CapitaLand Investment Limited

Can you hear us? If you can, can you give us a thumbs up? Okay, great. So thank you for joining us today. We know it's an early start, and we appreciate you for dialing in on time. We have the management team with us here today. We have our CEO, Chun Xiang. of investment, Jacqueline, portfolio management, Yi-Chan, and there are teams here with us. We have Mei-Ping, Tammy, and myself. We have to keep things focused today, so we'll start off with key highlights by Chunxiang before moving on to the Q&A. With that, I will pass the time over to Chunxiang.

Thank you, Alison. Good morning everybody. Thank you for joining us today. I know it's bright and early. Bright and early for me too. Feels like we've just spoken recently and here we are back again. Okay, today we just announced business updates for the first quarter 2026. So the numbers could be a little stale given that we have already spent some time talking about some of the transactions earlier and also obviously we have reported an advance distribution so some of you would have if you turn down your numbers from there as well. But nevertheless, let's go through some of the operating numbers, and then we will take some Q&A. But there are some exciting updates in this business update as well. We will walk through in the subsequent slides. Okay, so first quarter net property income, very healthy, 300 and close the quarter at 314 million, up 8%. But of course, this has a lot of, we're going through a lot of changes in our portfolio, so we need to dissect the numbers a little bit, but overall, a very healthy set of financial numbers as you would have been from our fund distribution anyway. Aggregate leverage 38.5%, down 0.1 percentage points from the end of 2025. Average cost of debt has come down quite significantly from 3.2% as at 31st December. 2025 to 31st March 2026. This quarter, in terms of cap market transaction, we issued 300 million fixed rate notes due in 2031, which is a five-year note at 2.18% on 10th of March 2026. Portfolio occupancy, 95.2%, down 1.7% quarter on quarter. I'll spend some time walking you through some of the reasons why the occupancy is down for this particular quarter. I think it's mainly due to actually, I don't think it's a portfolio-wide reflection. It's actually very tenant specific. The top three contributors to the decline in occupancy is actually tenant in MAC in Frankfurt. We have the largest contribution. In fact, it contributed approximately half of the job. Because by NLA, that tenant takes up quite a significant space and that contributed. But the rent on that tenant actually is not very significant. So the contribution was about 0.8% of portfolio occupancy. The rent contribution was actually less than is not as significant. Then the second and tenant, we have a tenant departure from Hunan office, one of the larger tenants that we have there. And also the third tenant contribution is a tenant in Clark Key that's on the third floor, is an event organizer. Very large space, but as you can imagine, third floor of Clark Key, very little rent contribution. So the financial impact is more significant It's not as significant as the job in occupancy suggests. But I want to highlight that we are very actively marketing the space. So, of course, we all know that MAC itself has some challenges in terms of leasing. We actually did improve the occupancy last quarter. I think when we highlighted last quarter as well, there's always some in and out in terms of the leasing momentum. So we'll be working quite hard to try to improve the performance for that particular asset. Kaki, a lot of work in progress. So the team is curating the tenant mix to try to dovetail with the completion of Canning Hill, getting some good traction in the recent discussions. So there could be some new names that will show up at Kaki over the next few months. And also for Hunan, the office tenant, probably contributed about slightly over 10% of the Hunan office occupancy. So we are also actively marketing that space, which we think is transitional and the office space is actually quite nice because it's fitted out. So it should take us not too long to lease up that space. Okay, so these are the three main. So it's actually very asset and tenant specific. I think overall the portfolio is still very healthy as Evidence by the renter reversions, which is still very healthy at 4.4% for the retail portfolio. And for the office portfolio, it's at 6.1% renter reversion. Quite in line with our guidance earlier to be trending around mid-single digits. Tenant sales per square foot up 2.2% year-on-year. Fairly healthy. This includes the March numbers as well, even after the start of the Iran war. I think January and February numbers were very healthy, as you can see also from the national retail sales numbers. I think February, they reported a 11% increase in year-on-year sales. Of course, there's some Chinese New Year effect, but then even if you combine the January and February sales, I think overall it was up about close to 4%, if I'm not wrong. So in our mall, Okay, next. Shopper traffic, also very healthy, up 3.2%. So quite in line with, I mean, slightly better than the tenant sales. In terms of the updates for first quarter, AEIs that we have previously announced, I think they're all work in progress. Lot One, Raffle City, companies more, all progressing quite well. Divestment of Okipanga has been completed at the end of February. In terms of utilities costs, I think we have been getting a lot of questions in all of our meetings over the last one month. I think happy to reiterate that our utilities costs, energy rates are all locked in across our portfolio. Our Singapore portfolio locked in until end of 2026 at a better rate than what we locked in in 2025 actually. So this year we're actually expecting savings from our utilities costs. For our overseas properties, we are locked in as well until 2027, depending on which property, and 2028 for some other properties overseas. Okay, so I think we have spent some time over the last few days talking about this transaction already. So I won't go spend too much time. We can take some questions as well. But I think a lot of you have already had a session with us on this. But I think the market reaction has been fairly positive. So we