Speaker #1: From 1 April to 30 September 2026, MEA I'll be your host for today's readout briefing. Our speakers today are Ms. Sharon Lim, Chief Executive Officer for Impact; Ms. Janica Tan, Chief Financial Officer; and Mr. Koh Leong, our Head of Investment and Asset Management.
Speaker #1: He'll be presenting our financial results, providing key business development, and sharing market insights. Following the presentation, we'll open the floor for Q&A, where we're welcome to ask questions.
Speaker #1: So, without further ado, I'll hand the floor over to Janica, our CFO. Janica, please.
Speaker #2: Good morning, everyone. Let me start with our second quarter's results for FY26/27 compared with the same period last year. Gross revenue for the quarter was 207.5 million, while NPI was 153.5 million.
Speaker #2: These were down 5% and 6.3% year-on-year, respectively. Contributions from our Singapore Properties remain steady. Vivo City delivered stronger performance, following the completion of the B2AEI, alongside sustained rental growth.
Speaker #2: This was partly offset by transitional downtime at MBC and M Tower, lower compensation income at MBC, and higher property taxes across the Singapore Properties.
Speaker #2: Overseas contributions were lower, mainly due to the previously disclosed non-renewal at Fujitsu Building in Japan, and the challenging conditions in China and Hong Kong.
Speaker #2: We also no longer receive contributions from the asset divested last year, and the net proceeds from those divestments were used to repay that. On expenses, property operating expenses were 1.2% lower year-on-year, primarily due to the divestment.
Speaker #2: Finance expenses fell by 10.1%, reflecting lower interest rates on our Singapore borrowing, and continued interest savings from debt reduction. DPU for Q2 was 1.94 cents, with Vivo City's growth and interest savings partially offsetting this softer overseas contribution.
Speaker #2: Turning on to Slack 9, on the performance across our markets, Singapore continues to underpin MPACT's resilience at MBC, with our progressively backfilling space with a key committed lease expected to begin contributing rental income progressively from next quarter onwards.
Speaker #2: For our overseas properties, longer downtime and negative rental reversions weighed on contributions. Moving on to our first half results for FY26/27 compared with the same period last year.
Speaker #2: Gross revenue was 413.9 million, and NPI was 308.3 million, down 5.3% and 6.5% year-on-year, respectively. Singapore's gross revenue grew 1.2% year-on-year, while overseas contributions were affected by the same factor I've mentioned for Q2.
Speaker #2: As well as a stronger Singapore dollar against Japanese yen and Hong Kong dollar. Finance expenses were 14.4% lower at 83.4 million, and DPU for the first half was 3.90 cents.
Speaker #2: Okay, on Slack 11, our Core Asset Vivo City and MBC continue to anchor portfolios earnings, together they contributed 58% of gross revenue and 59% of NPI.
Speaker #2: Vivo City's gross revenue grew 7.5%, while NPI increased 6.9%, benefiting from the B2AEI. Moving on to our balance sheet on Slack 12, our NAV per unit remained relatively stable at $1.73 at 30 September 2026.
Speaker #2: Yeah. So now I move on to capital management on Slack 13. Gross outstanding borrowings stood at 5.9 billion, with aggregate leverage 38.1%. Interest coverage was 3.3 times on the 12-month trailing basis.
Speaker #2: Our weighted average all-in cost of debt declined to 2.95% from 3.23% a year ago, and of the total gross debt, 71.8% was either fixed rate or hedged through interest rate swap.
Speaker #2: And the average term-to-maturity was 3.2 years. Okay. On the financial flex, MPACT has approximately 0.6 billion in cash and underwent committed facility at the close of the reporting period.
Speaker #2: Providing sufficient liquidity for working capital and financial obligations. So we continue to maintain a natural balance sheet hedge by allowing our debt currency mixed with our fragile distribution of MPACT's AUM, where feasible.
Speaker #2: Debt maturity profile remained well spread, with no more than 22% falling due in any single financial year. Facility are already in place to refinance the remaining borrowings due in this financial years.
Speaker #2: Moving on to risk management, to manage interest rate volatility we continue to keep more than 70% of our debt on fixed rate. So as at September, this portion stood at 71.8%.
Speaker #2: FX remained volatile against Singapore, on a rolling four-quarter basis, approximately 94% of MPACT's distributed income was derived from or hedged into Singapore. We will continue to take a risk-based approach to capital management, with a focus on overall financial resilience.
Speaker #2: Financing costs remain subject to market conditions, and we expect the scope for further savings to narrow as rates rise. Finally, let me cover the distribution detail.
Speaker #2: DPU for Q2 1.94 cents, unit holder can expect to receive the distribution on 16 December, and the book closure date will be on 10 November 2026.
Speaker #2: With that, I'll hand over to William. Thank you.
Speaker #3: Okay, good morning, everyone. Maybe let's start with the numbers. So MBC continues to see continues to see leasing progress. We are able to we have been able to increase the committed occupancy slightly from 94.3 to 95.4.
Speaker #3: As mentioned in previous quarters, results previewing, this committed leases will gradually contribute to revenue from the third quarter onwards. So majority of them will come in towards the later part of this quarter, as well as in the early part of next year.
Speaker #3: Next quarter. Vivo City remains fully committed. And the contributions of the AI have been flowing through the numbers this year. For the other SG properties, we had a little bit of transitional vacancy at M Tower.
Speaker #3: That's gradually being filled up. And we are maintaining our committed occupancy at a 95 mark so far. On Festival, the mall remains fully committed at 99.9%, just in transitional vacancies at the current moment.
Speaker #3: For the China properties, leasing continues to be challenging. While the numbers on the committed occupancy have increased slightly. There are still weaknesses in the market, and you'll see that they are flowing through in the negative rental reversion of the next slide.
Speaker #3: For Japan properties, they remain stable. Committed occupancy increased slightly. But we are seeing we are continuing to see weakness in the Makuhari assets. Despite we are continuing to see weakness in the Makuhari assets.
Speaker #3: There are some green shoots. We are seeing some increased rental inquiries in the Makuhari area. We have talked about Makuhari being a challenging market in the past two or three years.
Speaker #3: We had very few inquiries for large spaces. And in the current market, because of the increasing rentals in central Tokyo, there is now a little bit more traction for Makuhari.
Speaker #3: There are more leasing inquiries. And we are slowly converting some of these into leases and hopefully we'll get a bit more progress over the next half year or so.
