Frasers Centrepoint Trust

Good morning, everyone. Thanks for logging on FCT's Business Update for the first quarter ended 31st of December 2024. Very good morning for everyone. And today we have the full team with us, CEO Richard Ng, CFO Annie Kong, and our Head of Asset and Investment, Pauline Lim. So without further ado, let me hand this session over to Richard to kick off the session.

Richard, please. Yeah, thanks, Hong Ling. Good morning, everyone. I understand you guys have a back-to-back call, so hopefully you had a chance to look at our presentation, which was already uploaded. Okay, this is a key highlight of our performance in the first quarter. As you're aware, this is actually a business update quarter, so we talked and focused a lot more on the operational metrics and also some of the happenings around our malls. So, if I may just run very quickly in terms of the highlights. So, in terms of occupancy, you can look at it, still above 99.99%. For this quarter, it's slightly marginally dropped from 99.7% to 99.5%, but we could talk about the reasons behind this in greater detail later on. Healthy financial position, we are still around that kind of region, 39% there about in terms of gearing level. Chocolate traffic continue to see recovery, 2.7% quarter to quarter, year on year change. And also tenant sales, again, we see pretty strong performance for retailers. On the year on year for that quarter, it's about 2.5% increase in sales. Cost of debt, as we shared before, probably we have seen the tip of our cost of debt back in the first quarter of 2024 at 4.3% and now we are looking at about 4%. A few other updates which we will again go in greater detail. One firstly will be in terms of the Alkang Mall AEI. We shared this during our full year result announcement back in October 2024. But just a bit of update, happy to say that we have achieved around 50% of pre-commitment ahead of work commencement. Again, a testament of the demand of our malls and the fact that Tenants are still looking for good space to operate their businesses. We also want to share some ideas of the placemaking that we have done and also wanted to share that this is something that we think is very important for our malls to continue to be able to create activities because at the end of the day I think you know what we want to position our mall is not just a transactional marketplace where you come to our mall because you need to buy something you need to get some services done but also a community hub where people constantly can come back so we can come back all the time and do the same things we'll share a little bit more details later on Big picture in the market, these are numbers probably very familiar to you guys. GDP grew stronger than expected, 4% in the full year for 2024. Core inflation, and that's something that again is going to be very helpful for us, for our retailers as well, moderated to below 2%. We hope that this trend continues in this FY. Retail sales a little bit mixed for November. The broader market, the RSI, saw a dip of 1.4%. So again, it's a mixed bag. For us, in the whole quarter as well, we actually saw an increase. F&B sales continue to be one of the key drivers, 3.9% for the wider market perspective and similar trend is being observed in our portfolio as well that F&B continues to thrive. retail rents for suburban prime retail rents grew 1.6% year-on-year and if you look at the chart on the right this is where again you can see that it has continued to grow for the prime suburban as well as the orchard wood sector of the market another very important key aspect of strong demand is underpinned by the fact that we see very limited or muted supply that's going to come on stream between 2025 to 2027 that's less than one percent overall stock that's coming to the market and then if you break it down specifically for suburban that is denoted by the red colour on the chart itself it's even lesser so Mutant supply, strong performance and that's one of the key drivers that we are seeing continuous demand for our malls. Okay this is something extracted from our annual report looking at firstly in terms of occupancy the chart on the left you can see that suburban market has outperformed the other sector of the market at an average about 96% as of third quarter 2024. If you compare this to our portfolio, as I shared just now, we are achieving 99.5%. So we are actually outperforming the wider market. And again, that's the testament of the fact that if you look at our portfolio of assets, I would say that it's differentiated from the wider market perspective in terms of the quality of the assets we have and also the performance of our retailers. Prime Rent, this is a trajectory that was provided by CBRE in the report that we have included in our annual report. And you can see that for the red line, that's the suburban market and CBRE also expect the trend to continue to grow for the rental to continue to grow all the way to 2027. So I think this is something that we are happy to see that the expectation is also similar. for the retail sector as a whole that the rental trend will be on an uptrend perspective. Okay. Besides, you know, we talk about supply limitation, there are also some other key components or elements that underpins the strength of Prime Suburban Retail Malls. And these are some of the key aspects that we have been seeing, we have been sharing. And probably you guys are also familiar with some of this and there are three factors that we have provided here. The first being the continuous growth in terms of