CapitaLand Investment Limited

A very good morning to all of you. Welcome to Capital Land Integrated Commercial Trust First Half FY2024 Results Briefing. CICG released our results this morning and the materials are all uploaded on SGXNet and on CICG's website. So similar to what we have done for our full year briefing, we are conducting this session as a fireside chat instead of a formal presentation. So focusing on certain key themes and topics before we move on to the Q&A session. So before we start, we would like to introduce the panel. I am Mei Peng, the Head of Investor Relations. And in the center is our CEO, Mr. Tony Tan. And on Tony's left is Ms. Jacqueline Lee, our Head of Investment. And on Jacqueline's left is Mr. Lee Yi Chuan, our Head of Portfolio Management. On Tony's right is Ms. Wong Mei Lien, our Chief Financial Officer. So to kick off today's fireside chat, we would like to invite Tony to share with us some of the highlights of CICG's first half performance. Tony.

Good morning. Hope you all have a little bit of time to digest the announcement this morning. Needless to say, I think we're quite pleased that we are able to deliver a resilient result in the first half. Bear in mind the performance of first half, number can be a little bit noisy. We have embarked on our AEI program in Galileo from February this year, which means that we have no income from Galileo from February onward. And at the same time, we have been able to ride on a positive active no rent discussion over the last 12 months or so resulting in a higher reversion rate so that slowly would translate into the income stream so while we actively work towards our active portfolio bear in mind that second half January macro environment is a little bit uncertain So we will pin our strategy actively to ensure we try to reduce as much as possible. Looking at some of the key metrics, I think it's been relatively stable other than the MPI they have grown, which is backed by higher rental growth and also inclusion of Club T started to contribute. We will also be actively managing our costs, which is very important, resulting in MPI growth of 5.4% for the first half. Portfolio vacancy remains relatively stable. On and off you may see some kind of movement here and there, but generally I think we are actively managing our portfolio, planning ahead, not just the second half of the year, but also looking beyond 2024 to try to de-risk as much as possible, knowing that the environment out there can be highly uncertain. So our team will touch on later on as we move along. So overall, Other than the property level that we managed to secure a higher NPI, we have also stabilized our financing cost at around 3.5%, which is quite similar to the first quarter. We are hopeful that with the general market consensus that we're beginning to see some easing of the interest rate, that hopefully it will translate into a positive outcome from an average cost perspective. Nevertheless, in July, we already announced that we did a bond issue. We did a 10-year placement at 3%, 5%. So that sort of replaced some of the debt that would be coming due in third and fourth quarter. On the passing level, I think it's just a marginal creep up. But importantly, also managing the short-term interest exposure is equally important so that holistically, we try to maintain a reasonable, stable overall average cost of debt. Rental reversion, quite pleased that actually we managed to gain the confidence of our retailer. Very high retention rate, reasonably good rental reversion. We are clocking in about 9.3% for the retail and 15% for the office. Thanks to the team who worked very hard to ensure we are able to strike a reasonably good deal with our tenant. balancing the risk as well as the well-being of our own tenant as well. They need to survive to be able to do well in a very uncertain environment. But overall, I think we are quite pleased to achieve an outcome that we have shown here. So as a result, I think the first half, unitholders should expect to see a distribution of 5.43 cents. Factoring within the DRP, if you remember, in the beginning of the year DRP, it would have been about 5.48 cents. So if you look at it sequentially, actually we are still also growing our cash flow on a sequential basis. We are trying to work very hard on the rest of the period this year as well as making sure we are able to secure a stable return in 2025 as well. But that I passed on.

Yeah, thank you, Tony, for the overall highlights. So maybe going to some of the specifics, I think just now Tony touched on the positive rent reversions, which we have achieved for the first half of this year. So I think the question will be that, so are we likely to continue to achieve such positive rent reversions for the rest of 2024? And also whether you can share a bit on 2025?