Speaker #3: Pinnacle Gangnam continues to be performing well, fully committed occupancy, except for a small unit in the basement for FMB. So moving on to rental reversions.
Speaker #3: So for MBC, rental reversions remain positive. Market rentals at MBC are still about the 650, 650 plus minus mark. And for most of the PP leases, we are signing leases around that space, maybe a little bit higher.
Speaker #3: Vivo City continues to perform well in the current market. And we see 15% rental reversion this year. So far. And for the other SG properties, reflecting the improvement in the general office sentiment, there's a slight positive rental reversion of 5.5%.
Speaker #3: Festival Wharf, still remains weak in terms of rental reversion. The market has come down a little has come down over the last two or three years, and that's reflected in the rental reversion numbers we are seeing.
Speaker #3: As I mentioned earlier, China remains challenging. Market rentals in the Changxiang area as well as in the Lufthansa area in Beijing remains low. On a quarter-on-quarter basis, we're still seeing market rentals come down.
Speaker #3: That's reflected in our rental reversion numbers, which are, as you can see, there's close to minus 30%. Japan, most of this rental reversion is coming from the leases outside of the outside of Makuhari.
Speaker #3: So in the Tokyo area, where market is slightly improving, and we are able to increase rentals slightly. And for Korea, Pinnacle Gangnam continues to perform well, and because of the tight space in the Gangnam area, in particular, and that's delivered a rental reversion of 30%.
Speaker #3: Lease expiry remains at 2.3 years, roughly consistent with the last few quarters. Okay, moving into performance for Vivo City. Shopper traffic and tenant sales are up.
Speaker #3: Shopper traffic up slightly, and tenant sales up about 4.1% year on year. Large part of this is contributed by FMB. And some of it is due to the improvement in the tenant sales due to the AI that we concluded last year.
Speaker #3: So you see some of the new tenant remixing and rejuvenation that we have done over the past quarter. As well as some of the events that we have done over the last quarter as well, particularly for the middle of the Festival.
Speaker #3: Looking at Hong Kong, starting to see a little bit more green shoots in the Hong Kong retail market in general. So that's also flowed through a little bit to Festival Wharf, where shopper traffic is up 56.7.
Speaker #3: Tenant sales is up 3.9. Largely driven by improvements in the FMB sector for FW, as well as some of the luxury particularly the jewelry side of the jewelry tenants.
Speaker #3: So we continue to remix the tenancies at FW to improve. And like I mentioned, because we are seeing improvements in the FMB sector, one of the things that we've been doing is also trying to put in a bit more FMB in the mall.
Speaker #3: Okay. Then lastly, FW continues to be very strong in running traffic to running events to bring traffic to the mall. These are just some of the things that we have done over the last quarter.
Speaker #2: Okay. Thank you, Jessica and Li Yong. That brings us to our Q&A session. So we kindly request that all analysts, please state your name and affirm before asking your question.
Speaker #2: And to allow everyone a chance, please limit yourself to two questions at a time. You're the most welcome to join the queue again for follow-up.
Speaker #2: So for those joining us online, please submit your questions through the text-based platform, and we will relay them to the panel accordingly. So now let's open the floor for questions.
Speaker #2: Terence Lee, please go ahead. Please unmute yourself and yeah.
Speaker #1: Terence Lee from UBS. So the outcome from the Circle Line and Harborfront Center closure is intriguing. I think sales was up 3% in the quarter when shopper traffic seems to be slightly down.
Speaker #1: Would you say that some of this incremental tourist spend coming from Marina Bay is perhaps more higher spending? And ticket size? And I guess, can we extrapolate this sales pattern for the rest of the year?
Speaker #1: And I guess, anecdotally, has there been any meaningful impact to the Sentosa traffic due to the haze?
Speaker #2: Okay. Thank you for your question. It's very hard for us to quantify who exactly comes from Marina Bay. But I would say that the Circle Line completion with connecting Vivo within the line is definitely a huge plus for Vivo City itself.
Speaker #2: In terms of traffic and all, but precisely whether they come from Marina Bay, we won't be able to tell. Okay? But it's definitely a huge plus with the Circle Line completion for Vivo.
Speaker #2: HSC, there is a they have already started a closure. So there's a little bit of impact on the leeways. But I would say that our business is carrying on as it is.
Speaker #2: Our car park is way more full than before. Vivo itself, I think, is steady. We have completed our AEI, and the numbers are all flowing through today.
Speaker #2: That's where you see the increases of about 7%. For a 20-year-old mall, to still be generating very positive MPI year on year is a combination of effects.
Speaker #2: Okay? So the Circle Line completion is definitely one. Our AEI effects and also one. And of course, our regular changes in tweaking the trade mix to complete experience for our shopper is also another factor.
Speaker #2: Yeah.
Speaker #1: Okay. And maybe on Festival Wharf, what should we make of the disparity between the negative rental reversions despite sustained sales increases? Granted, I know I mean, on the ground, there are certainly more challenges, especially, I think, Pintoto is giving I guess, malls a run for the money.
Speaker #1: How should we think about the timeline of when reversions start to flatten out from here?
Speaker #2: Okay. I think the spread of increases in sales for different category is different. Okay? FMB is a very clear sector that is doing well.
Speaker #2: The luxury end, I would say that is only the for example, like Goldsmith Shop and all jewelry shops, they were at the last few quarters, they were doing extremely well.
Speaker #2: On the flip side, the fashion and all, I think it's not just specific to Hong Kong. It's on a weaker side. Okay? So when we look at sales, I think we are comforted that there is positive sales growth.
Speaker #2: And definitely in sectors of the FMB. It's positive. So how do we look at rental reversion? Rental reversion looks at the specific cluster of leases that is due for renewal and that's how we and numbers are reported accordingly.
Speaker #2: So depends on who is up for expiry. I would say that in quarters where there is fashion, there will definitely be a little bit more downside.
Speaker #2: So over time, what have we been doing? We have been tweaking a little bit of the fashion and personal cosmetics, which is on a little bit more challenged okay?
Speaker #2: So next year, for Festival Wharf, we are already on track to rezone our entertainment cluster, which is the cinema. Cinema operations is slightly different between Singapore and Hong Kong.
Speaker #2: In Hong Kong, I would say that the sentiments are way weaker than in Singapore. So when we look at the viability of the unit, we thought that what we could do better was to reconfigure it, reduce the size whilst we like some format of cinema.
Speaker #2: It doesn't have to be in that format. And convert it to a combination of FMB. So that's well on track. Well on track. The planning is well on track.
