CapitaLand China Trust

Good morning, everyone. Welcome to CLCT's full year 2025 Analyst and Media Briefing. I'm Siu-Yi, Investor Relations for CLCT. Joining me today, we have our CEO, Jerry, CFO, Joanne, CFO, Designate, Ling Tong, and Head of IPM, Yeo Hong. For this briefing, we'll start with a brief presentation followed by a Q&A session. If you have a question, please use the raise hand feature and I'll direct the time to you. If that, I'll now hand over the time to Jerry. Please go ahead.

Welcome everyone to CLCT's full year 2025 financials result briefing. Thank you for making time to attend our presentation this morning. First, CLCT is the first and largest China-focused SREIT, and we uniquely offer connectivity to both SREIT and CREIT markets. Our total assets now is $4.5 billion. We have eight retail malls, five business parks, and four logistics parks. We predominantly tier one and tier two city exposure. Distribution yield, based on our announced FY25, full year 25, our DPU is 6.2%. In terms of our asset allocation, retail is our largest and most resilient asset class at 69% of gross rental income. This bread and butter more relatively defensive and benefits from government initiatives to boost domestic consumption. We also have new economy assets, business parks, logistics parks, which form smaller part of our portfolio at 31%, providing us some exposure to China's efforts to grow technology and innovation, including key sectors like semiconductors, electronics and ICT. For our retail portfolio, one of the key highlights in 2025 was our establishment and listing of our CREIT platform, CLCR, on Shanghai Stock Exchange, together with our sponsor. We managed to securitize one of CLCT's assets, Capital Mall Yu Hua Ting, which is from a tier 2 city in Changsha, into the CREIT, CLCR, at a premium to our valuation. The CREIT has also done well, and since listing has traded up almost 20% year-to-date. So all the transactions that we have done in 2025 validate the value and liquidity of our retail assets and CLCT will continue to seek opportunities to utilize this unique S-RID connection to benefit our unit holders. This also gives us greater confidence to actively source for new retail assets for investments, where we want to repeat what we have done in Huating's case, that is we buy well, add value with our operational and AEI expertise, and recycle at a good price within a relatively short period of time. While we are happy with the successful divestment of Yeehawating and demonstration of our retail value proposition, we did lose some income, which we will need to replenish over time. This would show up in our full year revenue and NPI, which I will now address. For full year 25, overall business conditions have been solved. Among the three sectors, retail have relative resilience, logistics, stability, We have stabilized amidst our rent resets for that portfolio, but Business Park has seen a weak demand. Portfolio gross revenue and NPI dropped about 9% year-on-year. Excluding the Huati, on same-store basis, portfolio gross revenue and NPI dropped to about negative 6% year-on-year. For retail, revenue declined by 9.6%, but narrows to 4.9% on the same-store basis, excluding the inviting factor, which was the biggest factor for retail. This year, we have embarked also on a number of AEIs in Sitzeman, Rock Square, Wang Jing, and Shefu, involving anchor or mini-anchors upgrading. The AEIs at downtime, around four to nine months, But that will benefit us when the AEIs are completed and started fully contributing by year end of 2025. Retail has also been affected by some of the continuing positioning at our Wickersmore Singan and general Wicker overall rent and occupancy in Grand Canyon Mall and Wang Sing. Next, for business part, revenue declined by 9% year-on-year due to lower rents and occupancy in Hangzhou and Xi'an. Main factors were the pre-termination of the service office master tenants in Hangzhou Phase 2 and delays for AIT in backfilling the vacancy created from a large tenant relocation a year ago. We're happy to share that AIT has made good progress. Now, AIT is at 85% occupancy. Although most of it came in in the last quarter of 2025, for Hangzhou Phase 2, for the service office operator backfilling, we have backfilled to 70% with a single-digit positive reversion for the area that we have backfilled. In terms of occupancy for BP, first quarter of 2025 was the lowest point for BP occupancy at 83.7%. But we have since worked hard to lease it up. And by the end of the year, the whole BP portfolio had an occupancy of 86.7%. Logistics, our smaller sector generally had seen improvement as we had leased out our previously vacant Shanghai Fengxian asset. And the lease was for a period of eight years, a long-term lease. And we have also improved occupancy in Kunshan and Chengdu. And so the whole log portfolio looks in a much better shape than maybe a year plus ago. For our full year occupancy, it ends at 98.1%, which is higher than a year ago. DPU-wise, DPU for second half 2025 is 2.33 cents. Full year 2025 is at 4.82 cents. So this 2.33 cents, this includes a one-time top-up distribution for second half of 0.33 cents, which amounts to about 5.7 million Sing dollars. That roughly equates the lost DI from Yu Hua Ting, which we divested in 2025. Our one-time top-up distribution is drawn from our past divestment gains that CLCT has done, and will be funded through that, and will only have a marginal plus 0.1% gearing effect. What we seek to do here is to provide unitholders with some income stability despite difficult conditions, while we look for a quality replacement asset to replenish and hopefully exceed the lost income from dividing it. I would also like to emphasize again, this is an interim measure. So what management is doing is therefore focusing on finding a good asset this year in 2026, as well as working on different ways to deliver further cost savings in financial costs to boost our DPU while continuing to work on preparations for further asset securitisation to the CREIT on our older, mature retail assets, which will of course expand our pathway for portfolio reconstitution and rejuvenation for our assets in our portfolio. For retail assets, there has been an improvement in shopper traffic and tenant sales in 2025. On the whole, For the full year, traffic grew 2.7% year-on-year and tenant sales grew 2.1%. 