are quite happy with that. The placement was well oversubscribed at about, I think it was about just almost five times subscribed, just below five, I think. That allowed us to upsize our placement from $600 million. So that's the key change from the last time we spoke. I think when we spoke, it was based on a $600 million equity offering. Now we have raised $750 million. And at a title discount and what we originally assumed, which was 2.7%, The price that we did at 2.30 was actually a 2.36% discount to the adjusted VWAP. So all in all, very healthy demand for the offering. As a result of that, there will be some adjustments to the DPU accretion because of the larger equity offering. Accretion is at 1.7%. But of course, that also means that it allows us to lower our leverage to 38.7%. I think previously we reported just slightly over 39%. So that also means that it gives us larger headroom for other activities that we wish to pursue at least going forward in the future. Next. Okay, so I think this is the key update for this quarter. We want to also report that we have actually started the process for the AEI. at Plaza Singapura at the atrium. I mean, we have been looking at this for a while. I think we are now confident to go out and announce this asset enhancement, I think for a few reasons. I think planning wise, of course, this is not something that we take it quite lightly, asset enhancement, and this is quite a substantial asset enhancement at 160 million. I think we have always been quite deliberate in terms of the spacing of our asset enhancements, as you guys are familiar by now. We always try to time it with a minimal or execute it in a way that has minimal impact on our cash flows. So that has already started contributing to our numbers since February and March. And also that, in fact, gave us the uplift in terms of financial performance. That was one of the key contributors to the first quarter of performance also, in addition to Capital Spring and in addition to ION acquisitions. Danilo largely resolved and handed over to the tenant. We think that we are ready to take on another major AEI, which is Plaza Singapore, and most of you are familiar with the asset. It is an asset that has been around for a long time, and I think if you look at the performance of Plaza Singapore on a per square foot basis in terms of rent and sales, I think There is some room that we can value add when you compare it to some of the more neighboring malls in downtown, even within our portfolio. So the idea is to elevate the positioning. There are some infrastructure upgrades that we are doing. There is also a tenant refresh that we are planning. We will also be looking at, probably looking at some transforming some spaces into a more immersive experiential entertainment concept. This is something that we are exploring at the higher levels so that we are able to draw the crowd to the top floor. So that's one of the key feature and objective of this particular AEI. The other thing that we wanted to achieve was also to dark scale with the URA's master plan. There is a plan to pedestrianize the Orchard Road stretch in front of the mall. to now plan for the seamless linkage between Plaza Singapura to the Istana Park that is right in front. So we will be doing some upgrades at the front to extend the park experience so that it creates a more seamless connection between nature and retail. So to minimize the disruption, we do plan to carry out the AEI in phases with the mall remaining open and operational throughout this AEI period. So some of the pictures I think in the next page are this impression. Maybe go to the next page and show the pictures. So there will be some improvement in terms of the facade. There will be improvements to the drop-off point, creating a better experience. So the inside of the mall we will definitely be upgrading to make the space a bit more open and also the look and feel and the tenant mix is starting to see significant changes at least for the first and second levels and as well as the top level. Okay, so I think the other thing that's interesting is also we are creating some of these bridges standing across. I think the idea is also, because Tata Singapore actually is quite a big mall. It's about 700 over 1,000 square feet. So the idea is also to create better movement across various parts of the mall. So we have all these link bridges. not only looks good from the asian area but also facilitates the flow creates a bit more vibrancy to some of the upper floors so that overall effect on the mall is one of a little bit more exciting and vibrant across every floor and not just for The ground floor is doing well. All you want to do is also to replicate experience in the slightly quieter areas of the mall. Okay. So in terms of the financial performance, I will touch on that. Gross revenue, we are up 8%. But of course, this includes the contribution from Capital Spring, which previously was reported under JV structure. MTI up 314. year-on-year, we are up about 7.9%. So, this also excludes one month of Bukit Panjang because we have sold it in February. So, there's a lot of movements within the numbers. Okay, next. In terms of capital management, I think we have highlighted a very healthy balance sheet now. We are at 38.5%. Even with the acquisition and the And coupled with the equity offering, this is unlikely to change significantly. Interest coverage, very healthy, 3.8 times. I think the key takeaway from this part is that the average cost of debt has come down to 2.9% from 3.2%. Next. We'll spread out maturity profile. I think we only have about $450 million of loan left for refinancing for this year. and the rest of the years are I think fairly healthy with next year we're about a billion up for refinancing. In terms of Occupancy, I think we spent a lot of time at the beginning talking about occupancy, so I won't belabor the point. If you look at our retail, actually, it's generally, it's come down slightly, but I think the largest contributor to that drop was the truck key tenant I mentioned, but I think the financial impact is very small. because this is a combined look, including Germany and Australia, we can have some detailed breakdown later, largely contributed by Germany. Integrated development is down slightly. There are some vacancies