CapitaLand Ascendas REIT (A17U) Earnings Call Transcript & Summary

Good evening. Welcome to CapitaLand Ascendas REIT Full Year 2025 Results Briefing. I'm Johanna from the Investor Relations team. Thank you for joining us here today in person at Capital Tower and for those joining us remotely. Please note that this briefing is recorded and will be made available on our website. The session will start shortly with a presentation by Andrea from the Investor Relations team, followed by Q&A with the management. First and foremost, I would like to introduce the panel this evening. We have Mr. William Tay, our Chief Executive Officer. On his right, we have Ms. Koo Lee Sze, our Chief Financial Officer; and last but not least, we have Mr. James Goh, Head of Portfolio Management. Before we start, we would like to lay down some housekeeping rules. [Operator Instructions]. For those joining online, you may post your questions remotely via the chat box. And with that, I'll hand over the time now to Andrea, who will bring us the highlights of the results. Andrea, please.

Thank you, Johanna. Welcome, and thank you, everyone, for joining this briefing physically as well as online. So I will give a brief overview of the financial and operational performance of CapitaLand Ascendas REIT as well as some highlights of our investment. First, some key numbers. So CLAR continued to deliver growth in distributable income against the backdrop of economic uncertainty. For FY 2025, the distributable income was $678.3 million. This is 1.4% higher than the previous year. The better performance was driven by accretive acquisitions of quality assets in 2025 and supported by the prudent management of operating and interest expenses. So the higher distributable income translated to a distribution per unit of $0.15005. The value of investment properties rose to $18.2 billion, which is an increase of 8.6% year-on-year from $16.8 billion a year ago. And on to asset management. As at the end of December 2025, the portfolio occupancy was 90.9%, and we achieved a high rental reversion of 12% for leases renewed during the full year. This is CLAR's third consecutive year of double-digit reversions. As at end December, gearing was healthy at 39%, and the average cost of debt for 2025 was 20 basis points lower year-on-year at 3.5%. Our active portfolio rejuvenation strategy seeks to ensure that CLAR's portfolio remains relevant. So we were disciplined and focused on executing our multipronged strategy for growth in 2025. We completed approximately $1.5 billion of acquisitions, largely in Singapore. This is one of the highest levels of acquisition activity since 2021. So to recap, the acquisitions were 6 properties in Singapore as well as the U.S. and their initial NPI yields range from about 6% to 7-plus percent. So besides acquiring income-producing properties, we also invested about $350 million to develop new green certified logistics assets in the U.K. So there are 2 projects in the U.K. in Manton Wood and Towcester and the expected yields of these properties are about 7%. And we also completed 2 redevelopments in Singapore. They are 1 Science Park Drive, a business space and life sciences property and 5 Toh Guan Road East, a modern ramp-up logistics property. These 2 new properties have achieved healthy leasing levels of about 81% and 65%, respectively. So the good market reception reflects confidence in our rejuvenation strategy to future-proof our properties, and we will look to do more. We accelerated the pace of divestments in 2025, reaching about $506.5 million in total. So this divestment amount is a 9% premium to their total market valuation as well as a 14% premium to their total original purchase price. These divestments are in line with our capital recycling strategy to maintain financial flexibility and liquidity for accretive investment opportunities. We'll go into the financial performance. So comparing the full year of 2025 against 2024, our gross revenue increased by 1% to approximately $1.54 billion. So the properties acquired in 2025 contributed to the increase. They are DHL Indianapolis Logistics Center, a logistics property in the U.S. as well as 2 properties in Singapore, namely 5 Science Park Drive and 9 Tai Seng Drive. So the higher revenue contribution was partly offset by divestment of properties in 2024 and 2025. Partly supported by lower property operating expenses, NPI was up by a better 1.7%. So as mentioned earlier, the DI for 2025 increased by 1.4% year-on-year to $678.3 million. DPU for the full year declined slightly to $0.15005 on a slightly larger unit base. CLAR had conducted an equity fundraising in the first half of 2025 to fund investments. There was a private placement of about $500 million to fund our acquisitions. When we compare the second half of 2025 against the first half, both gross revenue and NPI increased by about 4%. So contributing to the higher income were the 2 properties acquired in August, namely the Data Center 9 Tai Seng Drive and the business space property 5 Science Park Drive. The increase was partially offset by some divestments completed in 2025. DI increased by 4.9% to $347.2 million, partly supported by lower interest expenses. So as a result, DPU in the second half increased by 0.7% to SGD 0.07528. CLAR distributes income on a semiannual basis. So we have declared a DPU of SGD 0.07528 for the second half and unitholders can expect to receive the distribution on Friday, the 13th of March. This section covers the details of all of CLAR's investments, which were summarized earlier. I would just like to highlight a couple of latest developments. So besides redevelopments, we also carry out AEIs, which are asset enhancement initiatives. So these AEIs are projects to upgrade our properties and modernize the facilities, thereby increasing long-term value. So in 2025, we completed about $29 million of AEIs, the largest of which was at Aperia in Singapore for $22.7 million. So at