4thQ was a strong quarter for the year, outperforming 9 months with 4-5% growth in both traffic and sales as AEI efforts kicked in, especially with the full reopening of the new supermarkets in Shefu, Wang Jing and Sitzeman, all of which the results came in the 4thQ. In fact, for the supermarkets, we can see in 4thQ, sales growth was plus 47%, which is a very strong number once supermarkets were open. Overall tenant sales now are above pre-COVID levels at slightly above about 2% above pre-COVID levels. In terms of overall trade, overall occupancy costs, we are at 17.5%. That's a healthy level compared compared to pre-COVID range of above 20. Tradecats, they've done well. Maybe I just mentioned a few highlights here. F&B, we had the positive 5.8% year-on-year. That's the biggest tradecat for retail for us at 39.4%. So there was strong acceleration in sales in third queue and fourth queue, driven by introduction of new high-performing trendy brands, which have been cool factors for our shoppers. Growth was broad-based. You have old local favourites like Hai Di Lao and new ones like Kao Jiang, Japanese sushi chain, Sushiro and Genki Sushi, and even Starbucks delivered growth. And we have also IT, which grew 9.3% for the full year. This trade cap is boosted by consumption vouchers, as well as expansion of more digital brands during our AEIs in Shareful and Wang Jing. really to cater for the evolving consumer demand and broaden the appeal in the malls. In this category, we have Apple, DJI, Xiaomi. These are some of the brands that have good growth in 2025. Jewelry and watches also did well, plus 18.3%. That's driven by increasing demand for investment in gold. Sales increased from established brands, especially in Beijing. Toys and hobbies done very well this year, plus 52.3%. This basically stems from the continued popularity of collectible toys market. Pop Mart, for example, year on year, the sales went up 100% and Miniso also a strong, very strong double digit number. So they are still growing strong in this category. We also benefited from our AEIs. The supermarket upgrading in Wang Jing, Xue Fu and Xizimeng, as I mentioned, powered supermarket category in 4Q by a 47% sales growth, which we expect to spill over to first half 2026, helping to reverse the supermarket downtrend in sales that we have seen in the first half of 2025. Decathlon, which was introduced in one of the mini-anchor AEIs in Rock Square in October, was also done successfully and has basically produced sales growth from the sporting goods category for us. In Flockfield, the sporting goods category actually grew 39%, largely due to Decathlon's introduction. Of course, there are weaker trade cuts that offset our general sales growth. We have mentioned before fashion and beauty and health has been trending downwards. And for the full year, they have trend downwards about single digits in sales for the full year. In terms of occupancy, our malls continue to be highly resilient, with high retail occupancy of 97.2%, so similar to 3Q, with almost all malls above 95% occupancy, except for Sinang, which continues to require some repositioning to attract shoppers. Rental reversion-wise, we clocked the full year at negative 2.4%. We are affected by EV consolidation, which we spoke about in previous quarters. And we are pivoting to less EV reliance across our portfolio. So without EV, the EV impact, the rental reversion for retail is actually negative 0.6%. For 2026, we still have some EV tenants to deal with, but that will be at half the number of lease that will expire when you compare 2026 and 2025. So there will be a lesser impact. So reversions probably slightly stronger than the 2025 print of minus 2.4%. But it will still be mildly negative. In terms of business parks, Our business park occupancy, which forms 27% of GRI, this sector generally faces weaker demand and ample supply. Our business park overall occupancy is now at 86.7%. This is an improvement from 3Q, which was at 85.2% due to our improvement in CIAN AIT leasing progress. Our business park assets generally outperform their sub-markets, despite the generous soft leasing environment for this sector. Sing Su, our strongest business park asset, continues to have a strong year at 95% occupancy, For the CN cluster, we have made good progress, especially with electronics and ICT tenants. AIT asset occupancy is now at 85.2%. And we have made big strides to backfill the major tenant that was relocated one year ago. So you can see that quarter to quarter, we actually improved from 75.4% in third quarter to 85.2% currently. One of the bigger tenants that came in to the backfield space was Chang Seng Memory, which took up half the space of that major tenant, which relocated. And Changsik Memory is basically the largest DRAM manufacturer in China and is known as a domestic alternative to Samsung, SK Hynix and Micron. So it's an important tenant, very much in team with the kind of companies that are being supported by the government in China nowadays. AIH also improved quarter to quarter at 86.7% occupancy. For Hangzhou, Hangzhou phase 1 and 2, this cluster has a more challenging leasing environment compared to the rest of the BP clusters with lots of supply. Hangzhou phase 1 occupancy sleep versus step kill to 73.6% due to the loss of a large cultural tenant, about 2.6k square meters. which we are looking to build up. Hangzhou phase two, we have been working through our service office master tenants, which we have disclosed before, which over the course of Inno2025, we basically put back about 55,000 square meters, and we have successfully released 70% of the area to the sub-tenants. And we managed to push, by the end of the year, the overall Hangzhou phase 2 occupancy to 74.9% for the full year, versus the Q, which was 70.7%. Overall, BP reversions at minus 8.1%, driven mostly by SIA and Hangzhou, where we are pursuing tenant occupancies in a soft market. For 2026 for BP, we feel that reversions will likely be in the same order of this year, of 2025. For logistics part, the smallest segment, 3.7% of GRI. Our logistics portfolio have stabilized. Our Shanghai Feng Xian asset, which was not leased for much of 2024, is now fully leased and rent paying from July 2025. And we have also improvements in Chengdu that drove our occupancy. So all this drove our occupancy up to 98.1% for the full year, higher than the Q of 96.6%. In terms of bringing up the occupancy, we had required to basically use lower rents to get the portfolio list up. So you can see that the rental reversion for 2025 for logistics is minus 24%. Also, there was some situation where we proactively renewed some of the major tenants so that 2026 will be a very stable year. So all our efforts combined, we feel that going forward for this 2026 year, our rents have bottomed in our logistics portfolio and we aim to maintain the full occupancy at these rent levels. Valuation-wise, relatively stable valuations versus previous years. Slight overall drop of 0.8% with cap rate of largely unchanged. And the larger impairments were in assets with weaker performance. So, Sengnan, Aiton Muntun, and Shanghai Fengxian. Shanghai Fengxian had a bigger percentage draw to reflect the rent adjustment that we needed to do to sign in the long-term lease, which will provide income stability for this asset. Next, we'll go to capital management. I will let Ling Tong from our finance team to take that through.