Speaker #2: And upon expiry, we will be downsizing our cinema in Festival Wharf. So I think if you talk about rental reversion and all, I would say we still have a few handful of tenants that we see that we need to weed that needs to be taken care of.
Speaker #2: And that will still affect the rental reversion. But for the FMB cluster, we are very confident that it is okay.
Speaker #1: Got it. And maybe after the cinema, is there anything else you think needs to be refreshed?
Speaker #2: Okay. I think the cinema was it's a nice corner cluster that we could act on. The MTR floor, certain subdivision is also underway. Okay?
Speaker #2: Which I think what we are trying to do is to create a create added more tenancies. Okay? So a little bit of resizing for the MTR floor is what we are trying to do.
Speaker #2: Also, in certain corners, where lots are bigger, which we may we are also looking at tuning it to make it a little bit more tenant-friendly because tenant size requirements have changed over time.
Speaker #2: We note that sometimes a 12,000 and a 10,000 doesn't work anymore. Tenants looked at slightly smaller and those are the things that we are doing.
Speaker #1: Okay. Sounds like one more year to go. Thank you.
Speaker #2: Yeah. Actually, if you look at our FMB, when we did our H&M transformation, H&M was split over a few floors. Stacked up. We took back that unit and we carved to a few restaurants.
Speaker #2: Those were a very big hit. And the numbers jumped. It was over a 50% change. In terms of numbers and definitely did help the sales and also the footfall.
Speaker #2: So I think that gives us a lot of confidence in terms of the food. I think where we are located, next to the university, is also a huge positive on the FMB.
Speaker #2: So from that angle, we are also looking at spreading widening the spread of our FMB offering to better cater for it. So I think the last quarter's AEI that we did for the H&M was very huge plus.
Speaker #2: For us.
Speaker #1: Thanks. Got it. Thank you.
Speaker #2: Thank you.
Speaker #3: Thank you, Terence. Geraldine, please go ahead.
Speaker #4: Good morning. Sharon Management Team. Just wanted to ask on the Festival Wharf AEI. Do you have a timeline for this or any target kind of quantum to deploy if you are ready to share?
Speaker #4: Yeah. And cinema space conversion to entertainment sounds like quite a big rent uplift to expect.
Speaker #2: Okay. Just as a general, I think we're expecting a positive ROI. Okay? The timing itself, there will be a bit of downtime next year.
Speaker #2: But I think it's a good change. ROI is looking positive. Based on the tender that we're receiving, for the construction works. But we are still fine-tuning it to see what else we can do to tighten the cost a little bit more.
Speaker #2: Okay? But it's positive ROI.
Speaker #4: Okay. Sharon, just to clarify, this cinema space is a tenant replacement or are you rejigging the space and?
Speaker #2: Rejigging and same tenants. Rejigging and same tenants.
Speaker #4: Okay. Got it. I think Festival Wharf, you still have quite a few anchor spaces to renew and some of these rents are from the protest or COVID lows.
Speaker #4: Should we still be expecting a good positive reversion uplift from this?
Speaker #2: I would say immediate few quarters, no. Because when we look at the numbers, we calculate on accumulative basis. Accumulative basis. So whatever numbers that you're seeing on a minus, the next quarter is accumulated.
Speaker #4: Okay. Okay. Understand. Also, I think back on the Makuhari area and queries, I think you shared that this could be a tenant for Fujitsu.
Speaker #4: Are you able to share a bit more color on this?
Speaker #5: Well, currently, we are still in negotiations with quite a few tenants, including one for Fujitsu building. Discussions are still fairly preliminary. And the decision-making process, we understand from the tenants, is fairly long drawn.
Speaker #5: So I think it's not opportune at this time to share more on that at the moment. But what we can say is that in general, compared to a year or two years ago, leasing inquiries in Makuhari have definitely picked up.
Speaker #5: In the past, most of the inquiries for Makuhari were small, right? We're looking at 25,000, something like 1,000 plus, 2,000 square feet to maybe 3,000, 4,000 square feet type of spaces.
Speaker #5: In the last two years, we signed one tenant that took up more than one floor. But in the current market, because there is so much price pressure in Tokyo Central, there is a little bit more inquiries coming out from tenants who potentially are looking to relocate out of Tokyo Central or in the Tokyo suburban areas.
Speaker #5: And we are seeing tenancies that are coming through asking for 50,000, 100,000 square feet of spaces. Most of these are not immediate. We are looking at next year before this leases will start.
Speaker #5: But discussions are ongoing with a few tenants on this type of spaces. Including one tenant who potentially could take the whole Makuhari. But like I said, tenants are taking a little bit of time.
Speaker #5: Rightly so, because it's a very big change for some of these tenants who used to have offices in central Tokyo and are now looking to move 40 minutes, one hour away to the Chiba area.
Speaker #5: So internally, they have a lot of hurdles to cross as well. When we are able to sign off the lease, then we will have something to report.
Speaker #4: Okay. Thanks for the color. I think from the same trade sector or various?
Speaker #5: Oh, quite a variety of sectors. Electronics, financial services, entertainment.
Speaker #4: Okay. Thanks for the color.
Speaker #3: Thank you, Geraldine. Terence from JPM, nice to see you again, Terence.
Speaker #6: Hi. Thanks for the opportunity. This is Terence from JP Morgan. Yeah. Just wanted to ask on MBC. What can you share on the physical occupancy as of 30th September versus the committed?
Speaker #6: And how should we think about the ramp up to that 95% number? And did I hear correctly, earlier you were saying that there's a one-off on impact on MBC?
Speaker #6: Was that in the last quarter or something? Yeah. Just the first question. Thanks.
Speaker #5: Okay. To answer the email first, MBC doesn't have any one-offs this quarter. In terms of occupancy, wise, physical occupancy so what really happened was if you look from last financial year to now, right, at the beginning of the previous financial year, we were in terms of physical occupancy wise, we were probably around the 90% mark plus just around that level.
Speaker #5: It dropped to about it dropped to about it just dropped to about 88, 89 percent at the end of last quarter. And it's slowly ramping upwards now.
Speaker #5: So in terms of the gap between our current committed and physical, that will gradually close towards the end of the financial year. So by the end of the financial year, we should be north of 92, 93 percent in terms of physical occupancy.
Speaker #5: There will be a few tenants whose leases will start next FY rather than this FY. And that's a small part of it.
Speaker #6: Okay. Thanks. Yeah. Just on my second question, just.
