Frasers Centrepoint Trust

Morning, everyone. Thank you for joining in Fraser Centrepoint Trust 3QFY26 Business Updates Earnings Rating. I've got here with me today the Senior Management Team, Richard, who is our CEO, Annie, who is our CFO, as well as Pauline, our Managing Director for Investment and Asset Management. As you can see from the contents, we've got a lot to go through today. So without further ado, I'll pass it on to Richard.

Hey, thanks, Judy. Good morning, everybody. So let's get down to business. For this quarter, we decided to, instead of jumping straight into the business update, we also included the recent activities that happened around itself. The first one being the divestment of white sand. Next slide, please. Okay, I'm not going to go into every detail here, but just a couple of quick highlights. The property was transacted at $467 million and the last valuation was done at $431 million. So that kind of gave us a net gain of approximately 32.4%. And this transaction is also at a premium to the valuation at about 8.4%. and the entry or rather the exit yield based on 2025 year end NPI is about 4.6%. So some of the key rationale you can see there. Of course, one of the main one is actually the reduction of gearing from 40% to 36.5%. That's giving us a little bit of headroom for us to again look out for opportunities in the market, which we did and I'm going to share shortly as well. Okay, these are just some information on WhiteSense. Probably most of you are familiar with this. Also, just a couple of highlights. The leasehold for this asset has gone down to about 67 years. And it's also the smallest size mall in our portfolio, about 150,000 square feet. So some of those are also considerations we take into effect when we look at the divestment of this asset. Next slide. So what are the end product with this divestment? Aggregate leverage dropped to 36.5%, giving us a good headroom. NAV actually went up because we divested at a premium. There's a slight dilution of DPU by about 1.9%, right? Okay, next slide, please. Okay, so what did we do with the headroom that we have managed to... obtained from the divestment of White Sands. We participated with the sponsor FPL and our joint venture partners in this Bayshore Drive site. The one as you can see that is with the yellow star on the right side of this pictorium. Okay, next slide please. Okay, very quick run-through on some of the key details. Site area is about 618,000 square feet. What we did is the tender price is about $2.1 billion. But more importantly, the total development cost for the retail portion is approximately $613 million. The GFA for the commercial portion is about $230 million. 38,000 if you round that up. And the estimated NLA ranges between 160,000 to 180,000 square feet. It's a good sizeable mall if you can reach the upper limit of this NLA. Our joint venture partners, Sunray MCL and also Circus Rehouse. The target completion for this project is roughly end 2030. So it takes about four years of construction. Okay, so some of the key highlight of this site, of course, I mean, most of us, if not all of us are familiar with the precinct itself. This is a Bayshore precinct, an area where it has got high density population and also, I would say, pretty high income range for this whole precinct itself, right? So this will be the only commercial site in this whole precinct. And it's in a location where it's also encompassed part of the Bedok region as well. And what is important is also when we look at our investment criteria, one of such is definitely looking at connectivity. And this site, again, it's on a car light precinct and it has a direct connection with Bedok South MRT station. and also a new bus interchange. The population is expected to continue to grow. As you can see from this diagram, some of those developments that you can see here actually will be coming on stream. So we are expecting around 10,000 new homes that has been planned and will be developed around this mall itself. And the site itself, I mean, FPL and its partner will be actually building about 150 about rather 1,280 residential units. Of course, this site is also close to other amenities. It's going to be located next to the largest Safra Clubhouse, which is also due to open in 2030. So a lot of amenities, growing population, and very good connectivity. Next slide, please. Yeah, so this is kind of strategic. Suburban Mall If you look at it, this also gives us an opportunity to be looking at development as a new growth driver. I mean, the question is always about what's next. Is there more for us to purchase? what are the opportunities available. So this will give us a new opportunity to look into and I would say that not every developer or not every REIT in Singapore has this capability. So it is just a couple of us who can partner with our sponsors to do this kind of thing. So in a way that will give us an opportunity as a new source of growth. This site has Excellent location. That's something that I mentioned just now. Of course, the other critical part is if you get into a development of such, in a way, we are entering at a very attractive yield. So the yield on cost is approximately 5%. We divested White Sands at 4.6%, so you can see that kind of arbitrage that we can make if we are able to get into a development project. and by participating from the onset, it also gives us the opportunity to shape the direction of the mall that we wanted to see, how we want the mall to be positioned, etc. And I talk about the fact that this is a very highly populated region in Singapore and the retail space, the capital in this area is actually significantly lower than the Singapore average and also most part of Singapore itself. Okay, next slide. Okay, now turning back to the VAU or the business as usual, in terms of some of the key highlights for this quarter. Committed occupancy remained very strong. Again, it's over 99% with some fractional vacancy while we churn out some of the spaces. year-to-date shopper traffic and tenant sales continue to be positive traffic gone up by 2% year-to-date basis and also tenant sales at 1.8% capital management here you see we actually stated the gearing at 40.4% but that's because the completion of White sand is going to take place sometime in September. But if you take that into consideration, our gearing would have come down to 36.5%. And the other positive thing to note is also the cost of funding has continued to come down. So we are looking at 3% for this third quarter. Alkang Mall AEI update, we will go into a little bit more detail but happy to say that we are on track to complete and over 98% of the space has already been pre-committed. Next, AEI is also progressing very well. Phase 1 achieved 87% commitment and also 73% of those spaces at this phase is actually new to Mall, Brands and Concepts. High-level microeconomics, GDP, we are still looking at 2% to 4% for this year. Surprisingly, Q2 actually came in pretty strong at 5.7%, but MTI has kept that as in it of 2% to 4%. Core inflation for June came in at 1.6%, but they also maintain the inflation estimates to be around 1.5 to 2.5%. Hopefully, the announcement by MAS can also kind of cap the core inflation in check as well. Retail sales for Singapore on a whole, year-to-date as well. 3.3% and FCT came in at 1.8% of course the Singapore sales figures also include you know the entire sales right I mean those that happen in onshore road online etc right ours is just purely our portfolio F&B sales Singapore as a whole 1.1% for FCT we grew at 2.1% rental again Similarly, we are also on an upward trend comparing the market as a whole for suburban prime retail rents as expected or actually grew by 1.4% year on year. Okay, next slide. In terms of supply, it continues to be limited, especially if you look at significant suburban space. So between 2026 to 2029, we are looking at close to about 447,000 square feet of suburban space. but these are actually multiple sites right the largest probably is the one in Park Town to 107,000 square feet and then you oh sorry the one in Chincharu is 130,000 square feet right the rest are about 100,000 square feet and so on so it's quite fragmented it's more you would deem as a neighborhood center rather than a pure Prime Suburban Mall. So, limited supply is expected for the next couple of years. Next up, it's the financial highlights. I'll hand over to Annie.

Thanks, Richard. Good morning, everyone. A quick update from me on the financial highlights for this quarter. As mentioned earlier, I think gearing for this quarter stood at 40.4%, which increased slightly from last quarter. On a pro forma basis, post-West End divestment, the gearing would be approximately 36.5%. The interest coverage ratio remains healthy at 3.6 times. Cost of debt for the quarter is around 3%, which is a decrease of 20 basis points from last quarter and 70 basis points reduction down here. We expect that the full year cost of debt for this year to be around 3.2%. Around two-thirds of our debt is fixed at quarter end and our credit rating for Moody's remain unchanged at EAA2 stable. Next slide please. All refinancing in FY2026 has been completed. The next refinancing will be the first quarter of 2027 and we have commenced discussion with the banks on the refinancing. With the refinancing that were done this year, the debt maturity profile is, you can see that it's well stacked and there is no more than 30% borrowing that is due in one financial year.