Okay, thank you, Jerry. So for FY2025, CLCT continued to maintain healthy financial position. Our year-end total debt has reduced by $150 million on year-on-year basis. This is after Yu Hua Ting divestment as well as perpetual securities replacement in September 2025. Our year-end aggregate leverage is 40.7%. which is a significant improvement of almost 1.2% year-on-year, and 0.6% from Q3. This is attributable to stabilising Renminbi, and of course, Yu Huaqing divestment proceeds, and we have also accelerated cross-border cash movement from China to Singapore. Notwithstanding, the property valuation has a slight dip. So through 2025, we have stepped up our balance sheet natural hedge effort to make our gearing less sensitive to FX movement. We will continue bring cash from Singapore to China to maintain our aggregate leverage level. Average cost of debt has also gradually decreasing. Now is 3.32%, almost 20 basis point year on year improvement. CLCT has benefited from interest rate decrease both in China and Singapore. I would say CLCT has more exposure to renminbi borrowing and renminbi interest rate right now, which will give us more interest saving if renminbi rate continue to ease. Our ICR has decreased slightly to 2.8 times. This is mainly due to weaker asset performance. But this ICR is still much higher than MAS 1.5 times limit. Under required stress test scenario of 100 basis point increase in cost of borrowing or 10% decrease in EBITDA, our ICR level are still very comfortable. And overall, for our distribution income FX hedge, we have 72% of our distribution income. has been hatched from Renminbi to SingDollar. In Q4 2025, we successfully refinanced some SingDollar loans with Renminbi term loan, which boost our natural hedge and extended our debt maturity profile. Now, our Renminbi denominated denominated debt has increased to 60% of our total debt portfolio, up from 35% one year ago. This has exceeded our earlier target of 50% by the end of 2025. And we have also forward hedged to further improve our natural hedge position and reduce NAV impact due to renminbi and SING dollar fluctuation. Our debt maturity profile is well-stackered. We only have one offshore bond of RMB 600 million, which is due at the end of 2026. This was the FTZ bond issued two years ago. Notwithstanding we have sufficient bank facility to refinance this bond, we are still evaluating options which aim to continue our capital source diversification. Just to highlight that in early 2026, we announced that we have updated our MPM program, which is used to incorporate Hong Kong CMU clearing mechanism, which means that we are now able to issue bing san bon, renminbi denominated bing san bon. The mechanism is ready. For interest rate hedge, we have a 65% of our debt is hatched into a fixed rate and the remaining floating rate loans are mostly in remedy.

So with this, yeah. Okay, let me take over from Lin Tong. So looking forward, if you look at what we have done this year, we completed four AEIs. So we have done share for Wang Jing, RockSquare, and Sitzeman, and they've all opened by 4th of this year. So all these supermarket upgrading AEIs, which is share for Wang Jing and Sitzeman, all produce good results with returns or rental increase more than 10%. The decathlon introduction in Rock Square helped us to strengthen a previously weak corner in B1 as part of our overall plan to drive traffic and improve ramps in that part of the mall. But with these successful AEIs, I think we have proven again, similar to the supermarket AEIs that were executed in 2023 for three other malls, that CRCT is able to extract value from our older malls and demonstrate our track record of doing so. When we look for new investment in the future, we will also want to utilize our AI ability not just to buy good malls at good price, but also to actively identify and add value to these malls. In terms of strategy, we are still focused on building a balanced portfolio. And how we go about doing it, I think in 2025, we have demonstrated a few initiatives, which we will continue in 2026. Unlocking Valley, we have successfully established a long-term capital recycling vehicle by the CWIT platform. and in fact, we have managed to divest capital more with Huating. This supports our ongoing portfolio reconstitution. We created value by entering the Syriac market in 2025 and 2026, our immediate priority is a source for a new retail asset to replenish Huating's lost income while maintaining our existing operations at high occupancies. Extract value or track record ability to identify and execute on AEIs speaks for itself. We'll continue to see whether we have opportunities in our existing assets, as well as using AEIs as a key part of extracting value from any new acquisition. proactive capital management. We have been proactively working on capital management to drive interest cost savings. And that would include expanding roaming fee debt access by reducing our FX rates where appropriate. So with that, I'll end my presentation. Maybe we will have time for some Q&A.