Speaker #2: Maybe in short about 60% are starting and it's so-called physically vacant, but it's committed. But about COVID, it's starting rental payment on 1st of November.
Speaker #2: 60%.
Speaker #6: Okay.
Speaker #2: Is committed. There has not started.
Speaker #6: Okay. And maybe on my second question, I mean, we've seen this focus on sharpening the portfolio and I guess it's been mentioned a few times before, but could you share with us is there further urgency to sharpen the portfolio?
Speaker #6: Are we looking at maybe accelerated pace of divestments? How should we think about refocusing on your core markets? And what's the timeline for that?
Speaker #2: Okay. I think it has been ongoing. If you look at what we have done for the last two years, we have trimmed about 1.2 billion of assets.
Speaker #2: For various reasons. One, better offer. Yields are worse than interest rates. The other thing is future tenancy issues. That we brought forward to divest.
Speaker #2: To not be held in a challenged position. So for various good reasons, we divested 1.2. Okay. I don't think that's the end. I think we are in a combination of trying to trim where possible the weaker assets.
Speaker #2: But I think I will not hide away from the challenges in the market of certain markets in terms of divestment. I think the weaker ones definitely, like Makuhari, okay?
Speaker #2: But I think the challenges remain in terms of divestment. So there are certain things that we try to do along this line. That for like Fujitsu, if we can successfully lease it, I think the chances of divesting it will be higher.
Speaker #2: Right? So I think we are working along those directions to trim to continue to trim weaker yielding assets. And try to replace with better ones.
Speaker #2: Okay? So I think the focus is still the same. Where it's not a matter of the challenged markets, it's not a matter of whether I put my timeline, I want to do it next year, or I want to do it in three months' time.
Speaker #2: Okay? It's not a scenario of a Singapore market. Okay? So I would say that our focus is still the same. Trim all those that is not doing us good.
Speaker #2: And we will definitely continue to look at assets that make even out the portfolio in terms of strengthening the portfolio for the. Okay? So no change to what we have been doing.
Speaker #6: Okay. I guess, I mean, as you mentioned, that 1 billion over two years, I mean, you still have about 6 billion of overseas assets.
Speaker #6: Would that take I don't know how long would that take? Because I guess the overseas environment, that still seems to be very, very challenged.
Speaker #6: Is the sponsor still so long? Yeah.
Speaker #2: Yeah. Terence? I think there is a balance there between what investor would what buyers will potentially look at or the existence of certain buyers for certain zones.
Speaker #2: Okay? If we are willing to take certain huge haircuts, which I don't think is warranted, and I think that there is on a sustained basis, it shouldn't go down to that level.
Speaker #2: Those are the decisions that we will take that we will continue holding it. There are certain markets that I am willing to let go.
Speaker #2: Okay? But buyers are limited due to the investment environment. Where interest could be higher than any of the property yielding. Property yield. And the next is interest level on locations, like certain parts of Japan.
Speaker #2: Okay? So we have to think slightly differently of trying to couple the whole thing and mix and match certain things for to make it more palatable.
Speaker #2: But unfortunately, Japan interest rate has started to move up. That makes viability of an investment case for any potential buyers slightly more difficult. That being said, our focus on trying to get all these done is still there.
Speaker #2: Okay? A bet that it's slightly longer in view of the changing environment.
Speaker #6: Okay. Thanks. That's all I have for that.
Speaker #4: Thank you, Terence. Jonathan, over to you please, Jonathan.
Speaker #5: Yeah. Good morning, Sharon and management team. My first question relates to festival walk. Are the retention is about 56%. Is that typical sort of is it the typical level in Hong Kong or is it kind of lower than industry average?
Speaker #5: Is that low level of retention causing that negative rental reversion and how can you kind of improve that retention? Second question relates to South Korea.
Speaker #5: One of your peers have divested and I think recorded handsome gain. Is that something that you're looking at and does impact benefit if that were to be divested?
Speaker #5: Is it something good to do? Thank you.
Speaker #2: Okay. I think Korea our asset is very stable giving us decent operating matrix in terms of rental reversion, stability, tenancies, and so on and so forth.
Speaker #2: The right now, the impact of which would be quite nominal because we are sharing a 50/50 on the building with the sponsor. I think it's a if there is any decent offers we'll look at it.
Speaker #2: Recently, the interest rate has climbed quite tremendously for Korea. Okay? So I think we need to be a bit more balanced. I mean, for us, whether we sell or we don't sell, it doesn't have much impact to us.
Speaker #2: Similarly, for Japan, the Japan is also quite small. Okay? We have revalued to the point where it's maybe about 3% of our portfolio. Okay?
Speaker #2: So Korea is even smaller than that. So whether we sell or we don't sell, it doesn't have much impact. But it's a very stable asset.
Speaker #5: Okay. Yes.
Speaker #6: Sorry, Jonathan, could you repeat your question on festival walk?
Speaker #4: Let me get the question is on festival walks retention rate. And how does it relate to a rental reversion?
Speaker #2: Okay. I think I don't see there's a lot of change due to for example, we I don't see very drastic change. Okay? Because depending on the port that is up for renewal, we count either reversion and the retention.
Speaker #2: Okay? So there were certain little bit of change over. Like for example, Rolex became two-door and whatever. So it changes. But it's still in the same trade.
Speaker #2: Yeah? So it became a two-brand trade. As opposed to a mono. Yeah? So on the basis, I am not quite I'm not actually alarmed with the numbers.
Speaker #2: I think it's a substance over form. If you look at festival walk, we are not changing the trade very much. Okay? So for example, this watch group, we swapped to two.
Speaker #2: Okay? Then one of the one of the fashion we swapped to two other similar but slightly different type of fashion. So I think it's not alarming for festival walk.
Speaker #2: Like H&M, we split to five sorry, four F&B. So I'm not too alarmed.
Speaker #5: Okay. So as you continue to reconfigure, this number will be like 50, 60 percent is quite typical.
Speaker #2: 50% what rental reversion?
Speaker #5: A retention.
Speaker #2: Actually, yeah. The truth of the matter is retention is not in my is not in my KPI. Not in my KPI. When we look at the tenancy, we look at whether the trade still fits.
Speaker #2: Whether this tenant is still can survive. This exact tenant in this trade. Okay? If we think that there are a better options we will go.
Speaker #2: I don't go like I need to retain 80% and we go. Okay? No. If subdivision changing trade makes sense, or keeping the same trade changing tenants out makes sense, we will do it.