additional households into the various catchment markets where we have our most located. This is something that probably has been shared a lot in terms of publicity in the newspaper, in various news and so on that the government is really building a lot of flats around the island and also there is a good supply of hybrid residential that's coming up and based on what again you have seen in the news there's a very strong take-up for the private sale as well so overall we expect cash flow markets to continue to grow We are also seeing median income continue to grow. So again, this is what we always look out for, especially for our sector, growth in population, growth in income, and that's going to give you the support level that you need for your shoppers to be able to continue to come and spend at our mall and more people will come to the mall. and the third aspect is something which is unique to us as well the government policies that has been rolled out the various support measures we are all familiar with CDC voucher has already been issued and I think most of us who have There are so many different support that has been dished out. In December, the cash handout and then followed by CDC, but an ongoing vouchers or handouts has been given to support the wider markets in terms of utilities rebates, GST rebates, transport rebates. So there are actually a slew of all the support measures that helps the wider population of the mass market. And again, this is the market that we are serving. This is our catchment market that comes to our malls. And the other very key component that I think is going to be here to stay and something that really helps us underpin the sales productivity of our malls going forward, that is the progressive wage model where Many industries are today included in this Progressive Wage Model where every year people working in this sector that has already been placed under Progressive Wage Model will see an increase in their salary regardless of outcome. So you have your cleaning sector, your security sector, the retail sector, F&B sector, landscaping people who are doing our maintenance for lift and escalator and many more right so this is where again very strong support given by the government and we see this as a good potential that underpins the performance of our malls because if these people has an increase in income then the propensity for them to spend at our mall will also grow I'm not going to go into detail. This is again an area that we have spent a lot of time sharing with all of you. We included this slide in case we have investors also elaborate a little bit more but just overall in summary that there is a lot of development there are a lot of developments that's happening in the northern region increase in population increase in commercial activities increase in infrastructure works which we for us as far as we are concerned we see this as not just a risk factor from the RTS development but if you look at an overall perspective there are opportunities for us to tap on for our moss on the northern region as well We have also shared this particular information because again the question has always been, because a lot of people are shopping in Johor and so on, so what's the impact? So we thought maybe to give an overview that shopping in JB is nothing new, it's been ongoing forever. even the last few years a lot more people are going because of the difference in terms of the forex exchange but if you look at our malls right in terms of revenue from 2019 to 2024 we have increased capital shift right so what does it mean right it means that and at the same time we have also seen a very strong occupancy you know for all our malls and even the sales of our retailers is also double the shift right so The perspective that we are coming from is that the market is growing overall. So while there are people who go and shop in Malaysia, and they will continue to shop in Malaysia, but we feel that our malls are also doing better because of the underlying attributes that I spoke about in terms of growth in catchment, growth in income, and there's very strong support dished out by the government. Okay, for financial highlights, I will hand over to Annie to share a little bit more on this. Annie, please.

Thank you, Richard. Good morning, everyone. Let me take you through the financial matrix for this quarter. We continue to deliver a healthy financial position for this quarter with the improved average cost of debt. As of 31st December 2024, the aggregate leverage is at 39.3%, which is slightly higher than last quarter. The interest coverage ratio is at 3.33 times, and we are pleased to report that the average cost of debt has decreased by 10 basis points to 4.0% for this quarter. The average debt maturity has lengthened to 3.03 years following the refinancing of the loans that was done recently. 65.5% of our debt has been hedged to fixed rate. The decrease is mainly due to the expiry of the MTN which was refinanced using loans. The percentage of green loan has increased to 88.3% in this quarter and the total undrawn facility asset on 31st December is at 549 million. Credit rating for Moody's remain unchanged at BAA2 stable. We have a well spread debt maturity profile as can be seen from the chart with no refinancing risk in this financial year. The debts that were due in FY25 were already refinanced using bankrollings and with a maturity shifted to FY2013. As of 31st December, 15.8% of our debts have secured. I'll now hand over to Pauline who will take you through the portfolio highlights in the next section.