in, I think, this is Funan, because it's contributed, it's included under integrated development. That's the drop that I was mentioning as well in the Funan planet. Next. Top 10 tenants, no significant changes. I will just add that ECB, which we have put into the footnote, will feature as a top 10 tenant going forward, but we're still in a process of handing over the last 2-3% of the, so we haven't included it. Once it's 100% handed over, then we will start including it probably from the next quarter or the following quarter onwards. Next. lease expiry profile generally still doesn't look too dissimilar from our previous. We have 11% for expiry this year for retail and 5% for office. Out of that, probably 4.3% of the retail and 1.6%, which is about one-third each, has been kind of resolved in advance negotiations. Thanks. Okay, healthy leasing activity. Despite the decline in occupancy, we still have a very healthy retention rate. For retail, it's close to 90%. For office, about 70%. And we have had quite a lot of new leases and renewed leases as well, about 339,000 square feet, spread across the various trade categories. And also for office, about 121,000 square feet. Retail occupancy broken down into suburban, downtown. Downtown, as I mentioned, contributed primarily by the drop in club key. Next. Rental reversion of 4.4% for retail broken down into downtown and suburban. Downtown, 3.9%. Suburban, 5.1%. Tenant sales, 2.2%, as we mentioned, broken down into suburban growth at 3% and also downtown at 1.7%. Just some of the highlights on some of the new retail concept that we have. Show Pasta, which is a Michelin-recognized casual pasta concept. They just opened in Rappel City. Shiseido at Tampines Mall. I don't know whether you guys have been to Tampines more. I think you can see the slow upgrade on the ground floor. We have also hoarded up the Isetan space. I think that's work in progress. So we expect to probably finish that over the next few months. But I think the ground floor area has been done in phases. So you can really see some of the new tenants showing up at the ground floor entrance area. Prada at Rappel City. We also have a new tenant at IMM, EYD, which is on the third floor. So that's quite interesting because it's on the third floor and we have a massive hub at IMM, so which are able to showcase some of their cars. So fairly interesting concept there. Okay, maybe we'll just move on. Okay, in terms of the office occupancy, as I mentioned, as you can see here from Germany, the significant drop in office is actually due to Germany. from 91% to 83%. But financial impact is, I think, not as significant as what the numbers suggest. Australia, actually, the occupancy has been healthy. As we have mentioned a couple of times, we think that the leasing momentum is still picking up. Occupancy in Australia actually improved from 91.8 to 92.8. And Singapore was touched on. I think generally quite healthy. slight drop due to the Hunan vacancy. The good news is that our average rent continues to inch up from last quarter 10.95 to 11.002.2%. Although I'll just caveat that of course you guys are aware that we have just announced the sale of Asia Square Tower 2 which has a slightly average Higher average rent than our overall portfolio. So this number could come down, but that's probably because it's not a like-for-like comparison once we take Asia Square out of the equation. Okay, next. Focus and outlook. Yeah, so I think overall, we are still on a pretty good and healthy space in terms of outlook. I don't think anything significant has changed from our last update. Rental reversions continue to provide the organic growth. Capital Spring, we are still benefiting from the contribution because it was only accrued, I mean, the additional 55% was only included from 26 August onwards. So this first half of the year, we are likely to see the accretion coming from Capital Spring. Galileo already, our first quarter numbers already started recognizing the income. So you can see it in the DPU impact as well. IIMM already completed, performing well above our underwriting numbers. So we are very happy with the outcome. If you go to IIMM today, you will see that the look and feel of the mall is significantly different from what it was before. So that was ADI that we're very happy with. Okay, so I think organic growth and also some of the contribution from the inorganic growth has really done well for us. And going forward, we expect this recent announcement on the divestment of Asia Square and the acquisition of Paragon to continue to build on that momentum with the 1.7% accretion. You can also see that our capital management, Merian's team has done a very good job in terms of our interest rate management. Over the last one quarter, we have brought the interest rate down from 3%, 3.2% to 2.9%. That's actually a very significant tailwind definitely helped to improve the bottom line performance and we expect this to continue to contribute. Because as you can see, last year we have been reporting, even in the second half of last year, we were still at 3.3, 3.2 average. So this 2.9, even if it maintains, will be a significant savings compared to last year already. I think energy rates, we've talked about it. Okay. I think value-growing strategy, I think this is the same slide we talked about it earlier at both when we briefed on the transaction as well as at the AGM. I won't spend too much time. I think we remain the five pillars continue to drive our growth, organic, asset enhancement, unlocking value through divestments and driving growth. And we have been very consistently unlocking value every year. In fact, we have been doing one divestment almost Well, this year we did two divestments. Last year we did one, the year before we did one, and we have been doing one high quality and meaningful, significant, highly accretive acquisition every year for the last two years as well. Okay, and capital management, of course, has an important tailwind. All right, sustainability, we are on track for most of our indicators. We won't spend too much time on that. Next. We'll just probably... I think maybe we can start moving to Q&A.

Okay, yeah. I see a few raised hands. Yeah, and I'm looking to have somebody other than Mervin. Unfortunately, it's still him. So, Mervin, please go ahead.