Speaker #2: The truth of the matter is retention is not on my KPI list. We look at individual lots, per se, when we do the assessment.
Speaker #5: Okay. For rental reversion, would you be able to kind of narrow it to a negative single digit in, say, second half?
Speaker #2: I'm telling you, this quarter was because of one big one. Okay? This can there's one tenancy actually his odd cost was okay. I think it's decent.
Speaker #2: Okay, okay. But because he opened another lot in a more in a in what I might stop away. Okay? And when they first started, they had very preferential rents.
Speaker #2: And that was used as a comparison. But I would say over time, that kind of rents cannot hold for my competitor. So it will come up to a certain normality.
Speaker #2: There's certain things that I will take it up because we current the trade is something that I still that we still want but yet my competitors are throwing a bit of rents because they were new.
Speaker #2: So right now, I would say after the first term, it will come back to it will come back again. Okay? Because any new malls cannot hold rents at that level.
Speaker #2: It's only to attract and that tenant rightfully used to leverage. And I think over time, it will normalize because rents cannot be in that manner.
Speaker #2: So that was one of the big hit that we took.
Speaker #5: So if excluding that exception, going forward, it's quite likely that you can narrow it to a single digit.
Speaker #2: Okay. So few things. There's a few handful that I need to deal with the cinema. Okay? The grocer. One of the ad leisure. And plus one, I suddenly just fell off my there's a few a couple more of the meat bigger ones, not anchor, anchor per se, that we have to deal with.
Speaker #2: Okay? The rest are in terms of cosmetic, they are small, small, but PSF higher. These are the two weakest areas I would say. About F&B is about maybe 30, 20, 30 percent of the mall.
Speaker #2: It's fine. And it's doing okay. The entertainment, which is cinema, or the wellness part, that one is also fine. It's only the personal cosmetics and also sports of fashion has to be handled.
Speaker #5: Okay. Yeah. Got it. Thank you. Thank you, Sharon, for the update. Thank you.
Speaker #4: Thank you. Tabitha, you may go ahead.
Speaker #6: Hi, good morning, Sharon Tin. This is Tabitha from PBS. So my first question is on Vivo City, continues to be the stand-up performer in your portfolio.
Speaker #6: How long more do you expect to sustain these double-digit rental reversions? And what is the current op cost? And are there AEI plans over the next two to three years to further optimize the mall?
Speaker #2: Okay. Op cost is around low 20s. Okay? So it's plus minus around 20. They any rental reversion for a positive rental reversion for a 20-year mall, I would say it's positive.
Speaker #2: So I will not commit a double digit because it's typically not that easy. Okay? So for us, I say what we have done a few rounds was number one, long a few years ago, we started looking at right sizing.
Speaker #2: Then we went on changing tapping on tapping on tenants who want a face, who wants a standalone from the ad leisure side as opposed to coming up from a multi-brand to a single store.
Speaker #2: Okay? Then we went on a went on a basis of weeding out all tenant that has been very loyal but have not been has not been performing well recently.
Speaker #2: All these were giving us all the rental pluses. Okay? The rental reversions. So I think we will continue to start continue in scrutinizing individual leases.
Speaker #2: And clusters. To strengthen it. Then whereby we are hoping to see rental reversion. Now, rental reversion has to come together with positive sales growth.
Speaker #2: Okay? So the op cost question, I think, is good. In a way that I think you're trying to ask me whether how much more can we push.
Speaker #2: Okay? So I need sales to grow. Then we can move the we can move the rental further. Okay? So I think we are on the right track.
Speaker #2: Places that we cannot we do AEI. Where we transform lower yielding to higher yielding spaces. I think that is like what we have done for the entire basement too.
Speaker #2: Okay? Which is increasing kiosk from 20 to 24. Upgrading everything else. Changing car park 60 to retail. And creating NLA or 20 over 1,000.
Speaker #2: So all these are positive also. It may still start with a 20, but 20 with a bigger base. That's how we get our 7 million out.
Speaker #2: Okay? Numbers along the way. So what other AEIs can we do? I would say that we're in very I think I've been guiding that we're in very advanced planning.
Speaker #2: For two big ones. That will carry us for another two years. Okay? So what does it include? If you look at a mall, you'll say, Sharon, what else can you all do?
Speaker #2: You have touched basement two. You have touched basement one. You have touched a lot of corners. What will everywhere? What else can you do?
Speaker #2: So now, if you look at Vivo City, like I always said, our back of the house can be turned to some form of a front, which is our drop-off point.
Speaker #2: Okay? So much traffic pass there and it's quite a shame that it's technically a back of a house. Who is at our back of our house?
Speaker #2: The back of our house is actually units connecting to our hypermarket and also to the back of our so-called prime unit, H&M. So I think there is a lot of work that we can do to turn the whole strip to change and to add a new cluster.
Speaker #2: I'm quite confident that we are getting on the right track, but it's just that we are not tendered out. We are already in a very advanced drafting stage.
Speaker #2: We don't see big hurdles, but we just have not tendered out to get all the number to get the AEI going. Okay? But all are planned.
Speaker #2: Other things that we are looking at is retrieving GFA. Retrieving GFA from pockets. That means the catment of GFA and redeploying into higher yielding.
Speaker #2: I think if we creatively look at how certain of our trades have certain of our tenancies are sitting on excess GFA based on old design and old code, that gives us some flexibility in extracting the GFA and to redeploy.
Speaker #2: So where else I'm going to redeploy besides the drop-off point, the whole entire back? It's definitely level one. And certain slamming over of level two to create a level one space.
Speaker #2: Okay? So I think that gives you give me some time when we we are very advanced. It's just I'm going to tender when we are done, we'll definitely come out to talk about it.
Speaker #2: Okay? All are positive ROI. We are trying to minimize disruption. There will be disruption. Okay? But we need disruption before we can get the numbers.
Speaker #2: So that's how we have been planning our AEIs. When one disrupts, next year, number comes out, I will start the disruption again and that's where the numbers can come out the following year and so on and so forth.
Speaker #2: Okay? So I think we have a good two-year program. We are trying to make sure that the program limits disruption and where income comes in, we bring down another part.
Speaker #2: And after a while, you will stabilize to a higher number. So I think I'm quite positive that a good two years we have already a good two years right right now.
Speaker #1: Yeah. Thanks a lot for the color. My next question is on the cost of debt outlook.
Speaker #3: The outlook for FY 26, 27?
Speaker #1: Yep.
