaction and also attract new tenants by carrying outfit outlooks on vacant units to improve occupancy.
Speaker Change: The logistics occupancy in our portfolio remained healthy at over 96% and demand for our facilities are predominantly driven by E Commerce and third party logistics operators.
Speaker Change: And turning our attention to our international business, which consist of <unk> Island offices, located predominantly in Australia and Singapore.
Speaker Change: And our strategy to recycle assets located in the Sydney CBD positive leasing momentum continues from tenant demand.
Greg: and our Australian retail assets located in the Sydney CBD, positive leasing momentum continues from tenant demand and now sees occupancy of 99.5%. This was supported by our active, ongoing leasing efforts, which has not only introduced the curation of new brands, but also has allowed for continued upgrading of retail offerings. Out of the trade categories in particular, food and beverage and apparel perform well across the three properties. Now moving on to Singapore, where our malls of Jurong Points and Thompson Plaza perform very strongly, achieving occupancies now at 100% with ongoing positive leasing reversions. The ongoing enrichment of our tenant variety has been boosted through strong leaking interest from overseas retailers, including those from mainland China, and in particular food and beverage brands.
Speaker Change: And now see occupancy of 99, 5%.
Speaker Change: This was supported by our active ongoing leasing efforts, which not only introduced the curation of new brands with wholesale it allowed for continued upgrading of Brookdale offerings.
Speaker Change: Out of the <unk> categories in particular, food and beverage and apparel performed well across the three properties.
Speaker Change: Now moving on to Singapore, where animals are general points and Thomson Plaza performed very strongly achieving occupancy is now at 100% with ongoing positive leasing revisions.
Speaker Change: The ongoing enrichment about tenant variety is being boosted through strong leasing interest from either stage III tyler's, including those from mainland China and in particular food and beverage brands.
Speaker Change: F&B in beauty and wellness categories were the main drivers of 10 sales growth over the period.
Greg: F&B and beauty and wellness categories were the main drivers of tenant sales growth over the period. and funding from me on office, we note the further bifurcation in the Sydney office market with the fight to quality trend continuing. We've made some good progress, however, through the backfilling of vacant tenancies, in particular of 347 Kent Street in Sydney, and our retention rate on renewals remains strong. Under current market conditions, it's essential for us to continue to enhance the appeal of our office spaces through pacemaking and the provision of amenities. and now I'll pass over to KS.
Speaker Change: And finally from me on office, we note that the <unk>.
Speaker Change: Bifurcation in the Sydney office market with the flight to quality trends continuing.
Speaker Change: We've made some good progress however through the back filling a vacant tenancies in particular at <unk> in Sydney and our retention rate on renewals remained strong.
Speaker Change: Under current market conditions, it's essential for us to continue to enhance the appeal of our office spaces through Pacemaking and a provision of amenities.
Speaker Change: And now I'll pass over to <unk>. Thank you.
Speaker Change: Good afternoon to everyone.
KS: Thank you. Thank you, Greg. Good afternoon to everyone. Moving on to Capital Management, our robust financial position is well supported by a healthy balance sheet as shown by the key metrics here. As of 30th September 2024, net gearing remained low at 20.6%, while the average borrowing cost remained competitive at 3.69%. Our EBITDA interest coverage stood at 4.8 times. Fixed debt ratio in the upper range of 50-70% It's in anticipation of more gradual and shallow rate cuts Supported by our A ratings from all three credit agencies, we have the stability and credibility to attract investors, as well as secure favourable terms for future funding needs.
Speaker Change: Moving on to capital management.
Speaker Change: Our robust financial position is well supported by a healthy balance sheet as shown by the key metrics here.
Speaker Change: As of 30 of September two zero to four.
Speaker Change: Net gearing remained low at 26%.
Speaker Change: While the average borrowing costs remain competitive at three 6%.
Speaker Change: Our EBITDA interest coverage stood at four eight times.
Speaker Change: Debt ratio in the upper range of 50% to 70%.
Speaker Change: Dispersion of more gradual and schedule rate cuts.
Speaker Change: The part about a ratings from all three credit agencies, we would have to disturb repeat incredibly few to attract investors.
Speaker Change: Third secure favorable terms for future funding needs.
Speaker Change: Between 90, Zemba two zero to $4 seven January 225.
KS: Between 9 December 2024 and 7 January 2025, we deployed over HK$500 million to buy back approximately 17 million units. Overall, our robust financial position will enable us to effectively navigate the uncertainties in valuation. The disciplined approach to debt management with diversified sources of capital across debt instruments has helped us to achieve our goals. with a competitive average boarding cost as well as robust credit rating. Our financial stability is reinforced through FX Management, which includes extensive hedging of non-HKD distributable income. and the currency risk of overseas assets. alongside capitalizing on lower RMB interest rates. after repaying some debt The debt balance at of end September 2024 was reduced to HK$55.6 billion.
Speaker Change: We deployed over $500 million local dollars to buyback approximately $17 million.
Speaker Change: Overall, our robust financial position will enable us to effectively navigate the uncertainties in evaluations.
Speaker Change: Okay.
Speaker Change: The disciplined approach to debt management with diversified sources of capital across debt instruments.
Speaker Change: Our search.
Speaker Change: Paper Coca tea beverage board costs.
Speaker Change: Robust credit ratios.
Our financial stability is reinforced through FX management.
Speaker Change: Which includes extensive hedging of non Hong Kong dollar distributable income.
Speaker Change: And the currency risk of overseas assets.
Speaker Change: Alongside capitalizing on lower RMB interest rates.
Speaker Change: After repaying some debt.
Speaker Change: The debt balance at September.
Speaker Change: September two zero to four plus.
Speaker Change: <unk> was reduced to 50 560 <unk>.
Speaker Change: And we have been proactively managing our maturity profile.
Ronald: and we have been proactively managing our maturity profile. I now pass the time to Ronald to cover other updates. Thank you. Thank you, Taz. Good afternoon, everyone. We have made significant progress in developing our real estate investment management business through the launch of our new business line, LINQ Real Estate Partners. which focuses on serving third-party, private and institutional sectors. It will leverage on links to robust operational skills, deep knowledge, and scale in Asia, and provide proven track record to identify and execute compelling real estate investment strategies and match them with capital across the risk spectrum.
Speaker Change: I'll now pass the time to rollout the cover other updates. Thank you. Thank you to ask it's good afternoon everyone.
Speaker Change: We have made significant progress in developing our real estate investment management business through the launch of a new business line link real estate partners.
Speaker Change: Which focuses on serving third party private institutional capital.
Speaker Change: It will leverage on a linked robust operate channel skills deep knowledge and scale in Asia.
Speaker Change: And provide track record and proven track record to identify and execute compelling growth state investment strategies and match them with capital across the risk spectrum.
Speaker Change: It will also help accelerate our diversification and create new income from co investing and matching assets put new bonds.
Ronald: It will also help accelerate our diversification and create new income from co-investing and managing assets for new partners. We have spent much of 2024 assembling a fund management team led by John Sordes, our Group Chief Investment Officer, along with several new hires, including Head of Australian Investments, Head of Research, Proposal Director and a Product Strategist. While we're unable to disclose too many details at this juncture, we expect 2025 to be a busy for both fundraising and investment. Before we move on to Q&A session, I would like to discuss our new approach to providing operational updates in between our interim and final results.
Speaker Change: We have spent much of 2020 for assembling a fund management team led by John Saunders Chief Investment Officer.
Speaker Change: Along with several new hires including head of Australia investments head of research.
Speaker Change: With Iressa added product strategies.
Speaker Change: While we are unable to disclose too many details at this juncture, we expect 2025 to be a busy will both fund.
Speaker Change: Fund raising and investments.
Speaker Change: Okay.
Speaker Change: So we move on to Q&A session I would like to discuss a new approach to providing operational updates in between our interim and final results.
Speaker Change: We always strive to continuously improve our engagement with investors and as part of that to provide robust transparent information on a timely manner.
Ronald: We always strive to continually improve our engagement with investors and as part of that, to provide robust, transparent information on a timely manner. Starting with the operational update after our next final results, we will be able to provide our Q1 and Q3 operational updates approximately one and a half months earlier than we currently do, as we will transition to providing quarterly operational updates announcements instead of pre-blackout briefings. We plan to provide Q1 updates in February and Q3 in August. This change, made after feedback from the investment community, will allow us more time to engage with investors and analysts prior to any blackout period.
Speaker Change: Starting with the operational update after our next final results.
Speaker Change: We will be able to provide our Q1 and Q3 operational updates approximately one and half months earlier than we currently do as we will transition to providing quarterly operational updates announcements and instead of pre blackout briefings.
Speaker Change: We plan to provide Q1 update in February in Q3 in August.
Speaker Change: This change made after the feedback from the investment community will allow us more time to engage with investors and analysts prior to any blackout period.
Speaker Change: At the timing of our quarterly update and results will be distributed more evenly throughout the year.
Ronald: At the timing of our quarterly update, the results will be distributed more evenly throughout the year. To facilitate this, we will upload the quarterly operational updates to the Stock Exchange and our corporate website, ensuring timely access to essential information. This will enable stakeholders to access our performance more effectively and make well-informed investment decisions.
Speaker Change: To facilitate this we will upload the quarterly operational updates to the stock exchange and corporate website, ensuring timely access to essential information.
Speaker Change: This will enable stakeholders to access our performance more effectively and make well informed investment decisions.
Speaker Change: I'll now pass over to Christy for Q&A session. Thank you.
Christie: I'll now pass over to Christy for Q&A session. Thank you, Ronald. So let's move on to the follow-up of Q&A. Please submit your questions using the Q&A function. We got a few questions already, let's see if we can start now. So quite some questions on the retail sales in Hong Kong. So let's start with... Cindy from Citi. So how's the retail sales trend in the first few of Canada's year 2025? Any green shots or early signs of recovery? I'll take that question. Thank you, Cindy. So just looking at the, I guess, the period after December, we've seen an improvement and we've just spoken to a negative 3.3 total sales position.
Speaker Change: <unk> also I'm sorry, Nate.
Speaker Change: And your question using the Q&A button.
Speaker Change: We got a few questions on high level they can.
Speaker Change: Now.
Speaker Change: Some questions on the retail staffing Hong Kong now unless that went down.
Damian.
Speaker Change: So how can they have sales trend in <unk>, Canada, <unk> and clean shop floor and signs of a recovery.
Speaker Change: That's a question some things we've seen so just looking at the I guess the period up to December we've seen.
Speaker Change: And improvements.
Speaker Change: We've just spoken to a negative $3 three.
Speaker Change: Total SaaS position and just to remind you that at the end of the first quarter of the financing that was negative $5 nine and then at the first half was a negative $4 <unk>. So a gradual improvement over the period.
Greg: And just to remind you that at the end of the first quarter of the financial year, that was negative 5.9. And then at the first half, it was negative 4.3. So a gradual improvement over the period. And we've seen that across the three major categories that we report to. So as it's December, food and beverage was flat year on year. And that was an improvement from negative 1.5% for the first quarter. Supermarkets, we're seeing some gradual improvement. And I think that's largely off a lower base. So supermarkets were negative 5.9% in the first quarter, negative 5.2% at the first half, and negative 3.9% at Q3.
Speaker Change: And we've seen that across the three major categories that we report to.
Speaker Change: So is it.
Speaker Change: Send about food and beverage was flat year on year.
Speaker Change: And that was an improvement from negative one 5% for the first quarter.
Speaker Change: Supermarkets were seeing some gradual improvement and I think thats largely off a lower base.
Speaker Change: Substitute markets were negative five 9% in the first quarter negative five 2% at the first half and negative three 9% in Q3 in general retailers also improved significantly so as.
Greg: And general retail has also improved significantly. So as we move into the last quarter of this year, we are seeing that trend continuing. But I will say that there is a lag from this improvement in sales and flowing through into rental resurgence. The other associated metric to the sales is our football, which we've seen ongoing improvement over the last few months. And in particular, we've seen more of a dramatic improvement on weekend football. And that, I think, is associated with some of the stabilisation of the northbound linkage. So some green shoots, but still somewhere to go.
Speaker Change: As we move into <unk>.
Speaker Change: The last quarter. This financial year, we are saying that trend continuing.
Speaker Change: But I will say that there is a lag from this improvement in sales and flowing through into the retro resurgence.
Speaker Change: The other associated metrics to the styles is applicable, which we have seen ongoing improvements.
Speaker Change: For the last few months.
Speaker Change: Particularly seen.
Speaker Change: More of a dramatic improvement on weekend portfolio things that I think is associated with some of the stabilization of the north them linkage.
Speaker Change: So some green shoots, but still somewhat better.
Speaker Change: Thanks.
Speaker Change: So another question I think that also continued to build a company that any disposal recycling capital given high for longer rate outlook.
Ronald: Thank you. So another question is, will you consider any disposal to recycle capital given high for longer rate outlook? I'll take that. So, obviously, we always look at optimising our portfolio and we're always constantly reviewing acquisitions as well as disposals. And so, yes, if there is the right deal in the market, if there's the right price, we will consider recycling. I think right now we're still looking for those opportunities and we're constantly assessing those recyclables. Thanks, Ronald. So, next question is from Sam of Dresdes. Could you share a bit more color on China side, sales and reversions?
Speaker Change: I'll take that.
Speaker Change: Obviously, we always look at optimizing the whole.
Speaker Change: Folio and we're always constantly reviewing.
Speaker Change: Acquisitions as well as disposals.
Speaker Change: So yes.
Speaker Change: If there was a right deal in the market. We are at the right price, we will consider recycling I think.
Right now we're still looking for.
Speaker Change: For those opportunities and we're constantly.
Speaker Change: Youre assessing.
Speaker Change: Those recycle opportunities. Thanks Shlomo. So next question thanks, Tom some of Jefferies.
Tom: Could you shed more color on China, South and dimension.
Speaker Change: Yes.
Speaker Change: China from a retail estate management from a retail perspective.
Ronald: Yes, so, um... I'm afraid we can't really say much about that at this moment. Again, we're under regulatory restrictions to say anything about the funding. And then the next question is from Goldman, Simon. To the extent we can, can you provide us with some targets or milestones we are setting out for your link real estate fund? I'll say that. The answer is the same. Okay. And then... will be from Dubas Matlan. What is the rental reversion guidance for next year? Yeah, so I think you touched on that in the previous question. So we're anticipating slightly negative reversion for Hong Kong, fairly flat for Mainland and positive for Singapore and Australia.
Speaker Change: <unk> biggest challenge at the moment in Beijing in particular outcome penchant asset way with doing some ongoing asset attachments and Senate races.
Speaker Change: When we reported the half first half result, we spoke to the fact that it was negative revisions to the mainline business that if you excluded some quach on it would be slightly positive that is still the case.
Speaker Change: Pleasingly, there is quite a lot of tenant activity in the mainland market.
Speaker Change: So the markets of Shanghai, Guangzhou, and Shenzhen for us continued to be pretty stable.
Speaker Change: Beijing is where a lot of efficacy is.
Speaker Change: And the slight dip in occupancy from the first half to this reporting period, we think will.
Speaker Change: Signs of improvement as we get to the end of this financial year.
Speaker Change: Probably the most pleasing thing with regards to mainland retail.
Speaker Change: Very good underlying tenant activity and tenant demand.
Speaker Change: But that is offset somewhat by significant increases of supply new supply in markets like Beijing and Guangzhou in particular.
Speaker Change: And then another question tying up with NUCYNTA law regarding long held camera or other things.
Speaker Change: Based on our second half look like now and then now landed where we estimate <unk> globally.
Speaker Change: Okay.
Speaker Change: Apple has been so.
Speaker Change: Tinder with progressing well building off the success that we had for the first phase.
Speaker Change: Our digital site a few weeks ago with privacy is good leasing momentum is very strong.
Speaker Change: So as we move through into the new financial year.
Speaker Change: We're fairly confident that we will have the lion's share of that projects completed and width with very satisfied with the ongoing leasing demand for that property is very well positioned assets that are very strong catchments.
Speaker Change: But again, the major issue with Boeing with ICD to increased competition.
Speaker Change: Getting well ahead of that new competition is important.
Speaker Change: We can put this project.
Speaker Change: And then finally just mentioned at some point.
<unk> principal asset management.
Speaker Change: Kenny.
Speaker Change: <unk> apparently fashion trends.
Speaker Change: Should we be credible quality kingdom attractions and dining room.
Speaker Change: So just the general trend on leasing reversion for Hong Kong.
Speaker Change: You mentioned during the prepared remarks.
<unk> seen a deterioration from the first half to the third quarter I am very very slightly negative leasing revisions by Hong Kong.
Speaker Change: And as we've discussed many times the competition of activity in any given year, usually tapers off in the back half.
Speaker Change: Financial year.
Speaker Change: So we reported plus 7% at the first half.
Speaker Change: Like I said very very low single digits with version as at December.
Speaker Change: And that trend will continue through until the end of this financial year.
Speaker Change: And I think the concept of negative perversely something that.
Speaker Change: We should be prepared for this new financial year that would be embarking on shortly.
Speaker Change: It.
Speaker Change: Very modest.
Speaker Change: Negative revision. Thank you and our next question today found next time in person that's fairly chunky past them ask any update on capital raising for the sand business.
Speaker Change: So I'm afraid, we can't really say much about that at this moment against that way on the regulatory.
Speaker Change: Restrictions to say anything about the fund raising.
Speaker Change: And then the next question think about the government Diamond.
Speaker Change: Thank you Ken can give her back with some tactical milestones setting out for you on maintenance, we will add based on expanding again I'll say that the answer to safely Okay and then.
Speaker Change: Right.
Speaker Change: One.
Speaker Change: We'll see you.
Speaker Change: Back Mike Lang.
Speaker Change: According to the rental results and guidance for next year, Yeah. So I.
Speaker Change: Touched on that in the previous question. So we are anticipating slightly.
Speaker Change: Slightly negative, but I think for Hong Kong.
Speaker Change: Fairly flat for mainland and positive, but Singapore and Australia.
Speaker Change: The main focus element to that and we've said on numerous occasions now is preserving occupancy across our portfolio and I think the numbers that we expect them to again today.
Ronald: The main focus, I will point to that, and we've said it on numerous occasions now, is preserving occupancy across our portfolios. And I think the numbers that we've spoken to again today illustrate that. What we are experiencing is that the reversion on new deals or replacement tenants is significantly worse than the reversion for us in retaining tenants. Pleasingly, our retention rate, I should say, remains at our long-term averages in the high 70% range as of December. So a big part of our strategy is retaining our existing tenants. We do an analysis that we call right tenant, right location.
Speaker Change: Right.
Speaker Change: What we are experiencing is that reversion.
Speaker Change: On new deals so replacement tenants is significantly worse than.
Speaker Change: The reversion for us in retaining tenants.
Speaker Change: Pleasingly our.
Speaker Change: The reversion of our retention rate I should say remain.
Speaker Change: It remains it out long term averages in the high 70% range as of December.
Speaker Change: So a big part of that strategy.
Speaker Change: Is retaining our existing tenants, we do an analysis that equal right tenant right location.
Speaker Change: And a large proportion of our portfolio saves us having pleasingly, the right tenants and the right locations.
Ronald: And a large proportion of our portfolio sees us having pleasingly the right tenants in the right locations. So we'll be working with our tenants to retain them. Another strategy that we're working through is endeavouring for our tenants to invest in upgrading their facilities. And if that means that we forego some reversion in return for some capital investment by those retailers to improve their environments, that's something we'll be treating on a case-by-case situation as well. So along with an answer to a very simple question, that, yeah, there is some pressure on reversion, but we anticipate that that will be offset by preserving occupancy here in Hong Kong.
Speaker Change: So we'll be working without tends to retain them. Another strategy that we're working seriously in devry <unk> tenants to invest in upgrading their facilities.
Speaker Change: And if that means that we forgo.
Speaker Change: Some reversion in returning some capital investments by those titles to encourage their environments. That's something we'll be trading on a case by case situations as well so a long winded answer to a simple question, but yes. There is some pressure on revision, but we anticipate that that will be offset by preserving occupancy here in Hong Kong.
Speaker Change: Next question from Nathan JP, Morgan Count and any guidance on how FX financing costs will be in second half of the financial year two five.
Ronald: Next question will be from JP Morgantau. Any guidance on how average financing costs will be in the second half of the financial year, 2025? And will it further go down from the average 2.69%? or stay open? I think the third option that you didn't mention is will it go up marginally? And I think, Carl, the answer is yes. We have fixed 66.4 so there's about one third that's not fixed and if you look at our maturity profile. This coming financial year, there's about $12 billion of refinancing. Clearly today, high falls are already at 3.8 to 3.9, without ABC at 3.7, it's unlikely that you can beat that because a lot of these were hedge fund, when risk was much lower and stocks were much cheaper.
Speaker Change: And that is all the gallons and the average six 9%.
Speaker Change: All our stakeholders.
Speaker Change: So I think that option that you Didnt mentioned is really to go up much.
Speaker Change: And I think called the unsaved, yes, we are.
Speaker Change: Fixed <unk>.
Speaker Change: 66, four so there is about one third that is not fixed and if you look at our maturity profile.
Speaker Change: This coming financial year, it's about $12 billion of refinancings.
Speaker Change: Clearly today high baud rate at 3839.
Speaker Change: With our ABC at three said, but its unlikely that you could beat that does a lot of detail textbook when rates are much lower in Salzburg cheaper. So we do expect borrowing closely synched up margin.
Carl: So we do expect borrowing costs to inch up marginally this coming year. Thank you. And next question is also from Karl. Any comments on when the stock may become eligible for stock comments? Um I think when you look at the announcement on various topics around StockConnect, there is a lot of discussion around these StockConnect issues. Since February this year, there's already a conclusion to implement it as soon as possible and our sense is hopefully somewhere next month we get more announcements on how fast CSRC is willing to make clearer announcements, but my sense is so far the regulators have been very supportive and progressively have been trying to accelerate the implementation.
Speaker Change: This coming year.
Speaker Change: And next question please.
Speaker Change: Any color on when to stop named accounts.
Speaker Change: Stock connect.
Speaker Change: Yeah.
Speaker Change: I think when you look at the announcements.
David I'll take that Scott.
David: So there is a lot of discussion about the stockholder issues.
David: Same story this year, the third vehicle group bookings.
David: To conclude Monday, as soon as possible and authentic.
David: Police somewhere next month, when we get more announcements on that.
David: Plus you get the Aussie is building too.
Speaker Change: Could I read announcement about my sentence.
David: So far the regulators have been very.
David: Supportive progressive has been kind of a fair rate implementation.
The Investor Conference.
Carl: During the investment conference happening in Hong Kong this week, the financial secretary also said the same. He said it's coming. It's a matter of when, not an if. So obviously we're still waiting for the time, but it should be more imminent. And just to add to that, obviously we've been doing quite a bit of IR on China, and we know there's demand, and we are ready to capture those when it comes. Thank you. Next question is from Phil Collins. Will we consider the increased borrowing from mainland China below average financing cost? And what's the financing cost outlook for FY25 and FY26?
David: State and local this week.
David: But initial separately also staying the same.
David: This is coming.
David: Little ways.
David: And so.
David: Two is the wisdom of other times.
David: This should be lower in.
Speaker Change: And just to add to that because we've been through quite a bit of IR from China.
Speaker Change: We know that a few months and we are ready to capture those milestones.
Speaker Change: <unk> next question is from cell count.
Speaker Change: We remain confident the increased borrowings on mainland China, asking lower average financing cost and what step financing plus outlook flooding.
Speaker Change: Aflac, Japan and logistics.
Speaker Change: I'll take the first question is again I guess.
Phil Collins: So I think I'll take the first question, the second I'll just answer and it will be the same, that will be a marginally higher financing cost. On taking advantage of the RMB... lower financing costs. In reality, what we are doing is actually... to use RMB borrowing to hedge against the RMB assets and there's no intention to overhedge as that's not part of our business to take hedging risk. So we will continue to hedge and each of these hedges does have their maturity profile and as it expires we will continue to hedge and so far hedging RMB we are paid a premium to help reduce our financing cost.
Speaker Change: It will be the same there'll be a marginally higher financing costs.
Speaker Change: Taking advantage of the RMB.
Speaker Change: Lower financing costs.
Speaker Change: In reality, what we are doing is actually.
Speaker Change: Produce RMB borrowing hedge against the RMB assets and its no intention over hedge.
Speaker Change: While the specific activities.
Speaker Change: So we'll continue to hedge.
Speaker Change: Each of these stages at their maturity profile.
Speaker Change: Expire we will continue to pitch in so far.
Speaker Change: Hedging RMB.
Speaker Change: Premium adult reduce operating vehicles and today, we are already almost fully hedged against RMB suggest waiting book that just due to expire and then we will review.
Phil Collins: And today we are already in the almost fully hedged against our RMB so we're just waiting for hedges to expire and then we will renew. So there are actually a few questions regarding the M&A or acquisition, so in general, they are asking how the progress is and then how the M&A environment in Asia, whether it's for the fund or for Ling? I think I'll just answer that in general terms. I think in certain markets, in particular Australia, we're seeing price correction and there's been a bit more activity there where the buyer and sellers, you know, it's been our spread has narrowed.
Speaker Change: Okay.
Speaker Change: The address two questions regarding the M&A or acquisition.
Speaker Change: In January asking how will go ahead, and then how the M&A environment.
Speaker Change: Asia.
Speaker Change: On a final for me.
Speaker Change: Just answer that in general terms I think in certain markets in particular, Australia, we're seeing.
Speaker Change: This correction.
Speaker Change: And that's been a bit more activity that with the buyer and sellers.
Speaker Change: Bid ask spread has narrowed and we've also seen funding costs spiked to drop in Australia. So that market remains interesting for us and we do spend time looking at that market.
Phil Collins: And we've also seen funding costs starting to drop in Australia. So that market remains interesting for us and we still spend quite a bit of time looking at that market. And so, you know, we will continue to look at that. The other markets, Singapore is still, you know, pricing is still pretty tight. So is Japan. And I guess, you know, our focus is probably at the moment in Australia, the M&A. Thank you. And then next question is about the Mainland China operations. The question is about CentralWall, so how the cell is doing? Is it bypassing, exceeding the level of pre-COVID already?
Speaker Change: And so.
Speaker Change: We will continue to look at that the other markets.
Speaker Change: Singapore is too.
Speaker Change: Pricing is still pretty tight.
Speaker Change: So as Japan.
Speaker Change: And I guess I'll focus probably for the moment in Australia when they occur.
Speaker Change: Thank you.
Speaker Change: Next question.
Speaker Change: Mainland China operations so.
Speaker Change: The question just about California law.
Speaker Change: So how far south.
Speaker Change: This delay is it.
Speaker Change: I think Russell optical behind it.
Speaker Change: The sales in general and portfolio in general with Central work is progressing very very well.
Grant: The sales in general and football in general at Central Walk is progressing very, very well and it's our best performer across Mainland, it's probably our best performer across all of our shopping centres. We are also in the process of some fairly significant tenant optimisation work there. So we're seeing ongoing better quality demand from retailers for Central Walk. So a lot of the strategies that we've executed on over the last few years are really starting to pay some significant dividends. So good continued sales growth, good continued NPI growth, and now we're focused on really managing our costs, not just on a project like Central Walk, but doing what we can to preserve or at least enhance, at least preserve our operating margins on a portfolio.
Speaker Change: And southwest pro forma across mainland.
Speaker Change: It's probably our best performer across our professional incentives.
