Kiwi Property Group Ltd

Good day and thank you for standing by. Welcome to KiwiProperty FY26 Interim Results. At this time, all participants are in a listen-only mode. After this speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone keypad. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Clive McKenzie, Chief Executive Officer, and Steve Penny, CFO from Kiwi Property. Please go ahead.

Thank you, Maggie. Kia ora and good morning, everyone. Thank you for joining us for Kiwi Property's interim results announcement for the six-month end of 30 September 2025. I'm Clive McKenzie, the CEO of Kiwi Property, and today I'm joined by Steve Penny, our CFO, and Fraser Gunn, our Head of Investor Relations. I assume you have a copy of our presentation in front of you. If not, you can access one from the investor section of our website at kp.co.nz. A quick reminder that, as usual, we have included detailed financial and property information and dependencies to the interim financial presentation. Turning now to slide four to look at our progress on key priorities over the last six months. Kiwi Property is focused on increasing long-term returns for its investors. We do this through the ownership, development, and management of a portfolio of high-quality real estate. At the core of our strategy is an ambition to be New Zealand's leading creator and curator of retail-led mixed-use communities. We believe our strategic mixed-use assets located in metropolitan areas with great transport access such as Sylvia Park, Linmore, Drury, and The Base will continue to grow and that by prioritizing them, we will create the greatest value for our shareholders in the years ahead. We are pleased with our achievements in the first half of FY26. making strong progress against each of our strategic priorities. The first priority we identified at our annual results earlier this year was to efficiently manage the balance sheet and free up additional investment capacity. As at the 30th of September, Gearingham remained relatively flat at 38.5% with the operation of the dividend reinvestment plan funding of CapEx requirements. Since balance date, we have agreed the sale of Sylvia Park Lifestyle to a large format retail fund managed by Makisee Property. The proceeds from this sale is approximately $53 million, with some of the proceeds to be reinvested into growth opportunities. The pro forma impact of the sale reduces gearing to 37.5%. The second priority was to continue to drive rent growth. Despite a weak economy and a challenging leasing market, during the first half of the financial year, we have delivered strong leasing outcomes across the portfolio, with total rental movements, including new leasing and rent reviews, up 3.5%. Office leasing spreads were up 3.4%, supported by the ASB lease extension and encouraging tenant demand for premium office space within the Bureau Centre. Mixed-use leasing spreads were up 3.2%, now turning to slide five. The third priority was to maintain strong discipline on costs. Through controlled management and a culture of continuous improvement, employment and administrative expenses were down by 5% when compared to the same period last year and adjusted for one-off costs. The fourth priority was to progress the sell down of very large format retail sites. Around 77% of the large format retail land intended to be sold at the development is now under contract. with segment and profit recognition expected from FY27 to FY29. I'll talk through the conditional sales of land in further detail later in this presentation. Drury land sales will help to fund the project's capital expenditure, with minimal net gearing impact on the Kiwi property balance sheet expected from the development. Now turning to slide six. As well as strong progress on our key priorities, a number of other business highlights over the last six months are worth noting. Strong leasing momentum was seen at a number of our assets. ASB's lease at their North Wharf headquarters was extended through to 2040, which was a significant milestone and provides long-term certainty of tenure at the asset. Rosado, a built-to-rent asset adjacent to Sylvie Park, was 99% leased at the end of the period, and Veracent's leasing is progressing well, with occupancy now 94.3%, up from 92.4%. Sales and foot traffic were marginally up at our mixed-use centres over the last 12 months. Positively, sales were showing signs of improvement, up 1% in the last six months, compared to the prior six months. Catalysts for further sales growth are expected through improving customers' spending conditions, following interest rate cuts, and IKEA's first New Zealand store opening adjacent to Silvia Park in early December. In November last year, we provided a convertible loan to Makisee Property with the intention that this would convert to equity With the earnings milestone and the loan agreement now met, we can confirm that this loan will convert to a 50% equity stake in early December, unlocking an additional source of capital and potential earnings growth over time. McAfee has launched a new large format retail fund with Sylvia Park Lifestyle as a cornerstone asset and is currently seeking investor interest. I'll talk through the new LFR proposition in further detail later in the presentation. Over now to slide seven. With New Zealand's first IKEA opening next week adjacent to Sylvia Park, it would be remiss not to mention its significance for the Sylvia Park precinct today. IKEA is one of the most highly anticipated retail openings in recent years, and once open, it is expected to act as a significant drawcard to the precinct. To ensure the seamless integration of the two sites, we have completed a pedestrian walkway between IKEA and Sylvia Park to encourage cross shopping. This walkway's entry point on level one will be beneficial in driving foot traffic to Sylvia Park's upper floor retail. We anticipate that the opening of Ikea will drive additional custom activity and reinforce the long-term value proposition of Sylvia Park. Now turning to slide eight. Among others in the property industry, Kiwi probably discussed the country's seismic regulations with government ministers and raised whether the mitigation costs associated with appropriately sized compared to the risk. We are pleased to see the proposed changes announced in September by Minister Chris Pink, which are