Okay. Thank you, Jerry, for the presentation. Now let's proceed to the Q&A segment. We have our first question from Jovi. I'll pass over these hands. Please go ahead.

Hello, good morning. Can you hear me? Yes, we can hear you. Thank you. Thanks, Jerry. Thanks for the presentation. I just have two questions. The first one, actually, just looking at the Shanghai Logistics Park. The valuation for this sank because of an adjustment. Is that correct?

because of the rent adjustment.

Okay, can you just tell us a bit more about this fixed rate lease that you have here? And also, can you share the rental reversion for this asset specifically?

I will let Yu Hong take that question.

Yeah, so this lease is an eight-year lease that we signed with... uh i would say sea freight uh and logistic uh provider so they actually uh together we uh i mean they have actually spent some time uh and uh kpx to convert a portion of the park to fit their own use. So that's why it took a while. Actually, the reversion was already captured in 2024, 2025, right? So that is not in the 2025 reversion, but 2025 to begin with, it's actually a much smaller area that we're reverting. Although the magnitude is a, quite similar. yeah so so i think that that's about the the color that i want to give okay in the yes in the eight year list yes it's a normal step i can't remember the exact figure but uh it's a typical two to three years we will pack it to you know uh we will have uh have a step up uh that's uh similar to the kind of uh uh market market uh uh terms yes okay so when did this ideally start

It's July 2025. Okay, got it. Sorry. And my second question here is just looking at the overview of our strategy on page 19 of the slides. The four pieces, the four puzzle pieces. One is about CLCR. Two are about the retail malls. The last one is about capital management. Can you just provide some indication of your plans for the logistics and business part of your portfolio? Are you planning any divestments in these assets? Thanks.

Actually, well, it's maybe a little bit of a condensed statement. In my Great Valley, we did say that we want to continue to maintain stable occupancy across these two business parks and logistics parks. So I think that's the first step that we have to do. Business parks, of course, at current stage, we still need to push up the occupancy. When the occupancy of some of our weaker businesses business parks are stabilized, then we can talk about whether portfolio reconstitution is a good time to do it. Of course, if you want to reconstitute the asset or divest the asset, it has to be in good condition here first to get a good price. For logistics, I think we have we have stabilized the occupancy. So I would say that if the right opportunity comes, we may consider it.

Okay, thank you. So we're just following up on the Shanghai asset as well. If you can provide a forecast about the valuation, how would that hold up this year? Because, of course, the adjustment was the biggest impact last year. Would there be an impact from the sub-market this year? How is the sub-market performing outside of this asset?

I think we are seeing in Shanghai the vacancy level still there, but it actually has improved year on year. I don't want to forecast too much, but I think the situation is better. You know, rent stabilizes, I expect the valuation to be stable as well. Because I think from a term point of view, we are locked in there already.

So I think this is a one-time cut, if you have it, right? Because we have sort of locked in an eight-year lease, and that reflects, the valuation itself reflects, you know, the cut that we have done.

All right, thank you. Okay, we have our next question from Terrence. Please go ahead.

Hey, hi. Happy New Year, Jerry and team. This is Terence from JPMorgan. Actually, before I start on the questions, can I request that that you provide the quarterly updates for the sectoral revenue and MPI for each other, like on the RMB basis, because I think previously that was provided, I think last year, maybe earlier this year, but seems to the numbers seems to have been replaced by a full annual number. So it's a bit challenging to track on the underlying income. Maybe I'll start with the questions first. On this 0.33 cents top up, 5.7 mil, in the event that you don't acquire any asset, perhaps let's say the first half of next year, would you still consider continuing with this top up? Or how should we think about it?

What I would say is management is very focused on trying to find the replacement assets within this year. So that's our number one priority. Between us and Bob, we have a lot of discussion about this. And we considered this and we thought because we are very focused on finding a replacement asset, so we were okay to give a one-time top-up for this in the interim.

Okay, sure. I guess then in the sense that you're looking at replacement assets, Can you share what you're looking at? Is it like tier one, tier two cities? Is this something from your sponsor pipeline? How large would it be? And given that gearing is still, I mean, it's come down, but it's still relatively elevated. How should we think about funding this?