Speaker Change: <unk>.
Speaker Change: We are also in the process of some fairly significant tenant optimization work that we're seeing.
Speaker Change: Ongoing better quality demand from retailers the central work. So a lot of the strategies that we've executed on over the last few years are really starting to pay some significant dividends.
Speaker Change: Good continued sales growth. Good continued continues NPI growth.
Speaker Change: And now we're focused on.
Speaker Change: Managing our costs not just on a project by Central walk with doing what we can to preserve or at least can have enhanced at least preserve our operating margins on on X.
Speaker Change: Portfolio of assets. Thank you.
Speaker Change: I think more question some downspacing.
Grant: Thank you, Grant. So, a bit more questions on the operations. So, why the occupancy drop to one year for Hong Kong and China? It's a phasing thing. So, as we gear up to the end of the year, we anticipate that those occupancy numbers will get back to what they were around a half year. So, it's a phasing and timing thing more than anything else. And then, another question from Sam again. So, what it takes for Hong Kong inversion to return to positive, in your view, with Cotala mainland visitors? We're not really impacted by Mainnet Visitors, we're obviously servicing on-commerce for their daily needs.
Speaker Change: Why the operations outweighed the occupancy is up to our sales in Hong Kong and China.
Speaker Change: So.
Speaker Change: As we gear up to the end of the year.
Speaker Change: We anticipate that both.
Speaker Change: The occupancy numbers will get back to what they were around the half year.
Speaker Change: So, it's a phasing and timing thing more than anything else.
Speaker Change: And then final question.
Sam: Sam again so.
Sam: What it takes for Hong Kong impressions have returned to positive in the RVO the capella.
Sam: Mainland interface.
Sam: Well, we're not really impacted by that as it is with obviously servicing Hong Kong has been a daily needs.
Sam: I think the 90 issue that we need to see is the stabilization and growth in margin throughout retailers.
Greg: I think the main issue that we need to see is the stabilisation and growth in margin for our retailers. So their operating margins have been under pressure with increased costs, and then that puts pressure on our negotiations with them. So I think the main thing that we need is continued growth in sales, which we're starting to see the growth of. Our purpose is to provide footfall for our retailers so they can capitalise and execute that in sales, and then hopefully start to see some improvement in the bottom line for the retailers, not just the top line, and that then will allow us to see some growth in our revenues.
Sam: Operating losses have been under pressure increased costs.
Sam: And that puts pressure on and negotiations with them. So I think the 19 that we need is continued growth in sales, which we're starting to see the benefit of.
Sam: Our purpose is to provide football gravity titles that I can capitalize and execute on that in the styles and a hard place that exciting to see some improvement in the bottom line for the retailers not just the top line and that then will allow us to see some some growth in our revenues I will say, though that.
Sam: Portfolio occupancy cost is stable at eight 1%.
Greg: I will say though that our portfolio occupancy cost is stable at 13.1%, our sales densities are very, very strong. So we're facing into what is a very challenging market in a very strong position, and our continued focus on the non-discretionary trades, particularly food and beverage, places us in a reasonably strong position in relative terms. And then another question is regarding whether our company would consider to help bring in some brands from mainland China into Hong Kong, and so as to help the consumption in Hong Kong. Absolutely, and we are seeing that. So pleasingly, the new leasing transactions that we do, approximately one third of those are to retailers new to the Link portfolio.
Sam: Our SaaS entities are very very strong.
Sam: So.
Sam: We're facing into what is a very challenging market and very in a very strong position.
Sam: Our continued focus on the non discretionary tribes, particularly food and beverage.
Sam: I suggest in a reasonably strong position in relative terms.
Sam: And then another question.
Sam: Our company will continue to help bringing in.
Sam: Some brands from mainland China, Hong Kong and has that helped the consumption in Hong Kong.
Sam: Absolutely and we are seeing that.
Sam: So.
Sam: Pleasingly.
Sam: The new leasing transactions that we do approximately one third of those two retailers unused genomic portfolio.
Sam: So we're bringing in.
Sam: 100, 150, new retailers to our portfolio every year, we're seeing an increasing number of lilac businesses predominantly.
Greg: So we're bringing in 100, 150 new retailers to our portfolio every year. We're seeing an increasing number of mainland businesses, predominantly food and beverage. The move into Hong Kong by Luckin Coffee, for example, has been well documented. We've secured a number of locations with them. The first of those is open at Cheung Kwan O, and it's performing really, really well. So yeah, we're hopeful that our portfolio is incredibly well suited to support the introduction of new mainland brands. The other thing I will say is we've seen a significant increase of demand from mainland retailers to our Singapore portfolio as well.
Sam: Predominantly food and beverage.
Sam: The.
Sam: Moving to Hong Kong Biomarker coffee for example has been well documented.
Sam: We've secured a number of.
Sam: Locations with them the first Andaz resorts under chunk, Colorado, and it's performing really really well.
So yes, we're hustling.
Sam: Our portfolio is incredibly well suited to support the introduction of <unk> 900 brands. The other thing I will say, we've seen a significant increase demand from retailers to our Singapore portfolio as well so.
Sam: I think a lot of the very good.
Greg: So I think a lot of the very good innovation and market positioning from mainland retailers is seeing them spread their wings more broadly across Asia Pacific, and we're well positioned to be able to support them to grow in our portfolios, whether it be in mainland Hong Kong, Singapore, or even Australia over time. So that's a big part of our strategy is to harness the strength of our portfolio and grow our retailers as they look to expand across the region. Thank you. Another question is regarding the recent public housing rent increase. What will be the impact on rent?
Innovation and market positioning for mainland rates highlights.
Sam: These statements spread their wings multiple laid across Asia Pacific and were well positioned to be able to support them to grow in our portfolios whether it be in mainland Hong Kong, Singapore, even Australia over time, so that's a big part of our strategy is to harness the strength of our portfolio and growth now ray titles as they look to expand across the region.
Sam: Another question is regarding the recent public housing nice increase once we have an impact on rate.
Sam: Yeah, Matt I think there's a negative data. There's also positive in the increase to the minimum wage again voice of a slot to box since.
Greg: I think there's a negative there, but there's also a positive in the increase to the minimum wage again more recently of 5.25%, so again we're not servicing the discretionary spending patterns of our population, we're servicing their daily needs. So I don't think that that would be a significant impact to us. I think if we look at minimum wage going up, which would increase our cost. For those who want to help us to find a shopping center, especially a frontline community security center. As Seth said, they will typically spend at our shopping center. So that increase in income will help our tenants sell.
Again, we're not servicing the discretionary spending patents.
Sam: A population with servicing that 98.
So I think that that.
Sam: That would be a significant impact for us, but it will be.
Sam: The minimum wage going up which increased our costs.
Sam: For those.
Sam: Hopefully it help us to have the shopping centre of especially the frontline appears acuity stuff.
Sam: We have said they would typically spend at our shopping center.
Sam: That increase in income.
Sam: It will help alternatives sales.
Sam: The rental increase for those who may not know.
Greg: The rental increase for those who may not know, most of the public housing rental for each unit is less than $1,000 to $200,000 a month. for those who park their car, that our car parks will probably be charging $2000 for car parks. But I think the relative charge, you can see that the amount of the rent that they're paying, albeit to a different segment of the communityłby may have such an impact but to a large extent they're still affordable. on the spending. I think we'll be all set by noon. Thank you, Josh. So due to the time limit, we have the last two questions.
Sam: Most of the corporate closing window.
Sam: The view that the.
Sam: This led to a 1000 of our goal is to Delever pulpwood goals in London.
Sam: For those with pocket cause adult cutbacks were both EV charges without similar.
Sam: Goals for <unk>.
Sam: But I think on a relative services.
Sam: You bet.
Sam: The bulk of the rents that they are paid.
Sam: To assist with that segment of the community.
Sam: It may.
Sam: Lee.
Sam: Yes.
So it did impact us to a large extent civil reportable.
Sam: On the spending that there would be offset by the wage increase.
Dave: Thank you Dave.
Dave: At the time limit we have the last two questions. One is can be paths one is the shortcomings.
Josh: One is from DBS. What is the short-term lease as percentage of area in Hong Kong as of December? And should we expect that to go further increase? That's actually fairly stable. So it's an insignificant number in terms of our overall portfolio. And I can also say that the number of tenants on holdover has reduced quite significantly from the first half to this period. So for the most part, leasing transactions in Hong Kong are on a normalised basis of a three-year cycle. We don't see that short-term or holdover leases being an issue to call out. We have, in the past few times, announced results, both interim and final results, we talked about how many new tenants that we have signed.
Dave: And HL area in Hong Kong as of December and now should we expect that the bill will not increase.
Dave: FX actually fairly stable so its an insignificant number in terms of our overall portfolio.
Dave: <unk> and <unk>.
Dave: Yes.
Dave: I will say that the number of tenants on holdover has reduced quite significantly from the first half to these periods. So.
Dave: For the most past.
Dave: Leasing transactions in Hong Kong or on a normalized basis or a three year cycle.
Dave: We don't see that short term, although the leases.
Dave: And issued a call out.
Dave: Then we have in the past few times of announcing results both internally by our results. We spoke about on the new tenants that we have signed.
Dave: Well not representative appeal, but <unk>.
Greg: And, well, not every centre has a queue, but the ability for our colleagues to replace tenants, as some YouTubers pay for various reasons, has allowed us to keep that occupancy strong. Obviously, sometimes we do need to subsidise some new tenants, especially if we want to change the mix, but the strong occupancy has continued to grow. Thank you. So, last question as well from Nanyam. Despite the slight negative rental reversions, can we keep the overall rest of the meal flat-ish? I think there's a lack of feedback and we have only roughly a third of the lease expiring each year.
Dave: The ability for the I'll call it two week base et cetera.
Dave: We need to repeat for business reasons.
Dave: You can put us allow us to keep that occupancy strong, albeit ultimately, sometimes we need to to subsidize Utah.
Dave: The new tenants, especially the award to change the mix.
Dave: The strong occupancy.
Dave: That's what the teams are out.
Dave: So last question and Samsung Romanian despite the slight negative blanka retention can be kept the ultimate lasting Neal vantage.
Dave: I think theres a lag could feedback.
Dave: We have only roughly a third of the lease expiring each year.
Dave: So if you look at a downtrend it would take several years with its own P&L and certainly in the last this year has been challenging.
Greg: So if you look at the downtrend, it will take several years to hit our P&L and certainly the last year, this year has been challenging. We expect 2025-26 financial year also will be challenging in the discussion with our tenants. Greg mentioned that some of that is the retail market is stabilising, but I think the process of impact will take a little bit of time to come back into our portfolio. Again, because it's one third expiring each year, even the upside will take a little bit of time to run in. So I think we'll see probably some challenge to our top line as a result of the activities that, the leasing activities that we've done from about the 2024 to about late 2025-26, with a lack of impact on both the downside and the future.
Dave: We expect 2025 26 financial year, or so will be challenges in the discussions with our tenants.
Dave: Greg mentioned that some of that is for the state of the retail market is stabilizing.
But because the process of impact to the world.
Dave: Time to come back into the room to grow our portfolio again because.
Dave: Both inspiring and cheered EBITDA upside will tip, a little bit tough times, we run in.
Dave: So I think we will see hopefully.
Dave: Some challenge to our top line.
Dave: As a result of the activities that.
Dave: The leasing activities that we've done.
Paul: Paul about third.
Paul: The year 2004 through about <unk> at 856.
Paul: Is that going to be an easy path.
Paul: And both the <unk> and the future upsell.
Paul: So <unk>.
Greg: So here comes the end of our update, so thanks for joining us today and look forward to seeing you again in our final results in May, May. Thank you. Today, we are pleased to have our Group CEO, Mr. George Hongchoi, DEFO, Mr. Pa Shongwoon, COO, Mr. Gleickhoff, and CPPO, Mr. Ross and Ronald Luntz to be here with us to provide this update on our business. We'll begin with company highlights, then operational updates, followed by financial and outlook. Lastly, we will have our Q&A session. Now, I would like to pass the floor to our Group CEO, George, please.
Paul: So thanks for joining us today and look forward to seeing you again in our finding ways that in May may. Thank you Mikael.
Speaker Change: Okay May I, please stand up our co CEO, Mr. Joshua <unk>.
Speaker Change: Therefore, Mr Prashant womb CLO, Mr Blackhawk and till today.
Speaker Change: And one of our plan to be here with us to provide an update on our destiny.
Speaker Change: I'll begin with company highlights and operational update followed by financial and outlook. Lastly, we will have a Q&A session now I would like to pass the floor to hours of a fee to electrical.
Speaker Change: Thank you Christie.
Speaker Change: Appreciate everyone joining us today.
Christie: Thank you, Christie. We appreciate everyone joining us today for what will be the last time we're doing the pre-blackout briefing. And going forward, we'll be shifting to a quarterly update instead. For further information, we share at the end of this presentation about what we have planned and the reasons that we will be making this adjustment. Let me start with some highlights and a reminder of the uncertainty that we're dealing with as we operate and the strategy that we have been pursuing these past years. Let me give an overarching summary of the big picture of a link.
Speaker Change: Or what will be the last pie with doing the premium level rebuild.
Speaker Change: Going forward, we will be shifting to a quarterly update instead and photos the ratio risk share at the end of this presentation that about what we have planned and the reason is that we will be making this adjustment.
Speaker Change: So let me start with some highlights and a reminder of the uncertainty.
Speaker Change: There will be a data where because we operate.
Speaker Change: And the strategy that we have been pursuing these past years.
Speaker Change: Let me give an overarching summary of the big picture for link.
Speaker Change: We continue to operate in a highly uncertain times four.
George Pruitt: continue to operate in the highly uncertain times for higher or longer interest rates and uncertainty around how the global economy will fare in the face of various challenges. in the geographies where LINK operates. We are facing challenges in Hong Kong, where our retail tenants are facing significant pressure in terms of rising costs, sales leakage to online and cross-border travel, and this together with the continuous challenge in re-energizing the economy in mainland China is leading to significant pressure on rental reversion. At this time, we're glad that we have started our diversification effort when we did. as the picture in Cinderfall in Australia.
Speaker Change: Ohio for longer interest rates and uncertainty around how the global economy will trade at the face of various challenges.
Speaker Change: In the geographies, where a link operates.
Speaker Change: We are facing challenges in Hong Kong.
Speaker Change: Our retail tenants are facing significant pressure in terms of rising costs sales leakage through online and cross border trebled.
Speaker Change: This together with the continuous challenge.
Speaker Change: Energizing the economy in mainland China.
Speaker Change: Leading to a significant pressure on rental reversion.
Speaker Change: At this time, we're glad that we have started our diversification effort when we did.
Speaker Change: As the picture in Singapore and Australia.
Speaker Change: It's more positive.
Speaker Change: Looking ahead, we remain committed to our latest pre zero strategy, which builds on our capabilities and <unk> achieved.
George Pruitt: Looking ahead, we remain committed to our LINK 3.0 strategy, which builds on our capabilities and track record achieved over almost two decades, to further strengthen LINK's portfolio and to develop our real estate investment management business under LINK. Just to provide a bit more detail on the global and local context for our business in the year ahead, globally, we anticipate the growth outlook to remain mixed due to factors including the U.S. policy environment, continued challenge with mainland China economies, and unclear interest rate cut timing. These factors combined together with evolving technology and changing consumer behaviors create an uncertain global structure and demands that we act with caution.
Speaker Change: Almost two decades.
To further strengthen <unk> portfolio and to develop.
Speaker Change: Real estate and investment management business under link.
Speaker Change: Just to provide a bit more detail on.
Speaker Change: While the global and local contacts for all puts us in the year ahead.
Globally, we anticipate the global outlook to remain mixed.
Speaker Change: Two practice, including in the U S.
Speaker Change: Policy environment continued challenge with mainland China with economy and unclear interest breakup Tanya.
These factors combined together with evolving technology and changing consumer behaviors create.
Speaker Change: Created uncertain global glass jar and demands that we act with caution.
Speaker Change: In our key markets, although in mainland China.
George Pruitt: In our key markets, Hong Kong and Mainland China, the outlook is less favourable. However, monetary policy loosening and the focus on boosting domestic demand are expected to stimulate economic activity, though we expect it will take some time before things will improve. Meanwhile, Singapore and Australia offer a more positive outlook, with robust economic indicators and consumption support. Despite the prevailing macro conditions, our portfolio has continued to endure. A quick reminder of the shape of our business and our diversification strategy, currently our linked REITs portfolio comprises 74% Hong Kong, 15% mainland China and 11% international, which includes Australia, Singapore and the UK.
Speaker Change: Overall this less favorable however, monetary policy loosening and a focus on boosting domestic demand are expected to stimulate economic activity.
Speaker Change: We expect it will take some time before things will improve.
Speaker Change: Meanwhile, Singapore, and Australia offer a more positive outlook with robust economic indicators and consumption and support.
Speaker Change: Despite the prevailing macro conditions, our portfolio has continued to endure.
Speaker Change: A quick reminder of the shape of our business.
Speaker Change: Diversification strategy currently operating lease portfolio comprised of 74% of phone calls.
Speaker Change: 18% mainland China.
Speaker Change: 7% International which includes Australia, Singapore and the UK.
Speaker Change: As we diversify and grow pooling three zero, we are focused on optimizing our portfolio by exploring opportunities in the APAC region, including Australia, Japan, and Singapore and.
George Pruitt: As we diversify and grow ThruLink 3.0, we are focused on optimizing our portfolio by exploring opportunities in the APEC region, including Australia, Japan, and Singapore. And at the same time, we are also committed to maintain a high bar for rice acquisition and organic M&A. In line with our strategy to grow our real estate investment management, we've officially launched Link Real Estate Partners, a private fund management business line in Trafford. And Ronald will provide further details on this later. Let me now pass the time to Greg to share more on the operational update. Thanks, Georgian. Good afternoon, everyone.
Speaker Change: And at the same time, we are also committed to maintain a high bar for <unk> and <unk> organic M&A.
Speaker Change: In line with our strategy to grow our real estate investment management.
Speaker Change: Officially launched linked real estate partners, a private fund management business line and peppered the vulnerable will provide further details on this later.
Speaker Change: Let me now pass the time to grab to share more on the operational update.
Speaker Change: Thanks, George and good afternoon, everyone and I will stop this afternoon with a review of our overall portfolio occupancy.
George Pruitt: And I'll start this afternoon with the review of our overall portfolio occupancy. Our portfolio has demonstrated solid performance, with occupancy levels remaining high and our international retail assets approaching nearly full occupancy. In Hong Kong, the resilience of our non-discretionary retail portfolio is reflected with high occupancy and showcasing stability and strength in the underlying market. In Mainland China, we're pleased to report healthy occupancy rates across various asset types, underscoring the effectiveness of our Focused Leasing Initiative. In the international markets, our retail assets in Australia and Singapore achieve nearly full occupancy with robust ongoing leasing demands, while ongoing challenges are noted in the Australian office market.
Speaker Change: Our portfolio has demonstrated solid performance with occupancy levels remaining high and our international retail assets approaching nearly full occupancy.
Speaker Change: In Hong Kong, the resilience of our non discretionary retail portfolio is reflected with high occupancy and showcasing stability and strength in the underlying markets.
In mainland China, we are pleased to report healthy occupancy rates across various asset types underscoring the effectiveness of uptake and focused leasing initiatives.
Speaker Change: In the international markets are retail assets in Australia, and CFO achieved nearly full occupancy with robust ongoing leasing demand, while ongoing challenges and notice in the Australian office markets.
Speaker Change: Now, let's look at Hong Kong in some more detail and our retail portfolio, where the occupancy rate has remained robust at 97, 1% as of December highlighting the resilience and stability of our essential needs flex track mix, even amidst challenging market conditions.
Greg: Now let's look at Hong Kong in some more detail and our retail portfolio, where the occupancy rate has remained robust at 97.1% as of December, highlighting the resilience and stability of our essential needs focused trade mix, even amidst challenging market conditions. Rental reversions for the period experienced negative low single digits for the first nine months of the period, which also impacted the unit rent per square foot, bringing it to $64.10. Despite tenant sales being affected by changing consumption patterns among limited and residents, which recorded a decline of 3.3% year-on-year for the first nine months, this was a narrower drop compared to the broader Hong Kong market at negative 7.6%.
Speaker Change: Rachel revisions for the period experienced negative low single digits for the first nine months of the period, which also impact the unit ramp per square foot, bringing it to $64 10.
Speaker Change: Despite tenants out being affected by changing consumption patterns, among visitors and residents, which recorded a decline of three 3% year on year for the first nine months.
Speaker Change: This was a narrow would drop compared to the broader Hong Kong market at negative seven 6%.
Speaker Change: Occupancy costs has slightly come down compared to the first half of the year, indicating potential stabilization at certain conditions.
Greg: Occupancy costs have slightly come down compared to the first half of the year, indicating potential stabilisation at value conditions. And when we break it down by trade mix, both food and beverage in general retail segments outperformed the Hong Kong market, while supermarket and foodstuff saw some weaker performance for the period. In terms of the Hong Kong car park and related businesses, we observed moderate growth in parking revenues for the first nine months of the year. While parking ticket sales experienced a decline, this was balanced out by increases to parking tariffs. We aim to stay responsive to market trends, creating plans to enhance performance and rolling out our new car park management system and ongoing enhancements to that program.
Speaker Change: And when we break it down by trade mix, but food and beverage in general retail segments outperformed the Hong Kong markets, while soup market and foodstuffs saw some weaker performance for the periods.
Speaker Change: In terms of the Hong Kong <unk> and related businesses, we observed moderate growth in parking revenues for the first nine months of the year, while parking ticket sales experienced a combined this was balanced out by increases to pocket tariffs.
Speaker Change: We ended sorry responsive to market trends credit plans to enhance performance and rolling out a new car Park management system and ongoing enhancements to that program.
Speaker Change: Now, let's shift to mainland China, whereas previously mentioned occupancy was healthy across our various asset types.
Greg: Now let's shift to Mainland China, where as previously mentioned, occupancy was healthy across our various asset types. Our retail team on the ground in China has been able to manage tenant remixing very effectively in order to secure more productive and innovative operators. We saw softer demand in specific trades such as cosmetics and jewellery, while sporting goods in particular and retailers featuring intellectual property designs are doing really well. As for office, our occupancy exceeded the district average despite new supply. We will continue to upgrade our facilities to enhance our customer satisfaction and also attract new tenants by carrying out fit-out works on vacant units to improve profitability.
Speaker Change: Our retail team on the ground in China has been able to manage tenant remixing very effectively in order to secure more productive and innovative operators.
Speaker Change: We saw softer demand in specific trials, such as cosmetics and jewelry, while sporting goods in particular and re titles featuring intellectual property designs and doing really well.
Speaker Change: As for office occupancy exceeded the district average despite new supply.
Speaker Change: We will continue to operate our facilities to enhance our customer satisfaction and also attract new tenants by carrying outfit outlooks on vacant units to improve occupancy.
Speaker Change: The logistics occupancy in our portfolio remains healthy at over 96% and demand for our facilities are predominantly driven by E Commerce and third party logistics operators.
Greg: The logistics occupancy in our portfolio remains healthy at over 96% and demand for our facilities are predominantly driven by e-commerce and third party logistics operators. and turning our attention to our international business which consists of retail and offices located predominantly in Australia and Singapore. and our Australian retail assets located in the Sydney CBD, positive leasing momentum continues from tenant demand and now sees occupancy of 99.5%. This was supported by our active, ongoing leasing efforts, which has not only introduced the curation of new brands, but also has allowed for continued upgrading of retail offerings. Out of the trade categories in particular, food and beverage and apparel performed well across the three properties.
Speaker Change: And turning our attention to our international business, which consists of <unk> Island offices, located predominantly in Australia and Singapore.
Speaker Change: And our strategy of retail assets located in the Sydney CBD positive leasing momentum continues from tenant demand.
Speaker Change: And now see occupancy at 99, 5%.
Speaker Change: This was supported by our active ongoing leasing efforts, which not only introduced the curation of new brands, but also it allowed for continued upgrading of Brookdale offerings.
Speaker Change: Out of the trade category in particular, food and beverage and apparel performed well across the three properties.
Speaker Change: Now moving on to Singapore, where Apple's apparel <unk> and Thompson deposit performed very strongly achieving occupancy is now at 100% with ongoing positive leasing revisions.
Greg: Now moving on to Singapore, where our malls at Jurong Points and Thompson Plaza perform very strongly, achieving occupancies now at 100% with ongoing positive leasing reversions. The ongoing enrichment of our tenant variety has been boosted through strong leaking interest from overseas retailers, including those from mainland China, and in particular food and beverage brands. F&B and beauty and wellness categories were the main drivers of tenant sales growth over the period. and funding from me on office, we note the further bifurcation in the Sydney office market with the fight to quality trend continuing. We've made some good progress, however, through the backfilling of vacant tenancies, in particular at 347 Kent Street in Sydney, and our retention rate on renewals remains strong.
Speaker Change: The ongoing enrichment about tenant variety is being boosted through strong leasing interest from either stage III tyler's, including those from mainland China and in particular food and beverage brands.
Speaker Change: F&B in beauty and wellness categories were the main drivers of 10 sales growth over the period.
Speaker Change: And finally from me on office, we note that the.
Speaker Change: Bifurcation in the Sydney office market with the flight to quality trend continuing.
Speaker Change: We've made some good progress however through the back filling a vacant tenancies in particular at <unk> in Sydney and our retention rate on renewals remained strong.
Speaker Change: Under current market conditions, it's essential for us to continue to enhance the appeal of our office spaces through pacemaking and the provision of amenities.
Greg: Under current market conditions, it's essential for us to continue to enhance the appeal of our office spaces through pacemaking and the provision of amenities. and now I'll pass over to KS. Thank you. Thank you, Greg. Good afternoon to everyone. Moving on to Capital Management, our robust financial position is well supported by a healthy balance sheet as shown by the key metrics here. As of 30th September 2024, net gearing remained low at 20.6%, while the average borrowing cost remained competitive at 3.69%. Our EBITDA interest coverage stood at 4.8 times. 6X ratio in the upper range of 50%-70% is in anticipation of more gradual and shallow recovery.
Speaker Change: And now I'll pass over to chaos. Thank you.
Speaker Change: Thank you, Greg and good afternoon to everyone.
Speaker Change: Moving on to capital management.
Speaker Change: Our robust financial position itself supported by a healthy balance sheet as shown by the key metrics here.
Speaker Change: As of 30 of September two zero to four net.
Speaker Change: Net gearing remained low at 26%.
Speaker Change: The average borrowing costs remain competitive at three 6%.
Speaker Change: So EBITDA interest coverage stood at four 8%.
Speaker Change: Fixed debt ratio in the upper range of 50% to 70%.
Speaker Change: The anticipation of more gradual and schedule rate cuts.
Speaker Change: So both about a ratings from all three credit agencies, we have the stability and credibility to attract investors.
KS: Supported by our A ratings from all three credit agencies, we have the stability and credibility to attract investors, as well as secure favourable terms for future funding needs. Between 9th December 2024 and 7th January 2025, we deployed over HK$500 million to buy back approximately 17 million units. Overall, our robust financial position will enable us to effectively navigate the uncertainties in valuation. The disciplined approach to debt management with diversified sources of capital across debt instruments has helped us to achieve... with a competitive average boarding cost as well as robust credit rating. Our financial stability is reinforced through FX Management, which includes extensive hedging of non-HKD distributable income.