expected to provide greater clarity regarding seismic strengthening obligations. Proposed legislation will remove the new building standards ratings. Instead, the legislation will target buildings posing substantive risk to life in medium or higher seismic zones. Auckland is said to be removed from the earthquake-prone building regime altogether due to low seismic risk. meaning seismic strengthening would not be mandatory for Auckland buildings. Kiwi Properties portfolio is predominantly Auckland-based, with 86% of our assets based there, when excluding held-for-sale assets. In the valuations of Kiwi Properties Auckland assets, we currently have a combined present value of $83 million in seismic capex, assumed to be spent over time. Across our portfolio, including held-for-sale assets, the total seismic capital capex provision have a present value of $116 million, which could significantly reduce once this legislation is passed and implemented. Kiwi Properties' valuations currently remain unchanged and any potential Catholic savings from the reduced seismic upgrade requirements will depend on a variety of factors, including market reaction, tenant commitments and lender expectations. Over now to slide nine. We're pleased to have continued to maximise the day-to-day operational performance of our assets. Despite the challenging leasing market, we have continued to grow rents and increase both our weighted average lease term and occupancy. As you can see on this slide, total rental growth from mixed-use office and retail leasing activity was up 3.5% for the half year. Driven by the renewal of ASB's lease at North Wharf, over 28% of our office space was re-leased or renewed, with a spread of 3.4%. At the half year, 68% of our total portfolio of our income was subject to either a fixed or CPR based review, allowing for future rental growth. Overall occupant portfolio occupancy has increased 96.9% to 97.9% over the period. This increase was primarily due to the lease up of Rosado, which had 293 of 295 apartments leased as at 30 September. and positive leasing momentum in the Vero Centre and Sylvia Park's adjoining properties. Our weighted average lease expiry increased from 3.8 years to 4.3 years over the period, primarily due to the lease extension at North Walk for a further nine years. Turning now to site 10. Sales across our total portfolio were margin lower, down by 0.6% over the last 12 months. Sales and foot traffic at our mixed-use assets were marginally up by 0.2% and 1.1% respectively compared to the previous period. Stronger mixed-use sales in the second half, up by 1%, shows there's momentum heading into the Christmas shopping period. Total occupancy costs were up to 15.5% from 14.5% across the mixed-use assets, with a target TOC of 17% to 18%. This provides further scope for rental growth. Overall, sales appear to be recovering, and our hope is that this theme continues over the coming months. On now to slide 11. Kiwi properties assets values were margin lower over the year with a fair value movement for the total portfolio down by 0.9% to $30.3 million over the last six months. Values look to have stabilized as interest rates continue to decrease with the investment portfolio capitalization rate broadly flat versus the prior year. The base valuation increased by 1.9% thanks to continued strong leasing activity with a spread of 5.8% and occupancy at more than 99%. On the other hand, our prairie landholding valuation has seen a small decrease of 4.3 million or down 2.6%. This is primarily due to ongoing development investment. These cattle works are expected to enhance the site's long-term value with short-term valuation movements expected during active project phases. I'll now pass over to Steve to talk through our FY26 interim financial results on slide 13. Thanks, Clive, and good morning, everyone. TV Property has delivered a strong overall rental performance in the last six months with net operating income up 5.7% across our portfolio compared to the prior period. Our focus on mixed-use assets has delivered through cycle net operating income growth of 6.9%. At Sylvia Park, the lease-up of Rosado has contributed to An additional $3.8 million in income compared with September 2024, while the ASB lease deal at Geneva House added $900,000. The base continues to perform well with Tiala's new medical and entertainment tendencies on level one driving higher income up half a million dollars. These results reflect our ongoing commitment to optimising portfolio performance even in market conditions challenging. Turning now to slide 14. Adjusted funds from operations or AFO increased by 3.5 million or 7.2%. This was driven by high net rental income and stable finance expenses over the period. Employment and administration expenses were normalised for one-off costs associated with the ASB lease extension and other transaction costs were lowered by 600,000 or 5.1%, reflecting our continued focus on controlling costs and delivering operational efficiency. Although our half-year dividend of 2.8 cents per share reflects an 88% FO payout ratio. We expect the final FY26 dividend payout ratio to be at the lower end of our 90% to 100% FO target range. Turning over to slide 15. Our total property assets, including our investment properties and jury land classified under inventories, was $3.3 billion as at 30 September 2025. Earring remains relatively flat at 38.5%, with proactive capital spend reduction and the dividend reinvestment plan supporting this stability. Proforma gearing is expected to reduce to 37.5% following the completion of the LFR fund transaction. Net tangible assets per share were marginally lower at $1.12, down by 2% from $1.14. The interest cover ratio was 3.1 times, up from 2.9 times in March. Now over to slide 16. Kiwi Property continues to be well supported by our banking group. In August, we increased our bank facilities by $35 million with headroom of $248 million as of 30 September. Our weighted average term to get maturity was flat at 3.1 years. During the period, Kiwi Property took advantage of lower cost facilities during the refinance while still ensuring a healthy term to maturity was retained. To take advantage of lower relative interest costs after balance date, we refinanced the recently matured $100 million 040 green bond series with bank debt. Moving now to slide 17. As a result of