I think in terms of asset, we're looking for retail asset because that's, in our experience, has been the most defensive. And of course, we do have the ability to provide more stable liquidity for retail assets through the CWIT platform. So that's one. Two, in terms of the cities, I think we're casting our net wide, I mean, right now in our mind is tier one, tier two cities. that we have been looking for. In the start of the year, actually, the team visited China looking for some of those assets across different cities in China. So that's what we are focusing on. In terms of the size, we will calibrate it accordingly. I mean, what we have said is we want to replenish Yeehawting's lost income and perhaps just exceed it slightly. But I don't think that we'll do too big acquisition that will stretch the balance sheet. So in terms of You think that's a 7 to 800 million renminbi asset? I would think that's probably where we are focusing in the ballpark, up to a billion renminbi.

As to internal and external, obviously we are open to both. We want to look at the best asset. Of course, like what Jerry mentioned, we want to have a little bit of a value add end goal as well. So I think as of now, I would say external will also be part of the consideration.

And in terms of addictness?

In terms of funding this, we'll look at the market situation at that moment. If it's not too big a deal, we may do it through debt in the short term. If it's a bigger deal, we may fund part debt, part equity. That could be some of the considerations.

Okay, thanks. And maybe just a final question from me. Any outlook on borrowing cost for FY26?

Borrowing cost? Yeah, sure. So for FY26, we do see the borrowing cost inch, we expect the borrowing cost to inch down. But I think not to the significant extent. Because we still have some earlier hatched IRS that is actually still ongoing. And then we have some bond that is on the fixed rate. But we actually do note that our floating rate in Remedy has actually formed a significant component of our borrowing. So they are actually news that PBOC will continue easing. So that should actually benefit us.

If I may clarify, when you say inch down, are we talking about maybe 10 to 30 basis points? Is that the ballpark that we're looking at?

Yeah, I think probably 10 basis points and then we will continue looking for cheaper debt to actually make it better.

Okay. Can I? I mean, 2026, like Ming Tong is saying, just happened to be the year that some of the historically lower interest rate swaps expired. But in 2027 and 2028, we have more opportunities to drive down interest rate costs because that's where... the higher rated interest rate swaps are expiring. Having said that, like Wing Tung says, we will still try to find ways to deliver more than what we are using as a baseline.

And in terms of the RMB proportion, how much higher can we go?

Okay, so for RMB loan, this year, bearing any additional debt that is actually used to fund acquisition. So for this, on the status quo basis, I think we only have one RMB denominated debt that is actually due for refinancing. We will aim to actually get the RMB denominated debt as well to maintain our natural hedge. So that doesn't mean that we don't have the same dollar market. It's just that we will actually, while we find the cheapest source of debt, and we also are mindful that we have to actually maintain a high level of natural hedge.

I think taking into context, I think what Intern is trying to say is if everyone recall, you know, Maybe one half a year ago, maybe 30% to 35% of our debt was remit. Now we have brought it up to 60% above our own target. So we do have a little bit of leeway. And depending on where we can get cheaper source of funding and what's appropriate, we may either losing or remit. Of course, the long-term direction is we want to be as natural hedge as possible.

Okay, great. Thank you.

Thank you, Terrence. We have the next question from Jerry Dean.

Please go ahead. Hi, morning. Jerry Dean. Hi, morning. Maybe just three questions from me. Yeah, sorry. If we look at second half without the capital gain, DPOs at two cents, and this, I presume there's some impact from AEI. So going to 2026, is this the kind of baseline that we should expect?

in terms of the baseline in terms of a 2.33?

Yeah, for DPU.

I think second half of, second half indeed, Of course, we talked about the AIs, that was in fact. So there will be some positive flow through from the AIs that have been completed in 2025 that will come through in the whole of 2026 just as context. I think the downtime I'd say of four to nine months probably about 15 million of uh you know 15 million of uh mpi you know was was lost from there And the other thing that I spoke about, which is we are looking for an acquisition to top up the re-voting loss of income. The other thing is, while we're not a big asset, it still contributed about 40 million of the MPI that was lost in 2025. So I think that if we manage to find, if we manage to acquire an asset, I think we should do probably better than two cents. If that's what you're trying to ask.

Okay, thanks Jerry. The 15 million is in SING or RMB?

It's RMB numbers, yeah.

Okay, and the $5.7 million cap top-up, this half will likely be one-off and you'll save your bullets for the acquisition?

Yes, it's our intent really to find the asset so that we don't need to top-up.

Okay, maybe a quick second question on divestment back into your sponsor's CWIT platform. Any guidance in terms of timeline and probably quantum? Because just thinking a lot, that proceeds will likely go towards your acquisition. Just thinking about the steps.

We are actually concurrently working on this as well, right? Identifying assets that are suitable for the next securitization. So you are right, depending on the timelines and when you find the asset, it could be that, you know, the sale may happen before the securitization may happen before the acquisition or the acquisition may have happened with the securitization. So you touched on a good point, right? In fact, I think the earlier question that Terence has asked, I omitted one point, which in fact is true. If we manage to securitize the asset before we acquire, obviously we will use the proceeds from the securitization to fund the asset purchase. So we are indeed working simultaneously, both on the acquisition front, as well as working on identifying and preparing a next securitization target. In terms of size, I think we would probably not want to give guidance at this moment. There are few that we are looking at. So we definitely want to balance it a little bit depending on the kind of assets that you know, we can also refresh our property, right? As we, of course, want to make sure that the DPU profile is, you know, maintained, you know, while we reconsider our portfolio.