Speaker Change: And third secure favorable terms for future funding needs.
Speaker Change: Between 90, Zemba, two zero to $4 seven generated 225.
Speaker Change: We deployed over $500 million local dollars to buyback approximately 17 million units.
Speaker Change: Overall, our robust financial position will enable us to effectively navigate the uncertainties of evaluations.
Okay.
Speaker Change: This disciplined approach to debt management with diversified sources of capital across debt instruments.
Speaker Change: <unk>.
Speaker Change: Super competitive beverage borne costs, so it's robust credit ratios.
Speaker Change: Our financial stability is reinforced through FX management.
Speaker Change: Which includes extensive hedging of non Hong Kong dollar distributors, both will come.
Speaker Change: And the currency risk of overseas assets.
KS: and the currency risk of overseas assets. alongside capitalizing on lower R&D interest rates. after repaying some debt. The Debt Balance as of 10 September 2024 was reduced to HK$55.6 billion. and we have been proactively managing our maturity profile. I now pass the time to Ronald to cover other updates. Thank you. Thank you, Paz. Good afternoon, everyone. We have made significant progress in developing our real estate investment management business through the launch of our new business line, Link Real Estate Partners. which focuses on serving third-party, private and institutional sectors. It will leverage on links to robust operational skills, deep knowledge, and scale in Asia, and provide proven track record to identify and execute compelling real estate investment strategies and match them with capital across the risk spectrum.
Speaker Change: Alongside capitalizing on lower RMB interest rates.
Speaker Change: After repaying some debt.
Speaker Change: The debt balance as of end September.
Speaker Change: September two zero to four plus.
Speaker Change: It was reduced to $55 <unk>.
Speaker Change: And we have been proactively managing our maturity profile.
Speaker Change: I'll now pass the time to rollout the copper other updates. Thank you. Thank you to ask it's good afternoon everyone.
Speaker Change: We have made significant progress in developing our real estate investment management business through the launch of a new business line link real estate partners.
Speaker Change: Which focuses on serving third party private institutional capital.
Speaker Change: We will leverage on a linked to robust operate channel skills deep knowledge and scale in Asia.
Speaker Change: And provide track record and proven track record to identify and execute compelling real estate investment strategies and matched them with capital across the risk spectrum.
Speaker Change: They will also help accelerate our diversification and create new income from co investing and matching assets put new bonds.
Ronald: It will also help accelerate our diversification and create new income from co-investing and managing assets for new partners. We have spent much of 2024 assembling a fund management team led by John Saunders, our Group Chief Investment Officer, along with several new hires, including Head of Australia Investments, Head of Research, Proposal Director and a Product Strategist. While we're unable to disclose too many details at this juncture, we expect 2025 to be a busy for both fundraising and investment. Before we move on to Q&A session, I would like to discuss our new approach to providing operational updates in between our interim and final results.
Speaker Change: We have spent much of 2020 for assembling a fund management team led by John Saunders Chief Investment Officer.
Speaker Change: Along with several new clients, including head of Australia investments head of research.
Speaker Change: With Iressa added product strategies.
Speaker Change: While we are unable to disclose too many details at this juncture, we expect 2025 to be a busy will both fund.
Speaker Change: Fundraising and investments.
Speaker Change: Before we move on to Q&A session I would like to discuss a new approach to providing operational updates in between our interim and final results.
Speaker Change: We always strive to continuously improve our engagement with investors and as part of that to provide robust transparent information on a timely manner.
Ronald: We always strive to continually improve our engagement with investors and as part of that, to provide robust, transparent information on a timely manner. Starting with the operational update after our next final result. We will be able to provide our Q1 and Q3 operational updates approximately one and a half months earlier than we currently do, as we will transition to providing quarterly operational updates announcements instead of pre-blackout briefings. We plan to provide Q1 updates in February and Q3 in August. This change, made after feedback from the investment community, will allow us more time to engage with investors and analysts prior to any blackout period.
Speaker Change: Starting with the operational update after our next final results.
Speaker Change: We will be able to provide our Q1 and Q3 operational updates approximately one and half months earlier than we currently do as we will transition to providing quarterly operational updates announcements instead of pre blackout briefings.
Speaker Change: We plan to provide Q1 update in February in Q3 in August.
Speaker Change: This change made after the feedback from the investment community will allow us more time to engage with investors and analysts prior to any blackout period.
Speaker Change: At the timing of our quarterly update and results will be distributed more evenly throughout the year.
Ronald: At the timing of our quarterly update, the results will be distributed more evenly throughout the year. To facilitate this, we will upload the quarterly operational updates to the Stock Exchange and our corporate website, ensuring timely access to essential information. This will enable stakeholders to access our performance more effectively and make well-informed investment decisions. I'll now pass over to Christy for the Q&A session. Thank you, Ronald. So let's move on to the follow-up Q&A. Please submit your questions using the Q&A function. We got a few questions already, let's see if we can start now. So quite some questions on the retail side in Hong Kong.
Speaker Change: To facilitate this we will upload the quarterly operational updates to the stock exchange and our corporate website, ensuring timely access to essential information.
Speaker Change: This will enable stakeholders to access our performance more effectively and make well informed investment decisions.
Speaker Change: I'll now pass over to Christy for Q&A session. Thank you.
Christy: That's more balanced.
Speaker Change: Ill start Q&A in your comments and your questions using makena in Edmonton.
Christy: We got a few questions on mining.
Christy: Now some.
Christy: Some questions on the retail path in Hong Kong.
Christy: That's our plan.
Christy: Damian.
Christie: So let's start with... Cindy from Citi. So how's the retail sales trend in the first few of Canada year 2025? Any green shots for early signs of recovery? I'll take that question. Thank you, Cindy. So just looking at the period up to December, we've seen an improvement and we've just spoken to a negative 3.3 total sales position. And just to remind you that at the end of the first quarter of the financial year, that was negative 5.9. And then at the first half, it was negative 4.3. So a gradual improvement over the period. And we've seen that across the three major categories that we report to.
Christy: So has the maintenance sales trend in <unk>, Canada, <unk> and clean shop floor and signs of recovery.
Christy: That's question <unk>.
Christy: So we're still looking at.
Christy: It's a period up to December we've seen.
Christy: And improvements.
Christy: We've just spoken to a negative $3 three.
Christy: Total SaaS position and just to remind you that at the end of the first quarter of the financing that was negative $5 nine and then at the first half was a negative $4 <unk>. So a gradual improvement over the period.
Christy: And we've seen that across the three major categories that we report to.
Christy: So as it.
Cindy: So as it's December, food and beverage was flat year on year. And that was an improvement from negative 1.5% for the first quarter. Supermarkets, we're seeing some gradual improvement. And I think that's largely off a lower base. So supermarkets were negative 5.9% in the first quarter, negative 5.2% at the first half and negative 3.9% Q3. And general retailers also improved significantly. So as we move into the last quarter of this financial year, we are seeing that trend continuing. But I will say that there is a lag from this improvement in sales and flowing through into rental reversions.
The standard that food and beverage was flat year on year.
Christy: And that was an improvement from negative one 5% for the first quarter.
Christy: Supermarkets were seeing some gradual improvement and I think thats largely off a lower base.
Substitute market to a negative five 9% in the first quarter negative five 2% at the first half and negative three 9% in Q3 in general retailers also improved significantly as.
Christy: As we move into.
Christy: The last quarter this financial year, we say that trend continuing.
But I will say that there is a lag from this improvement in sales and flowing through into rental revisions.
Christy: The other associated metrics to the sales is applicable, which we have seen ongoing improvements.
Ronald: The other associated metric to the sales is our footfall, which we've seen ongoing improvement over the last few months. And in particular, we've seen more of a dramatic improvement on weekend footfall. And that I think is associated with some of the stabilisation of the northbound linkage. So some green shoots, but still somewhere to go. Thank you. So another question is, will you consider any disposal to recycle capital given high for longer rate outlook? I'll take that. So, obviously, we always look at optimising our portfolio and we're always constantly reviewing acquisitions as well as disposals. And so, yes, if there is the right deal in the market, if there's the right price, we will consider recycling.
Christy: For the last few months.
Christy: And in particular, we've seen.
Christy: More of a dramatic improvement on weekend portfolio that I think is associated with some of the stabilization of the knockdown linkage.
Christy: So at some green shoots.
Christy: Group somewhat better.
Christy: Sure.
Christy: Another question I think that also continued to build a company that any disposal recycling capital given high for longer rate outlook.
I'll take that so.
Christy: Obviously, we always look at optimizing the portfolio and we're always constantly reviewing.
Christy: Acquisitions as well as disposals so yes.
If there is a right to you and the market. We are at the right price, we will consider recycling I think.
Christy: Now we're still looking.
Sam: I think right now we're still looking for those opportunities and we're constantly assessing those recycle Thanks, Ronald. So, next question is from Sam of Jersey. Could you share a bit more color on China side, sales and reversions? Yeah, so, um... I'm afraid we can't really say much about that at this moment. We understand we are under regulatory restrictions to say anything about the funding. And my next question is from Goldman, Simon. To the extent you can, can you provide us with some targets or milestones you're setting out for your link real estate on this fund?
Christy: For those opportunities and we're constantly.
Christy: Youre assessing.
Christy: Others recycle opportunities. Thanks, Shlomo So next question Sam.
Kathy: Sam of Kathy.
Speaker Change: Could you shed more color on China, South and retention.
Kathy: Yes.
Kathy: Sure.
Kathy: China from a retail estate minus five from a retail perspective.
Kathy: Stabilizing the biggest challenges environment in Beijing in particular, our truck launch on asset way with doing some ongoing asset enhancements and tenant remixing.
Kathy: When we reported the first half result, we spoke to the fact that it was negative revisions to the mainland business. If you excluded some crunch on it would be slightly positive that is still the case.
Kathy: Pleasingly, there is quite a lot of tenant activity in the mainland market.
Kathy: So the markets of Shanghai, Guangzhou, and Shenzhen for us continued to be pretty stable.
Kathy: Beijing is where a lot of focus is.
Kathy: And the slight dip in occupancy from the first half to this reporting period, we think will.
Kathy: Signs of improvement as we get to the end of this financial year. So.
Kathy: Probably the most placing things with regards to mainland retail east very good underlying tenant activity and tenant demand.
Kathy: But that is offset somewhat by significant increases of supply new supply in markets like Beijing and Guangzhou in particular.
Kathy: And then another question Tommy China business as well.
Kathy: Getting one telecom <unk> data, our secondhand half look like now and then when.
Kathy: When we will be activating <unk> Belize.
Kathy: After the ethical Hudson.
Kathy: We ended up with progressing well building off the success that we had for the first phase.
Kathy: On its own site, a few weeks ago, where the progress is good leasing momentum is very strong.
Kathy: So as we move through into the new financial year.
Kathy: We're fairly confident that we will have the lion's share of that projects completed and width with very satisfied with the ongoing leasing demand for that property. So very well positioned assets that are very strong catchments.
Kathy: But again the major issue with Paul.
Kathy: Two is increased competition.
Kathy: Getting well ahead of that new competition is important.
Kathy: And put this project.
Kathy: And then maybe you mentioned it.
Kathy: Principal asset management.
Kathy: And Kenny.
Kathy: That's an idea on the apparently pricing trends.
Kathy: Should we be spending some quality kingdom infections in Panama.
Kathy: So just the general trend on leasing reversion for Hong Kong.
Kathy: We mentioned during the prepared remarks.
Kathy: We have seen a deterioration from the first half to the third quarter I am very very slightly negative leasing reversion for Hong Kong.
Kathy: And as we've discussed many times the competition of activity in any given year, usually tapers off in the back half of financial year <unk>.
Kathy: We reported plus 7% at the first half.
Kathy: We sit very very low single digit with version as at December.
Kathy: And that trend will continue through into the end of this financial year.
Kathy: And I think the concept of negative diversity is something that.
Kathy: We should be prepared for this new financial year that would be embarking on shortly.
Kathy: It.
Kathy: Very moderate.
Kathy: Negative revision. Thank you and the next question is they sound next time in person that's fairly champing firm ask any update on capital raising for the SaaS business.
Kathy: So I'm afraid we can't really say much about that at this moment that we on the regulatory restrictions to say anything about the $10 million.
Kathy: And then the next question to academic government financing.
Kathy: And can I extend Mccann can do go back with some tactics are milestones setting out for you on these real estate understanding I guess I'll say I'll say at the outset the savings Okay and then.
Ronald: I'll say that the answer is the same. Okay. And then... will be from D-BAC, Mark Lang. What is the rental reversion guidance for next year? Yeah, so I think you touched on that in the previous question. So we're anticipating slightly negative reversion for Hong Kong, fairly flat for Mainland and positive for Singapore and Australia. The main focus, I will point to, and we've said it on numerous occasions now, is preserving occupancy across our portfolios. And I think the numbers that we've spoken to again today illustrate that. What we are experiencing is that the reversion on new deals or replacement tenants is significantly worse than the reversion for us in retaining tenants.
Kathy: Thanks.
Kathy: One.
Kathy: Will be from the back.
Kathy: Back Mike Lang.
Speaker Change: What is the rental were posted guidance for next year yeah. So.
Speaker Change: Touched on that in the previous question. So we're anticipating slightly negative EBIT for Hong Kong.
Speaker Change: Fairly flat for mainland and positive Singapore and Australia.
Speaker Change: The main focus element to that and we've said on numerous occasions now is preserving occupancy across our portfolio and I think the numbers that we expect them to again today illustrate that.
Speaker Change: What we are experiencing is that reversion.
Speaker Change: On new deals so replacement tenants is significantly worse than the reversion for us in refining tenants.
Speaker Change: Pleasingly our.
Speaker Change: Our version of a retention rate I should say.
Ronald: Pleasingly, our retention rate, I should say, remains at our long-term averages in the high 70% range as of December. So a big part of our strategy is retaining our existing tenants. We do an analysis that we call right tenant, right location, and a large proportion of our portfolio sees us having pleasingly the right tenants in the right locations. So we'll be working with our tenants to retain them. Another strategy that we're working through is endeavouring for our tenants to invest in upgrading their facilities. And if that means that we forego some reversion in return for some capital investment by those retailers to improve their environments, that's something we'll be treating on a case-by-case situation as well.
Speaker Change: Since it out long term averages in the high 70% range as of December.
Speaker Change: So a big part of that strategy is retaining our existing tenants, we do an analysis that equal right tenant right location.
Speaker Change: And a large proportion of our portfolio saves us having pleasingly to write checks in the right locations.
Speaker Change: So we'll be working without tends to retain them. Another strategy that we're working seriously in devry for our tenants to invest in upgrading their facilities.
Speaker Change: And if that means that we forgo.
Speaker Change: Some reversion in returning some capital investment by those titles to encourage their environments. That's something we'll be trading on a case by case situation as well.
Speaker Change: Along with an answer to a very simple question, but yes. There is some pressure on revision, but we anticipate that that will be offset by preserving occupancy here in Hong Kong.
Ronald: So a long-winded answer to a very simple question, but, yeah, there is some pressure on reversion. But we anticipate that that will be offset by preserving occupancy here in Hong Kong. Next question will be from Debbie Mormentau. Any guidance on how average financing costs will be in the second half of the financial year, and will it further go down from the average 2.69%? or stay home. I think the third option that you didn't mention is will it go up marginally. And I think, Carl, the answer is yes. We have fixed 66.4, so there's about one-third that's not fixed, and if you look at our maturity profile.
Speaker Change: Next question for Jason This morning, Pal and any guidance on how FX financing costs will be in second half of the financial side.
Speaker Change: And with that I thought were down from the average of $2 six 9%.
Speaker Change: All our stakeholders.
Speaker Change: And so I think that option that you didn't mention is already go up much.
Speaker Change: I think it's called the unsafe, yes, we are.
Speaker Change: Fixed <unk>.
Speaker Change: $66 four so thats about one step it's not fixed and if you look at our maturity profile.
Speaker Change: This coming financial year, it's about 12 billion of refinancing.
Carl: This coming financial year, there's about $12 billion of refinancing. Clearly today, high 4 is already at 3.8, 3.9 Without ABC at 3.7 it's unlikely that you can beat that because a lot of these will hedge from it when rates are much lower and stocks are much cheaper So, we do expect borrowing costs to hinge up marginally this coming year Thank you. And next question is also from Karl. Any comments on when the stock name becomes eligible for stock comments? Um I think when you look at the announcement on various topics around StockConnect, there is a lot of discussion around the StockConnect issues.
Speaker Change: Clearly today high baud rate at 3839.
With our ABC at $3 seven it's unlikely that you.
Speaker Change: <unk> got a big depth, because a lot of batesville textbook when Richard Shaw in Salzburg cheaper. So we do expect Laurie closely in spot market earnings.
Speaker Change: This coming year.
Speaker Change: And next question is a tougher comp any color on when the stock named accounts.
Speaker Change: <unk> stock connect.
Speaker Change: Yeah.
Speaker Change: I think when you look at the announce Linda.
Speaker Change: David I'll take that Scott.
Speaker Change: There is a lot of discussion about the stockholder issue.
Speaker Change: Same story this year.
Carl: Since February this year, there's already a conclusion to implement it as soon as possible, and our sense is hopefully somewhere next month we get more announcements on how fast CSRC is willing to make clearer announcements. But my sense is, so far, the regulators have been very supportive and progressively have been trying to accelerate the implementation. During the investment conference in Hong Kong this week, the financial secretary also said the same. He said it's coming, it's a matter of when, not a if. So obviously we're still waiting for the time, but there should be more. And just to add to that, obviously we've been doing quite a bit of IR on Hong Kong China.
Speaker Change: Conclusion of it.
Speaker Change: Looking to the Monday as soon as possible.
Speaker Change: Our sense is.
Speaker Change: Hopefully somewhere next month, and we get more announcements on that.
Speaker Change: Help us get us team is doing to make create a revenue bump my senses.
Speaker Change: So far the regulators have been very soft.
Speaker Change: Positive progress UBS, Sydney trains with the <unk> implementation.
Speaker Change: Starting with the investment conference.
Speaker Change: So state and local this week.
Speaker Change: But Israel Secretary also safe to say that.
Speaker Change: This is coming a little wind in order to do so so too was the wisdom of this time.
Speaker Change: There should be lower.
Speaker Change: And just to add to that.
Speaker Change: We've been through quite a bit of IR on China.
Speaker Change: We know that a few months now we are ready to capture those milestones.
Phil Collins: And we know there's demand and we are ready to capture those when it comes. Thank you. Next question is from Phil. Will we consider the increased borrowing from mainland China below average financing cost and what's the financing cost outlook for the FY25 and FY26? So I think I'll take the first question, the second I'll just answer and it will be the same, that will be marginally higher financing costs. On taking advantage of the RMB... lower financing costs. In reality, what we are doing is actually... to use RMB borrowing to hedge against the RMB assets and there's no intention to overhedge because that's not part of our business to take hedging risk.
Speaker Change: <unk> next question comes from Telecom.
Speaker Change: Well, we can say that the increased borrowings funding nanchang, asking our average financing cost and debt financing cost outlook for them.
Speaker Change: <unk> and <unk>.
Speaker Change: So I think I'll take the first question.
Speaker Change: Just answer it will be the same there'll be a marginally higher financing costs.
Speaker Change: Taking advantage of the RMB.
Speaker Change: Lower financing costs.
Speaker Change: In reality, what we are doing is actually.
Speaker Change: Produce RMB borrowing hedge against the RMB assets and there's no intention over hedge because it's the thought about the specific activities.
Speaker Change: So we'll continue to hedge.
Speaker Change: Each of these stages does appear maturity profile.
Phil Collins: So we will continue to hedge and each of these hedges does have their maturity profile and as it expires we will continue to hedge and so far hedging RMB we are paid a premium to help reduce our financing cost. And today we are already in the almost fully hedged against our RMB so it's just waiting for hedges to expire and then we'll renew. So, there are actually a few questions regarding the M&A or acquisition, so in general, they are asking how the progress is and then how the M&A environment in Asia, whether it's for the fund or for Ling?
Speaker Change: Expire we will continue to pitch in so far.
Speaker Change: Hedging RMB.
Speaker Change: Premium to help reduce operating politicals and today, we are already almost fully hedged against RMB. So just waiting book that just to expire and then we will begin.
Speaker Change: Okay.
Speaker Change: The address the same questions with adding the M&A or as efficiently.
Speaker Change: In January asking how that will go ahead, and then how the M&A environment.
Speaker Change: Asia.
Speaker Change: On a final for me.
Speaker Change: Just answer that in general terms I think in certain markets in particular, Australia, we're seeing.
Phil Collins: I think I'll just answer that in general terms. I think in certain markets, in particular Australia, we're seeing price correction, and there's been a bit more activity there where the buyer and sellers, you know, bid and our spread has narrowed. And we've also seen funding costs starting to drop in Australia. So, that market remains interesting for us, and we still spend quite a bit of time looking at that market. And so, you know, we will continue to look at that. The other markets, Singapore is still, you know, pricing is still pretty tight. So is Japan.
Speaker Change: Rice correction.
Speaker Change: Peter goodwill activity that with the buyer and seller.
Speaker Change: <unk> been off spreads narrowed and we've also seen our funding costs sponsored drop in Australia. So that market remains interesting for us and we must do.
Speaker Change: Spend.
Speaker Change: I'm looking at that market.
Speaker Change: And so.
Speaker Change: We will continue to look at that the other markets Singapore is too.
Speaker Change: Pricing is still pretty tight.
Speaker Change: So as Japan.
Speaker Change: And I guess I'll focus probably for the moment in Australia laminate.
Grant: And I guess, you know, our focus is probably at the moment in Australia. Thank you. And then next question is about the Mainland China operations. The question is about CentralWall, so how the cell is doing? Has it bypassed, exceeded the level of pre-COVID already? The sales in general and football in general at Central Walk is progressing very, very well and it's our best performer across Mainland, it's probably our best performer across all of our shopping centres. We are also in the process of some fairly significant tenant optimization work there. So we're seeing ongoing better quality demand from retailers for Central Walk.
Speaker Change: Activity.
Speaker Change: And then next question back to mainland China operations. So.
Speaker Change: The question is about our central law.
So how small cell.
Speaker Change: It's doing is it.
Speaker Change: I think Russell I'll pick both at R&D.
Speaker Change: The sales in general and portfolio in general with Central work is progressing very very well.
And southwest performed across mainland.
Speaker Change: It's probably our best performer across the whole national incentives.
Speaker Change: <unk>.
Speaker Change: We are also in the process of some fairly significant tenant optimization work that we're seeing.
Speaker Change: Ongoing better quality demand from retailers for central work. So a lot of the strategies that we've executed on over the last few years are really starting to pay some significant dividends.
Grant: So a lot of the strategies that we've executed on over the last few years are really starting to pay some significant dividends. So good continued sales growth, good continued NPI growth, and now we're focused on really managing our costs, not just on a project like Central Walk, but doing what we can to preserve or at least enhance, at least preserve our operating margins on a portfolio. Thank you, Grant. So, a bit more questions on the operation. So, why the occupancy drop to one year for Hong Kong and China? It's a phasing thing. So, as we gear up to the end of the year, we anticipate that those occupancy numbers will get back to what they were around the half year.
Speaker Change: Good continued sales growth with continued continues NPI growth.
Speaker Change: And now we're focused on.
Speaker Change: Managing our costs not just on a project by Central walk with doing what we can to preserve or at least can have enhanced at least preserve our operating margins on a portfolio of assets.
Speaker Change: I think mark has seen some downspacing.
Speaker Change: Why the Iranians outweighed the upcoming lease up to our sales, while Hong Kong and China.
Speaker Change: And so.
Speaker Change: As we gear up to the end of the year.
Speaker Change: We anticipate that those occupancy numbers will get back to what they were around the half year.
Speaker Change: So, it's a phasing and timing thing more than anything else.
Greg: So, it's a phasing and timing thing more than anything else. And then another question from Sam again. So, what it takes for Hong Kong inversion to return to positive in your view? We cut dollar, mainline visitors. We're not really impacted by Mainnet Visitors, we're obviously servicing on-commerce for their daily needs. I think the main issue that we need to see is the stabilisation and growth in margin for our retailers. So their operating margins have been under pressure with increased costs, and then that puts pressure on our negotiations with them. So I think the main thing that we need is continued growth in sales, which we're starting to see the benefit of.
Speaker Change: And then final question.
Sam again so.
Speaker Change: What it takes for Hong Kong question should return to positive.
Speaker Change: With Capella may.
Speaker Change: <unk> interface.
Speaker Change: But we're not really impacted by that as it is with obviously servicing Hong Kong has been a dining names.
Speaker Change: I think the 90 issue that we need to see is the stabilization and growth in margin throughout retailers.
Speaker Change: <unk> operating margins have been under pressure with increased costs.
Speaker Change: And that puts pressure on and negotiations with them. So I think the 19 that we need this continued growth in sales, which were starting to state of <unk>.
Speaker Change: Our purpose is to provide football for every title so that can be capitalized and execute that in styles and <unk> see some improvement in the bottom line for the retailers not just the top line and that then will allow us to see some some growth in our revenues I will say, though that a portfolio occupancy cost.
Greg: Our purpose is to provide football for our retailers, so they can capitalise and execute that in sales, and then hopefully start to see some improvement in the bottom line for the retailers, not just the top line, and that then will allow us to see some growth in our revenues. I will say though that our portfolio occupancy cost is stable at 13.1%, our sales densities are very, very strong. So we're facing into what is a very challenging market in a very strong position, and our continued focus on the non-discretionary trades, particularly food and beverage, places us in a reasonably strong position in relative terms. And then another question is regarding whether our company would consider to help bring in some brands from mainland China into Hong Kong, and so as to help the consumption in Hong Kong.
Speaker Change: With stable at 38, 1%.
Speaker Change: <unk> SaaS entities are very very strong.
Speaker Change: So.
Speaker Change: We're facing into what is a very challenging market and very very strong position.
Speaker Change: And our continued focus on the non discretionary tribes, particularly food and beverage places us in a reasonably strong position in relative terms.
Speaker Change: And then another question.
Speaker Change: Our company will continue at Tfl, bringing in.
Speaker Change: Some brands from mainland China, Hong Kong and has that helped the consumption in Hong Kong, absolutely and we are seeing that.
Greg: Absolutely, and we are seeing that. So pleasingly, the new leasing transactions that we do, approximately one third of those are to retailers new to the Lync portfolio. So we're bringing in 100, 150 new retailers to our portfolio every year. We're seeing an increase in the number of mainland businesses, predominantly food and beverage. The move into Hong Kong by Luckin Coffee, for example, has been well-documented. We've secured a number of locations with them. The first of those is opened at Cheung Kwan O, and it's performing really, really well. So yeah, we're hopeful that our portfolio is incredibly well-suited to support the introduction of new mainland brands.
Speaker Change: So.
Speaker Change: Pleasingly.
Speaker Change: The new leasing transactions that we do approximately one third of those two retailers and use of the <unk> portfolio.
Speaker Change: So we're bringing in.
Speaker Change: 100, 150, new retailers to our portfolio every year, we're seeing an increasing number of lilac businesses predominantly.
Speaker Change: Predominantly food and beverage.
Speaker Change: The.
Speaker Change: Moving to Hong Kong Biomarker coffee for example has been well documented.
Speaker Change: We've secured a number of <unk>.
Speaker Change: Locations with them the first Andaz resort opened a chunk of it and it's performing really really well.
