Frasers Centrepoint Trust

Good morning and welcome to Fraser Centrepoint's results announcement for second half and the financial year 2024, ended 30th September 2024. We have put up the results announcement this morning on the SGXNet and we hope you have the chance to go through them. And we are very pleased today to have the management team led by Richard, the CEO, Annie, the CFO, and our head of asset and investment management, Pauline Lin. and the IR on hand here to give you the run-through of today's results. Without further ado, let me hand this over to Richard to kick off the presentation.

Richard, please. Yeah, thanks, thanks, Fangling, and good morning, everybody. Thanks for joining us this morning. And as what Fangling mentioned just now, the deck has really been uploaded, so hopefully you guys had some time to go through and digest the deck so that we could have some discussion at the end of this presentation. So I'm just going to go dive right in to share some of the key highlights. Firstly, on the financial front, if you look at this slide, both our revenue and NPI has dropped slightly over 4% but if you want to compare light with light and we exclude Chinese City Point which was sold in October last year and also the impact of companies we actually did better more than 3% higher in terms of revenue and also NPI some of the details Annie will share a little bit later next slide please Okay, so in terms of DPU, second half, it's managed to achieve the same level as last year, 6.02 cents. And this brings our total DPU to 12.042, marginally lower than last year. But we ask you, you know, being able to achieve a DPU above 12 cents, and I think we have been doing so with the exception of the 2020 pandemic period. to be able to deliver a strong set of financial results. Okay, this is where we look into more details from the operational perspective. What I'd like to say is, firstly, our occupancy rate remains very, very healthy at over 99%, 99.7%. We've been achieving 99.9%, 99.8%. Again, this is a testament of the demand that we are seeing from the market. The demand across our portfolio has been very strong, continue to see very close to full occupancy, and in some instances, some of them are actually at full occupancy. that actually flows down to the sales performance as well. So for the full year, 2024, we managed to achieve 1.2% growth in our sales. Probably you would have... Same for the market, there's been some softening in sales overall. But from our portfolio, we are still able to achieve a 1.2% increase in sales. Not forgetting that we actually had a pretty high base in the last couple of years. And if we take this set of numbers, you compare it back to 2019, we actually achieved a sales growth of about 20%. So we have been able to continue to have a very positive trajectory from a sales perspective. In terms of shopper traffic, continuing to inch up 4.2% year-on-year, so we are probably about 10% of the pre-pandemic period. So again, as more people return to work, different arrangements are put in place, but we continue to see this inching up 4.2%. Rental reversion, again, something very strong for this year. We have achieved about 4.2% in 2022. Last year, we did 4.7%. And this year, we achieved 7.7%. And over and above that, what I'm going to share a little bit later on is that we are still at the occupancy cost of about 16%. So very healthy occupancy cost. Very strong demand and strong occupancy rates. Sales are still holding up. Traffic returning and reversion very strong. So all the operating metrics, the performance is very robust for our portfolio. Leverage, not much has changed. We are currently at 38.5% gearing level, and our cost of debt has been flattish at 4.1%. The height of what we have seen so far is first Q20 before, that is at 4.3%. But I think probably since then, rates have come down and so on. So we are now at 4.1%. Okay, this is kind of a snapshot of what we have done this year. Again, we have done a lot of work around investment, around divestment, and also in the ESG front. So we kick off the year in October with the completion of our sale in Changi City Point, and then we follow up by the announcement of our acquisition of the remaining 24.5% stake in next in January. which was completed in March and our AUM has since grown to $7.1 billion. At the same time, we also joined the Straits Times Index in March. Again, that... gave us a wider perspective, a wider audience from the investor front. So that has helped also in terms of our volume of training for FCT. We also announced the completion of a AI in Tampines 1 and later on, Pauline will go into a little bit detail. We are very happy with the outcome of the AI works and the tenants that we've been able to bring in and also the response, you know, from the shoppers in Tampines area. So we have been getting very good positive response and also from the tenants themselves. Separately, at the ESG front, again, we have done quite extensive work around that area. In January, we rolled out the first-of-its-kind food waste valorisation at five of our malls. Again, this is something that not only helped us in terms of our ESG journey, but there are also core savings components to that. What we have also done is in April, we announced the launch or the embarking on the works to provide spill-out panels across six of our malls, FCT and FCT portfolio. So a lot of things have happened. We continue to work on growing our portfolio, reconstitute our portfolio, and also not forgetting our journey in the ESG front. Okay, overall market perspective, I mean, you guys are probably aware of all these numbers, not going to go into large detail, but safe to say that Singapore economy continues to grow between 2% to 3%. That's the latest that we have. But also importantly, looking at the inflation numbers, it seems to have stabilised and the projection is between 2.5% to 3.5%. And that is on the back of also the fact that our GST is now at 9%. So if you strip that out, the overall CPI would come in between 1.5% to 2.5%. So that kind of would help, you know, whether from the cost perspective for us, cost perspective for the retailers as well. From retail sales, the wider market, you see some softening, as I mentioned just now. So on bullet point two, What we have put together, if you look at from January to August for the Retail Sales Index, because they are FCT Groups The figure that I shared earlier on at 1.2, that is for full-year financial period from 1st October to 30th of September. So it's a different period. In terms of rent, you can see in the second bullet point there from the suburban prime retail rents, again, continue a positive trajectory, 2.1% year-on-year and 0.5% quarter-and-quarter. So it's a different measurement. This is the only look at prime retail space. We have a basket of transactions that happen, but from our perspective, if you look at our reversion, as mentioned just now, we were able to achieve a 7.7% reversion across our portfolio. Supply continues to be muted. If you look at the rest of 2024 all the way out to 2027, you're probably looking at slightly over a million square feet of NLA, about 1.1 million. And this is spread out all across the island. There are a lot of smaller ones, part of the development. without much of a significant size, with the exception of Punggol Digital District. Even then, that is not really, as what you would say, a mall per se. It's pretty well spread out. It's more a linear type of shopping place in the Punggol Digital District. But overall, it remains to be noted, slightly over 1 million square feet of NLD. Next, we are going to look at the financial highlights. I will pass on to Annie to share with you the numbers. Annie, please.