Speaker #3: Okay. So you need a guidance. So as I've previously mentioned, we expect to end this financial year with the cost of debt to be above 3%.
Speaker #3: We are hopefully should be below the 3.16 a year ago. But it's likely to be 3%. As you know, interest rates are all climbing up.
Speaker #1: Okay. Thank you.
Speaker #3: Okay. So far, we do have we will still see savings from disrupting out of the same dollar interest rate. So we do not have much or any Hong Kong dollar interest rate.
Speaker #3: So this year, expiring. Yeah. So you can still see some positive. But whether it's a big positive or small positive, it really depends on the market.
Speaker #1: Okay. Understood. Thank ank you.
Speaker #4: Thank you, Tabitha. Just to let Donna go first ahead of Terence. Terence, I'll get back to you later. Donna, can you please go ahead with the question?
Speaker #5: Hi. Can you hear me?
Speaker #4: Yes.
Speaker #5: Thanks. Just a couple of questions. First on the lease expiry. For the second half and also 2020, FY 28. What's the proportion of these lease expiry coming from both Hong Kong and China?
Speaker #1: You've been muted to unmute yourself, press star, six.
Speaker #5: Okay. So Hong Kong and China in terms of the portfolio, it's actually not that big in terms of number of leases and spaces. So I roughly proportionate the big chunk that you see there, the 16 if you're looking at if you're looking at next year's next year's lease expiry, for Hong Kong and you're looking at you're looking at the retail number, I'm assuming, that should be split about half-half with Vivo and Hong Kong.
Speaker #5: So both 2H 27 and FY 28, you'll be half-half? Roughly around the same proportion. It will be around that same proportions. And then China?
Speaker #5: China? China will be commercial. China will be a smaller, much smaller proportion of that. And it's in the office and business park side. The most of the office and business park leases expiry is actually Singapore and BC.
Speaker #5: Could we have sort of a range? Like how many percent of the GRI? Yeah. Give me a second. We are probably looking at yeah.
Speaker #5: I don't have that I don't have the breakdown for you. But we'll probably looking at maybe 60 to 70 percent Singapore. Okay. So maybe about 30, 40 percent will be China.
Speaker #5: Okay. That's fine. On festival walk, I appreciate the stronger sales, but clearly the reversions to normal the negative reversions to normalize will take some more time.
Speaker #5: In terms of leases that's expiring in the next 18 months, how much over-renting at this point for the leases that are rolling over versus market rents now?
Speaker #5: How much is it above the current market?
Speaker #2: I think the big one the big one would be the city park. Okay? Because the expiry comes, then we will revert to the so-called lower rents today.
Speaker #2: But I think we have been giving them I think what I've been saying for a few quarters that we have been giving them rental rebate if they don't hit a certain sales.
Speaker #2: Over the last term. So the current term, that is going to be expiring by end January. Okay? Now, if the rent the rental rebate has kicked in and already been booked into our number, but the rental reversion number, when it comes to expiry, we will still use the higher number to count.
Speaker #2: Okay? So I think that will also be one pain. But actually, it's been flushed out in the MPI pertaining to that lease. I give you an example.
Speaker #2: There were actually the cinema rents were roughly maybe about, let's say, shy of 100 Hong Kong. Then the rental rebate we're talking about one third off.
Speaker #2: Okay? Roughly about one third off. And it has kicked in. And has always been in our books. So when we when the time comes, rental reversion we will start looking at it again.
Speaker #2: Then we will have to think about the numbers have already been flushed out. I think that's my point. In terms of cash. So the.
Speaker #5: Chairman, are you?
Speaker #2: Yeah. Go ahead.
Speaker #5: So Chairman, are you prepared or at this point, given that there have been a couple of years, do you think will you be a year or two years if you have if you look at your leases now, when do you think will we start to see the rents for all leases being at market?
Speaker #5: Or starting to be below?
Speaker #2: We look at profiling our MPI, yeah? Because rental reversion is certain bucket package of leases at a certain point in time. It doesn't reflect the entire so if we look at more performance, we have been looking at what minus 30 before, minus 20 rental reversion.
Speaker #2: But if you look at the true impact of the MPI, it's not in the 30, in the minus 30, minus 20. No, it's not.
Speaker #2: Yeah? So if I look at MPI profile, I would say that it's not in the same magnitude as what you're seeing. Okay? As what you're seeing in terms of rental reversion.
Speaker #2: Because there's other components in the performance of in the P&L of an individual asset. There are other revenue. There are operating expense. And rental, whatever you see, is a spread over a three years.
Speaker #2: There is also AEIs that we do. So a combination of all these, I don't see it dropping the same manner as the rental reversion that is reported.
Speaker #2: Okay? Not in a year, not in two years.
Speaker #5: Okay. Sorry. Maybe just to supplement the question, your question earlier. So the 60, 70 percent MBC is correct. Then there's another 10 percent which is Singapore the other Singapore assets.
Speaker #5: Then the remaining 20 percent is 10 percent China, 10 percent Japan. Okay. So Japan is 10 percent. Of the. Of the leases? Of the office and BC park?
Speaker #5: Yeah. Of the office and BC park? Okay. Yeah. That's very helpful. Maybe my last question. At this level, is buyback an option, a viable option?
Speaker #2: I would say that the buyback, we would like to couple it with other things that if we can free up capital somewhere else, and I think for me, for a short term or for if we think that it's a long-term viability, I think we will look at buyback.
Speaker #2: But it has to be coupled with something else. It can't be just borrowing money to do money back. You know what I mean?
Speaker #5: Okay.
Speaker #2: I won't borrow money to give you money. It's like going to the bank. I take $200. Then I go to Donald. Here's your ampoule, $200.
Speaker #5: Not really, Sharon. You're borrowing money to buy back your own assets, right?
Speaker #2: Yeah, yeah. But it's technically I agree with you, but what I'm saying is we will prefer to free up capital in a different manner.
Speaker #2: Free up capital first, and I'll definitely consider a buyback. I think buyback has always been on our books. Okay? But for the last few deals, when we look at we look at what is the better use of cash, I think we make the call to pardon debt.
Speaker #2: Okay? The borrowed money to give you money back, I think that is only a simplified manner. I think you're rightfully pointed out there is certain other considerations.
Speaker #2: So we are on the same page. Okay? I think there is benefit of doing a buyback. I'm not denying that. But we will do it when there is another capital free up.
Speaker #2: We didn't do it for the first round, first three rounds. But I think we are seriously considering once we can free up certain capital.