Speaker Change: So, yes, we're hustling Apple.
Speaker Change: Our portfolio is incredibly well suited to support the introduction of new 99 brands.
Speaker Change: I think our mill sites, we've seen a significant increase in demand from land that retailers have to our Singapore portfolio as well so.
Greg: The other thing I will say is we've seen a significant increase of demand from mainland retailers to our Singapore portfolio as well. So I think a lot of the very good innovation and market positioning from mainland retailers is seeing them spread their wings more broadly across Asia Pacific, and we're well-positioned to be able to support them to grow in our portfolios, whether it be in mainland Hong Kong, Singapore, or even Australia over time. So that's a big part of our strategy, is to harness the strength of our portfolio and our retailers as they look to expand across the region.
Speaker Change: I think a lot of the very good innovation and market positioning for my elaborate tyler's.
Speaker Change: These statements spread their wings multiple laid across Asia Pacific and were well positioned to be able to support them to grow in our portfolios whether it be in mainland Hong Kong, Singapore, even Australia over time, so that could be part of our strategy is to harness the strength of our portfolio and growth now ray titles as they look to expand across the region.
Speaker Change: Another question is regarding the recent public housing nice increase.
Greg: Thank you. Another question is regarding the recent public housing rent increase. What will be the impact on rent? I think there's a negative there, but there's also a positive in the increase to the minimum wage, again more recently at 5.25%, so again we're not servicing the discretionary spending patterns of our population, we're servicing their daily needs. So I don't think that that would be a significant impact for us. I think if we look at minimum wage going up, which would increase our costs. For those who want to help us to find a shopping center, especially a part-time premium security As Seth said, they will typically spend at our shopping center.
Speaker Change: What we're able to impact online.
Speaker Change: I think there is a.
Speaker Change: Maybe David is also positive is the increase to the minimum wage again more recently a slot to box. So again, we're not servicing the discretionary spending patents.
Speaker Change: A population with servicing that dining needs.
Speaker Change: So I think that that would be a significant impact for us, but it will be.
Speaker Change: But.
Speaker Change: Minimum wage going up which increased our costs.
Speaker Change: So those goodwill.
Speaker Change: Folks to help us through the shopping center, especially a frontline appears acuity side.
Speaker Change: That said they were typically spend at our shopping center.
Speaker Change: So that increase in income.
Josh: So that increase in income will help our tenants sell. The rental increase for those who may not know, most of the public housing rental for each unit is less than $1,000 to $300 a month. For those who park their car, that our car parks will probably be charging 2,000 dollars for car park fix. So but I think on a relative charge, you can see that the amount of the rent that they're paying, albeit to a different, to that segment of the community, may have a certain impact, but to a large extent, it's still affordable. on the spending, I think we'll be offset by the minimum wage increase.
It will help alternatives sales.
Speaker Change: The rental increase for those who may not know.
Speaker Change: Most of the profit goes into rental.
Speaker Change: The view that the.
Speaker Change: It's less than 1000 of our goal is to feel under $4 a month.
Speaker Change: But also because of the cutbacks were both easy charges without similar.
Speaker Change: Total is for <unk>.
Speaker Change: But I think on a relative certainty, but we can see that the.
Speaker Change: The bulk of the rents that they are paid albeit towards specific to.
Speaker Change: That segment of the.
Speaker Change: Community.
Speaker Change: Lately.
Speaker Change: So it could impact us to a large extent.
Speaker Change: Civil reportable.
Speaker Change: On the spending I think it will be offset by the wage increase.
Dave: Thank you Dave.
Dave: At the time limit we have the last two questions. One is I'm going to ask one it's the shortcomings and spend HR area in Hong Kong as of December and should we expect that the bill sudden increase.
Greg: Thank you, Josh. So, due to the time limit, we have the last two questions. One is from DBS. What is the short-term lease as a percentage of area in Hong Kong as of December? And should we expect that to go further increase? That's actually fairly stable. So, it's an insignificant number in terms of our overall portfolio. And I can also say that the number of tenants on holdover has reduced quite significantly from the first half to this period. So, for the most part, leasing transactions in Hong Kong are on a normalised basis of a three-year cycle.
Dave: FX actually fairly stable so its an insignificant number in terms of our overall portfolio.
Dave: And.
Dave: And also say that the number of tenants on holdover has reduced quite significantly from the first half to these periods. So.
Dave: For the most past.
Dave: Leasing transactions in Hong Kong or on a normalized basis or a three year cycle.
Dave: We don't see that short term, although the leases.
Greg: And we don't see that short-term or holdover leases being an issue to call out. We have, in the past few times, announced results, both income and final results, we talk about how many new tenants that we have signed. And, well, not every centre has a few, but the ability for our colleagues to replace the tenants, some need to repay for various reasons, has allowed us to keep that occupancy strong. Obviously, sometimes we need to subsidise some new tenants, especially if we want to change the next, but the strong occupancy that's going to be used. Thank you.
Dave: An issue to call out.
Dave: So that we have.
Dave: Few times, there's analysis results will inherently biodiesel, we spoke about on the new.
Dave: Tenants that we have signed.
Dave: Well not every center is a few but.
Dave: The ability for the I'll call. It two week base et cetera, and Thats, something we need to repeat for various reasons.
Dave: Put us allow us to keep that occupancy strong, albeit ultimately sometimes show resiliency to.
Dave: To subsidized.
Dave: New tenants, especially rewarding to change the mix.
Dave: Thank you.
Dave: <unk> occupancy.
Dave: So the teams are now.
Dave: So last question Samsung mainland despite the slight negative blanka retentions cannot get the ultimate lasting Neal vantage.
Greg: So, last question is from William. Despite the slight negative rental reversions, can we keep the overall rest of the meal planted? I think there's a lack of feedback and we have only roughly a third of the lease expiring each year. So if you look at the downtrend, it will take several years to hit our P&L and certainly the last year, this year has been challenging. We expect 2025-26 financial year also will be challenging in the discussion with our tenants. Greg mentioned that some the retail market is stabilizing but I think the positive impact will take a little bit of time to come back into our portfolio.
Dave: I think there is a lack of feedback.
Dave: We have only one.
Dave: Roughly a third of the lease expiring each year.
Dave: If you look at a downtrend it will take several years to hit the P&L and certainly in the last this year has been challenging.
Dave: We expect 2025 26 financial year also will be challenges in the discussions with tenants.
Dave: Greg mentioned that some of that is for the state of the retail market is stabilizing.
Dave: Yes.
Dave: I think the positive impact we took a little bit.
Dave: Time to come back into the room to grow our portfolio again, because one third of expiring each year, even the upside will take a little bit tough time to run in.
Greg: Again, because it's one third expiring each year, even the upside will take a little bit of time to run in. So I think we'll see probably some challenge to our top line as a result of the leasing activities that we've done from about the current year, 2024 to about late 2025-26, with a lack of impact on both the downside and the future. So here comes the end of our update, so thanks for joining us today and look forward to seeing you again in our final results in May, May. Thank you. Today, we are pleased to have our Group CEO, Mr. George Hongchoi, CEO, Mr. Park Seong-Woon, COO, Mr. Greg Kopp, and CPDO, Mr. Ross and Warner's Man, to be here with us to provide an update on our business.
Dave: So I think we will see hopefully.
Dave: Some challenge to our top line.
Dave: As a result of the activities that.
Dave: Leasing activities that we've done.
Dave: About.
Dave: The year 2004 through about <unk> 856.
Dave: Is that going to be in Asia Pac.
Dave: And both the <unk> and the future upside.
Dave: So <unk> now.
Dave: So thanks for joining us today and look forward to seeing you again in our finding ways that they may make thank you Mikael.
Speaker Change: And we are pleased to have our co CEO, Mr. Joshua <unk> capital with their personal wound CLO, Mr Black Hawk and till today.
Dave: And one of our plan to be here with us to provide an update on our destiny.
Speaker Change: I'll begin with company highlights and operational update followed by financial and outlook. Lastly, we will have a Q&A session now I would like to pass the floor geography electrically.
Christie: We'll begin with company highlights, then operational updates, followed by financial and outlook. Lastly, we will have our Q&A session. Now, I would like to pass the floor to our Group CEO, George, please. Thank you, Christie. We appreciate everyone joining us today for what will be the last time we're doing the pre-blackout briefing. And going forward, we'll be shifting to a quarterly update instead. For further information, we'll share at the end of this presentation about what we have planned and the reasons that we'll be making this adjustment. Let me start with some highlights and a reminder of the uncertainty that we're dealing with as we operate and the strategy that we have been pursuing these past years.
Geography: Thank you Christie.
Speaker Change: Appreciate everyone joining us today.
Speaker Change: Or what will be the last pie with doing the premium level rebuild.
Speaker Change: Going forward, we will be shipping to a quarterly update instead and photos the ratio risk share at the end of this presentation that about what we have planned and the reasons that we will be making this adjustment.
Speaker Change: So let me start with some highlights and a reminder of the uncertainty.
The data were because we operate.
Speaker Change: And the strategy that we have been pursuing these past years.
Speaker Change: Let me give an overarching summary of the Bickford tripling.
George Pruitt: Let me give an overarching summary of the picture of a link. continues to operate in highly uncertain times for higher or longer interest rates and uncertainties around how the global economy will fare in the face of various challenges. in the geographies where LIMC operates. We are facing challenges in Hong Kong, where our retail tenants are facing significant pressure in terms of rising costs, sales leakage to online and cross-border travel, and this together with the continuous challenge in re-energizing the economy in mainland China is leading to significant pressure on rental reversion. at this time. We're glad that we have started our diversification effort when we did.
Speaker Change: We continue to operate in a highly uncertain times four.
Speaker Change: Or higher for longer interest rates and uncertainty around how the global economy will trade at the face of various challenges.
Speaker Change: In the geographies, where a link operates.
Speaker Change: We are facing challenges in Hong Kong.
Speaker Change: Our retail tenants are facing significant pressure in terms of rising costs sells leakage to online and cross border trebled.
Speaker Change: This together with the continued challenge.
Speaker Change: Energizing the economy in mainland China.
Speaker Change: Leading to a significant pressure on rental reversion.
Speaker Change: At this time, we're glad that we have started our diversification effort when we did.
Speaker Change: As the picture in Singapore and Australia.
George Pruitt: as the picture in Singapore and Australia. Looking ahead, we remain committed to our LINK 3.0 strategy, which builds on our capabilities and track record achieved over almost two decades, to further strengthen LINK's portfolio and to develop our real estate investment management business under LINK. Just to provide a bit more detail on the global and local context for our business in the year ahead. Globally, we anticipate the global outlook to remain mixed due to factors including the U.S. policy environment, continued challenge with mainland China economy, and unclear interest rate cut timing. These factors combined together with evolving technology and changing consumer behaviors create an uncertain global flex job and demands that we act with caution.
Speaker Change: It's more positive.
Speaker Change: Looking ahead, we remain committed to our link pre zero strategy, which builds on our capabilities and <unk> achieved.
Speaker Change: Almost two decades.
Speaker Change: To further strengthen our.
Speaker Change: Portfolio and to develop.
Speaker Change: Our real estate and investment management business under link.
Speaker Change: Just to provide a bit more detail on.
Speaker Change: While the global and local context for all puts us in the year ahead.
Speaker Change: Globally, we anticipate the global outlook to remain mixed.
Speaker Change: Two practice, including in the U S.
Speaker Change: Policy environment continued challenge with mainland China as economies and unclear interest breakup timing.
Speaker Change: These factors combined together with evolving technologies and changing consumer behaviors create.
Speaker Change: Created uncertain global glass jar and demands that we act with caution.
Speaker Change: In our key markets, although in mainland China.
George Pruitt: In our key markets, Hong Kong and Mainland China, the outlook is less favourable. However, monetary policy loosening and the focus on boosting domestic demand are expected to stimulate economic activity, though we expect it will take some time before things will improve. Meanwhile, Singapore and Australia offer a more positive outlook, with robust economic indicators and consumption support. Despite the prevailing natural conditions, our portfolio has continued to endure. A quick reminder of the shape of our business and our diversification strategy, currently our linked REIT portfolio comprises 74% Hong Kong, 15% mainland China, and 11% international, which includes Australia, Singapore, and the UK.
Speaker Change: Overall this less favorable.
Speaker Change: Monetary policy loosening and to focus on boosting domestic demand.
Speaker Change: Brexit to stimulate economic activity.
Speaker Change: So we expect it will take some time before things will improve.
Speaker Change: Meanwhile, Singapore, and Australia offer a more positive outlook.
Speaker Change: Robust economic indicators and consumption support.
Speaker Change: Despite the prevailing macro conditions, our portfolio has continued to endure.
Speaker Change: A quick reminder of the shape of our business and our diversification strategy currently.
Speaker Change: <unk> portfolio comprises 74% halls.
Speaker Change: 15% mainland, China, and 11% International which includes Australia, Singapore and the UK.
Speaker Change: As we diversify and grow pooling three zero, we are focused on optimizing our portfolio by exploring opportunities in the APAC region.
George Pruitt: As we diversify and grow ThruLink 3.0, we are focused on optimizing our portfolio by exploring opportunities in the APEC regions, including Australia, Japan, and Singapore. And at the same time, we are also committed to maintain a high bar for right acquisitions and organic M&A. In line with our strategy to grow our real estate investment management, we've officially launched Linked Real Estate Partners, a private fund management business line in Krebrick. And Ronald will provide further details on this later. Let me now pass the time to Greg to share more on the operational update. Thanks, Georgian. Good afternoon, everyone, and I'll start this afternoon with the review of our overall portfolio occupancy.
Speaker Change: <unk>, Australia, Japan and Singapore.
Speaker Change: And at the same time, we are also committed to maintain a high bar for <unk> and <unk> organic M&A.
Speaker Change: In line with our strategy to grow our real estate investment managers.
Speaker Change: <unk> officially launched linked real estate partners, a private fund management business line in preparation for <unk>.
Speaker Change: Donald will provide further details on this later.
Speaker Change: Let me now pass the time to grab to share more on the operational update.
Donald: Thanks, George and good afternoon, everyone and I will stop this afternoon with a review of our overall portfolio occupancy.
Donald: Our portfolio has demonstrated solid performance with occupancy levels remained high and our international retail assets approaching nearly full occupancy.
George Pruitt: Our portfolio has demonstrated solid performance with occupancy levels remaining high and our international retail assets approaching nearly full occupancy. In Hong Kong, the resilience of our non-discretionary retail portfolio is reflected with high occupancy and showcasing stability and strength in the underlying market. In Mainland China, we're pleased to report healthy occupancy rates across various asset types, underscoring the effectiveness of our Focus Leasing Initiative. In the international markets, our retail assets in Australia and Singapore achieve nearly full occupancy with robust ongoing leasing demands, while ongoing challenges are noted in the Australian office market. Now let's look at Hong Kong in some more detail in our Retail Portfolio, where the occupancy rate has remained robust at 97.1% as of December, highlighting the resilience and stability of our essential needs focused trade mix, even amidst challenging market conditions.
Donald: In Hong Kong, the resilience of our non discretionary retail portfolio is reflected with high occupancy and showcasing stability and strength in the underlying markets.
Donald: In mainland China, we're pleased to report healthy occupancy rates across various asset types underscoring the effectiveness about thickness focused leasing initiatives.
Donald: In the international markets are retail assets in Australia, and CFO achieved nearly full occupancy with robust ongoing leasing demand while ongoing challenges of notice and the Australia office markets.
Donald: Now, let's look at Hong Kong, and some more detail and our retail portfolio, where the occupancy rate has remained robust at 97, 1% as of December highlighting the resilience and stability of our essential nature, but let's try it mix, even amidst challenging market conditions.
Donald: The rental reversion for the period experienced negative low single digits for the first nine months of the period, which also impact the unit rent per square foot, bringing it to $64 10.
Greg: Rental reversions for the period experienced negative low single digits for the first nine months of the period which also impacted the unit rent per square foot bringing it to $64.10. Despite tenant sales being affected by changing consumption patterns among lenders and residents, which recorded a decline of 3.3% year-on-year for the first nine months, this was a narrower drop compared to the broader Hong Kong market at negative 7.6%. Occupancy costs have slightly come down compared to the first half of the year, indicating potential stabilisation at value conditions. And when we break it down by trade mix, both food and beverage in general retail segments outperformed the Hong Kong market, while supermarket and foodstuff saw some weaker performance for the period.
Donald: Despite tenants out being affected by changing consumption patterns among leave it doesn't residents, which recorded a decline of three 3% year on year for the first nine months.
Donald: This was a narrower drop compared to the broader Hong Kong market at negative seven 6%.
Donald: Occupancy cost has slightly come down compared to the first half of the year, indicating potential stabilization at setting conditions.
Donald: And when we break it down by trade mix, but food and beverage in general retail segments outperformed the Hong Kong market, while supermarket and foodstuffs saw some weaker performance for the periods.
Donald: In terms of the Hong Kong <unk> and related businesses, we observed moderate growth in parking revenues for the first nine months of the year, while parking ticket sales experienced a decline this was balanced out by increases to patent tariffs.
Greg: In terms of the Hong Kong car park and related businesses, we observed moderate growth in parking revenues for the first nine months of the year. While parking ticket sales experienced a decline, this was balanced out by increases to parking tariffs. We aim to stay responsive to market trends, creating plans to enhance performance and rolling out our new car park management system and ongoing enhancements to that program. Now let's shift to Mainland China, where as previously mentioned, occupancy was healthy across our various asset types. Our retail team on the ground in China has been able to manage tenant remixing very effectively in order to secure more productive and innovative operators.
Donald: We ended sorry responsive to market trends credit plans to enhance performance and rolling out a new car Park management system and ongoing enhancements to that program.
Donald: Now, let's shift to mainland China, whereas previously mentioned occupancy was healthy across our various asset types.
Donald: Our retail team on the ground in China has been able to manage tenant remixing very effectively in order to secure more productive and innovative operators.
Donald: We saw softer demand in specific trials, such as cosmetics and jewelry, while sporting goods in particular and re titles featuring intellectual property designs and doing really well.
Greg: We saw softer demand in specific trades such as cosmetics and jewellery, while sporting goods in particular and retailers featuring intellectual property designs are doing really well. As for office, our occupancy exceeded the district average despite new supply. We will continue to upgrade our facilities to enhance our customer satisfaction and also attract new tenants by carrying out fit-out works on vacant units to improve options. The logistics occupancy in our portfolio remain healthy at over 96% and demand for our facilities are predominantly driven by e-commerce and third-party logistics operators. and turning our attention to our international business which consists of retail and offices located predominantly in Australia and Singapore.
Donald: As for office occupancy exceeded the district average despite new supply.
Donald: We will continue to operate our facilities to enhance our customer satisfaction and also attract new tenants, while carrying out fit outlooks on vacant units to improve occupancy.
Donald: The logistics occupancy in our portfolio remains healthy at over 96% and demand for our facilities are predominantly driven by E Commerce and third party logistics operators.
Donald: And turning our attention to our international business, which consists of rates island offices, located predominantly in Australia and Singapore.
Donald: And our strategy to recycle assets located in the Sydney CBD positive leasing momentum continues from tenant demand.
Greg: and our Australian retail assets located in the Sydney CBD, positive leasing momentum continues from tenant demand and now sees occupancy of 99.5%. This was supported by our active, ongoing leasing efforts, which has not only introduced the curation of new brands, but also has allowed for continued upgrading of retail offerings. Out of the trade categories in particular, food and beverage and apparel perform well across the three properties. Now moving on to Singapore, where our models of Jurong Points and Thomson Plaza perform very strongly, achieving occupancies now at 100% with ongoing positive leasing reversions. The ongoing enrichment of our tenant variety has been boosted through strong leaking interest from overseas retailers, including those from mainland China, and in particular food and beverage brands.
Donald: And now <unk> occupancy of 99, 5%.
Donald: This was supported by our active ongoing leasing efforts, which not only introduced the curation of new brands with wholesale it allowed for continued upgrading of Brookdale offerings.
Donald: Out of the trade category in particular, food and beverage and apparel performed well across the three properties.
Speaker Change: Now moving on to CFO, where a malls if general points and Thomson Plaza performed very strongly achieving occupancy is now at 100% with ongoing positive leasing revisions.
Speaker Change: The ongoing enrichment about tenant variety as they boosted through strong leasing interest from overseas retailers, including those from mainland China and in particular food and beverage brands.
Speaker Change: F&B in beauty and wellness categories were the main drivers of 10 sales growth over the period.
Greg: F&B and beauty and wellness categories were the main drivers of tenant sales growth over the period. and funding from Leon Office, we note the further bifurcation in the Sydney office market with the fight to quality trend continuing. We've made some good progress, however, through the backfilling of vacant tenancies, in particular of 347 Kent Street in Sydney, and our retention rate on renewals remains strong. Under current market conditions, it's essential for us to continue to enhance the appeal of our office spaces through pacemaking and the provision of amenities. And now I'll pass over to KS. Thank you.
Speaker Change: And finally from me on office, we note that the.
Speaker Change: Bifurcation in the Sydney office market with the flight to quality trend continuing.
Speaker Change: We've made some good progress however through the back filling a vacant tenancies in particular at <unk> in Sydney and our retention rate on renewals remained strong.
Speaker Change: Under current market conditions, it's essential for us to continue to enhance the appeal of our office spaces through Pacemaking and the provision of annuities.
Speaker Change: And now I'll pass over to <unk>. Thank you.
Speaker Change: Thank you, Greg and good afternoon to everyone.
KS: Thank you, Greg. Good afternoon to everyone. Moving on to capital management, our robust financial position is well supported by a healthy balance sheet as shown by the key metrics here. As of 30th September 2024, net gearing remained low at 20.6%, while the average borrowing cost remained competitive at 3.69%. Our EBITDA interest calculation stood at 4.8 times. Fixed debt ratio in the upper range of 50%-70% is in anticipation of more gradual and shallow recovery. Supported by our A-Ratings from all three credit agencies, we have the stability and credibility to attract investors, as well as secure favorable terms for future funding needs.
Speaker Change: Moving on to capital management.
Speaker Change: Our robust financial position is well supported by a healthy balance sheet as shown by the key metrics here.
Speaker Change: As of 30 of September two zero to four.
Speaker Change: Gearing remains low at 26%.
Speaker Change: While the average borrowing cost remain competitive at three 6%.
Speaker Change: So EBITDA interest coverage stood at four eight times.
Speaker Change: Debt ratio in the upper range of 50% to 70%.
Speaker Change: Anticipation of more gradual and Chevrolet cuts.
Speaker Change: The part about a ratings from all three credit agencies, we have the stability and credibility to attract investors.
Speaker Change: So it's secure favorable terms for future funding needs.
Speaker Change: Between 90, Zemba, two zero to $4 seven generate through year two five.
KS: Between 9th December 2024 and 7th January 2025, we deployed over HK$500 million to buy back approximately 17 million units. Overall, our robust financial position will enable us to effectively navigate the uncertainties in valuation. The disciplined approach to debt management with diversified sources of capital across debt instruments has helped us to achieve our goals. with a competitive average boarding cost, so it's robust credit rating. Our financial stability is reinforced through FX Management, which includes extensive hedging of non-HKD distributable income. and the currency risk of overseas assets. alongside capitalizing on lower R&B interest rates. after repaying some debt.
Speaker Change: We deployed over 500 million local dollars to buyback approximately 17 million units.
Speaker Change: Overall, our robust financial position will enable us to effectively navigate the uncertainties of evaluations.
Speaker Change: Okay.
Speaker Change: The disciplined approach to debt management with diversified sources of capital across debt instruments.
Speaker Change: Search.
Speaker Change: Paper Coca beverage board costs.
Speaker Change: <unk> robust credit ratios.
Speaker Change: Our financial stability is reinforced through FX management.
Speaker Change: Which includes extensive hedging of non Coca Cola distributor Chipotle will come.
Speaker Change: And the currency risk of overseas assets.
Speaker Change: Alongside capitalizing on lower RMB interest rates.
Speaker Change: After repaying some debt.
Speaker Change: The debt balance as of end September.
Speaker Change: September two zero to four plus.
Ronald: The Debt Balance as of 10 September 2024 was reduced to HK$55.6 billion. and we have been proactively managing our maturity profile. I now pass the time to Ronald to cover other updates. Thank you. Thank you, Paz. Good afternoon, everyone. We have made significant progress in developing our real estate investment management business through the launch of our new business line, Link Real Estate Partners. which focuses on serving third-party, private and institutional tax. It will leverage on links, robust operational skills, deep knowledge and scale in Asia and provide track record, and proven track record to identify and execute compelling real estate investment strategies and match them with capital across the risk spectrum.
Speaker Change: Was reduced to $55 6 billion bulk of it.
Speaker Change: So we have been proactively managing our maturity profile.
I'll now pass the time to rollout the cover other updates. Thank you. Thank you for asking good afternoon, everyone.
Speaker Change:
Speaker Change: We have made significant progress in developing our real estate investment management business through the launch of a new business line link real estate partners.
Speaker Change: Which focuses on serving third party private institutional capital.
Speaker Change: We will leverage on Linkedin robust operate channel skills deep knowledge and scale in Asia.
Speaker Change: And provide track record and proven track record to identify and execute compelling growth state investment strategies and match them with capital across the risk spectrum.
Speaker Change: It will also help accelerate our diversification and.
Ronald: It will also help accelerate our diversification and create new income from co-investing and managing assets for new partners. We have spent much of 2024 assembling a fund management team led by John Saunders, our Group Chief Investment Officer, along with several new hires, including Head of Australian Investments, Head of Research, Portfolio Director and a Product Strategist. While we're unable to disclose too many details at this juncture, we expect 2025 to be a busy for both fundraising and investment. Before we move on to Q&A session, I would like to discuss our new approach to providing operational updates in between our interim and final results.
Speaker Change: Create new income from co investing and matching assets put new bonds.
Speaker Change: We have spent much of 2020 for assembling a fund management team led by John Saunders Chief Investment Officer.
Speaker Change: Along with several new hires including head of Australia investments.
Speaker Change: Research.
Speaker Change: Those are extra added product strategies.
Speaker Change: While we are unable to disclose too many details at this juncture, we expect 2025 to be a busy will both.
Speaker Change: Fundraising and investments.
Speaker Change: Before we move on to Q&A session I would like to discuss a new approach to providing operational updates in between our interim and final results.
Speaker Change: We always strive to continuously improve our engagement with investors and as part of that to provide robust transparency information on a timely manner.
Ronald: We always strive to continually improve our engagement with investors and as part of that, to provide robust, transparent information on a timely manner. Starting with the operational update after our next final result. We will be able to provide our Q1 and Q3 operational updates approximately one and a half months earlier than we currently do, as we will transition to providing quarterly operational updates announcements instead of pre-blackout briefings. We plan to provide Q1 updates in February and Q3 in August. This change, made after feedback from the investment community, will allow us more time to engage with investors and analysts prior to any blackout period.
Speaker Change: Starting with the operational update after our next final results.
Speaker Change: We will be able to provide our Q1 and Q3 operational updates approximately one and half months earlier than we currently do as we will transition to providing quarterly operational updates announcements and instead of pre blackout briefings.
Speaker Change: We plan to provide Q1 update in February in Q3 in August.
Speaker Change: This change made after the feedback from the investment community will allow us more time to engage with investors and analysts prior to any blackout period.
Speaker Change: At the timing of our quarterly updates and the results will be distributed more evenly throughout the year.