Aperia, besides upgrading the drop-off point, the office and retail entrances, we also reconfigured some of the retail space on Level 1 for better flow, and there are new F&B offerings to provide more offerings and choices for tenants and visitors. So the new retail units are mostly leased and the expected ROI is approximately 9%. At the end of the year, we have 7 projects that will rejuvenate the portfolio and enhance returns. So currently, there are 3 developments, 2 redevelopments and 2 AEIs worth about $730 million. These projects are scheduled for completion in the next 3 years, meaning from 2026 to 2028. And continuing our acquisition momentum into 2026, just last week, we completed the acquisition of DHL Canal Winchester. The purchase price is about $95 million and the initial NPI yield is about 7.4%. This property was completed just 2 years ago and is fully occupied by DHL, an international logistics company. The WALE is about 5 years, and the lease term includes built-in annual rental escalation of 3.5%. The property is well located along a highway with access to 3 interstate expressways and is close to a cargo-dedicated international airport. The property is in Columbus, Ohio, one of the main logistics markets in the Midwest in the U.S. So it complements CLAR's logistics portfolio in the U.S., which comprises assets in 3 other Midwest cities, which are namely Kansas City, Chicago and Indianapolis. We'll move on to the balance sheet. So the gearing remains healthy at 39%. It increased slightly from a year ago, mainly due to higher borrowings to fund investments. Total assets have also increased to more than $19 billion. The adjusted net asset value per unit was stable year-on-year at $0.221. So CLAR's financial metrics remain strong, and we exceed bank loan covenants by a healthy margin. So just going through some key financial metrics. The ICR remains at 3.6x and cost of debt has come down slightly to 3.5%. The percentage of our fixed rate debt is also high at about 75%. So our total debt is about $7.6 billion, and it comprises various currencies such as Sing dollar, U.S. dollar, Aussie dollar, Great Britain pound and euro. So the debt expiries are well spread over the next 8 years until 2034. Over these 2 years, meaning 2026 and 2027 specifically, only about 12% of the total debt is due. On natural hedge, we continue to have a high level, about 76% for our overseas investments, which make up about 30-plus percent of the portfolio. So we also conducted the annual revaluation of our portfolio of investment properties. So the total valuation of our 222 investment properties was $18.2 billion as at the end of the year. This is a year-on-year increase of about 8.6% or about $1.4 billion. This was mainly due to new properties acquired as well as the completion of the redevelopment of 5 Toh Guan Road East. On a same-store basis, the portfolio valuation increased by 2% or about $300-plus million to $16.6 billion. This was mainly due to cap rate compression. By segment, all 3 segments, meaning business space and life sciences, industrial and data centers as well as logistics all recorded year-on-year increases. Here we move on to portfolio occupancy. So as shared earlier, the portfolio occupancy was 90.9% as at the end of December. We will go into each geography specifically. So starting from the left, which is Singapore. So the occupancy rate of the Singapore portfolio was 91.2%. This is an increase of 80 basis points quarter-on-quarter. Excluding 5 Toh Guan Road East, which just completed its redevelopment in the third quarter of 2025, the occupancy rate of the Singapore portfolio would have been higher at 91.7%. For the U.S., it was a slight increase of 20 basis points from the previous quarter to 85.5%. For Australia, the occupancy rate was 94.4%, slightly lower by 40 basis points. The occupancy of the U.K. Europe portfolio was 92%. The decline was due to a lease expiry at a logistics property in the U.K., which is actually slated for redevelopment. So if you exclude this property, which is slated for redevelopment, the U.K. Europe portfolio occupancy rate will remain high at 98.7%. So excluding 5 Toh Guan Road East, which just completed redevelopment in third quarter as well as this U.K. logistics property, which is slated for redevelopment, the portfolio occupancy will actually be higher at 91.9% instead of 90.9%. We will go on to talk about the rental reversions. So rental reversions for the portfolio on a whole was 12%. You can refer to the last brown row of the table. In 4Q, the reversion was 19.6%, which is higher than 3Q and the earlier 2 quarters of 2025. The high reversion achieved in 4Q was boosted by Singapore's Business Space and Life Sciences segment, which had a reversion of 26.7%. So our strong reversion performance reflects the quality and relevance of our portfolio. And for the coming year 2026, our guidance is in the mid-single-digit range. The WALE of the portfolio remains stable at 3.7 years. And in 2026, for the whole portfolio, meaning all 4 geographies, only about 20% of our gross rental income is due for expiry. Here I will end with the market outlook slide. So global economies are expected to remain resilient, although uncertainties to the outlook remain. So in this current economic environment, we are confident of navigating through challenges given our well-diversified portfolio in developed markets, our large tenant base, good operational management as well as prudent financial management. So the investments in 2025 have strengthened CLAR's earnings resilience and strengthened our portfolio quality. So we will continue to pursue our portfolio rejuvenation strategy. And this is so as to enhance the long-term income sustainability and create additional value for unitholders. So I've come to the end of my presentation, and thank you for your attention. We will move on to the Q&A segment. So those who are joining us, basically, you can raise your hand and I will call in.