Thank you, Richard. Good morning, everyone. Let me take you through the financial highlights. For the second half results, gross revenue is 2.5% lower as compared to corresponding period last year. This was due to the absence of revenue contribution from Chinese CityPoint, which was divested on 31st of October 2023. Excluding Changi City Point and Tampines One which underwent AEI during the year, gross revenue is 4.1% higher mainly due to the higher physical occupancy and higher rents across most malls. For property expenses, it is 6.9% lower due to the divestment of CCP. Excluding the effect of Changi City Point and T1, it is about 2.1% higher due to the higher utilities, higher property tax. which is offset by the lower maintenance expenses. This translates to a low NPI of 0.6%. Distribution from investments relate to the distributions from joint venture which holds the Waterway Point as well as the next. It is 34.5% higher due to the six months contribution from the additional 24.5% interest in the next which was completed in March 2024 this year. For DPU, for this second half, it remained unchanged at 6.02 cents. Next slide, please. On a full year basis, gross revenue is lower by 4.9%, mainly due to the divestment of Chinese CityPoint and T1, which underwent AEI, excluding the effect of both factors. gross revenue is 3.5% higher, mainly due to the higher rental income from new and renewed lease, as well as higher turnover rents. As for the property expenses, it is lower by 5.6% due to the divestment, excluding the CCP and T1, it is higher by 3.8%, mainly due to the higher utilities costs, as well as the higher property tax arising from the higher annual value. MPI is 4.6% lower than last year, but it is 3.4% higher if you exclude the effect of both CCP as well as T1. We recorded higher distribution from investment in 2024 by 29.3%, which actually mitigated the impact from the divestment of CCP during the year. With the two-half DPU of 6.02 cents, this brings us to a total DPU of 12.042 cents during the financial year. Next slide, please. The net asset value has decreased by 0.03 cents to 2.29 cents as of 30 September 2024. Next slide. We continue to report healthy financial position with a stable average cost of debt. As at 30th September, the aggregate leverage is at 38.5%, which is 0.6 percentage point lower than last quarter. The ICR is healthy at 3.41 times, which has improved compared to last quarter. This is mainly due to the T1 contribution with the completion of the AEI, as well as a decrease in the borrowing cost from a lower loan quantum during this period. Cost of debt remained low at 4.1%, and 71.4% of our debt has been hedged to fixed rate. Total undrawn facilities asset year-end is about $786 million, and our credit rating remained unchanged at BBB stable and BAA2 stable for S&P and Moody's, respectively. Next slide, please. We have a well-spread debt maturity profile as can be seen from the chart. I'm pleased to inform that we have no refinancing risk this year as we have already secured all the facilities that are needed to refinance all debts due in 2025, moving the debt maturity profile further to FY2013. Next slide, please. We have a stable appraised portfolio value as compared to last financial year. The aggregate appraised value of total portfolio, including 50% of next and waterway point, increased by about 1.2%. This is mainly due to the higher appraised value from the completion of P1 AEI and improved rents in NEXT. The capitalisation rates adopted by the valuers remain unchanged as compared to last year. Next slide. For DPU, 6.02 cents for the second half, it will be paid on the 29th of November 2024. I will now hand over to Pauline who will take you through the portfolio highlights in the next section. Thank you.