Ronald: At the timing of our quarterly update, the results will be distributed more evenly throughout the year. To facilitate this, we will upload the quarterly operation updates to the Stock Exchange and our corporate website, ensuring timely access to essential information. This will enable stakeholders to access our performance more effectively and make well-informed investment decisions. I'll now pass over to Christy for the Q&A session. Thank you, Arnold. So let's move on to the follow-up Q&A. Please submit your questions using the Q&A function. We got a few questions already, let's see if we can start now. So quite some questions on the retail sales in Hong Kong.
Speaker Change: To facilitate this we will upload the quarterly operational updates to the stock exchange.
Speaker Change: Corporate website, ensuring timely access to essential information.
Speaker Change: This will enable stakeholders to access our performance more effectively and make well informed investment decisions.
Christy: Now pass over to Christy for Q&A session. Thank you.
And I'll close out with our outbound Q&A.
Christy: Going to your question is using Makena anytime soon.
Christy: We got a few questions on high level.
Christy: Now.
Christy: Some questions on the retail path in Hong Kong now unless that went down.
Christy: Damian.
Christie: So let's start with... Cindy from Citi. So how's the retail sales trend in the first few of Canada year 2025? Any green shots for early signs of recovery? I'll take that question. Thank you, Cindy. So just looking at the period after December, we've seen an improvement and we've just spoken to a negative 3.3 total sales position. And just to remind you that at the end of the first quarter of the financial year, that was negative 5.9. And then at the first half, it was negative 4.3. So a gradual improvement over the period. And we've seen that across the three major categories that we report to.
Christy: So how's the maintenance sales trend in <unk>, Canada, <unk>, and clean shop floor and signs of recovery.
Christy: That's question <unk>.
Christy: Looking at the I guess the period up to December we've seen.
Christy: And improvements.
Christy: We've just spoken to a negative $3 three.
Christy: Total SaaS position and just to remind you that at the end of the first quarter of the financing that was negative $5 nine and then at the first half was a negative $4 <unk>. So a gradual improvement over the period.
Christy: And we've seen that across the three major categories that we report to.
Christy: Sorry.
Christy: The standard that food and beverage was flat year on year.
Cindy: So as it's December, food and beverage was flat year on year. And that was an improvement from negative 1.5% for the first quarter. Supermarkets, we're seeing some gradual improvement. And I think that's largely off a lower base. So supermarkets were negative 5.9% in the first quarter, negative 5.2% at the first half and negative 3.9% at Q3. And general retailers also improved significantly. So as we move into the last quarter of this financial year, we are seeing that trend continuing. But I will say that there is a lag from this improvement in sales and flowing through into rental reversions.
Christy: And that was an improvement from negative one 5% for the first quarter.
Christy: Supermarkets were seeing some gradual improvement and I think thats largely off a lower base.
Christy: Substitute markets were negative five 9% in the first quarter negative five 2% at the first half and negative three 9% in Q3 in general retailers also improved significantly so.
Christy: As we move into.
Christy: The last quarter of this financial year, we see that trend continuing.
Christy: But I will say that there is a lag from this improvement in sales and flowing through into rental revisions.
Christy: The other associated metrics to the sales is applicable, which we have seen ongoing improvements.
Ronald: The other associated metric to the sales is our football, which we've seen ongoing improvement over the last few months. And in particular, we've seen more of a dramatic improvement on weekend football. And that I think is associated with some of the stabilisation of the northbound linkage. So some green shoots, but still somewhere to go. Thank you. So, another question is, will you consider any disposal to recycle capital given high for longer rate outlook? I'll take that. So, obviously, we always look at optimising our portfolio and we're always constantly reviewing acquisitions as well as disposals. And so, yes, if there is the right deal in the market, if there's the right price, we will consider recycling.
Christy: The last few months.
Christy: Particularly we've seen.
Christy: More of a dramatic improvement on weekend portfolio and that I think is associated with some of the stabilization of the northbound linkage.
Christy: So it sounds green shoots exclude somebody got it.
Christy: So another question I think that also continued to build a company that any disposal should we think about capital given high for longer rate outlook.
Christy: I'll take that.
Christy: Obviously, we always look at optimizing.
Christy: Folio and we're always constantly reviewing.
Christy: Acquisitions as well as disposals.
Christy: So yes.
Christy: If there is a right to you and the market. We are at the right price, we will consider recycling I think.
Christy: Right now we're still looking for.
Sam: I think right now we're still looking for those opportunities and we're constantly assessing those recycle Thanks, Ronald. So, next question is from Sam of Dresdes. Could you share a bit more color on China side, sales and reversions? Yeah, so, um... I'm afraid we can't really say much about that at this moment. As you understand, we are under regulatory restrictions to say anything about the funding. And then the next question is from Goldman, Simon. To the extent you can, can you provide with some targets or milestones you are setting out for your real estate real estate fund?
Christy: For those opportunities and we're constantly.
Christy: Youre assessing.
Christy: Those recycle opportunities. Thanks, Marc next question Sam.
Sam: Sam of Kathy.
Speaker Change: Could you shed a bit more color on China site, south and attention.
Sam: Yes.
Sam: Yeah.
Speaker Change: China from a retail state managed side from a retail perspective.
Speaker Change: Stabilizing our biggest challenges alignment in Beijing in particular, our truck launch an asset we have been doing some ongoing asset enhancements and Senate races.
Speaker Change: When we reported the half first half result, we spoke to the fact that it was negative revision for the 99 business that if you excluded some quach on it would be slightly positive that is still the case.
Speaker Change: Pleasingly, there is quite a lot of tenant activity in the mainland market.
Speaker Change: So the markets of Shanghai, Guangzhou, and Shenzhen for us continued to be pretty stable.
Speaker Change: Beijing is where a lot of focus is.
Speaker Change: And the slight dip in occupancy from the first half to this reporting period, we think will.
Speaker Change: Show signs of improvement as we get to the end of this financial year. So.
Speaker Change: Probably the most placing things with regards to mainland retail east very good underlying tenant activity and tenant demand.
Speaker Change: But that is offset somewhat by significant increases of supply new supply in markets like Beijing and Guangzhou in particular.
Speaker Change: And then another question Tommy China think nuisance law regarding long health, Canada data, our secondhand half look like now and then when we will be activating <unk> globally.
Speaker Change: Okay.
Speaker Change: The asset enhancement, so tentatively progressing well building off the success that we had for the first phase.
Speaker Change: On August one site a few weeks ago with privacy is good leasing momentum is very strong.
So as we move through into the new financial year.
Speaker Change: We're fairly confident that we will have the lion's share of that projects completed and width with very satisfied with the ongoing leasing demand for that property. So very well positioned assets that are very strong catchments.
Speaker Change: And again, the major issue with prohibited with Ice's two is increased competition.
Speaker Change: Getting well ahead of that new competition is important.
Speaker Change: We can put this project okay.
Speaker Change: Our next session.
Speaker Change: Principal asset management.
And Kenny.
Speaker Change: That's an idea on the apparently fashion trend and should we be spending some quality kingdom on traction in signing up so.
Speaker Change: So just the general trends on leasing reversion for Hong Kong.
Speaker Change: As mentioned during the prepared remarks.
Speaker Change: <unk> seen a deterioration from the first half to the third quarter.
Speaker Change: Very very slightly negative leasing reversion for Hong Kong.
Speaker Change: And as we've discussed many times the competition of activity in any given year, usually type is also in the back half.
Speaker Change: Financial year.
Speaker Change: So we reported plus 7% at the first half as I said very very low single digit with version as of December.
Speaker Change: And that trend will continue through until the end of this financial year.
Speaker Change: And I think the concept of negative diversity is something that.
Speaker Change: We should be prepared for that.
Speaker Change: This new financial year that would be embarking on shortly.
Speaker Change: It.
Speaker Change: Very moderate.
Speaker Change: Negative revision. Thank you and the next question is it sounds like some fairly chunky past them ask any update on capital raising for the SaaS business.
Speaker Change: So I'm afraid we can't really say much about that at this moment that we under regulatory restrictions to say anything about the fund raising.
Speaker Change: And then the next question think about the government financing.
Speaker Change: And can I extend Mccann can do go back with some tactical milestones setting out for you on these real estate understanding I guess I'll say I'll say at the outset to safely Okay and then.
Ronald: I'll say that the answer is the same. Okay. And then... We'll be from Hubec, Mat-Land. What is the rental reversion guidance for next year? Yeah, so I think you touched on that in the previous question. So we're anticipating slightly negative reversion for Hong Kong, fairly flat for Mainland and positive for Singapore and Australia. The main focus, I will point to that, and we've said on numerous occasions now, is preserving occupancy across our portfolios. And I think the numbers that we've spoken to again today illustrate that. What we are experiencing is that the reversion on new deals or replacement tenants is significantly worse than the reversion for us in retaining tenants.
Speaker Change: Thanks.
Speaker Change: One.
Speaker Change: We'll see you back.
Speaker Change: Back Mike Lang.
Speaker Change: What is the rental results and guidance for next year, Yeah. So I think touched on that in the previous question. So we're anticipating slightly.
Speaker Change: Slightly negative EBIT for Hong Kong.
Speaker Change: Fairly flat for mainland and positive Singapore and Australia.
Speaker Change: The main focus I would point to that and we've said on numerous occasions now is preserving occupancy across our portfolio and I think the numbers that we've spoken to again today illustrate that.
Speaker Change: What we are experiencing is that sort of recession.
Speaker Change: On new deals with replacement tenants is significantly worse than.
Speaker Change: The reversion for us in retaining tenants.
Speaker Change: Pleasingly.
Speaker Change: Reversion of a retention rate I should say.
Ronald: Pleasingly, our retention rate, I should say, remains at our long-term averages in the high 70% range as of December. So a big part of our strategy is retaining our existing tenants. We do an analysis that we call right tenant, right location. And a large proportion of our portfolio sees us having, pleasingly, the right tenants in the right locations. So we'll be working with our tenants to retain them. Another strategy that we're working through is endeavouring for our tenants to invest in upgrading their facilities. And if that means that we forego some reversion in return for some capital investment by those retailers to improve their environments, that's something we'll be treating on a case-by-case situation as well.
Speaker Change: Lines at our long term averages in the high 70% range as of December.
Speaker Change: So a big part of that strategy is retaining our existing tenants, we do an analysis that equal right tenant right location.
Speaker Change: And a large proportion of our portfolio saves us having <unk> in the right locations.
Speaker Change: So we'll be working without temps to retain them. Another strategy that we're working seriously in devry for our tenants to invest in upgrading their facilities.
Speaker Change: And if that means that we forgo.
Speaker Change: Some reversion in return on invested capital investments by those retailers to encourage their environments. That's something we'll be trading on a case by case situation as well.
Speaker Change: Along with an asset towards our Super question, but yes. There is some pressure on revision, but we anticipate that that would be offset by preserving occupancy here in Hong Kong.
Ronald: So along with an answer to a very simple question, that, yeah, there is some pressure on reversion, but we anticipate that that will be offset by preserving occupancy here in Hong Kong. Next question will be from Debbie Morgan Powell. And any guidance on how average financing costs will be in the second half of the financial year, year 2.5? And will it further go down from the average 2.69%? All stable. I think the third option that you didn't mention is will it go up marginally? And I think, Carl, the answer is yes. We have fixed 66.4, so there's about one-third that's not fixed, and if you look at our maturity profile.
Speaker Change: Our next question from Nathan JP, Morgan Count and any guidance on how FX financing costs will be in second half of the financial side.
Speaker Change: And with that though down from the average to 690%.
Speaker Change: All our stakeholders.
Speaker Change: So I think that option that you Didnt mentioned is really to go up much Adobe.
Speaker Change: And I think honestly, yes.
Speaker Change: Fixed <unk>.
Speaker Change: <unk> 66 for so that's about one third that is not fixed and if you look at our maturity profile.
Speaker Change: This coming financial year, it's about 12 delivered both refinancing.
Carl: This coming financial year, there's about $12 billion of refinancing. Clearly today, high ball is already at 3.8, 3.9, without ABC at 3.7, it's unlikely that you can beat that because a lot of these are hedge funds when rates are much lower and stocks are much cheaper. So we do expect borrowing costs to inch up marginally this coming year. Thank you. And next question is also from Karl. Any comments on when the stock may become eligible for stock comments? Um I think when you look at the announcement on the various topics around StockConnect, there is a lot of discussion around the StockConnect issues.
Speaker Change: Clearly today, Hi boys radiate 3839.
Speaker Change: With our ABC at $3 seven it's unlikely that.
Speaker Change: <unk> got a big that does a lot of batesville textbook when Richard Shaw in Salzburg cheaper. So we do expect volume closely Gamestop marginality.
Speaker Change: This coming year.
Speaker Change: And next question is a tunnel that will call any color on when the stock needs to come out.
Speaker Change: <unk> stock comment.
Speaker Change: Yeah.
Speaker Change: I think when you look at the announcement.
Speaker Change: David I'll take that Scott.
David Scott: There is a lot of discussion about the stockholder issue.
Speaker Change: Same story this year the third vehicle gender.
Carl: Since February this year, there's already a conclusion to implement it as soon as possible, and our sense is hopefully somewhere next month we get more announcements on how fast CSRC is willing to make clearer announcements. But my sense is so far the regulators have been very supportive and progressively have been trying to accelerate the implementation. During the investment conference in Hong Kong this week, the financial secretary also said the same thing, that the thing is coming, it's a matter of when, not a if, and so obviously we're still waiting for the time, but it should be more than a minute.
David Scott: As soon as possible.
Speaker Change: I will send it.
Speaker Change: Hopefully somewhere.
Speaker Change: Next month, we get more announcements on that.
Speaker Change: Help us get US Steve is building to make create a revenue bump my senses.
Speaker Change: So far the regulators have been very.
Speaker Change: Supportive and progressive VSP trends with the <unk> implementation.
Speaker Change: The Investor Conference.
Speaker Change: The state and local this week.
Speaker Change: But initial secretary also stayed the same.
Speaker Change: This is coming.
Speaker Change: Little wins.
Speaker Change: And so.
Speaker Change: <unk> was the wisdom of the tons of them.
Speaker Change: This would be lower.
Speaker Change: And just to add to that.
Speaker Change: B do quite a bit of.
Phil Collins: And just to add to that, obviously we've been doing quite a bit of IR on China, and we know there's demand, and we are ready to capture those when it comes. Thank you. Next question is from Phil Collins. Will we consider the increased borrowing from mainland China below average financing cost? And what's the financing cost outlook for FY25 and FY26? So I think I'll take the first question, the second I just answer and it will be the same. There will be a marginally higher financing cost. On taking advantage of the RMB... lower financing costs. In reality, what we are doing is actually...
Speaker Change: China.
Speaker Change: And we know that a few months now we are ready to capture those milestones.
Speaker Change: <unk> next question is from cell count.
Speaker Change: When we consider the increased borrowings on mainland China.
Speaker Change: Average financing cost and what step financing plus outlook flooding.
Speaker Change: Yeah.
Speaker Change: Supply and logistics.
Speaker Change: I'll take the first question and the second.
Speaker Change: Just answer it will be the same but there'll be a marginally higher financing costs.
Speaker Change: Taking advantage of the RMB.
Speaker Change: Lower financing costs.
Speaker Change: In reality, what we are doing is actually.
Speaker Change: Produce RMB borrowing hedge against the RMB assets and there's no intention over hedge because it's a part of our specific activities.
Phil Collins: to use RMB borrowing to hedge against the RMB assets and there's no intention to overhedge as that's not part of our business to take hedging risks. So we will continue to hedge and each of these hedges does have their maturity profile and as it expires we will continue to hedge and so far hedging RMB we have paid a premium to help reduce our financing costs and today we are already in the almost fully hedged against our RMB so just waiting for hedges to expire and then we'll renew. So there are actually a few questions regarding the M&A or acquisition, so in general, you're asking how the progress is and then how the M&A environment in Asia, whether it's for the fund or for Ling?
Speaker Change: So we will continue to hedge.
Speaker Change: Each of these stages at their maturity profile.
Speaker Change: Expire we will continue to pitch in so far.
Speaker Change: Hedging RMB.
Speaker Change: Premium that's helped reduce operating and political and today, we are already almost fully hedged against RMB. So just waiting book hedges expire and then we will begin.
Speaker Change: Okay.
Speaker Change: That's about the same questions with adding the M&A or acquisition.
Speaker Change: In January asking how will go ahead, and then how that anymore.
Speaker Change: Asia.
Speaker Change: On a final for me.
Speaker Change: Just answer that in general terms I think in certain markets in particular, Australia, we're seeing.
Phil Collins: I think I'll just answer that in general terms. I think in certain markets, in particular Australia, we're seeing price correction and there's been a bit more activity there where the buyer and sellers, you know, it's been our spread has narrowed and we've also seen funding costs starting to drop in Australia. So that market remains interesting for us and we still spend quite a bit of time looking at that market and so, you know, we will continue to look at that. The other markets, Singapore is still, you know, the pricing is still pretty tight, so And I guess, you know, our focus is probably at the moment in Australia, let me name.
Speaker Change: Rice correction I.
Speaker Change: And that's been a bit more activity that went on the buy and sell us.
Speaker Change: <unk> been off spreads narrowed and we've also seen our funding costs. Despite a drop in Australia. So that market remains interesting for us and we still spend quite a bit of time looking at that market.
Speaker Change: And so.
Speaker Change: We will continue to look at that the other markets.
Speaker Change: Singapore is too.
Speaker Change: Pricing is still pretty tight.
Speaker Change: Right.
Speaker Change: So as Japan.
And I guess I'll focus probably at the moment in Australia laminate.
Speaker Change: Thank you.
Speaker Change: Next question.
Grant: Thank you. And then next question is about the Mainland China operations. The question is about CentralWall, so how the cell is doing? Has it bypassed, exceeded the level of pre-COVID already? The sales in general and football in general at Central Walk is progressing very, very well and it's our best performer across Mainland, it's probably our best performer across all of our shopping centres. We are also in the process of some fairly significant tenant optimization work there. So we're seeing ongoing better quality demand from retailers for Central Walk. So a lot of the strategies that we've executed on over the last few years are really starting to pay some significant dividends.
Speaker Change: Mainland China operations.
Speaker Change: The question is about our controller.
Speaker Change: How small cell.
Speaker Change: It's doing is it.
Speaker Change: I think Russell pick health authority.
Speaker Change: The sales in general and portfolio in general with Central work is progressing very very well.
Speaker Change: And southwest performed across mainland.
Speaker Change: It's probably our best performer across the whole national incentives.
Speaker Change: <unk>.
Speaker Change: We are also in the process of some fairly significant tenant optimization work that February was saying.
Speaker Change: Ongoing better quality demand from retailers the central work. So a lot of the strategies that we've executed on over the last few years are really starting to face some significant dividends.
Speaker Change: Good continued sales growth with continued continues NPI growth.
Grant: So good continued sales growth, good continued NPI growth, and now we're focused on really managing our costs, not just on a project like Central Walk, but doing what we can to preserve or at least enhance, at least preserve our operating margins on a portfolio. Thank you, Grant. So, a bit more questions on the operation. So, why the occupancy drop here for Hong Kong and China? It's a phasing thing. So, as we gear up to the end of the year, we anticipate that those occupancy numbers will get back to what they were around the half year.
Speaker Change: And now we're focused on.
Managing our costs not just on a project black central walk with doing what we can to preserve or at least can have enhanced at least preserve our operating margins on a portfolio of assets.
Speaker Change: Yeah.
Speaker Change: I think more question some downspacing.
Speaker Change: Why the operations outweighed that occupancy is up to our sales, while Hong Kong and China.
Speaker Change: And so.
Speaker Change: As we gear up to the end of the year.
Speaker Change: We anticipate that.
Speaker Change: The occupancy numbers will get back to what they were around the half year.
Speaker Change: So, it's a phasing and timing things more than anything else.
Greg: So, it's a phasing and timing thing more than anything else. And another question from Sam again. So, what it takes for Hong Kong reversion to return to positive, in your view? We cut dollars, mainline visitors. We're not really impacted by Maynard Visitors. We're obviously servicing on-commerce for their daily needs. I think the main issue that we need to see is the stabilisation and growth in margin for our retailers. So their operating margins have been under pressure with increased costs, and then that puts pressure on our negotiations with them. So I think the main thing that we need is continued growth in sales, which we're starting to see the growth as well.
Speaker Change: And then final question.
Speaker Change: Sam against them.
Speaker Change: What it takes for Hong Kong, especially should return to positive.
Speaker Change: The catalog.
Speaker Change: <unk> events.
Speaker Change: We're not really impacted by that as it is with obviously servicing Hong Kong has been a daily needs.
Speaker Change: I think the 90 issue that we need to see is the stabilization and growth in margin throughout <unk>.
<unk> operating margins have been under pressure.
Speaker Change: <unk> costs.
Speaker Change: And that puts pressure on negotiations with them. So I think the 19 that we need this continued growth in sales, which was studying the state of <unk>.
Speaker Change: Our purpose is to provide football for every title so that can be capitalized and execute that in styles and <unk> see some improvement in the bottom line for the retailers not just the top line and that then will allow us to see some some growth in our revenues I will say, though that app.
Greg: Our purpose is to provide football for our retailers so they can capitalise and execute that in sales, and then hopefully start to see some improvement in the bottom line for the retailers, not just the top line, and that then will allow us to see some growth in our revenues. I will say though that our portfolio occupancy cost is stable at 13.1%. Our sales densities are very, very strong. So we're facing into what is a very challenging market in a very strong position, and our continued focus on the non-discretionary trades, particularly food and beverage, places us in a reasonably strong position in relative terms. And then another question is regarding whether our company will consider to help bringing in some brands from mainland China into Hong Kong, and so as to help the consumption in Hong Kong.
Speaker Change: Portfolio occupancy cost is stable at 38, 1%.
Our SaaS entities are very very strong.
Speaker Change: Sorry.
Speaker Change: Which we're facing into what is a very challenging market and very very strong position.
Speaker Change: And our continued focus on the non discretionary tribes chico's food and beverage.
Speaker Change: Places us in a reasonably strong position in relative terms.
Speaker Change: And then another question Thats the number went.
Speaker Change: Our company will continue to Tfl, bringing in some.
Speaker Change: Some brands from mainland, China, and Hong Kong and has that helped the consumption in Hong Kong.
Speaker Change: Absolutely and we are seeing that.
Greg: Sure, absolutely, and we are seeing that. So pleasingly, the new leasing transactions that we do, approximately one third of those are to retailers new to the Link portfolio. So we're bringing in 100, 150 new retailers to our portfolio every year. We're seeing an increase in our mainland businesses, predominantly food and beverage. The move into Hong Kong by Luckin Coffee, for example, has been well documented. We've secured a number of locations with them. The first of those is opened at Cheung Kwan O and is performing really, really well. So yeah, we're hopeful that our portfolio is incredibly well suited to support the introduction of new mainland brands.
Speaker Change: So.
Speaker Change: Pleasingly.
Speaker Change: The new leasing transactions that we do approximately one third of those two or three titles in use and the lease portfolio.
Speaker Change: So we're bringing in.
Speaker Change: 100, 150, new retailers to our portfolio every year, we're seeing an increasing number of lilac businesses predominantly.
Speaker Change: Predominantly food and beverage.
Speaker Change: The.
Speaker Change: Moving to Hong Kong Biomarker coffee for example has been well documented.
Speaker Change: We've secured a number of.
Speaker Change: Locations with them the first Andaz resorts under chunk, Colorado and is performing really really well.
Speaker Change: So yes, we're hustling.
Speaker Change: Our portfolio is incredibly well suited to support the introduction of <unk> 900 brands.
Speaker Change: I will say, we've seen a significant increase demand from my memory titles to our Singapore portfolio as well so.
Greg: The other thing I will say is we've seen a significant increase of demand from mainland retailers to our Singapore portfolio as well. So I think a lot of the very good innovation and market positioning from mainland retailers is seeing them spread their wings more broadly across Asia Pacific, and we're well positioned to be able to support them to grow in our portfolios, whether it be in mainland Hong Kong, Singapore, or even Australia over time. So that's a big part of our strategy, is to harness the strength of our portfolio and our retailers as they look to expand across the region.
Speaker Change: I think a lot of the very good.
Speaker Change: Innovation and market positioning for my elaborate pilots.
Speaker Change: These statements spreading their wings multiple laid across Asia Pacific and were well positioned to be able to support them to grow in our portfolios whether it be in mainland Hong Kong, Singapore, even Australia or a sponsor that could be part of our strategy is to harness the strength of our portfolio and growth now ray titles as they look to expand across the region.
Speaker Change: And then the question is regarding the recent public housing right now what we're able to impact online.
Josh: Thank you. Another question is regarding the recent public housing rent increase. What will be the impact on rent? I think there's a negative there, but there's also a positive in the increase to the minimum wage, again more recently at 5.25%. So again, we're not servicing the discretionary spending patterns of our population, we're servicing their daily needs. So I don't think that that would be a significant impact to us. I think if we look at minimum wage going up, which would increase our costs. For those who help us to find a shopping center, especially a frontline community security center.
Speaker Change: I think there is a.
Speaker Change: Negative data, there's also positive in the increase to the minimum wage again more recently <unk>.
Speaker Change: So again, we're not servicing the discretionary spending patents.
Speaker Change: A population with servicing that dining H.
Speaker Change: So I.
Speaker Change: That would be a significant impact for us I think it will be.
Speaker Change: The minimum wage going up okay.
Speaker Change: T cell costs.
Speaker Change: For those.
Folks to help us to other shopping centers, especially a frontline appears acuity side.
Speaker Change: Website.
Speaker Change: We're typically spend at our shopping center.
Josh: As Greg said, they will typically spend at our shopping center. So that increase in income will help our tenants sell. The rental increase for those who may not know, most of the public housing rental for each unit is less than $1,000 to $300,000 a month. For those who'll park their cars, our car parks will probably be charging 2,000 or... dollars for car park fees. So, um... whether on a relative term we see the amount of the rent that they are paying, albeit to a different segment of the community. May have certain impact, but to a large extent are still affordable.
Speaker Change: So that increase in income.
Speaker Change: We'll help alternatives sales.
Speaker Change: The rental increase for those who may not know.
Speaker Change: Most of the profit goes into rental.
Speaker Change: Each unit is.
Speaker Change: It's less than 1000 of our goal is to Delever. The total dollars of London.
Speaker Change: So those will pop because of those compounds were both easy targets without similar.
Speaker Change: Charles for copper.
Speaker Change: But I think on a relative certainty.
Speaker Change: You bet.
Speaker Change: The bulk of the rents that they are paid.
Speaker Change: To assist with that segment of the.
Speaker Change: Community.
Speaker Change: Lately.
Speaker Change: So it did impact us to a large extent.
Speaker Change: Civil reportable income fundamentals on the spending I think it will be offset by these.
Josh: The impacts... on the spending, I think it will be offset by the new evolution. Thank you, Josh. So due to the time limit, we have the last two questions. One is from DBS. What is the short-term lead as percentage of area in Hong Kong as of December? And should we expect that to go further increase? That's actually fairly stable. So it's an insignificant number in terms of our overall portfolio. And I can also say that the number of tenants on holdover has reduced quite significantly from the first half to this period. So for the most part, leasing transactions in Hong Kong are on a normalised basis of a three-year cycle.
Speaker Change: Which increased.
Thank you for your attention.