declining interest rates and lower cost bank facilities in our recent refinance, our weighted average cost of debt reduced by 41 basis points to 4.89% over the last six months. In this half-year period, we entered into $95 million of new interest rate swaps. The proportion of fixed rate debt has decreased from 88% to 76% with an anticipated reduction in debt levels after completing proposed asset sales. We will continue to actively manage our hedging profile to provide greater certainty around interest costs. I'll now hand back to Clive, who will resume on slide 19. Thanks, Steve. We're pleased that our investments in Makisee property is progressing to the next phase, creating value for KPG shareholders. The strategy behind our investment in Makisee was to support the growth of Kiwi property by providing us with a potential new source of capital and delivering earnings growth from a scalable business. The original loan arrangement supported the growth of Makisee's business before our investment converted from debt to equity. McAfee has made strong progress over the last 12 months, and the equity criteria for conversion of the loan has been met as expected. This will result in the conversion of our original $6.5 million loan to equity in early December. We look forward to becoming a 50% shareholder in the McAfee Investment Management business, which currently has over $2.2 billion in assets under management. Over now to slide 20. We are pleased to announce that Macassie launched a new large format retail fund also known as the Macassie LFR Fund in early November. The new LFR seed asset will be Sylvia Park Lifestyle, which is our LFR property adjacent to Sylvia Park. The fund will be managed by Macassie with Kiwi Property retaining property management and leasing of its contributed assets. Kiwi Property intends to maintain a long-term interest of between 25% and 50% in the fund, with the fund intended to grow over time. This transaction highlights the benefit of our investments in MACSI, which can provide us with new sources of capital to support our strategic objectives. The LFR fund structure will enable us to release approximately $53 million in capital upfront, contain control of key land holdings within the Sylvia Park precinct, and partner on any future potential LFR developments at existing Kiwi property sites. Turning now to slide 21. With asset sales providing some capital for reinvestment, we expect to commence several key development projects in the near term, subject to board approvals and final designs. These projects include an Asian supermarket, a new pedestrian plaza at Silvio Park, as well as an expansion of the available retail space at the base. These initiatives will diversify our tenant mix, revitalize key precincts, and create additional retail space to meet growing demand. The estimated spend for these projects is approximately $32 million. Moving now to slide 22. At Drury, we are pleased to be able to announce three further sales of large-format retail land following the unconditional sale of 1.2 hectares to Foodstuffs in April. Earlier this month, we confirmed the conditional sale of 6.4 hectares to Costco Wholesale, a major international retailer. This significant agreement will serve as a catalyst for further development and growth at the site. This sale, along with conditional sales to the Briscoe Group and Harvey Norman, will provide capital for reinvestment. Together with the recent Stage 2 fast track approval, this validates the strategic vision for Drury as Auckland's next major metropolitan centre. Proceeds from all sales to date total $115 million with settlement and profit recognition expected in FY27 to FY29. Stage 1 civil works and power connections for the large format retail sections are underway, and Stage 2 has now been granted consent under the Fast Track Approvals Act 2024, increasing the consented developable area to around 140,000 square meters. Turning now to slide 23. Our Drury development covers a gross land area of 53.3 hectares with total acquisition and development cost to date of $141.4 million. The current market value at September 2025 is $162 million with a saleable land area of 39 hectares. CapEx remaining post-30 September is estimated around $161 million with an estimated completed value of around $387 million. In our capital allocation framework, the Drury project is classified as opportunistic with a target IRR of 15 to 20% supporting our long-term value creation strategy. And finally, over to slide 25 for our priorities and guidance for the remainder of the financial year. Kiwi Property delivered a robust operating result in the first six months of FY26 and delivered on our key strategic priorities. Heading into the remainder of FY26, we will continue to focus on our four key priorities, which we know will make an impact. First, we will continue to efficiently manage the balance sheet. Asset sale proceeds will allow us to enhance our existing high-quality assets and progress other investment opportunities as market conditions allow, in line with our capital allocation framework. Secondly, we will continue to drive rental growth with a focus on maximizing the operational performance of our high-quality assets. Thirdly, we look to maintain strong discipline on costs following great progress made to date in this area. And finally, we will look to progress the Drury Stage 1 Civil Works, which will bring land sales closer to settlement. This follows the four large format retail land sales we have achieved at Drury over the last few months. As a business, our goal is to deliver sustainable earnings and dividend growth for our shareholders. I'm pleased to reconfirm the FY26 full year dividend guidance of 5.6 cents per share. This represents a 3.7% increase on the prior year, in line with our intention to continue to deliver dividend growth over time. Kiwi Property has made great strategic progress over the last six months, and we will continue to look for ways to add shareholder value over the rest of the financial year. Thank you for joining us today. That concludes our overview of Kiwi Property's interim financial results for the six months to 30 September 2025. Today's presentation, along with our FY26 interim report, is available on the Kiwi Property website. And I'll pass over to the moderator who will open the phone lines for questions. Thank you.

Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by as we compile the Q&A roster. First question comes from Nicholas Hill from Craig's Investment Partners. Please go ahead.

Hi, good morning. I'd like to kick things off with a couple of questions on the performance of your retail and mixed-use assets. Would it be possible to talk to what was behind the decrease in specialty sales per square metre?

Yeah, there's probably a couple of things that are driving that. The first one, obviously, the economic climate would be the obvious one. But the other thing is we've seen, especially at Sylvia Park and the base, a lot of our previously categorised specialty stores got up to many majors as they've increased their store size. And so those sales have gone out of the specialty store sales numbers.

Okay. And then just in looking at Centreplace North, I believe, was the Kmart lease renewal the main driver increasing income or has there also been a change in occupancy?

Sorry, are you talking about the plaza or Centreplace?

Sorry, I think I've got my wires crossed. It was the one with the Kmart renewal.

We did a Kmart renewal at the plaza. Sorry, what was the question?

Was that the main driver in the increase in rental income or has there been a change in occupancy?

That was the main driver, yes.

Okay, thanks. And then I guess just to clarify something for me, You've announced that you're selling effectively a 50% interest in the Sylvia Park lifestyle asset to the magazine fund for $90 million. You know, that equates to about $45 million, but you say that it will release $53 million from capital. Where does the other $8 million come from?

So the gearing in the fund is slightly higher.

So that's... We get proceeds Okay, thanks.

And then last one from me before I let someone else have a go. How is the inquiry going for the last 2,000 square metres of the Vero Centre?

Great question. In fact, we're very close to securing another 1,200 square metres of space. We're just getting the lease signed at the moment, which will take us down to effectively just under a floor.

Okay, thanks. That's all from me. Pleasure. Thanks, Nick.

Thank you. Next, we have Bianca Murphy from UBS. Please go ahead.

Morning, guys. Thanks for the update. First question for me is just on Drury. So, given the conditional nature of the land sales, are you able to share what specific conditions remain outstanding and what the key risks are to settlement timing there?

Thanks, Bianca. Obviously, with four sales, there's a number of conditions that need to play out. Firstly, we obviously have to do all the earthworks in terms of putting in the roads and the infrastructure so we can get a title. And for some of the international tenants, they require OIO as well. So those will be the main conditions across those tenants, yeah. Or buyers, sorry.

Thank you. Yep. Yeah, okay, that's helpful. And then just on the Macassie Fund, could you talk about which other assets in your portfolio you see as suitable to be transferred to the LFR Fund at some point?