Okay. Thanks, Jerry. Very clear. So, if a sale, if an acquisition happened before the sale, you're okay with gearing going up a little higher, but it's going to be temporary?

Yes. I mean, as you know now, we have multiple ways of you know, trying to manage the, you know, gearing of the trust.

Okay, thanks Jerry. So I just want very last quick one on the business park rental incentive. The tenant profile sounds quite solid, but is this rental incentive the current market practice to retain tenants and you still see this ongoing?

Yeah, I think such, I mean, the reversions that we are talking about, I think it is the current market. to attract tenants to come in.

Okay. Are you able to share how much you gave in terms of the incentive?

I mean, the general rental reversion was minus eight. Probably the one to comment on singular... Yeah, but it's a very good tenant, but I probably do not want to comment on singular. Okay. Yeah.

Yeah. China, Samsung. So the minus 8% already captured this rental incentive.

Yes. Okay.

Okay. Thanks so much. Yeah. All the best.

Thank you.

Thanks, Geraldine. The next question is from Ada. Please go ahead.

Hi Jerry and team, thanks for the presentation. First question, just to double check, is there a sort of blackout period post listing of CLCR before you can inject another asset into the vehicle?

Okay, I think you're referring to more than maybe, yeah.

Yes, the short answer is yes. So previously, it was about 12 months period before new injection can be considered or submitted, so to speak, right? So last year, somewhere middle of last year, I think it was shortened to six months. So I think that's good. But then I think there's still regulatory approval, the process will still take a while. So in the normal circumstances, you will expect about one year around that for another asset to be injected.

Perfect. Are you seeing any interesting transactions come to market in the retail space recently? And how soon do you think you'll be able to acquire?

We are actually following on a number of leads, but we also want to be prudent at the moment because although retail is actually one of the more resilient asset classes but consumer sentiment and all that still remains to be so I think we want to be very careful in selecting the right city right location but this is our brand so I would say yes we are you know cautiously confident that we should be able to do something this year to you know get the priority going and then to you know like what Jerry articulated to deliver what we set out to do

I think interesting transaction, volume of transaction have came down, generally speaking. But if you talk about big moves, maybe slightly more maybe a platform or move, I mean, PAG, you know, the PAG deal, maybe you want to talk about it a little bit. And then SKP as well. These two maybe sort of show the interest in detail.

Indeed. So PAG is actually one of the sort of cornerstone in the Wanda have been for a long time. So I think they acquired their management platform. And last year, I think they did quite a big study separate venture that actually is asset platform that actually, if I'm not mistaken, 40 over assets was put into that.

Retail assets.

Retail assets, right? One title retail, right? So that's one deal that's quite big. Another one is the SKP, I think the Pouyu actually took a substantial share in that And plus in the last year, I think they also did a set deal. There was an outlet in Beijing. So that was also something that's interesting. So I think there are still deals ongoing.

I don't want to jinx it, but touch wood, you see in the worst case scenario, if you're not able to acquire to replace the lost income from Capital Mall Yu Hua Ting, will you actually consider further distribution top-ups for this year?

2026 you mean? I think I answered that question. We are quite focused on getting an asset this year for 2026. And if the worst case happens, we will consider it at the end of the year.

Okay, got it. Just one last question for me. Does this mean that share buybacks will be off the book for now given that you are focusing on finding the replacing asset?

Actually, I don't want to use the word off the books, but we are guided by logic, right? You know, share buyback was... mathematically, you know, accretive when, you know, the yield was very high and share price was very low. Right now that our share price has, you know, recovered, you know, it may not make as much of a sense to do share buyback versus buying a higher yielding, you know, asset.

Yeah. Thanks for the additional, Carla. I'll jump back to the back of the queue.

Thank you.

Thanks, Ada. The next question is from Yokeam. Please go ahead.

hi hi jerry um just now you touched on the moratorium right like now it's six months instead of 12 months uh and you mentioned that there's there's maybe some regulatory um processes that might take a while so more realistic to assume a year okay can you explain what's the regulatory uh issues here and and also technically you you can start to maybe target assets to or identify assets to be divested, maybe in another two months or three months time, right?

I let you take the regulatory part, but I think in terms of preparing the asset, actually, we are already in preparation. I mean, things like, you know, testing the valuation or, you know, making sure it's, you know, doing up the numbers, so on and so forth. Those are all within our own team's work, which we have already started for a few assets.

Regulatory side, I think there is the... So I think maybe to put it that way, the follow-on listing of assets still requires quite regulatory screening That's a bit different from how Singapore is. The listing part is actually heavy regulatory involvement, but the follow-on is more market-driven. I think in China, the market is still relatively new. The regulators still want to be a bit more careful. So the follow-on process will still have to... It's just that the vehicle is already set up, the investor base is there, it's slightly shorter, but everything seems to go through the regulatory approval. So basically, when I mentioned regulators, NDRC, CSRC.

So in terms of a proposed divestment, how should we think about it in terms of size? And also, are you looking at the weaker assets? And also, is it going to be bigger, smaller than you are thinking?