Speaker Change: It's a time limit we have the last two questions. One is can be backed mortgage the shortcomings.
Speaker Change: And HR areas in Hong Kong as of December and now should we expect that the barrels that increase.
Speaker Change: FX actually fairly stable so it's insignificant.
Speaker Change: Number in terms of our overall portfolio.
Speaker Change: And.
Speaker Change: And also say that the number of tenants on holdover has reduced quite significantly from the first half to these periods. So.
Speaker Change: For the most past.
Speaker Change: Leasing transactions in Hong Kong or on a normalized basis or a three year cycle.
Speaker Change: And you see that short term, although the leases.
Greg: We don't see that short-term or holdover leases being an issue to call out. We have, in the past few times, been announcing results, both income and final results. We talk about how many new tenants that we have signed. And, well, not every centre has a few, but the ability for our colleagues to replace tenants, as some YouTubers have paid for various reasons, has allowed us to keep that occupancy strong. Obviously, sometimes we need to subsidize some new tenants, especially if we want to change the mix. But the strong occupancy, that's not easy. Thank you. So, last question is from Marion.
Speaker Change: And issued a call out.
Speaker Change: So that we have in the past few times, there's analysis results both internally by our results we spoke about on the new.
Speaker Change: Tenants that we have signed.
Speaker Change: Well not every center of appeals, but.
Speaker Change: The ability for the I'll call it two week base et cetera, and.
Speaker Change: So we need to repeat for various reasons.
Speaker Change: We put us allow us to keep that occupancy is strong.
Speaker Change: It's ultimately sometimes will be into two.
Speaker Change: Subsidized.
Speaker Change: New tenants, especially rewarding to change the mix.
Speaker Change: But the strong occupancy.
Speaker Change: The teams are now.
Speaker Change: So last question it sounds like Romanian despite the slight negative blanka retentions cannot kick that ultimate resting Neal vantage.
Greg: Despite the slight negative rental reversions, can we keep the overall rest of the meal flat-ish? I think there's a lack of feedback, and we have only roughly a third of the lease expiring each year. So if you look at the downtrend, it will take several years to hit our P&L, and certainly the last year, this year has been challenging. We expect 2025, 2026 financial year also will be challenging in the discussion with our tenants. Greg mentioned that some of that is the retail market is stabilizing, but I think the process of impact will take a little bit of time to come back into our portfolio.
Speaker Change: Well I think there is a lag because feedback.
Speaker Change: And we have only.
Speaker Change: A third of the lease expiring each year.
Speaker Change: So if you look at a downtrend it will take several years to develop.
Speaker Change: P&L and certainly in the last this year has been challenging.
Speaker Change: We expect 2025 26 financial year <unk>.
Speaker Change: So there will be challenges in the discussion with our tenants.
Speaker Change: Greg mentioned that some of that is for the state of the retail market is stabilizing.
Speaker Change: But I think the positive impact we took a little bit.
Speaker Change: Real time to come back into the room to grow our portfolio again, because one third of expiring each year, even the upside will take a little bit tough time to run in.
Greg: Again, because it's one-third expiring each year, even the upside will take a little bit of time to run in. So I think we'll see probably some challenge to our top line as a result of the activities, the leasing activities that we've done from about the current year, 2024, to about late 2025, 2026, with a lack of impact on both the downside and the future. So here comes the end of our update, so thanks for joining us today and look forward to seeing you again in our final results in May, May. Thank you. Today, we are pleased to have our Group CEO, Mr. George Hongchoi, DEFO, Mr. Pa Shongwoon, COO, Mr. Greg Kopp, and CPDO, Mr. Ron Walnutman, to be here with us to provide an update on our business.
Speaker Change: So I think we will see hopefully.
Speaker Change: Some challenge to our topline.
Speaker Change: As a result of the activities that.
Speaker Change: Leasing activities that we've done.
Speaker Change: <unk> currently has 24 to about <unk> $825 six.
Speaker Change: What's that going to be an easy path.
Speaker Change: In both the <unk> and the future upsell.
Speaker Change: So <unk> now.
Vicki: So thanks for joining us today and look forward to seeing you again in our finding ways that they may make thank you Vicki okay.
Speaker Change: And we are pleased to have our co CEO, Mr. Joshua onetime capital Mr. Prashant womb CLO, Mr. Black Hawk and till today are looking at us and one that plan to be here with us to provide an update on our destination.
Speaker Change: I'll begin with company highlights and operational update followed by financial and outlook. Lastly, we will have <unk> session now I would like to pass the floor childhood as CEO Josh Coates.
Christie: We'll begin with company highlights, then operational updates, followed by financial and outlook. Lastly, we will have our Q&A session. Now, I would like to pass the floor to our Group CEO, George, please. Thank you, Christie. We appreciate everyone joining us today for what will be the last time we're doing the pre-blackout briefing. And going forward, we'll be shifting to a quarterly update instead. And further information we share at the end of this presentation about what we have planned and the reasons that we'll be making this adjustment. Let me start with some highlights and a reminder of the uncertainty that we are dealing with as we operate and the strategy that we have been pursuing these past years.
Speaker Change: Thank you Christine and we appreciate everyone joining us today.
Speaker Change: What will be the last time with doing the local region and going forward, we will be shifting to a quarterly update instead.
Speaker Change: Further the ratio of risk share at the end of this presentation that about what we have planned and the reasons that we will be making this adjustment.
Speaker Change: Let me start with some highlights.
Speaker Change: And a reminder of the uncertainty.
Speaker Change: The data were because we operate.
Speaker Change: And the strategy that we have been pursuing these past years.
Speaker Change: Let me give an overarching summary of the big picture for link.
George Pruitt: Let me give an overarching summary of the big picture of a link. continues to operate in the highly uncertain times for higher or longer interest rates and uncertainty around how the global economy will fare in the face of various challenges. in the geographies where LINK operates. We are facing challenges in Hong Kong, where our retail tenants are facing significant pressure in terms of rising costs, sales leakage to online and cross-border travel, and this together with the continuous challenge in re-energizing the economy in mainland China is leading to significant pressure on rental reversion. at this time.
Speaker Change: We continue to operate in a highly uncertain times or.
Speaker Change: For higher for longer interest rates and uncertainty around how the global economy will play in the face of those challenges.
Speaker Change: In the geographies, where a link operates.
Speaker Change: We are facing challenges in Hong Kong.
Speaker Change: Our retail tenants are facing significant pressure in terms of rising cost sales leakage to online and cross border trebled.
Speaker Change: This together with the continuous challenge.
Speaker Change: Energizing the economy in mainland China.
Speaker Change: Leading to significant pressure on rental reversion.
Speaker Change: At this time, we're glad that we have started our diversification effort when we did.
George Pruitt: We're glad that we have started our diversification effort when we did. as the picture in Cinderfall in Australia. Looking ahead, we remain committed to our LINK 3.0 strategies, which built on our capabilities and track record achieved over almost two decades, to further strengthen LINK's portfolio and to develop our real estate investment management business under LINK. Just to provide a bit more detail on the global and local context for our business in the year ahead globally, we anticipate the growth outlook to remain mixed due to factors including the U.S. policy environment, continued challenge with mainland China economy, and unclear interest rate cut timing.
Speaker Change: As the picture in Singapore and Australia.
Speaker Change: It's more positive.
Speaker Change: Looking ahead, we remain committed to our latest pre zero strategies, which built on our capabilities and <unk> achieved.
Speaker Change: Almost two decades.
Speaker Change: To further strengthen our portfolio and to develop.
Speaker Change: Real estate and investment management business under link.
Speaker Change: Just to provide a bit more detail on.
Speaker Change: While the global and local context for all puts us in the year ahead.
Speaker Change: Globally, we anticipate the globe outlook to remain mixed.
Speaker Change: Due to factors, including the U S.
Speaker Change: Policy environment continued challenge with mainland China economy, and unclear interest rate Cup timing.
Speaker Change: These factors combined together with evolving technologies and changing consumer behaviors create.
George Pruitt: These factors combined together with evolving technology and changing consumer behaviors create an uncertain global structure and demand that we act with caution. In our key markets, Hong Kong and Mainland China, the outlook is less favourable. However, monetary policy loosening and the focus on boosting domestic demand are expected to stimulate economic activity, though we expect it will take some time before things will improve. Meanwhile, Singapore and Australia offer a more positive outlook, with robust economic indicators and consumption support. Despite the prevailing macro conditions, our portfolio has continued to endure. A quick reminder of the shape of our business and our diversification strategy, currently our linked REIT portfolio comprises 74% Hong Kong, 15% mainland China, and 11% international, which includes Australia, Singapore, and the UK.
Speaker Change: Created uncertain global glass jar and demands that we act with caution.
Speaker Change: In our key markets, let alone in mainland China.
Speaker Change: Overall this less favorable however, monetary policy loosening and the focus on boosting domestic demand are expected to stimulate economic activity.
Speaker Change: We expect it will take some time before things will improve.
Speaker Change: Meanwhile, Singapore, and Australia offer a more positive outlook with robust economic indicators and consumption support.
Speaker Change: Despite the prevailing winds up growing conditions, our portfolio has continued to undo.
Speaker Change: A quick reminder of the shape of our business.
Speaker Change: Diversification strategies currently operating lease portfolio comprises 74% in Hong Kong.
Speaker Change: 18% mainland China.
Speaker Change: 7% International which includes Australia, Singapore and the UK.
Speaker Change: As we diversify and grow pooling three zero, we are focused on optimizing our portfolio by exploring opportunities in the APAC region, including Australia, Japan, and Singapore and at the same time. We are also committed to maintain a high bar for <unk> and <unk>.
George Pruitt: As we diversify and grow Schooling 3.0, we are focused on optimizing our portfolio by exploring opportunities in the APEC regions, including Australia, Japan, and Singapore. And at the same time, we are also committed to maintain a high bar for right acquisitions in organic M&A. In line with our strategy to grow our real estate investment management, we've officially launched Link Real Estate Partners, a private fund management business line in Creverick. And Ronald will provide further details on this later. Let me now pass the time to Greg to share more on the operational updates. Thanks George and good afternoon everyone and I'll start this afternoon with the review of our overall portfolio occupancy.
Speaker Change: <unk> organic M&A.
Speaker Change: In line with our strategy to grow our real estate investment management, we've officially launched linked real estate partners a private fund management business line is separate the vulnerable will provide further details on this later.
Grab: Let me now pass the time to grab to share more on the operational update.
Speaker Change: Thanks, George and good afternoon, everyone and I will stop this afternoon with a review of our overall portfolio occupancy.
Speaker Change: Our portfolio has demonstrated solid performance with occupancy levels remaining high and our international retail assets approaching nearly full occupancy.
George Pruitt: Our portfolio has demonstrated solid performance with occupancy levels remaining high and our international retail assets approaching nearly full occupancy. In Hong Kong, the resilience of our non-discretionary retail portfolio is reflected with high occupancy and showcasing stability and strength in the underlying market. In Mainland China, we're pleased to report healthy occupancy rates across various asset types, underscoring the effectiveness of our Focused Leasing Initiative. In the international markets, our retail assets in Australia and Singapore achieve nearly full occupancy with robust ongoing leasing demands, while ongoing challenges are noted in the Australian office market. Now let's look at Hong Kong in some more detail and our retail portfolio, where the occupancy rate has remained robust at 97.1% as of December, highlighting the resilience and stability of our essential needs focused trade mix, even amidst challenging market conditions.
Speaker Change: In Hong Kong, the resilience of our non discretionary retail portfolio is reflected with high occupancy and showcasing stability and strength in the underlying markets.
Speaker Change: In mainland China, we are pleased to report healthy occupancy rates across various asset types underscoring the effectiveness about fake focused leasing initiatives.
Speaker Change: In the international markets are retail assets in Australia, and Singapore achieved nearly full occupancy with robust ongoing lacing denounced while ongoing challenges and notice in the Australia office markets.
Speaker Change: Now, let's look at Hong Kong, and some more detail and our retail portfolio.
Speaker Change: The occupancy rate has remained robust at 97, 1% as of December highlighting the resilience and stability of our essential nature, but let's try it mix, even amidst challenging market conditions.
Speaker Change: Rental revisions for the period experienced negative low single digits for the first nine months of the period, which also impacts the unit ramp per square foot, bringing it to $64 10.
Greg: Rental reversions for the period experienced negative low single digits for the first nine months of the period, which also impacted the unit rent per square foot, bringing it to $64.10. Despite tenant sales being affected by changing consumption patterns among residents which recorded a decline of 3.3% year-on-year for the first nine months, this was a narrower drop compared to the broader Hong Kong market at negative 7.6%. Occupancy costs have slightly come down compared to the first half of the year, indicating potential stabilisation of value conditions. And when we break it down by trade mix, both food and beverage in general retail segments outperformed the Hong Kong market, while supermarkets and foodstuffs saw some weaker performance for the period.
Speaker Change: Despite <unk> being affected by changing consumption patterns, among Liza doesn't residents, which recorded a decline of three 3% year on year for the first nine months. This was a narrow would drop compared to the broader Hong Kong market at negative seven 6%.
Speaker Change: Occupancy costs has slightly come down compared to the first half of the year, indicating potential stabilization at setting conditions.
Speaker Change: And when we break it down by trade mix, but food and beverage in general retail segments outperformed the Hong Kong market, while supermarket and foodstuffs saw some weaker performance for the periods.
Speaker Change: In terms of the Hong Kong <unk> and related businesses, we observed moderate growth in parking revenues for the first nine months of the year, while parking ticket sales experienced a decline this was balanced out by increases to patent tariffs we.
Greg: In terms of the Hong Kong car park and related businesses, we observed moderate growth in parking revenues for the first nine months of the year. While parking ticket sales experienced a decline, this was balanced out by increases to parking tariffs. We aim to stay responsive to market trends, creating plans to enhance performance and rolling out our new car park management system and ongoing enhancements to that program. Now let's shift to Mainland China, where as previously mentioned, occupancy was healthy across our various asset types. Our retail team on the ground in China has been able to manage tenant remixing very effectively in order to secure more productive and innovative operators.
Speaker Change: We ended sorry responsive to market trends credit plans to enhance performance and rolling out a new car Park management system and ongoing enhancements to that program.
Speaker Change: Now, let's shift to mainland China, whereas previously mentioned occupancy was healthy across our various asset types.
Speaker Change: Our retail team on the ground.
Speaker Change: China has been able to manage tenant remixing very effectively in order to secure more productive and innovative operators.
Speaker Change: We saw softer demand in specific triad, such as cosmetics and jewelry, while sporting goods in particular and re titles featuring intellectual property designs and doing really well.
Greg: We saw softer demand in specific trades such as cosmetics and jewellery, while sporting goods in particular and retailers featuring intellectual property designs are doing really well. As for office, our occupancy exceeded the district average despite new supply. We will continue to upgrade our facilities to enhance our customer satisfaction and also attract new tenants by carrying out fit-out works on vacant units to improve profitability. The logistics occupancy in our portfolio remains healthy at over 96% and demand for our facilities are predominantly driven by e-commerce and third-party logistics operators. and turning our attention to our international business which consists of retail and offices located predominantly in Australia and Singapore.
Speaker Change: As for office occupancy exceeded the district average despite new supply.
Speaker Change: We will continue to operate our facilities to enhance our customer satisfaction and also attract new tenants by carrying outfit outlooks on vacant units to improve occupancy.
Speaker Change: So logistics occupancy in our portfolio remained healthy at over 96% and demand for our facilities are predominantly driven by E Commerce and third party logistics operators.
Speaker Change: And turning our attention to our international business, which consists of rates island offices, located predominantly in Australia and Singapore.
Speaker Change: And our strategy in retail assets located in the Sydney CBD positive leasing momentum continues from tenant demand.
Greg: and our Australian retail assets located in the Sydney CBD, positive leasing momentum continues from tenant demand and now sees occupancy of 99.5%. This was supported by our active, ongoing leasing efforts, which has not only introduced the curation of new brands, but also has allowed for continued upgrading of retail offerings. Out of the trade categories in particular, student beverage and apparel perform well across the three properties. Now moving on to Singapore, where our models of Jurong Points and Thompson Plaza perform very strongly, achieving occupancies now at 100% with ongoing positive leasing reversions. The ongoing enrichment of our tenant variety has been boosted through strong leasing interest from overseas retailers, including those from Mainland China, and in particular food and beverage brands.
Speaker Change: Now six occupancy of 99, 5%.
Speaker Change: This was supported by our active ongoing leasing efforts, which not only introduced the curation of new brands with wholesale it allowed for continued upgrading of Brookdale offerings.
Speaker Change: Out of the trade category in particular, food and beverage and apparel performed well across the three properties.
Speaker Change: Now moving on to Singapore, where a malls if general points and Thomson Plaza performed very strongly achieving occupancy is now at 100% with ongoing positive leasing revisions.
Speaker Change: The ongoing enrichment of that tenant variety as they boosted through strong leasing interest from either stage, III tyler's, including noise from mainland China and in particular food and beverage brands.
Speaker Change: F&B in beauty and wellness categories were the main drivers of 10 sales growth over the period.
Greg: F&B and beauty and wellness categories were the main drivers of tenant sales growth over the period. and funding from me on office, we note the further bifurcation in the Sydney office market with the fight to quality trend continuing. We've made some good progress, however, through the backfilling of vacant tenancies, in particular at 347 Kent Street in Sydney, and our retention rate on renewals remains strong. Under current market conditions, it's essential for us to continue to enhance the appeal of our office spaces through pacemaking and the provision of amenities. And now I'll pass over to KS.
Speaker Change: And finally from me on office, we note that the.
Bifurcation in the Sydney office market with the flight to quality trend continuing.
Speaker Change: We've made some good progress however through the back filling a vacant tenancies in particular at <unk> in Sydney and our retention rate on renewals remained strong.
Speaker Change: Under current market conditions, it's essential for us to continue to enhance the appeal of our office spaces through pacemaking in the provision of amenities.
Speaker Change: And now I'll pass over to chaos. Thank you.
Speaker Change: Thank you, Greg and good afternoon to everyone.
KS: Thank you. Thank you, Greg. Good afternoon to everyone. Moving on to Capital Management, our robust financial position is well supported by a healthy balance sheet as shown by the key metrics here. As of 30th September 2024, net gearing remained low at 20.6%, while the average borrowing cost remained competitive at 3.69%. Our EBITDA Interest Calibration stood at 4.8 times. Fixed debt ratio in the upper range of 50% to 70% is in anticipation of more gradual and shallow recovery. Supported by our A-Ratings from all three credit agencies, we have the stability and credibility to attract investors, as well as secure favorable terms for future funding needs.
Speaker Change: Moving onto capital management.
Speaker Change: Robust financial position is well supported by a healthy balance sheet as shown by the key metrics here.
Speaker Change: As of 30 of September to go through for next.
Speaker Change: Net gearing remained low at 26%.
Speaker Change: The average borrowing cost remain competitive at three 6%.
Speaker Change: No EBITDA interest coverage stood at four eight times.
Speaker Change: That ratio in the upper range of 50% to 70%.
Speaker Change: It's an anticipation of more gradual and Chevrolet cuts.
Speaker Change: So both about a ratings from all three credit agencies, we have the stability and credibility to attract investors.
Speaker Change: Secure favorable terms for future funding needs.
Speaker Change: Between 90, Zemba Toyota reported seven January 225.
KS: Between 9th December 2024 and 7th January 2025, we deployed over HK$500 million to buy back approximately 17 million units. Overall, our robust financial position will enable us to effectively navigate the uncertainties in valuation. The disciplined approach to debt management with diversified sources of capital across debt instruments has helped us to achieve our goals. with a competitive average boarding cost, such as school bus credit rating. Our financial stability is reinforced through FX Management, which includes extensive hedging of non-HKD distributable income. and the currency risk of overseas access. alongside capitalizing on lower RMB interest rates. after repaying some debt The Debt Balance as of 10 September 2024 was reduced to HK$55.6 billion.
Speaker Change: It brought over $500 million local dollars to buyback approximately 17 million units.
Speaker Change: Overall, our robust financial position will enable us to effectively navigate the uncertainties in evaluations.
Speaker Change: Okay.
Speaker Change: The disciplined approach to debt management with diversified sources of capital across debt instruments.
Speaker Change: As such.
Speaker Change: Coca tea beverage board costs, so it's robust credit ratios.
Speaker Change: Our financial stability is reinforced through FX management.
Speaker Change: Which includes extensive hedging of non Hong Kong dollar distributable income.
Speaker Change: The currency risk of overseas assets.
Speaker Change: Alongside capitalizing on lower RMB interest rates.
Speaker Change: After repaying some debt.
Speaker Change: The debt balance as of end.
Speaker Change: September two zero to four plus.
Speaker Change: Was reduced to $55 six eventful holdovers that.
Speaker Change: We have been proactively managing our maturity profile.
Ronald: and we have been proactively managing our maturity profile. I now pass the time to Ronald to cover other updates. Thank you. Thank you, Kaz. Good afternoon, everyone. We have made significant progress in developing our real estate investment management business through the launch of our new business line, Link Real Estate Partners. which focuses on serving third-party, private and institutional sectors. It will leverage on links, robust operational skills, deep knowledge and scale in Asia and provide track record, and proven track record to identify and execute compelling real estate investment strategies and match them with capital across the risk spectrum.
Speaker Change: I'll now pass the time to rollout the cover other updates. Thank you. Thank you for asking good afternoon, everyone.
Speaker Change: We have made significant progress in developing our real estate investment management business through the launch of a new business line link real estate partners.
Which focuses on serving third party private institutional capital.
Speaker Change: It will leverage on Lincoln robust operate channel skills deep knowledge and scale in Asia.
Speaker Change: And provide track record and proven track record to identify and execute compelling growth state investment strategies and match them with capital across the risk spectrum.
Speaker Change: It will also help accelerate our diversification and.
Ronald: It will also help accelerate our diversification and create new income from co-investing and managing assets for new partners. We have spent much of 2024 assembling a fund management team led by John Saunders, our Group Chief Investment Officer, along with several new hires, including Head of Australia Investments, Head of Research, Portfolio Director and a Product Strategist. While we're unable to disclose too many details at this juncture, we expect 2025 to be a busy for both fundraising and investment. Before we move on to Q&A session, I would like to discuss our new approach to providing operational updates in between our interim and final results.
Speaker Change: Create new income from co investing and magic assets put new bonds.
Speaker Change: We have spent much of 2020 for assembling a fund management team led by John Saunders Chief Investment Officer.
Speaker Change: Along with several new hires including head of Australia investments.
Speaker Change: Research.
Speaker Change: Those are extra added product strategist.
Speaker Change: While we are unable to disclose too many details at this juncture, we expect 2025 to be a busy for both fundraising and investments.
Speaker Change: Okay.
Speaker Change: Before we move on to Q&A session I would like to discuss a new approach to providing operational updates in between our interim and final results.
Speaker Change: We always strive to continuously improve our engagement with investors and as part of that to provide robust transparent information on a timely manner.
Ronald: We always strive to continually improve our engagement with investors and as part of that, to provide robust, transparent information in a timely manner. Starting with the operational update after our next final result. We will be able to provide our Q1 and Q3 operational updates approximately one and a half months earlier than we currently do, as we will transition to providing quarterly operational updates announcements instead of pre-blackout briefings. We plan to provide Q1 updates in February and Q3 in August. This change, made after feedback from the investment community, will allow us more time to engage with investors and analysts prior to any blackout period.
Speaker Change: Starting with the operational update after our next final results.
Speaker Change: We will be able to provide our Q1 and Q3 operational updates approximately one and half months earlier than we currently do as we will transition to providing quarterly operational updates announcements instead of pre blackout briefings.
Speaker Change: We plan to provide Q1 update in February in Q3 in August.
Speaker Change: This change made after the feedback from the investment community will allow us more time to engage with investors and analysts prior to any blackout period.
Speaker Change: At the timing of our quarterly update and results will be distributed more evenly throughout the year.
Ronald: At the timing of our quarterly updates, the results will be distributed more evenly throughout the year. To facilitate this, we will upload the quarterly operation updates to the Stock Exchange and our corporate website, ensuring timely access to essential information. This will enable stakeholders to access our performance more effectively and make well-informed investment decisions. I'll now pass over to Christy for the Q&A session. Thank you, Ronald. So let's move on to the follow-up Q&A. Please submit your questions using the Q&A function. We got a few questions already. Let's see if we can start now. So quite some questions on the retail sales in Hong Kong.
Speaker Change: To facilitate this we will upload the quarterly operational updates to the stock exchange and corporate website, ensuring timely access to essential information.
Speaker Change: This will enable stakeholders to access our performance more effectively and make well informed investment decisions.
Speaker Change: I'll now pass over to Christy for Q&A session. Thank you.
Speaker Change: Last month, obviously, that's all Sunshine eight senior can lead that change again using makena in Edmonton.
Speaker Change: We got a few questions on mining.
Speaker Change: Now some.
Speaker Change: Some questions on the retail staff in Hong Kong now unless that went down.
Speaker Change: Damian.
Christie: So let's start with... Cindy from Citi. So how's the retail sales trend in the first few of Canada's year 2025? Any green shots for early signs of recovery? I'll take that question thank you Cindy. So just looking at the I guess the period up to December we've seen an improvement and we've just spoken to a negative 3.3 total sales position and just to remind you that at the end of the first quarter of the financial year that was negative 5.9 and then at the first half it was negative 4.3. So a gradual improvement over the period and we've seen that across the three major categories that we report to.
Speaker Change: So how do we have sales trend in <unk>, Canada, <unk> and clean shop floor and signs of a recovery.
Speaker Change: I'll take that question <unk>, So we're still looking at.
Speaker Change: I guess the period up to December we've seen.
Speaker Change: And improvements.
Speaker Change: And we've just spoken to a negative $3 three.
Speaker Change: Total SaaS position and just to remind you that at the end of the first quarter of the financing that was negative $5 nine and then at the first half was a negative for <unk>. So a gradual improvement over the period.
Speaker Change: And we've seen that across the three major categories that we report to.
Speaker Change: So as it does.
Cindy: So as it's December food and beverage was flat year-on-year and that was an improvement from negative 1.5 percent for the first quarter. Supermarkets we're seeing some gradual improvement and I think that's largely off a lower base. So supermarkets were negative 5.9 percent in the first quarter, negative 5.2 percent at the first half and negative 3.9 percent Q3 and general retailers also improved significantly. So as we move into the last quarter of this financial year we are seeing that trend continuing but I will say that there is a lag from this improvement in sales and flowing through into rental resurgence.
Speaker Change: But food and beverage was flat year on year.
Speaker Change: And that was an improvement from negative one 5% for the first quarter.
Speaker Change: Supermarkets were seeing some congratulate pregnant and I think thats largely off a lower base.
Speaker Change: Substitute markets were negative five 9% in the first quarter.
Speaker Change: 85, 2% at the first half and negative three 9% in Q3 in general retailers also improved significantly so as.
As we move into.
Speaker Change: The last quarter this financial year, we see that trend continuing.
Speaker Change: But I will say that there is a lag from this improvement in sales and flowing through instead of rental revisions.
Speaker Change: The other associated metrics to the sales is applicable, which we have seen ongoing improvements.
Ronald: The other associated metric to the sales is our football which we've seen ongoing improvement over the last few months and in particular we've seen more of a dramatic improvement on weekend football and that I think is associated with some of the stabilisation of the northbound leakage. So some green shoots but still some way to go. Thank you. So another question is, will you consider any disposal to recycle capital given high for longer rate outlook? I'll take that. So, obviously, we always look at optimising our portfolio and we're always constantly reviewing acquisitions as well as disposals.