Speaker #5: Okay. That's helpful. Thank you. That's helpful.
Speaker #2: Thank you.
Speaker #1: Thank you very much, Donald. Can we have Derek? Derek Tan, can you go ahead first?
Speaker #3: Oh, thanks, Dean. Just on the festival walk, Sharon, you were saying that the reason for the shop declined this quarter is because existing tenant leverage on his other lease said the why to get a much more favorable rate.
Speaker #3: Is there any concern that the other mini anchors whose leases are expiring could use that same trick as well? I mean, since I guess the information will be pretty porous.
Speaker #2: I mean, when we did a match of the tenancies, there's I think about teens that we teens that are similar, similar. We did a match before.
Speaker #2: I'm only naming the significant ones because tenants always threaten you with anything. Because any way to cut rents, any reason you can think of, the book, it will come up.
Speaker #2: Okay? Just to get a to get the negotiation to be ahead of the negotiation. I think when we look at it, we always look at do we need this tenancy?
Speaker #2: Do we see completing a certain trade mix? Okay? I think we have held a if you have a walk in festival walk, you will understand that we were still trying to keep a certain integrity of a mall.
Speaker #2: As opposed to shoving any tenancies in there just for rents. Okay? So I think the discipline is still there. A bet that the rentals may be slightly lower, but I think on a long haul, it will keep the integrity of the valuation of the property.
Speaker #2: We don't take a short-term approach when we look at renewals. Sometimes we do take an approach of who can sustain longer, and we go.
Speaker #2: We are also very practical. If we find that we cannot find anybody obviously, what do we do? Take whatever that's on the table. But for this case, it is a trade that we wanted.
Speaker #2: And we had a very, very long discussion about it. To the point where we know that the next term, it will be similar. Okay?
Speaker #2: They cannot continue to hold at that kind of rents. But because they are still in the same term, they get they positively leverage on it.
Speaker #2: But I would say on a sales basis, we are technically not at worst off. Compared to our neighbors.
Speaker #5: Okay. But is there any risk of the I mean, as you said, tenants will do whatever, will use whatever information to nego hard on rents.
Speaker #5: Are there. Is there a risk of the upcoming ones? Yeah.
Speaker #2: Cinema, no. Cinema is everywhere threatening. Threatening everybody. So it's not specific to a competitor. It's an industry that is weakened. Okay? The cinema industry in Hong Kong is not good.
Speaker #2: So it's not a matter of competitor. It's a matter of the industry. So I think there are different issues in Hong Kong retail. The luxury and our educated that there is the biggest drop.
Speaker #2: Our drop is nothing compared to the super high-end. Okay? So I think there's a combination of effects. So what we think on the long haul, we still need to refine the trade mix a little bit more.
Speaker #2: Okay? I think the like I always mentioned, we are slowly trying to get out of some of the personal cosmetics. Painfully sold. Because the buyers are now comforted to buy locally.
Speaker #2: And all those brands cannot survive on so many outlets. And that means rentals will come down because of them reducing their platform or number of shops in Hong Kong.
Speaker #2: So from that basis, we are tweaking. Okay? I think the changes, I think you can see along the way, we are also tweaking along the way.
Speaker #2: Okay? We would love to keep the rentals of the old personal cosmetics, but we will continue to change them up. Okay? When the time
Speaker #7: comes. I will hold on to every single dollar now because the rentals are still high, but when the time comes, I will switch out.
Speaker #8: I will switch out.
Speaker #9: Okay, got it. And my next question would be, given what— given everything's been said on this call, is it fair to say that we would still— we should still expect DPU to see some slippage, I guess, for the next 2 years with interest rate higher?
Speaker #9: AI disruption, MPI for the overseas assets still challenged. And I guess that's the inflection point, 2029.
Speaker #7: Um, I hope to be faster. But next, you see, the 20— about 1/3-ish, 1/3 of our contribution is coming from overseas. Okay, about 1/3.
Speaker #7: Is coming from overseas. Singapore has been holding the fort. Okay, but slightly not enough to cover. It did cover for the first 1 year-ish too.
Speaker #7: than currently cannot. Why? I think the AI that we tear is not small in vivo.
Speaker #9: Okay.
Speaker #7: So next year I'm tearing more. Okay, because we are very confident of the output. I am not gonna hold back on what we think that is good just because I want to even out the pain, okay?
Speaker #7: I think the challenges in China will continue. The challenges in Festival Walk is way, way, way lesser. than China. Way lesser. Than China. Okay, so what I'm saying is the, the, on top of that, we have single tenant or festival in projects that left, which will have guided the market for a good 2 and a half years or more.
Speaker #7: So when we do year-on-year comparison, the drop will still be there. If you look at our MPI, 1/3 of our current MPI is divested assets.
Speaker #7: Okay, then majority of— then the balance of the 2/3 is operation, which is majority, some parts of MBC because of the transitional. which income will start coming in 1st November for about 6%, part of it that is committed but have not started.
Speaker #7: They are starting in 1st November. So the 2/3 that are down in the MPI can be accounted for on overseas and a chunk of— and not all overseas because there's a big slight chunk from MBC.
Speaker #7: Okay, and MBC numbers will kick in 1st November. A big lease will start. So the 6% that is committed but have not started will start.
Speaker #7: November. Okay, so Yo, no comparison. Fujitsu will kill me already.
Speaker #9: Right.
Speaker #7: My downtime next year, I'm carrying a lot on Level 1 in Vivo, but I'm trying to spread the pain and still get the gain.
Speaker #7: Okay, so the team is working through the detailing. of trying to maximize the timeline. Okay. Technically, if in hunky-dory, I would love to trash one time, we all paint together and get the income as fast as we can.
Speaker #7: But I need to balance the team's work. Okay, we have a good team that I don't need to exhaust them to the point where they cannot— they don't have time to breathe.
Speaker #7: Yeah, so we also need to manage the mental state of our team. Because the work is a lot. Okay, we are talking about trashing tenancies, we are talking about rebuilding tenancies, we are talking about building new tenancies, the construction work.
Speaker #7: And all the operational opening and everything is a humongous exercise behind. So based on numbers, my downtime will kill me, but I'm comfortable to do it.
Speaker #7: I'm comfortable to face the— to face investors to say, yes, I acknowledge my China is going down. But I always tell myself, my team, that we have to beat the market.
Speaker #7: Macro is macro, but we have to beat internal as well. You got to beat your own competitors. If you beat your own competitors, you are ahead.