Like Jerry mentioned, I think at this moment we are working on it, but we probably do not want to go so far as to say which asset, right? But the principle applies, right? It's basically where we actually completed AI and then we think there are you know, not much further growth to be, you know, milk from that set, then I think we will consider that injection. I think that's the principle that we always help. I mean, when you talk about weaker set, stronger set, I think that's... I would rather put it in a more stabilized, but true assets. That's the category.

So maybe a little bit of chicken and egg. Of course, we can look at our own acquisition pipeline. If for whatever reason, you manage to find a very attractive asset, but it has a higher quantum, then maybe all of the assets that we were thinking of securitizing, we may do the bigger one, so that we can match the funding needs. But if we don't manage to find a big one, maybe a more medium-sized one, then we will match it accordingly. As I said earlier, I want to basically have the DPO profile sort of maintained, even as we do portfolio reconstitution.

I mean, how should we think, because both are least core, right? And so how should we think about, and you have a stake in CLCR as well. So how should we think about the kind of asset? I mean, if you bring an existing asset, you know, post AEI, there's not much left to cream and then you sell it to CLCR, would the CLCR shareholders, unit holders be happy? Because there's not much upside to this asset. So I'm just trying to understand that.

If you summarize it for the investors in the Syri market, they are really insurance company, pension funds. They are trying to have very regular payouts. at the income rate that is competitive to their own environment. And their own environment now, you know, renminbi deposits are maybe 1%, you know, corporate rates, bond rates, government bond rates are below two, you know, some Penta bonds are just two plus, or some corporate renminbi bonds are two plus. So for them to get 3% plus yield, which is what CLCR is trading at right now, actually it's enough for them to buy those units. They are not looking for big growth or more than that. So I don't think that they are very concerned there's a lot of value add.

In fact, just to share some color, some of the pockets that's under those insurance or banks, you know, it's more like a fixed income department doing that investing. So I think there's a bit of difference in how they are seeing it. In fact, they actually really are seeking, you know, even that the China's domestic alternative are limited.

They just want to bid, you know, whatever they can get in the corporate bond market.

Okay, last one for me. So from the CLCR perspective, there's no regulations that prevent them from raising equity within first 12 months of listing to acquire stuff.

Is it correct? Like I said, I think after six months, they can do it.

After six months, they can actually acquire something through equity raising? Yes. Okay, got it. Thanks, Jerry.

Thanks, Youqiang. The next question is from Jessie. Please go ahead.

Okay. Hi, good morning, Jerry, everyone. I'm mindful of the time, so I'll keep it short. I know that many of us have asked, but are you able to give us a little bit of a hint, you know, what kind of mature assets, within which cities or which asset classes will possibly, you know, be divested into the C-rate? And secondly, I note that CLCT marks its 20th anniversary this year. So are there any, like, major strategic plans you can share with us for the rest of this year?

I think both parts we kind of covered, but maybe just bear repeating. So first one for the securitization, right? As you have put it, and also as we previously have shared, we are looking for assets that we feel that we have attracted full value from. Over the last many years, we actually, a lot of assets actually we have done AEIs on them. So you imagine many of them fit the category that we have done EI for them. But maybe some of them, we still feel that there's more value of keeping in our portfolio to continue to extract. So maybe we won't consider those. In terms of size, I think because the CLCR itself, the CREIT, you can only sell basically 100% of the asset, right? You cannot do part sale, right? So that would be, you know, the size would determine by which asset we put in. I mean, on our books, our valuation, we have assets that are one over billion to also assets that are three to four billion RMB. so that there's a whole range out there so it's therefore it's a bit difficult for me to pinpoint which which range right but if you want to talk about range one to one to four you know that's that will be the the range uh billion uh uh as far as our anniversary uh thank you very much for mentioning it uh i think uh seo city have come a long way since we were listed uh 20 years ago along the way you know we learned a lot of things about china China is evolving and you know what we have as a strategy today is really to tap into that evolution in China really they are looking at trying to grow their domestic consumption and then also they have a very strong innovation driven economy so both Both of these themes we're trying to cover through retail malls as well as the new economy assets. Of course, the new economy assets now is more challenging, but we are following it closely. Tenants like Chang Seng Memory, I'm sure it's only one now. There will be more such tenants that will be coming up. So we want to see those opportunities. so that we can put them into our business parks. As far as retail malls are concerned, that's certainly something that maybe you can say for the anniversary year, we want to focus on. to basically continue to drive the narrative that we have deep expertise in retail malls in China. We want to make use of that, not only operational AEI, but also capital markets with our ability to start up the CREIT platform as well as hopefully we will start to tap more on the WebMP capital markets for our debt financing. So these are things that we can look forward to for our anniversary.

Okay, thanks Jerry. Thank you, Jessie. We have one last question from Joel. Please go ahead.

Hi, can you hear me? Yes. Hi, thanks Jerry and Tim for the presentation and the opportunity. I just have three questions. I think I'll take it one by one. The first is regarding your retail. I think you see your retail sales, tenant food for occupancy costs. These are all headed in the right direction. Just wondering why the retail rent reversions remain weak. And is this, is it due to a supply situation or are tenants generally a bit more resistant to higher rents?