In terms of the assets that we have in our portfolio, there's probably potential new developments. So, for example, at Drury, there is still some LFR land that we haven't sold that could potentially end up in the Macassie LFR Fund. Also, there's an LFR site adjacent to the IKEA development, which also could, when developed, could also be sold into that fund as well. So, those are some of the more immediate ones, yeah.

Okay. Great. Thanks. That's all for me.

Thanks, Bianca.

Thank you. Just a moment for our next question, please. Next, we have Nick Ma from Macquarie. Please go ahead.

Morning. Just in terms of valuations, it's sort of a bit intriguing. You've executed the lease renewal at ASB, but the valuation is sort of flat despite the cap rate. Can you just talk what else has sort of gone on there? What it would apply is, you know, what you're spending is, you know, in line or more than what the value is. I'm sure it's an issue, but it might be a deal at the time.

I'll kick off and then I'll hand over to Steve. So effectively, the valuers haven't moved the valuation. They've looked at market evidence out on the market, and they don't believe that the current market evidence justifies a movement in the valuation. So that's probably the first point. I don't know, Steve, if there's anything else you want to add to that. It's probably market rents as well, Nick. It's a little bit soft, at least in the office market at the moment.

But I guess you've just, you know, reset the rent on it and the value has moved to cap rate, which would suggest that they have, you know, viewed it as a more attractive asset than it was prior to the lease renewal. So it's just a little bit more intriguing, but no, that's fine. And then with the sort of way you've kind of cut up the portfolio between core and non-core, you know, what is the sort of process around the balance of non-core assets and how you want to sort of exit these over time?

Yeah, so for some time now, we've obviously called out which assets we regard as non-core. Obviously, our intention is, and again, as we have called out before, we want to focus on mixed-use assets in the Golden Triangle, which is obviously part of the up and north island sort of area where we see there's the most opportunity for growth. And so, you know, that'll mean over time we'll move out of those regional retail assets and CBD retail, which is – sorry, CBD office, which is no longer core to our strategy. So we'll continue that process. Obviously, we've got the laws of health to sell, so that sort of signals our intent in that direction as well, yeah.

Okay, and the office assets, you know, is that something that must be – likely to help you with or those sort of outright sales and, you know, particularly with ASB following the lease renewal, have you had much sort of unsolicited interest in that and are you going to progress that?

In answer to the first part of your question, yes, obviously, Makisee is open to office assets as well as they have a number of office assets within their portfolio. Given the size of our office assets, it's most likely they will be to the broader market. And yes, we have had some initial interest in ASV, but still early days in terms of progressing that.

No, that's great. And then just on Sylvia Park, you know, the rent was down, or the total rent was down. Can you just talk through that and talk through what the leasing spread was at that stage as well?

Okay. Our leasing spreads at Sylvia Park were actually slightly lower. So I'm not sure which number you're looking at in terms of that. I'll just turn to John's number. So our overall rent reviews were sort of 4.1% and leasing spreads were sitting around 3.2%. Are you looking at slide 27, like the legal income? Yeah. Yeah. There's a $1.9 million surrender fee. So you've got to adjust it and normalise it for that.

Makes sense. Cool, thanks.

OK. Sorry.

Thank you. Just a moment for our next question, please.

It's me. Come on, I've got my hand up.

Next, we have Rohan Smith from Force of Bar. Please go ahead.

Hi, guys. Can I ask a couple of quick ones? I'm just on the 7.5 guidance. It, you know, implies, you know, a bit of a weaker half. I believe there's a bunch of maintenance capex that kind of looks pretty seasonal and incentives. I think last time we spoke, you said there was going to be a reasonable number this year, and it's obviously not in the first half. Can you just give us some colour on those two lines?

Yeah, maintenance capex will probably take up a little bit. And it's a challenge for the second half of the year from a leasing perspective. You lose two months to do deals.

So you're kind of running out of time to book those deals and see that upside. So that's probably what we're seeing at the moment. In terms of debtors, things like that, that's really stable. So it's more about the timing issue with leasing.

Sorry, you're saying the whole movement is a timing issue with leasing? Is that how I should read that? Do you have some colour on that? And also, you know, the incentives as well? I can feel like Maybe there's something that you provided ASB, given earlier comments on the building valuation, that are you capitalising incentives there or are you running them through your P&L? Capitalised, yeah. And sorry, maintenance capex?