Speaker Change: Philosophy announce.
Speaker Change: And in particular, we've seen.
Speaker Change: More of a dramatic improvement on weekend portfolio things that I think is associated with some of the stabilization of the north them linkage.
Speaker Change: So some green shoots.
Speaker Change: Some way to go.
Speaker Change: Thanks for that.
Speaker Change: So another question I think that also continued to build a company that any disposal recycling capital again and high for longer rate outlook.
Speaker Change: I'll take that so obviously, we always look at optimizing.
Speaker Change: Folio and we're always constantly reviewing.
Acquisitions as well as disposals.
Speaker Change: So yes.
Sam: And so, yes, if there is the right deal in the market, if there's the right price, we will consider recycling. I think right now we're still looking for those opportunities and we're constantly assessing those recycle Thanks, Ronald. So next question is from Sam of Jeffries. Could you share a bit more color on China side, sales and reversions? Yeah, so, um... I'm afraid we can't really say much about that at this moment. As you can understand, we're under regulatory restrictions to say anything about the funding. And my next question is from Golan Simon. To the extent you can, can you provide us with some targets or milestones you're setting out for your links, real estate, on this fund?
Speaker Change: If there is a right to you and the market at the right price, we will consider recycling I think.
Speaker Change: Right now we're still looking for.
Speaker Change: For those opportunities and with customer needs.
Speaker Change: Youre assessing.
Speaker Change: Those recycle opportunities. Thanks, Shlomo So next question Sam.
<unk> of Jefferies.
Sam: Could you shed a bit more color on China site, South and intervention.
Speaker Change: Yes.
Speaker Change: Sure.
Speaker Change: China from a retail estate minus five from a retail perspective.
Speaker Change: Stabilizing the biggest challenges environment in Beijing in particular are out jump anshan asset way with doing some ongoing asset enhancements and tenant remixing.
Speaker Change: When we reported the half first half result, we spoke to the fact that it was negative revisions to the mainland business that if you excluded some quach on it would be slightly positive that is still the case.
Speaker Change: Pleasingly, there is quite a lot of tenant activity in the 99 markets.
Speaker Change: So the markets of Shanghai, Guangzhou, and Shenzhen for us continued to be pretty stable.
Speaker Change: Beijing is where a lot of efficacy is.
Speaker Change: And the slight dip in occupancy from the first half to this reporting period, we think will.
Speaker Change: Show signs of improvement as we get to the end of this financial year. So.
Speaker Change: Probably the most pleasing thing with regards to mainland retail is very good underlying tenant activity and tenant demand.
Speaker Change: But that is offset somewhat by significant increases of supply new supply in markets like Beijing and Guangzhou in particular.
Thomas: And then another question Thomas hang up at nuisance law regarding Golan Telecom.
Speaker Change: Based on FX enhancements have look like now and then now landed where we estimate <unk> belief.
Thomas: Okay.
Thomas: At the Hudson, So tinder with progressing well building off the success that we had for the first phase.
Thomas: On its own site a few weeks ago with privacy is good leasing momentum is very strong.
Thomas: So as we move through into the new financial year.
Thomas: We're fairly confident that we will have the lion's share of that projects completed and with with very satisfied with the ongoing leasing demand for that property. So very well positioned assets that are very strong catchments.
Thomas: But again the major issue with Boeing with Ice's two is increased competition.
Thomas: Getting well ahead of that new competition is important.
Thomas: We can put this project.
Thomas: And then finally just mentioned at some point.
Thomas: <unk> principal asset management.
Kenny.
Thomas: <unk> apparently fashion trends.
Thomas: Should we be credible quality kingdom attractions in sand demand.
Speaker Change: So just the general trend on leasing reversion for Hong Kong.
You mentioned during the prepared remarks.
Speaker Change: <unk> seen a deterioration from the first half to the third quarter I am very very slightly negative leasing reversion for Hong Kong.
Speaker Change: And as we've discussed many times the composition of activity in any given year, usually tapers off in the back half.
Speaker Change: Financial year.
Speaker Change: So we reported plus 7% at the first half.
Speaker Change: Like I said very very low single digit with version as at December.
Speaker Change: And that trend will continue through until the end of this financial year.
Speaker Change: And I think the concept of negative diversity is something that.
Speaker Change: We should be prepared for this new financial year that would be embarking on shortly.
Speaker Change: It.
Very modest.
Speaker Change: Negative revision. Thank you and the next question is found next time in person that's fairly chunky pass them ask any update on capital raising for the participants.
Speaker Change: So I'm afraid we can't really say much about that at this moment was down slightly on the regulatory restrictions to say anything about the timing.
Speaker Change: And then the next question to ask about the government Diane.
Speaker Change: Thank you Ken can give her back with some tactical milestones setting out for Ya Ling relaxing on expanding again, I'll say I'll say at the outset the savings.
Speaker Change: Okay and then.
Ronald: I'll say that the answer is the same. Okay. And then... will be from Dubas Matlan. What is the rental reversion guidance for next year? Yeah, so I think you touched on that in the previous question. So we're anticipating slightly negative reversion for Hong Kong, fairly flat for Mainland and positive for Singapore and Australia. The main focus of 1.2, and we've said it on numerous occasions now, is preserving occupancy across our portfolios. And I think the numbers that we've spoken to again today illustrate that. What we are experiencing is that the reversion on new deals or replacement tenants is significantly worse than the reversion for us in retaining tenants.
Speaker Change: One.
Speaker Change: We'll see you back my plan.
Speaker Change: What is the rental results and guidance for next year, Yeah. So I think you.
Speaker Change: Touched on that in the previous question. So we're anticipating slightly.
Slightly negative, but I think for Hong Kong.
Speaker Change: Fairly flat for nine months and positive Singapore and Australia.
Speaker Change: The main focus I would point to that and we've said on numerous occasions now is preserving occupancy across our portfolio and I think the numbers that we expect them to again today illustrate that.
Speaker Change: What we are experiencing is that reversion.
Speaker Change: On new deals with replacement tenants is significantly worse than.
Speaker Change: The reversion for us in refining tenants.
Speaker Change: Pleasingly.
Speaker Change: Reversion of a retention rate I should say.
Ronald: Pleasingly, our retention rate, I should say, remains at our long-term averages in the high 70% range as of December. So a big part of our strategy is retaining our existing tenants. We do an analysis that we call right tenant, right location. And a large proportion of our portfolio sees us having pleasingly the right tenants in the right locations. So we'll be working with our tenants to retain them. Another strategy that we're working through is endeavouring for our tenants to invest in upgrading their facilities. And if that means that we forego some reversion in return for some capital investment by those retailers to improve their environments, that's something we'll be treating on a case-by-case situation as well.
Speaker Change: Since it out long term averages in the high 70% range as of December.
Speaker Change: So a big part of that strategy is retaining our existing tenants, we do an analysis that equal right tenant right location.
Speaker Change: And a large proportion of our portfolio saves us having pleasingly, the right tenants and the right locations.
Speaker Change: So we'll be working without tends to retain them. Another strategy that we're working seriously in devry for our tenants to invest in upgrading their facilities.
Speaker Change: And if that means that we forgo.
Speaker Change: Some reversion in returning some capital investment by those retailers to encourage their environments. That's something we'll be trading on a case by case situation as well.
Speaker Change: Alone, we had asset towards our Super question, but yes. There is some pressure on revision, but we anticipate that that will be offset by preserving occupancy here in Hong Kong.
Ronald: So along with an answer to a very simple question, that, yeah, there is some pressure on reversion, but we anticipate that that will be offset by preserving occupancy here in Hong Kong. KATE MAHERASKHI Next question will be from Debbie Moreland-Howell. Any guidance on how average financing costs will be in second half of the financial year, year 2025? And will it further go down from the average 2.69%? or a stable one? I think the third option that you didn't mention is will it go up marginally? And I think, Carl, the answer is yes. We have fixed 66.4, so there's about one-third that's not fixed.
Speaker Change: Next question for Jason. Thank you morning, Pal and any guidance on how FX financing cost will be in second half of the financial side.
Speaker Change: And that is all the gallons them to average six 9%.
Speaker Change: Our stable.
Speaker Change: So I think that option that you didn't mention is already go up much adobe.
Speaker Change: And I think it's called the answer is yes.
Speaker Change: Fixed <unk>.
Speaker Change: 66, four so there is about one third fixed and if you look at our maturity profile.
Carl: And if you look at our maturity profile... This coming financial year, there's about $12 billion of refinancing. Clearly today, Haibo is already at 3.8, 3.9. Without ABC at 3.7, it's unlikely that you can beat that because a lot of these, hatch conflict when rates are much lower in stores are much cheaper so we do expect borrowing costs to inch up marginally in this coming year. Thank you. And next question is also from Karl. Any comments on when the stock name becomes eligible for stock comments? Um I think when you look at the announcement on various topics around StockConnect, there is been a lot of discussion around this StockConnect issue.
Speaker Change: This coming financial year, it's about $12 billion of refinancings.
Speaker Change: Clearly today high baud rate at 3839.
Speaker Change: With our ABC at three segments, it's unlikely that you could beat that does a lot of detail attached locally with enriched with much lower and still support the cheaper. So we do expect borrowing closely in truck market.
Speaker Change: This coming year.
Speaker Change: And next question is a tunnel that with any color on when to stop named accounts.
Speaker Change: Stock comment.
Speaker Change: Yeah.
Speaker Change: I think when you look at the announce Linda Davis topic, there Els stock.
Speaker Change: So there is a lot of discussion about the stockholder issue.
Speaker Change: Same story this year 30 vehicle group bookings.
Carl: Since February this year, there's already conclusion that to implement it as soon as possible and our sense is hopefully somewhere next month we get more announcement on how fast CSRC is willing to make clearer announcement but my sense is so far the regulators have been very supportive and progressively has been trying to accelerate the implementation. During the investment conference happening in Hong Kong this week, the financial secretary also said the same, that this is coming, it's a matter of when, not a if, and so obviously we're still waiting for the time, but it should be more than that.
To conclude Monday, as soon as possible and authentic.
Speaker Change: Hopefully somewhere next month, when we get more announcements on that.
Speaker Change: <unk> is building too.
Speaker Change: Could I read and also about my centers.
Speaker Change: So far the regulators have been very.
Speaker Change: Supportive and progressive VSP trade with the <unk> implementation.
Speaker Change: The Investor Conference.
Speaker Change: State and local this week.
Speaker Change: But initial separately also safe to say.
Speaker Change: This is coming.
Speaker Change: Little wins.
Speaker Change: And so.
Speaker Change: Obviously, there was the wisdom of this time.
Speaker Change: This should be lower and just to add to that.
Speaker Change: We do quite a bit of IR from China.
Phil Collins: And just to add to that, obviously we've been through quite a bit of IR on China, and we know there's demand, and we are ready to capture those when it comes. Thank you. Next question is from Belka of Dallas. Will we consider the increased borrowing from mainland China to lower average financing cost? And what's the financing cost outlook for the FY25 and FY26? So I think I'll take the first question, the second I'll just answer and it will be the same, there will be a marginally higher financing cost. On taking advantage of the RMB... lower financing costs.
Speaker Change: We know that a few months now we are ready to capture those milestones.
Speaker Change: <unk> next question is from cell count.
Speaker Change: Well may consider to increase borrowings on mainland China, asking lower average financing cost and what step financing plus outlook flooding.
Speaker Change: Aflac, Japan, Inc.
Speaker Change: So I think all typically first question again.
Speaker Change: Uncertainty will be the same there'll be a marginally higher financing costs.
Speaker Change: Taking advantage of the RMB.
Speaker Change: Lower financing costs.
Speaker Change: In reality, what we are doing is actually.
Phil Collins: In reality, what we are doing is actually... to use RMB borrowing to hedge against the RMB assets and there's no intention to overhedge as that's not part of our business to take hedging risks. So we will continue to hedge and each of these hedges does have their maturity profile and as it expires we will continue to hedge and so far hedging RMB we have paid a premium to help reduce our financial income and today we are already in the almost fully hedged against our RMB so just waiting for hedges to expire and then we'll renew.
Speaker Change: Produce RMB borrowing hedge against the RMB assets and there's no intention over hedge.
Speaker Change: While these specific categories.
Speaker Change: So we'll continue to hedge.
Speaker Change: Each of these stages at their maturity profile.
Speaker Change: Expire we will continue to pitch in so far.
Hedging RMB.
Speaker Change: Premium reduce operating protocols and today, we are already almost fully hedged against RMB suggest waiting book hedges expire and then we will begin.
Speaker Change: Okay.
Speaker Change: That's about the same questions regarding the M&A or acquisition.
Phil Collins: So there are actually a few questions regarding the M&A or acquisition, so in general, they are asking how the progress is and then how the M&A environment in Asia, whether it's for the fund or for Ling? I think I'll just answer that in general terms. I think in certain markets, in particular Australia, we've seen price correction and there's been a bit more activity there where the buyer and sellers, you know, it's been our spread has narrowed and we've also seen funding costs starting to drop in Australia. So that market remains interesting for us and we still spend quite a bit of time looking at that market and so, you know, we will continue to look at that.
Speaker Change: In January asking how that will go ahead, and then how the M&A environment in Asia.
Speaker Change: On a final for me.
Speaker Change: Just answer that in general terms I think in certain markets in particular in Australia, we're seeing.
Speaker Change: This correction.
Speaker Change: And that's been a bit more activity that with the buyer and sellers.
Speaker Change: Bid ask spread has narrowed and we've also seen funding costs spiked to drop in Australia. So that market remains interesting for us and we do spend time looking at that market.
Speaker Change: And so.
Speaker Change: We will continue to look at that the other markets Singapore is too.
Grant: The other markets, Singapore is still, you know, pricing is still pretty tight, so is Thank you. And then next question is about the Mainland China operations. The question is about CentralWall, so how the cell is doing, is it bypassing, exceeding the level of pre-COVID already? The sales in general and football in general at Central Walk is progressing very, very well and is our best performer across Mainland, is probably our best performer across all of our shopping centres. We are also in the process of some fairly significant tenant optimization work there, so we're seeing ongoing better quality demand from retailers for Central Walk, so a lot of the strategies that we've executed on over the last few years are really starting to pay some significant dividends, so good continued sales growth, good continued continued CPI growth, and now we're focused on really managing our costs, not just on a project like Central Walk, but doing what we can to preserve or at least enhance, at least preserve our operating margins on on a portfolio.
Speaker Change: Pricing is still pretty tight.
Speaker Change: So as Japan.
Speaker Change: And I guess I'll focus probably for the moment in Australia by M&A activity.
Speaker Change: And then next question.
Speaker Change: Mainland China operations.
Speaker Change: The question is about California law.
Speaker Change: So how far south.
Speaker Change: <unk>.
Speaker Change: I think Russell optical behind it.
Speaker Change: The sales in general and portfolio in general with Central work is progressing very very well.
Speaker Change: And southwest performed across mainland.
Speaker Change: It's probably our best performer across our professional incentives.
Speaker Change: <unk>.
Speaker Change: We are also in the process of some fairly significant tenant optimization work that February was saying.
Speaker Change: Ongoing better quality demand from retailers the central work. So a lot of the strategies that we've executed on over the last few years are really starting to face some significant dividends.
Speaker Change: Good continued sales growth with continued continues NPI growth.
Speaker Change: And now we're focused on.
Speaker Change: Managing our costs not just on a project black central walk with doing what we can to preserve or at least can have enhanced at least preserve our operating margins on on X.
Speaker Change: Portfolio of assets.
Speaker Change: Yeah.
Speaker Change: I think mark has been sound Downspacing and stack.
Grant: Thank you, Grant. So, a bit more questions on the operations, so why the occupancy drop Q1 deal for Hong Kong and China? It's a phasing thing, so as we gear up to the end of the year, we anticipate that those occupancy numbers will get back to what they were around the half year, so it's a phasing and timing thing more than anything else. And another question from Sam again, so what it takes for Hong Kong reversion to return to positive in your view? Rika Dhala, Mainland Business We're not really impacted by Mayday Visitors. We're obviously servicing on-commerce for their daily needs.
Speaker Change: And why the operations outweighed the upcoming it's up to our sales, while Hong Kong and China.
Speaker Change: I think so.
Speaker Change: As we gear up to the end of the year.
Speaker Change: We anticipate that.
Speaker Change: The occupancy numbers will get back to what they were around the half year.
Speaker Change: So, it's a phasing and timing thing more than anything else.
Speaker Change: And then final question.
Speaker Change: Some of them again so.
Speaker Change: What it takes for Hong Kong compression should return to positive.
Speaker Change: The catalog.
Speaker Change: <unk> interface.
Speaker Change: We're not really impacted by that as it is with obviously servicing Hong Kong has been a daily needs.
Speaker Change: I think the 90 issue that we need to see is the stabilization and growth in margin throughout <unk>.
Greg: I think the main issue that we need to see is the stabilisation and growth in margin for our retailers. So their operating margins have been under pressure with increased costs, and then that puts pressure on our negotiations with them. So I think the main thing that we need is continued growth in sales, which we're starting to see the benefit of. Our purpose is to provide football for our retailers so they can capitalise and execute that in sales, and then hopefully start to see some improvement in the bottom line for the retailers, not just the top line, and that then will allow us to see some growth in our revenues.
Speaker Change: <unk> operating margins have been under pressure with increased costs.
Speaker Change: And that puts pressure on and negotiations with them. So I think the 19 that we need is continued growth in sales, which was studying the state of <unk>.
Speaker Change: Our purpose is to provide football gravity titles that I can capitalize and execute on that in styles and then hopefully it's exciting to see some improvement in the bottom line for the retailers not just the top line and that then.
Speaker Change: How occupancy some some growth in our revenues I will say, though that a portfolio occupancy cost is stable at 38, 1%.
Greg: I will say though that our portfolio occupancy cost is stable at 13.1%. Our sales densities are very, very strong. So we're facing into what is a very challenging market in a very strong position, and our continued focus on the non-discretionary trades, particularly food and beverage, places us in a reasonably strong position in relative terms. And then another question is regarding whether our company will consider to help bringing in some brands from mainland China into Hong Kong and still help the consumption in Hong Kong. Absolutely, and we are seeing that. So pleasingly, the new leasing transactions that we do, approximately one third of those are to retailers new to the Link portfolio.
Speaker Change: Our SaaS entities are very very strong.
Speaker Change: So.
Speaker Change: Which we're facing into what is a very challenging market and very very strong position.
Speaker Change: And our continued focus on the non discretionary tribes chico's food and beverage flights.
Speaker Change: Places us in a reasonably strong position in relative terms.
Speaker Change: And then another question Linda.
Speaker Change: Our company will continue to Tfl, bringing in.
Speaker Change: Some brands from mainland China, Hong Kong and has that helped the consumption in Hong Kong absolutely.
Speaker Change: Absolutely and we are seeing that.
Speaker Change: So.
Speaker Change: Pleasingly.
Speaker Change: The new leasing transactions that we do approximately one third of those two retailers new to the portfolio.
Speaker Change: So we're bringing in.
Speaker Change: 100, 150, new retailers to our portfolio every year, we're seeing an increasing number of lilac businesses predominantly.
Greg: So we're bringing in 100, 150 new retailers to our portfolio every year. We're seeing increasing number of mainland businesses, predominantly food and beverage. The move into Hong Kong by Luckin Coffee, for example, has been well-documented. We've secured a number of locations with them. The first of those is opened at Cheung Kwan O and is performing really, really well. So yeah, we're hopeful that our portfolio is incredibly well suited to support the introduction of new mainland brands. The other thing I will say is that we've seen a significant increase of demand from mainland retailers to our Singapore portfolio as well.
Speaker Change: Predominantly food and beverage.
Speaker Change: The.
Speaker Change: Moving to Hong Kong Biomarker coffee for example has been well documented.
Speaker Change: We've secured a number of.
Speaker Change: Locations with them the first andaz resorts under chunk of it and it's performing really really well.
Speaker Change: So yes, we're hustling.
Speaker Change: Our portfolio is incredibly well suited to support the introduction of <unk> 900 brands. The other thing I will say, we've seen a significant increase in demand from land that retailers have to our Singapore portfolio as well so.
Speaker Change: I think a lot of the very good.
Greg: So I think a lot of the very good innovation and market positioning from mainland retailers is seeing them spread their wings more broadly across Asia Pacific, and we're well-positioned to be able to support them to grow in our portfolios, whether it be in mainland Hong Kong, Singapore, or even Australia over time. So that's a big part of our strategy is to harness the strength of our portfolio and grow our retailers as they look to expand across the region. Thank you. Another question is regarding the recent public housing rent increase. What will be the impact on rent?
Speaker Change: Innovation and market positioning for my elaborate pilots.
Speaker Change: These statements spread their wings more broadly across Asia Pacific and were well positioned to be able to support them to grow in our portfolios whether it be in mainland Hong Kong, Singapore, even Australia over time, so that could be part of our strategy is to harness the strength of our portfolio and growth now retitled as they look to expand across the region.
Speaker Change: And then another question is regarding the recent public helping nice increase now what will be the impact on rate.
Speaker Change: I think there is a negative data. There's also positive in the increase to the minimum wage again voice of a slot to box. So.
Josh: Yeah, I mean I think there's a negative there, but there's also a positive in the increase to the minimum wage, again more recently of 5.25%, so again we're not servicing the discretionary spending patterns of our population, we're servicing their daily needs. So I don't think that that would be a significant impact for us. I think if we look at minimum wage going up, which would increase our costs. For those who want to help us to run the shopping center, especially the front line, please feel free to contact us. As Seth said, they will typically spend at our shopping center.
Speaker Change: Again, we're not servicing the discretionary spending patterns.
Speaker Change: A population with servicing that 98.
Speaker Change: So I think that that would be a significant impact for us, but it will be.
Speaker Change: Minimum wage is going up which increased our costs.
Speaker Change: For those.
Speaker Change: Folks to help us through the shopping centre of especially the frontline Appeals acuity stuff.
Speaker Change: Clips that they would typically spend at our shopping center.
Speaker Change: So that increase in income.
Josh: So that increase in income will help our tenants sell. The rental increase for those who may not know, most of the public housing rental for each unit is less than $1,000 to $300 a month. For those who park their cars, their car parks will probably be charging $2000 or $4 for a car park fix. So, I think in relative terms, you can see that the amount of the rent that they're paying all the way to a different, to that segment of the community, may have a certain impact to a large extent, is still affordable, on the spending, I think we'll be all set by the end of our virtual call.
Speaker Change: We'll help alternatives sales.
Speaker Change: The rental increase for those who may not know.
Speaker Change: Most of the profit goes into rental.
Speaker Change: Each new that is.
Speaker Change: Less than a 1000 of our goal is to delever below those of London.
Speaker Change: So those are positive cause adult cutbacks were both leasing charges without similar.
Speaker Change: Goals for <unk>.
Speaker Change: But I think on a relative certainty, but we can see.
Speaker Change: You bet.
Speaker Change: The bulk of the rents that they are paid.
Speaker Change: Albeit towards specific to that segment of the community.
Speaker Change: Lately.
Speaker Change: So it did impact us to a large extent.
Speaker Change: Civil reportable income fundamentals on the spending that there will be offset by the wage increase.
Speaker Change: Thanks, Dave.
Speaker Change: At the time limit we have the last two questions. One is can be paths. One is the shortcomings as concerned HR area in Hong Kong as of December and now should we expect that the bill sudden increase.
Greg: Thank you, Josh. So due to the time limit, we have the last two questions. One is from DBS. What is the short-term lease as percentage of area in Hong Kong as of December? And should we expect that to go further increase? That's actually fairly stable. So it's an insignificant number in terms of our overall portfolio. And I can also say that the number of tenants on holdover has reduced quite significantly from the first half to this period. So for the most part, leasing transactions in Hong Kong are on a normalised basis of a three-year cycle.
Speaker Change: FX actually fairly stable so its an insignificant number in terms of our overall portfolio.
Speaker Change: And.
Speaker Change: And also say that the <unk>.
Speaker Change: Tenants on holdover has reduced quite significantly from the first half to these periods. So.
Speaker Change: For the most past.
Speaker Change: Leasing transactions in Hong Kong or on a normalized basis or a three year cycle.
Speaker Change: We don't see that short term of the leases.
Greg: We don't see that short-term or holdover leases being an issue to call out. We have, in the past few times, announced results, both income and final results, we talk about how many new tenants that we have signed. And, well, not every centre has a few, but the ability for our colleagues to replace tenants, some need to repay for various reasons, has allowed us to keep that occupancy strong. Obviously, sometimes we do need to Thank you. So, last question is from Nanyam. Despite the slight negative rental reversions, can we keep the overall rest of the meal plantation?
Speaker Change: And issued a call out.
Speaker Change: Then we have in the past few times of announcing results both internally by our results. We spoke about on the new tenants that we have signed.
Well not every center is a few but.
Speaker Change: The ability for the oil.
Speaker Change: Call It two week base et cetera.
Speaker Change: So we need to repeat for various reasons.
Speaker Change: We put us allow us to keep that occupancy strong, albeit ultimately sometimes will be into two.
Speaker Change: Subsidized.
Speaker Change: Tenants, especially rewarding to change the mix.
Speaker Change: But the strong occupancy.
Speaker Change: The teams are out.
Speaker Change: So last question and Samsung Romanian despite that slight negative blanka recessions can we get the ultimate lasting Neal vantage.
I think there is a lack of feedback.
Greg: I think there's a lack of feedback, and we have only roughly a third of the lease expiring each year. So if you look at the downtrend, it will take several years to hit our P&L, and certainly the last year, this year has been challenging. We expect 2025, 2026 financial year also will be challenging in the discussion with our tenants. Greg mentioned that some of that is the retail market is stabilizing, but I think the process of impact will take a little bit of time to come back into our portfolio. Again, because it's one-third expiring each year, even the upside will take a little bit of time to run in.
Speaker Change: And we have only roughly a third of the lease expiring each year.
Speaker Change: So if you look at a downtrend it will take several years to hit the P&L and certainly in the last this year has been challenging.
Speaker Change: We expect 2025 26 financial year <unk>.
Speaker Change: So there will be challenges in the discussion with our tenants.
Speaker Change: Greg mentioned that some of that has to be a state of the retail market is stabilizing.
Speaker Change: But I think the positive impact we took a little bit.
Speaker Change: The time to come back into the room to grow our portfolio again, because one third of expiring each year, even the upside will take a little bit tough time to run in.
Speaker Change: So I think we will see hopefully.
Greg: So I think we'll see some challenge to our top line as a result of the activities, the leasing activities that we've done from about the current year, 2024 to about late 2025, 2026, with a lack of impact on both the downside and the future. So here comes the end of our update, so thanks for joining us today and look forward to seeing you again in our final results in May, May. Thank you. Today, we are pleased to have our Group CEO, Mr. George Hongchoi, DEFO, Mr. Pa Shongwoon, COO, Mr. Gleickhoff, and CPDO, Mr. Rod Walnut-Lund, to be here with us to provide an update on our business.
Speaker Change: Some challenge to our topline.
Speaker Change: As a result of the activities that.
Speaker Change: The leasing activities that we've done.
Speaker Change: Paul about.
Speaker Change: The year 2004 through about $8 $5 six.
Speaker Change: What's that going to be amazing.
