Frasers Centrepoint Trust

Good morning.

On behalf of the management team of Fraser Centrepoint Asset Management, welcome to FCT's full-year results analyst briefing. The presentation deck that you see on the screen right now has been released on the SGSnet as well as on our website this morning. So if you do not have a copy, please go to our website to download a copy. Today, we are pleased to have the management team here, led by CEO Richard Ngu, CFO Ms. Audrey Lin, Audrey Tan, and Head of Asset and Investment Management, Pauline Lin, and myself, I'm the Head of IR. So without further ado, let me pass this over to Richard to kick off the presentation.

Thank you. Richard, please. Thanks, Fang Leng. Very good morning to you, ladies and gentlemen. Thanks for joining us again today. First start, maybe let me quickly run through some of the key highlights. Again, I'm happy to share the fact that SEP has again delivered a pretty strong set of results, both financially as well as from our operating metrics. So very quickly, let's run through some quick numbers. Gross revenue up 3.6%, NPI 2.7%, and we are delivering a DPU for the full year at 12.15%. We have done a lot this year. I'm going to share a little bit more about all the activities we have done. All these actions, what has happened is that we were able to bring our aggregate leverage down from 39.3% to 36.1% upon completion of some of the divestment that we have done recently. Average cost of borrowing stands at 3.8%, and then the ICR and so on is stated there. And the other thing that we're happy to also inform all of you is that we have completed our refinancing for FY 2024. So for this entire FY, we don't have to be worried about refinancing. Operating metrics, very strong performance. Committed occupancy remained very high at 99.7%. Committed reversion, average to average, we are looking at 4.7%. That compares to FY22 at 4.2%. Shopper traffic has gone up almost 25% year-on-year, and tenant sales continue to show very good healthy growth at 7.3% year-on-year. We have also achieved a pretty stable set of valuation numbers. And at the same time, as I mentioned just now, we talked a little bit about our strategy in terms of portfolio reconstitution. AI work has started. It's on schedule at 10.1. And from the ESG side of things, we again happy to announce that we have achieved a five-star rating for Grasby for the year 2023. I'm not going to go to all these details. Audrey will take us through later on. But maybe we just stop at the DPU side. Okay, so if you look at from the DPU perspective, for this year, we are distributing 12.15 cents. Okay, of course, if you compare to last year, we did 12.27, there's a drop of 0.6%. So I guess if you look at it from a different perspective, I mean, if you compare year on year, we are down 0.6%, but if you just take a step back and perhaps look at a little bit further prior to this, maybe if you look at pre-COVID in 2019, we actually deliver a DPA of 12.07%. and at that point in time, the average cost of debt at the end of the year was 2.6%, but today our average cost of debt is at 3.8%. What I'm saying is that despite a very challenging environment, high interest rate environment, high inflation cost, we are still able to deliver a 12.15%, which is about 0.6%, incidentally higher than 2019. So I guess it's about how you measure the performance, and I'd like to say that... What we have been very focused on is to continue to do as well as we can in areas that we have control. And definitely the sets of financial results as well as operating metrics will show and demonstrate the fact that we have been doing very well in areas that we can control. So from that perspective, I think in terms of both financially and operating metrics, we're happy to announce the set of results that we have delivered today. Okay, this is where I wanted to also, again, as a summary of what we have done this year. It started off with our acquisition of 25.5% in NEXT at the start of February. That was also followed very closely with the completion of 10% additional stake in Waterway Point. We announced the commencement of AEI at 10.1 sometime also during that same period, the end of second quarter. We divested Changi City Point, and that was announced quite recently, as well as the divestment of Hector. So if you look in totality for FY 2023, the accumulated amount that we have done in terms of both investment and divestment, as well as AEI, amounts to almost close to $1.1 billion. I'm not very sure how many other REITs have done this. Probably one or two would have done something quite close to this, but definitely, In the current market condition, very choppy condition, very volatile, I believe we have demonstrated our ability to execute deals, both in terms of investment and also able to reconstitute our portfolio by improving the quality of our portfolio as a whole by divesting some of the assets that we felt not something that we want to hold for the long term. Next slide, please. Okay, then if you look at over the last five, six years from the start of FY 2018 until now, our AUM has grown by 2.3 times, right? At that point in time, it was about $2.8 billion, and today we have about $6.5 billion. But if you look at the transaction value itself, both investment and divestment as part of our reconstitution, the amount will go up probably by about more than $5 billion. So we have done over 5 billion worth of transaction in this period of time. And considering the fact that, you