Sorry, maintenance capex? Yeah, it's generally second half of the year. when we expect to do that and spend a bit more so it'll be pretty consistent with last year.

And then just to the seismic disclosures you know looking at your financial reports you go to last year's one you had 42.8 million as a net present value of the provisions in the but today you're telling us it's 116. What happened between FY25 and now in terms of more than doubling your seismic provisions?

You're talking about different numbers.

One's the movement last year, and then we've reported the total number. We've never reported the total number one more.

Okay, so these movements are the last, so 25, you added 40, and then 24, you added another 40-ish. So that's a cumulative number, not the total.

It's the change over the period.

Yeah. Yeah, okay, thanks. And then just thinking about gearing, because you've got a bunch of asset sales, and it's always going to take a while for you to – sell down this drury land, where's your kind of target for gearing? Are we still kind of in that 25% to 35% range? Is that where we should think about your gearing long-term?

Yep. So we can see with the capex we've got in front of us and the asset sales that we're targeting at the moment, we can see a pathway to get back to some pro-forma gearing at 35%.

Keeping in mind that the expenditure... Drury is over quite a long period of time.

Yeah, and, you know, any additional asset sales over time would reduce that amount further, yeah.

Yeah, cool. Thanks. And then just last one, and I know we probably agree and disagree on this all the time, but, you know, you comment multiple times that the Drury land sales will be used to fund Project CapEx, yet you're running the profit through FO. Are you going to be running a lower payout ratio in the medium term to retain those earnings? Yes. so to speak. Otherwise, you know, whilst the Drury land sales will fund the project CapEx you're given, you'll be part funded by debt.

Yeah, we expect the payout ratio to be lower if you included the Drury earnings in that. Yes, that's correct. Closer to the time we'll provide the market and update. Okay. Thanks, guys. Thanks, Ryan.

Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. Next question comes from Ari Decker from Jarden. Please go ahead.

Oh, good morning. Yeah, just starting with Rosido, net rental income was $3.6 million for the half, and your effective occupancy was pretty high, given the starting point was, I think, 82%. Can you just give an update on where your sort of, outlook is now that it's fully leased and the starting rents have come in for year three stabilised income, which I think last year you sort of sized at about 11.2 million?

Yeah, it's probably a little bit over double what it is now, close to eight, I'd say.

In terms of year three?

Well, that's in terms of this financial year, yes.

Yeah. Yeah, so in terms of, like, with the rental growth that you'd sort of be expecting, you know, does that mean your outlook now, you know, say in 18 months or so time, at the three-year point, would be sort of closer to $10 million?

Yeah, it's come back a bit. Yep, rental is off the market, but we expect it to pick up again.

And the market's very cyclical.

Okay, thanks. And then just in terms of the ASB, which has sort of come up in a couple of other threads of questions, I see in the commitments that there's a $22 million commitment, future commitment for ASB North Wharf. Can you just sort of talk a little bit about the nature of that and over what time period that $22 million will be incurred?

It's over the next couple of years, and there's some tenant put out in there.

There's some baseball boots as well for additional space.

There's a little bit of spin on green. Yeah, there's bathrooms. Yeah, it's basically, you know, it's a refresh of the tenancy for the next lease term here.

Okay. And then just in terms of Vero, which is also going, I guess, through a bit of a partial renewal cycle, commitments there, $12 million. Is that sort of over a similar period as well, sort of next 12, 18 months and sort of associated with, you know, CapEx and also some incentives or CapEx only? Okay.

That's sort of over the next 12 to 18 months as you call out and that there's a combination of upgrading works as well and sort of the entry lobbies in the trip and some capex as well. There's no incentives in that number.

Great, thank you. And then just the last one from me. I mean, I know it's a relatively small asset. I think you sort of paid $27.5 million for it four years or so ago. But the site that the City Impact Church used to occupy, what's sort of the future for that site now that you've sort of sold down an interest in the lifestyle asset?

We're actually very close to finalizing a lease for the office space in that tenancy. So that vacant space will come out. But it's an asset which over time, you know, we may look to download our ownership of with regards to MACACI as, you know, into the LFR fund potentially as well, yeah.

Oh, yeah. No, so kind of go down the way of the lifestyle. No, that's good. Thank you. Thanks, Ari.

Thank you.

Thank you. Thank you for all the questions. This concludes today's Q&A session and the conference call. Thank you for participating. You may now disconnect. Have a great day.