Speaker Change: And both the <unk> and the future upturn.
Speaker Change: So <unk> now.
Daniela: So thanks for joining us today and authority Daniela again, an outstanding result in May may Thank you Mikael.
Speaker Change: And we are pleased to have our co CEO, Mr. Jos <unk> CFO, Mr. Prashant womb Cielo will make the black Hawk and think about and one Atlanta at hand with us to provide an update on our destination.
Speaker Change: I'll begin with company highlights that operational update followed by financial and outlook. Lastly, we will have a Q&A session now I would like to pass the floor childhood as CEO Josh Coates.
Christie: We'll begin with company highlights, then operational updates, followed by financial and outlook. Lastly, we will have our Q&A session. Now, I would like to pass the floor to our Group CEO, George, please. Thank you, Christie. We appreciate everyone joining us today for what will be the last time we're doing the pre-blackout briefing. And going forward, we'll be shifting to a quarterly update instead. And further information will be shared at the end of this presentation about what we have planned and the reasons that we will be making this adjustment. Let me start with some highlights and a reminder of the uncertainty that we're dealing with as we operate and the strategy that we have been pursuing these past years.
Speaker Change: Thank you Christie.
Speaker Change: Appreciate everyone joining us today.
Speaker Change: Or what will be the last pie with doing the local region.
Speaker Change: Going forward, we will be shifting to a quarterly update instead and for those the ratio of risk share at the end of this presentation that about what we have planned and the reasons that we will be making this adjustment.
Speaker Change: So let me start with some highlights and a reminder of the uncertainty.
Speaker Change: The data were because we operate.
Speaker Change: And the strategy that we have been pursuing these past years.
Speaker Change: Let me give an overarching summary of the big picture for link.
Let me give an overarching summary of the big picture of a link. continues to operate in the highly uncertain times, for higher or longer interest rates and uncertainties around how the global economy will fare in the face of various challenges. in the geographies where Link operates. We are facing challenges in Hong Kong, where our retail tenants are facing significant pressure in terms of rising costs, sales leakage to online and cross-border travel. And this together with the continuous challenge in re-energizing the economy in mainland China is leading to significant pressure on rental reversion. At this time, we're glad that we have started our diversification effort, when we did.
We continue to operate in a highly uncertain times four.
Speaker Change: For higher for longer interest rates and uncertainty around how the global economy, we will trade at the face of those challenges.
Speaker Change: In the geographies, where a link offerings.
Speaker Change: We are facing challenges in Hong Kong.
Speaker Change: Our retail tenants are facing significant pressure in terms of rising costs sales leakage through online and cross border trebled.
Speaker Change: This together with the continuous challenge.
Speaker Change: Energizing the economy in mainland China.
Speaker Change: Leading to a significant pressure on rental reversion.
Speaker Change: At this time, we're glad that we have started our diversification effort when we did.
Speaker Change: As the picture in Singapore and Australia.
as the picture in Singapore in Australia. Looking ahead, we remain committed to our LINK 3.0 strategy, which builds on our capabilities and track records achieved over almost two decades, to further strengthen LINK 3's portfolio and to develop our real estate investment management business under LINK. Just to provide a bit more detail on the global and local context for our business in the year ahead. Globally, we anticipate the global outlook to remain mixed due to factors including the U.S. policy environment, continued challenge with mainland China economy, and unclear interest rate cut timing. These factors combined together with evolving technology and changing consumer behaviors create an uncertain global structure and demands that we act with caution.
Speaker Change: It's more positive.
Speaker Change: Looking ahead, we remain committed to our latest pre zero strategy, which builds on our capabilities and <unk> achieved.
Speaker Change: Almost two decades.
Speaker Change: Further spring's building portfolio and to develop.
Speaker Change: Real estate and investment management business under linked.
Just to provide a bit more detail on.
Speaker Change: While the global and local context for our business.
Speaker Change: Year pattern.
Speaker Change: Globally, we anticipate the growth outlook to remain mixed.
Speaker Change: Due to practice, including the U S.
Speaker Change: Policy environment continued challenge with mainland China with economies and unclear interest rate Cup timing.
Speaker Change: These factors combined together with evolving technologies and changing consumer behaviors create.
Speaker Change: Created uncertain global but blackjack and demands that we act with caution.
Speaker Change: In our key markets, let alone in mainland China.
In our key markets, Hong Kong and Mainland China, the outlook is less favourable. However, monetary policy loosening and the focus on boosting domestic demand are expected to stimulate economic activity, though we expect it will take some time before things will improve. Meanwhile, Singapore and Australia offer a more positive outlook, with robust economic indicators and consumption support. Despite the prevailing macro conditions, our portfolio has continued to endure. A quick reminder of the shape of our business and our diversification strategies. Currently, our linked REIT portfolio comprises 74% Hong Kong, 15% mainland China, and 11% international, which includes Australia, Singapore, and the UK.
Speaker Change: Overall this less favorable however, monetary policy loosening and a focus on boosting domestic demand are expected to stimulate economic activity.
Speaker Change: We expect it will take some time before things will improve.
Speaker Change: Meanwhile, Singapore, and Australia offer a more positive outlook with robust economic indicators and consumption and support.
Speaker Change: Despite the prevailing winds up growing conditions, our portfolio has continued to endure.
Speaker Change: A quick reminder of the shape of our business and our diversification strategies currently hourly rates portfolio comprises 74% of phone calls.
Speaker Change: Teen percent mainland China.
Speaker Change: Percent International which includes Australia, Singapore, and the U K.
Speaker Change: As we diversify and grow pooling three zero, we are focused on optimizing our portfolio by exploring opportunities in the APAC region, including Australia, Japan and Singapore.
As we diversify and grow Schooling 3.0, we are focused on optimizing our portfolio by exploring opportunities in the APEC regions, including Australia, Japan, and Singapore. And at the same time, we are also committed to maintain a high bar for right acquisitions and organic M&A. In line with our strategy to grow our real estate investment management, we've officially launched Link Real Estate Partners, a private fund management business line in Krefric. And Ronald will provide further details on this later. Let me now pass the time to Greg to share more on the operational update. Thanks George and good afternoon everyone and I'll start this afternoon with the review of our overall portfolio occupancy.
Speaker Change: And at the same time, we are also committed to maintain a high bar for <unk> and <unk> organic M&A.
Speaker Change: In line with our strategy to grow our real estate investment management.
Speaker Change: Officially launched linked real estate partners, a private fund management business line at corporate.
Speaker Change: Donald will provide further details on this later.
Speaker Change: Let me now pass the time to grab to share more on the operational update.
Speaker Change: Thanks, George and good afternoon, everyone and I will stop this afternoon with a review of our overall portfolio Occupancies.
Speaker Change: Our portfolio has demonstrated solid performance with occupancy levels remaining high and our international retail assets approaching nearly full occupancy.
Our portfolio has demonstrated solid performance with occupancy levels remaining high and our international retail assets approaching nearly full occupancy. In Hong Kong, the resilience of our non-discretionary retail portfolio is reflected with high occupancy and showcasing stability and strength in the underlying market. In Mainland China, we're pleased to report healthy occupancy rates across various asset types, underscoring the effectiveness of our Focused Leasing Initiative. In international markets, our retail assets in Australia and Singapore achieve nearly full occupancy with robust ongoing leasing demands, while ongoing challenges are noted in the Australian office market. Now let's look at Hong Kong in some more detail and our retail portfolio, where the occupancy rate has remained robust at 97.1% as of December, highlighting the resilience and stability of our essential needs focused trade mix, even amidst challenging market conditions.
Speaker Change: In Hong Kong, the resilience of our non discretionary retail portfolio is reflected with high occupancy and showcasing stability and strength in the underlying markets.
Speaker Change: In mainland China, we're pleased to report healthy occupancy rates across various asset types underscoring the effectiveness of our stated focus leasing initiatives.
Speaker Change: In the international markets, our retail assets in Australia, and CFO achieved nearly full occupancy with robust ongoing leasing demand, while ongoing challenges and notice in the Australia and office markets.
Speaker Change: Now, let's look at Hong Kong in some more detail and our retail portfolio, where the occupancy rate has remained robust at 97, 1% as of December highlighting the resilience and stability of our essential needs to trade mix, even amidst challenging market conditions.
Speaker Change: Rental revisions for the period experienced negative low single digits for the first nine months of the period, which also impacted the unit ramp per square foot, bringing it to $64 10.
Rental reversions for the period experienced negative low single digits for the first nine months of the period which also impacted the unit rent per square foot bringing it to $64.10. Despite tenant sales being affected by changing consumption patterns among visitors and residents, which recorded a decline of 3.3% year-on-year for the first nine months, this was a narrower drop compared to the broader Hong Kong market at negative 7.6%. Occupancy costs have slightly come down compared to the first half of the year, indicating potential stabilisation at value conditions. Then when we break it down by trade mix, both food and beverage in general retail segments outperformed the Hong Kong market, while supermarket and foodstuff saw some weaker performance for the period.
Speaker Change: Despite tenants out being affected by changing consumption patterns, among visitors and residents, which recorded a decline of three 3% year on year for the first nine months.
Speaker Change: This was a narrow would drop compared to the broader Hong Kong market at negative seven 6%.
Speaker Change: Occupancy costs has slightly come down compared to the first half of the year, indicating potential stabilization at setting conditions.
Speaker Change: And when we break it down by trade mix, both food and beverage in general retail segments outperformed the Hong Kong markets, while supermarket and foodstuffs saw some weaker performance for the periods.
Speaker Change: In terms of the Hong Kong <unk> and related businesses, we observed moderate growth in parking revenues for the first nine months of the year, while parking ticket sales experienced a decline this was balanced out by increases to pocket tariffs.
In terms of the Hong Kong car park and related businesses, we observed moderate growth in parking revenues for the first nine months of the year. While parking ticket sales experienced a decline, this was balanced out by increases to parking tariffs. We aim to stay responsive to market trends, creating plans to enhance performance and rolling out our new car park management system and ongoing enhancements to that program. Now let's shift to Mainland China, where as previously mentioned, occupancy was healthy across our various asset types. Our retail team on the ground in China has been able to manage tenant remixing very effectively in order to secure more productive and innovative operators.
Speaker Change: We ended sorry responsive to market trends credit plans to enhance performance and rolling out a new car Park management system and ongoing enhancements to that program.
Speaker Change: Now, let's shift to mainland China, whereas previously mentioned occupancy was healthy across our various asset types.
Speaker Change: Our retail team on the ground in China has been able to manage tenant remixing very effectively in order to secure more productive and innovative arthritis.
Speaker Change: We saw softer demand in specific trials, such as cosmetics and jewelry, while sporting goods in particular and re titles featuring intellectual property designs.
We saw softer demand in specific trades such as cosmetics and jewellery, while sporting goods in particular and retailers featuring intellectual property designs are doing really well. As for office, our occupancy exceeded the district average despite new supply. We will continue to upgrade our facilities to enhance our customer satisfaction and also attract new tenants by carrying out fit-out works on vacant units to improve profitability. The logistics occupancy in our portfolio remains healthy at over 96% and demand for our facilities are predominantly driven by e-commerce and third-party logistics operators. and turning our attention to our international business which consists of retail and offices located predominantly in Australia and Singapore.
Speaker Change: Really well.
Speaker Change: As for office occupancy exceeded the district average despite new supply.
Speaker Change: We will continue to operate our facilities to enhance our customer satisfaction and also attract new tenants by carrying outfit outlooks on vacant units to improve occupancy.
The logistics occupancy in our portfolio remained healthy at over 96% and demand for our facilities are predominantly driven by E Commerce and third party logistics operators.
Speaker Change: And turning our attention to our international business, which consist of <unk> Island offices, located predominantly in Australia and Singapore.
Speaker Change: And our strategy of retail assets by Kennedy in the Sydney CBD positive leasing momentum continues from tenant demand.
and our Australian retail assets located in the Sydney CBD, positive leasing momentum continues from 10th demand and now sees occupancy of 99.5%. This was supported by our active, ongoing leasing efforts, which has not only introduced the curation of new brands, but also has allowed for continued upgrading of retail offerings. Out of the trade categories in particular, food and beverage and apparel perform well across the three properties. Now moving on to Singapore, where our models of Jurong Points and Thompson Plaza perform very strongly, achieving occupancies now at 100% with ongoing positive leasing reversions. The ongoing enrichment of our tenant variety has been boosted through strong leaking interest from overseas retailers, including those from mainland China, and in particular food and beverage brands.
Speaker Change: And now see occupancy of 99, 5%.
Speaker Change: This was supported by our active ongoing leasing efforts, which not only introduced the curation of new brands, but also it allowed for continued upgrading of Brookdale offerings.
Speaker Change: Out of the <unk> categories in particular, food and beverage and apparel performed well across the three properties.
Speaker Change: Now moving on to Singapore for a malls, if general points and Thomson Plaza performed very strongly achieving occupancy is now at 100% with ongoing positive leasing revisions.
Speaker Change: The ongoing enrichment of that tenant variety as they've boosted through strong leasing interest from either stage III tyler's, including those from mainland China and in particular food and beverage brands.
F&B in beauty and wellness categories were the main drivers of 10 sales growth over the period.
F&B and beauty and wellness categories were the main drivers of tenant sales growth over the period. And finally for me on office, we note the further bifurcation in the Sydney office market with the fight to quality trend continuing. We've made some good progress, however, through the backfilling of vacant tenancies, in particular at 347 Kent Street in Sydney, and our retention rate on renewals remains strong. Under current market conditions, it's essential for us to continue to enhance the appeal of our office spaces through pacemaking and the provision of amenities. And now I'll pass over to KS.
Speaker Change: And finally from me on office, we note that the.
Speaker Change: Bifurcation in the Sydney office market with the flight to quality trends continuing.
Speaker Change: We've made some good progress however through the back filling a vacant tenancies in particular at <unk> in Sydney and our retention rate on renewals remained strong.
Speaker Change: Under current market conditions, it's essential for us to continue to enhance the appeal of our office spaces through Pacemaking and a provision of amenities.
Speaker Change: And now I'll pass over to <unk>. Thank you.
Speaker Change: Thank you Greg good afternoon to everyone.
Thank you. Thank you, Greg. Good afternoon to everyone. Moving on to Capital Management, our robust financial position is well supported by a healthy balance sheet as shown by the key metrics here. As of 30th September 2024, net gearing remained low at 20.6%, while the average borrowing cost remained competitive at 3.69%. Our EBITDA interest calculation stood at 4.8 times. Fixed debt ratio in the upper range of 50-70% is in anticipation of more gradual and shallow recovery. Supported by our A ratings from all three credit agencies, we have the stability and credibility to attract investors, as well as secure favourable terms for future funding needs.
Speaker Change: Moving on to capital management.
Speaker Change: Our robust financial position is well supported by a healthy balance sheet as shown by the key metrics here.
Speaker Change: As of 30 of September two will go to Paul <unk>.
Speaker Change: Gearing remains low at 26% while.
Speaker Change: While the average borrowing costs remain competitive at three 6%.
Speaker Change: So EBITDA interest coverage stood at four eight times.
Speaker Change: Debt ratio in the upper range of 50% to 70%.
Speaker Change: Dispersion of more gradual and schedule rate cuts.
Speaker Change: The part about a ratings from all three credit agencies, we would have to disturb repeat incredibly few to attract investors.
Speaker Change: So it's secure favorable terms for future funding.
Speaker Change: Between 90, Zemba Toyota reported seven January 225.
Between 9th December 2024 and 7th January 2025, we deployed over HK$500 million to buy back approximately 17 million units. Overall, our robust financial position will enable us to effectively navigate the uncertainties in valuation. The disciplined approach to debt management with diversified sources of capital across debt instruments has helped us to achieve our goals. with a competitive average boarding cost, as well as robust credit rating. Our financial stability is reinforced through FX Management, which includes extensive hedging of non-HKD distributable income. and the currency risk of overseas access. alongside capitalizing on lower RMB interest rates. after repaying some debt The debt balance as of 10 September 2024 was reduced to HK$55.6 billion.
Speaker Change: We deployed over $500 million local dollars to buyback approximately 17 million units.
Speaker Change: Overall, our robust financial position will enable us to effectively navigate the uncertainties in evaluations.
Speaker Change: Okay.
Speaker Change: This disciplined approach to debt management with diversified sources of capital across debt instruments.
Speaker Change: Our search.
Speaker Change: Paper Coca tea beverage board costs, so it's robust credit markets.
Speaker Change: Our financial stability is reinforced through FX management.
Speaker Change: Which includes extensive hedging of non Hong Kong dollar distributable it will come.
Speaker Change: And the currency of overseas assets.
Speaker Change: Alongside capitalizing on lower RMB interest rates.
Speaker Change: After repaying some debt.
Speaker Change: The debt balance as of end September.
Speaker Change: September two zero to four plus.
Speaker Change: Was reduced to $55 six eventful holdover.
Speaker Change: And we have been proactively managing our maturity profile.
and we have been proactively managing our maturity profile. I now pass the time to Ronald to cover other updates. Thank you. Thank you, Taz. Good afternoon, everyone. We have made significant progress in developing our real estate investment management business through the launch of our new business line, Link Real Estate Partners. which focuses on serving third-party, private and institutional sectors. It will leverage on Link's robust operational skills, deep knowledge, and scale in Asia, and provide proven track record to identify and execute compelling real estate investment strategies and match them with capital across the risk spectrum. It will also help accelerate our diversification and create new income from co-investing and managing assets for new farmers.
Speaker Change: I'll now pass the time to rollout a couple of other updates. Thank you. Thank you for asking good afternoon, everyone.
Speaker Change: We have made significant progress in developing our real estate investment management business through the launch of a new business line link real estate partners.
Speaker Change: Which focuses on serving third party private institutional capital.
Speaker Change: It will leverage on a linked robust operate shinall skills deep knowledge and scale in Asia and.
Speaker Change: I'll provide track record and proven track record to identify and execute compelling growth state investment strategies and match them with capital across the risk spectrum.
Speaker Change: It will also help accelerate our diversification and create new income from co investing and matching assets put new bonds.
Speaker Change: We have spent much of 2020 for assembling a fund management team led by John Saunders Chief Investment Officer.
We have spent much of 2024 assembling a fund management team led by John Saunders, our Group Chief Investment Officer, along with several new hires, including Head of Australia Investments, Head of Research, Portfolio Director and a Product Strategist. While we're unable to disclose too many details at this juncture, we expect 2025 to be a busy for both fundraising and investment. Before we move on to Q&A session, I would like to discuss our new approach to providing operational updates in between our interim and final results. We always strive to continually improve our engagement with investors and as part of that, to provide robust, transparent information on a timely manner.
Speaker Change: Along with several new hires including head of Australia investments head of research.
Speaker Change: With our extra added product strategies.
While we are unable to disclose too many details at this juncture, we expect 2025 to be a busy will both fund.
Speaker Change: <unk> raising and investments.
Speaker Change: Before we move on to Q&A session I would like to discuss a new approach to providing operational updates in between our interim and final results.
Speaker Change: We always strive to continuously improve our engagement with investors and as part of that to provide robust transparent information on a timely manner.
Speaker Change: Starting with the operational update after our next final results.
Starting with the operational update after our next final result. We will be able to provide our Q1 and Q3 operational updates approximately one and a half months earlier than we currently do, as we will transition to providing quarterly operational updates announcements instead of pre-blackout briefings. We plan to provide Q1 updates in February and Q3 in August. This change, made after feedback from the investment community, will allow us more time to engage with investors and analysts prior to any blackout period. At the timing of our quarterly update, the results will be distributed more evenly throughout the year.
Speaker Change: We will be able to provide our Q1 and Q3 operational updates approximately one and half months earlier than we currently do as we will transition to providing quarterly operational updates announcements and instead of pre blackout briefings.
Speaker Change: We plan to provide Q1 update in February in Q3 in August.
Speaker Change: This change made after the feedback from the investment community will allow us more time to engage with investors and analysts prior to any blackout period.
Speaker Change: At the timing of our quarterly updates and the result will be distributed more evenly throughout the year.
Speaker Change: To facilitate this we will upload the quarterly operational updates to the stock exchange and our corporate website, ensuring timely access to essential information.
To facilitate this, we will upload the quarterly operational updates to the Stock Exchange and our corporate website, ensuring timely access to essential information. This will enable stakeholders to access our performance more effectively and make well-informed investment decisions. I'll now pass over to Christy for the Q&A session. Thank you, Ronald. So let's move on to the follow-up Q&A. Please submit your questions using the Q&A function. We got a few questions already, let's see if we can start now. So quite some questions on the retail sales in Hong Kong. So let's start with... Cindy from Citi. So how's the retail sales trend in the first quarter of Canada year 2025?
Speaker Change: This will enable stakeholders to assess our performance more effectively and make well informed investment decisions.
Christy: I'll now pass over to Christy for Q&A session. Thank you.
Christy: That's more balanced that's all Sunshine eight significantly changed using makena in Edmonton.
We got a few questions on <unk>.
Christy: Now let's take.
Christy: Some questions on the retail path in Hong Kong now unless that went down.
Christy: In the income statement.
Christy: So how do we have sales trend in <unk>, Canada, <unk> and clean shop floor and signs of a recovery.
Any green shots for early signs of recovery? I'll take that question. Thank you, Cindy. So just looking at the, I guess, the period after December, we've seen an improvement and we've just spoken to a negative 3.3 total sales position. And just to remind you that at the end of the first quarter of the financial year that was negative 5.9 and then at the first half it was negative 4.3. So a gradual improvement over the period. And we've seen that across the three major categories that we report to. So as at December, food and beverage was flat year-on-year and that was an improvement from negative 1.5% for the first quarter.
Christy: That's the question <unk>. So we're looking at the I guess the period up to December we've seen.
Christy: And improvements.
We've just spoken to a negative $3 three total SaaS position and just to remind you that at the end of the first quarter of the financing that was negative $5 nine and then at the first half was negative $4 <unk>. So a gradual improvement over the period.
Christy: And we've seen that across the three major categories that we report to.
Christy: So as it is.
Christy: Send about food and beverage was flat year on year.
Christy: And that was an improvement from negative one 5% for the first quarter.
Christy: Supermarkets were seeing some gratulate pregnant and I think thats philosophy off a lower base.
Supermarkets, we're seeing some gradual improvement and I think that's largely off a lower base. So supermarkets were negative 5.9% in the first quarter, negative 5.2% at the first half and negative 3.9% at Q3. And general retailers also improved significantly. So as we move into the last quarter of this year, we are seeing that trend continuing. But I will say that there is a lag from this improvement in sales and flowing through into rental reversions. The other associated metric to the sales is our football, which we've seen ongoing improvement over the last few months. And in particular, we've seen more of a dramatic improvement on weekend football and that I think is associated with some of the stabilisation of the northbound linkage.
Christy: Substitute markets were negative five 9% in the first quarter negative five 2% at the first half and negative three 9% in Q3 in general retailers also improved significantly.
Christy: As we move into.
Christy: The last quarter of this financial year, we say net trend continuing.
Christy: But I will say that there is a lag from this improvement in sales and flowing through into the retro resurgence.
Christy: The other associated.
Christy: The trick to the sales is applicable, which we have seen ongoing improvements.
Christy: Over the last few months.
Christy: And in particular, we've seen.
Christy: More of a dramatic improvement on weekend footfall and that I think is associated with some of the stabilization of the milk linkage.
Christy: So it sounds green shoots groups.
So some green shoots, but still somewhere to go. Thank you. So another question is, will you consider any disposal to recycle capital given high for longer rate outlook? I'll take that. So, obviously, we always look at optimizing our portfolio and we're always constantly reviewing acquisitions as well as disposals. And so, yes, if there is the right deal in the market, if there's the right price, we will consider recycling. I think right now we're still looking for those opportunities and we're constantly assessing those recyclables. Thank you. So next question is from Sam of Dressy. Could you share a bit more color on China side, sales and reversions?
Christy: Group somewhat better.
Christy: Thanks.
Christy: Another question I think that also continued to build a company that any disposal should we think about capital again and high for longer rate outlook.
Christy: I'll take that so obviously, we always look at optimizing the portfolio and we're always constantly reviewing.
Christy: Acquisitions as well as disposals.
Christy: Yes.
Christy: There was a right to you and the market treatment at the right price, we will consider recycling I think.
Christy: Right now we're still looking.
Christy: For those opportunities and we're constantly.
Speaker Change: Youre assessing.
Speaker Change: Those recycle opportunities. Thanks, Mark next question. Please Sam.
Speaker Change: Sam of Kathy.
Could you shed a bit more color on China site, South and they mentioned.
Speaker Change: Yes.
Speaker Change: Sure.
Speaker Change: China from the retail segment side from a retail perspective.
Yeah, so, um...
Speaker Change: Is stabilizing the biggest challenge at the moment and in Beijing in particular, our truck launch on asset way with doing some ongoing asset enhancements and tenant remixing.
Speaker Change: When we reported the half first half result, we spoke to the fact that it was negative revisions to the mainland business, but if you excluded some crunch on it would be slightly positive that is still the case.
Speaker Change: Pleasingly, there is quite a lot of tenant activity in the mainland market.
Speaker Change: So the markets of Shanghai, Guangzhou, and Shenzhen for us continued to be pretty stable.
Speaker Change: Beijing is where a lot of efficacy is.
Speaker Change: And the slight dip in occupancy from the first half to this reporting period, we think will.
Speaker Change: Signs of improvement as we get to the end of this financial year. So.
Speaker Change: Probably the most pleasing thing with regards to mainland retail east very good underlying tenant activity and tenant demand.
Speaker Change: But that is offset somewhat by significant increases of supply new supply in markets like Beijing and Guangzhou in particular.
Speaker Change: And then another question Tommy China nuisance law.
Speaker Change: Getting blown telecom <unk> data on secondhand Hospital right now and then Randy will be activates TEP globally.
Speaker Change: After that asset the Hudson, so tentatively progressing well building off the success that we had for the first phase.
Speaker Change: On its own site a few weeks ago the premises good leasing momentum is very strong.
Speaker Change: So as we move through into the new financial year.
Speaker Change: We're fairly confident that we will have the lion's share of that project's completed.
Speaker Change: With very satisfied with the ongoing leasing demand for that property, so very well positioned assets that are very strong catchments.
Speaker Change #100: But again, the major issue with Paul Gilbert with <unk>.
Speaker Change: Two is increased competition.
Getting well ahead of that new competition is important.
Speaker Change #101: If you put this project.
Speaker Change: And then finally just mentioned.
Speaker Change #101: Principal asset management.
Speaker Change: And Kenny.
Speaker Change: That's an idea on the apparently fashion trends.
Speaker Change: Should we be spending some quality kagan infections in Santa Monica.
Speaker Change: So just the general trend on leasing reversion for Hong Kong.
Speaker Change: We mentioned during the prepared remarks.
Speaker Change: We have seen a deterioration from the first half to the third quarter I am very very slightly negative leasing revisions by Hong Kong.
Speaker Change: And as we've discussed many times the composition of activity in any given year, usually tapers off in the back half of financial year <unk>.
Speaker Change: We reported plus 7% in the first half.
Speaker Change: We sit very very low single digit with version as at December.
Speaker Change: And that trend will continue through into the end of this financial year.
Speaker Change: And I think the concept of negative diversity something that.
Speaker Change: We should be prepared for this new financial year that would be embarking on shortly.
Speaker Change: Very moderate.
Speaker Change: Negative revision.