So I think you probably have seen that the China business is more nature and all that. So I think we have seen some of that. I think previous quarters we also have shared. Generally speaking, I think tenants are doing good sales. but their margins are actually also been, I would say, thinner than before because they needed to promote, they need to offer more and to entice the consumer to keep shopping. So I think that's a trend that we have seen. And then what you mentioned is supply is selective right certain areas there are but not not for all of our most so so basically i think that's a that factor but i think when when these are the the tenants behavior is actually quite closely related to how they look forward so if they are looking forward to a you know good um you know growth then they will actually start to plant more shops. They see good business, they will do more, right? So I think at the moment, they are still a bit cautious, if you ask me.

Maybe I add to that, that I don't think that, you know, the retail supply is that much of an issue for, you know, generally for most retail markets versus, say, if you talk about business part of logistics. So among all the sectors in, real estate sector in China, I think retail is the one that, you know, have less of that supply issue. Then what Yuhong said is right, the general economy is deflationary. So obviously in the tenants' mind, they see prices being difficult to increase. I don't want to generalize it, but there are some sectors like the toys and hobbies that still maintain pricing power. But generally speaking, when tenants see that they don't have pricing power on their own revenue side, when it comes to increasing rentals, it's also difficult for them to increase rentals by too much. Having said that, uh if you think about the rental reversion it's really a blended rental reversion there are trick cats uh in our uh portfolio where you where you would see uh you know sales are increasing uh uh by uh by a lot right those trick cats uh we are still seeing some rental reversions some of the ffd brands some IT, and of course, toys and hobbies, we do get some positive rental reversion. But it's sort of offset, for a long time now, it's sort of offset by the weakness in fashion and beauty and health, which I've seen single-digit sales drop. So rental reversions there would have been negative as well. What I do observe when you talk about looking forward, all these are historical, but if you talk about looking forward, I see maybe two trends in relation to fashion particularly, which is an important trait because historically speaking, fashion trade, they usually have higher margins, usually in the good days, and therefore they can afford to pay a higher occupancy cost or rent in general. One is, I think in our, actually we didn't go through that, in the business outlook, in last year, there have been some changes to the taxation on e-commerce. Now all e-commerce players have to basically sellers have to disclose their sales and therefore the tax. So we've been hearing that that is leading to more online players thinking about setting offline stores, that means physical retail stores. And e-commerce, a large chunk of it is really fashion sales. And that could start to reverse maybe some of the damage that has been done to this sector over the last many years. And if I look at some of the reversions from fashion trade, I mean, I don't want to say that I'm painting a trend, but the revisions and sales drop are probably lesser than previous years. So we are slowly finding, hopefully slowly finding importance. And with some equalizing of the playing field, hopefully from 26 and onwards, it seems we can see some strengthening in the trade. So when either fashion or beauty and health, either one of the trade caps sort of even reverse their trend a little bit, I think that would help us finally, you know, be able to show some general positive regression on a blended basis because our other trickettes are actually okay. It's just really fashion and beauty and health that is, you know, contributing to the more negative emergence.

Okay, thank you so much. Very clear. My next question is regarding acquisitions. I just refer to two, I know your sponsor has two blockbuster assets, the Redford City Chongqing and Suzhou Centre Mall. I know it's not within your mentioned size of, I think it was close to a billion in RMB, but are these on your rover? And is this something you could potentially acquire in the further future?

RCCQ is not in our loafer. Sulso Centre is also not in our loafer.

They are not in our direct so-called acquisition loafer list. But I think for sure we will be if there's any chance that we will be ahead. Having said that, these two are also very big. And so I think we will be careful and hopefully the market will allow us to do big deals, then I think it will be a more opportune time to consider it, if this is my opinion.

I think at this stage, we basically just start I would just say have some headway in terms of our portfolio reconstitution journey here, having just started at CREIT and then having a stable channel of recycling our assets. So we probably would err on the side of caution first, but if we get something going, then of course, We have a proven model and the bigger assets will be something that we can have a deeper think about.

Okay, thank you. My last question is regarding your RMB debt percentage. Is there an intention to raise it to 100% over time or do you think 60-40% is pretty good?

I would say, sorry, let me take this question. So for Capital Land, China Trust, we are still a Singapore REIT. So we are actually very well supported by all our Singapore banks. So the Singapore bank's natural funding currency is Singapore dollar. So we can actually fund quite competitively in Singapore dollar. So that has actually been the case for many years. So I would say we will continue to maintain quite a balanced profile. We wouldn't actually totally give up on our most competitive source of capital, which is SingDollar. But yet we do need to actually have a good percentage of our debt in RMB. So that is actually both to benefit from the easing of RMB interest rate as well as RMB liquidity. And of course, that will actually also show up our balance sheet. So I would say we were actually 60-40 or maybe 50-50 is something that we will be looking at. And of course, going forward, one of the most important factor is also to evaluate the relative cost of fund. So Remy Bee, his rate has been I mean, decreasing. And SingDollar actually now is also quite competitive. So we will actually continue tapping both markets.

Okay, thank you. That's all from me.

Thank you, Joao, and thank you everyone for joining. This concludes our session for today. Please feel free to reach out to me or my team if you have any further questions. Thank you all and have a good day.