know, of which about two or three years was also down with pandemic. And of course, for FY23 itself, you know, it's all about interest rate and high inflationary market condition. So just to look at the trajectory that we have done over this period of time. And this is also a result of where I mentioned just now, despite the fact that if you compare to 2019, our DPU actually grew. And one of the resultant is because of our ability to buy well and also reconstitute our portfolio by switching out less performing assets with better performing assets. This is also a very interesting slide to put us in perspective. Today, we are the largest owner-operator of prime suburban malls in Singapore. If you look at out of the 10 prime suburban malls across Singapore, Jerome Point being the largest in the market, and if you go down that chart itself, Waterway Point being the 10th largest in Out of this 10, we actually have four in our portfolio. Again, that's a testament of the quality of assets that we have now in our portfolio as compared to 2018. It's a very different perspective, a very different set of assets that we have in our portfolio. Of course, Point City, you see here, is a combination of ourselves and also the sponsor making up the total of 520,000 square feet. So we have a significant number of the key prime suburban malls in Singapore. In terms of macroeconomy, I'm not going to touch A lot about this, we all know about the market condition in terms of GDP, but maybe a little bit more focused on retail sales as a whole. If you look at the RSV, retail sales value that was produced by the Singstats, year to date from October to August, for FY23, it was an increase of about 5.7%. At FCT level, we actually managed to achieve a 7.3%. On track, slightly, in fact, ahead of the overall general market perspective. So our tenants are actually performing better at our portfolio. In terms of retail rentals, again, if you look at CBRE stats, you can see that for suburban prime rental retail rents, it's about 1% quarter-on-quarter and 3.1% year-on-year. For us, we achieved a 4.7% average-to-average for our full year this time round. At the same time, we look at the supply that's coming on stream again. It's pretty muted. We've been sharing this for quite a while now. What we decided to do is also provide a little bit more information as to where are this supply coming from. By and large, we see that most of the supply are actually very smallish retail offering that we are expecting. And the only significant one is probably in par series, par series small that is due for completion sometime in 2024. Other than that, as a whole, the new supply is looking at about 1.2 million through to 2025, which is actually a very small proportion of what we have today. So again, we are seeing very strong demand. Our occupancy is 99.7%, and at the same time, a pretty muted supply that is coming to the market. So if you look at what's happening around us today, there's a lot of negative noises, geopolitical issues. And this is something that, like what I said, things that is not really our control. So you look at headwinds, there's an uptick in oil prices because of all the wars that's happening around the world. Interest rate, the new term is higher for longer. Nobody really knows which direction it is going to. Thank you very much. For retail, it's very important in terms of some of the key stats that we are seeing today, right? There's a growth in population, finally, you know, we are reaching close to 6 million people. There's also income growth, right? Well, we talk about higher manpower costs, but at the same time, what does that mean? It means that there's actually an income growth because of the progressive wage model. So overall, the income perspective for Singaporeans is still pretty bright because there's this progressive wage model that will underpin the income prospect for the population at large. Consumer spending remains healthy, especially for our prime suburban malls because, again, coming back to the basic provision that we have is essential products. So this is, again, a very strong part of the nature of our malls that we have in our portfolio. One percentage point GST increased in 2024. What we have seen last year is towards the end, somewhere in December, you see a little bit of a rush into buying some of the big ticket items. Probably we may see this again coming through. That will again help to propel the sales for the calendar year end of 2023. At the same time, we are also aware that the government has various schemes and also various initiative packages or whatever you might like to call it in terms of helping Singaporeans to overcome the current high cost of living and one of which is the Assurance Package. And if you recall, last year itself, we also have a similar package where where the distribution of CDC vouchers is such that half of it is meant for spending at HDB shop houses, hawker centres, etc. But the other half, you could actually spend in supermarkets like NTUC and so on. And that is where, again, we are likely to be a key beneficiary as a result because those spending would then come back to our malls where we have our supermarket operators at NTUC. So by and large, what I'm saying is that while we have headwinds, we have some stresses, some challenges in the market, we are also seeing some positive factors, offshoot that's coming our way. Okay, maybe I'll hand over to Audrey to take us through the financial highlights. Audrey, please.