Speaker #7: Because we cannot control macro, but we cannot 100% blame macro. We just have to draw comparison to your competitors. So today, I think I will acknowledge that China will continue to go down in the next year or so.
Speaker #7: Okay, the magnitude is way more than Festival Walk. Festival Walk is— magnitude is peanuts compared to China.
Speaker #9: Yeah, agreed. I mean, MPI is just down 1%, right? Festival Walk, China, Japan, 18%, 36% declines. And yes, and the contribution is small, but the
Speaker #7: It's big, yeah? When it can show up, it means the pain is more. So China is our biggest pain, if you ask me. Is the biggest pain, okay?
Speaker #7: Japan is maku hari, is maximum pain, nominal impact. Except once I clear out Fujitsu, the pain, the year-on-year comparison of Fujitsu, it will be lesser and lesser.
Speaker #7: Because by year-on-year comparison, you will see the negative. And last year when we divested, when we divested the Hong Kong office of Festival Walk, I think the deal was done I could receive a lot of feedback that we have actually charted a very good price for Kowloon Dock.
Speaker #7: for office. Okay, I think we were lucky in the spot where suburban office may not be that good. But we had a very willing and dedicated buyer.
Speaker #7: So that deal, I think, was a very, very nice deal done for Festival Walk office. So I think we will continue to explore pockets of this.
Speaker #7: Certain things I cannot commit. You ask me, would you like to sell certain parts of China? I will tell you yes. Realistically? Of course, gotta give me a very decent price.
Speaker #7: China today, I think we all have to be realistic that China is a long-term focus. China, we're not saying it's— we are saying bye-bye to China today.
Speaker #7: I am unlikely not to add anything of China today, but that also means that there will be very little tick-off of my China portfolio today.
Speaker #7: So we are trying to drive our whole portfolio. If I just purely look at our overseas without Singapore, I think it's very, very weak.
Speaker #7: It's weak, okay? But we are trying to mitigate the pain with Singapore moving, okay? So I think Vivo and MBC has done its job.
Speaker #7: Job. A bit, a bit of a flu. In terms of downtime for MBC, but it's catching, it's coming back. It's coming back to its good old self.
Speaker #7: It caught a bit of flu in terms of downtime. Okay, but 1st of November, big leases are all starting. Okay, so We are still— we can't clear out China's problem today.
Speaker #7: I can't confidently tell you, yes, I'm gonna be dealing with China. If can, I would have done it. Thank you, Sharon. Thank you. Just before we move on to the web, we have one question for— invite questions from Brandan first.
Speaker #7: Brandan?
Speaker #9: Hey, Sharon, I just have one quick question, right? If we look at your MPI yield for Festival Walk today at 3.5%, after 2 years, after 2 years of AEI, right, where should we see this number go towards, assuming your valuation doesn't change?
Speaker #9: You're talking about Vivo? That's it. The 2 years—
Speaker #7: Festival Walk. FWFW. FW will hover around the 3-ish. You know, 3.3% to 3.6% is 10% increase in MPI. Yeah, yeah, correct. So that's, so that's all.
Speaker #7: It's— it will hover around the 3+.
Speaker #9: Okay. Can, can, can. Okay, hey, that's, that's good enough. Thank you.
Speaker #7: Thank you, Brandan. Mervyn, let us move on to the web first before coming back to you. We have one question from Darius. Darius, individual investors are participating online.
Speaker #7: The questions relate to the Greater Southern Waterfront development. So there are upcoming developments on various fronts, including Sentosa and residential developments. So how does MPACT look at this, and are we already involved, or do we have any plans to participate in such development?
Speaker #7: Okay, I think the Southern Waterfront, I think the announcements were around residential and all. We are not into residential, but it's very positive towards definitely the VivoCity will definitely enjoy the outputs of the redevelopment of the Southern Waterfront.
Speaker #7: In terms of control, I think our government, URA, is very, very meticulous in terms of what they develop, and they have a grand master plan.
Speaker #7: Vivo is definitely benefiting from— will benefit from the increased residential population in this area. Okay, anything that Sentosa do positively will have a direct cum indirect impact.
Speaker #7: Because we are next door and we are a pass-through, or we— you have to pass through Vivo when you go there. So we are looking— we are very happy to hear of any new developments that Sentosa itself is bringing.
Speaker #7: Is, uh, is doing. Okay, anything that is positive on the tourism front or bringing Sentosa to a different level, it will benefit Vivo. It's a very direct impact.
Speaker #7: Thank you, Sharon. So, um, just to round up the Q&A session, can we have Mervyn?
Speaker #9: Yeah, thanks for the opportunity. In terms of Japan assets, um, can you talk about the rental differential between Makuhari and central Tokyo?
Speaker #7: What's the discount at this point in time and how wide does it need to get? You can take it as Orchard Road rent versus industrial rent in Singapore.
Speaker #7: That gives you a sense.
Speaker #9: Okay.
Speaker #7: So we need a significant, what, 30-50% increase in Tokyo before we see a jump in demand? Okay, no, no, no. I think your question is what's the difference between the rent, the variance, if you take as Orchard Road rent versus industrial rent, that gives you at Tokyo core rents versus Makuhari.
Speaker #7: So I'm answering your first question. I'm not talking about anything that trickles will have to go by Tier 1, then trickle down to Tier 2.
Speaker #7: I think that is correct to say for any office. industry or any office market.
Speaker #9: Yeah, okay. Yeah, I'm just trying to figure out like how much wider do we need to get before we see a significant pickup in demand.
Speaker #9: Yeah.
Speaker #7: Okay, anything that it will, it will possibly trickle, but if you're asking for granularity like Sharon, if the occupancy hits 88% from 80%, Will it move 1%?
Speaker #7: I won't be able to tell you that. I can safely tell you that there is, there is positive impact when the Central moves up to a point where rentals become too high, then it will trickle.
Speaker #7: Thank you. Okay.
Speaker #9: Yeah, Sharon, just want to mention, yeah, you're one of my favorite CEOs and I see significant inherent value in the share price. So that's one— that's why we have an overweight rating.
Speaker #9: Thank you. I feel the love, Marvin. Thank you. I think the market's overly punishing for their overseas exposure at this point in time.
Speaker #7: Thank you. Thank you, Mervyn, for your very kind comments. So with that, we will come to a close to our results briefing today. Thank you again for your active participation.
Speaker #7: So if you have further questions, please reach out to any of us in the IR team. Again, thank you for making time. We wish you a great weekend ahead.