We will have the first question from Rachel from Macquarie.

2 questions. I think firstly, maybe just on the positive side, your rental reversions have been very strong as what Andrea has alluded to your Singapore assets. So maybe guidance for this year, can you maintain this kind of reversions and where likely which market may have -- which market will be strong and which market will be a little bit weak. Do you want me to ask my second question, too?

I think thanks for your compliment of the rental reversion. It's our third year getting double digit. And right up to 3Q, we were still looking at -- right up to half year last year, we were still looking at single digit. Until 3Q, we realized that we were going to have a very high rental reversion from a lease in Singapore business park. It gave us more than 40% rental reversion from that lease. It's a huge lease, which is why we actually adjusted in 3Q. Last minute, we got to adjust it up to low double digit. And you heard me mention that we do want to continue to push rent. Occupancy has been very stable and very strong actually. If you look at all across all our asset classes, in terms of like industrial, logistics, U.K., Australia, they are all above 90%, 95%, 98%. The main gap is actually in business park in Singapore as well as U.S. office, which is about 85%. So rental reversion is important for us. If I say we continue to have some leasing challenges in these 2 segments, which is why we have been trying to upgrade and do AEI to our properties in order to make sure that our tenants remain sticky with us and our assets actually be meaningful for their occupation. Given that, I think we continue to look at mid-single digit in the entire portfolio. Markets that we think there will be strong continue to be in Singapore. In fact, Australia as well. Australia is probably the one that will be giving us quite good rental reversion. We will continue to push for United States to give us positive rental reversion. And mostly will still come from Singapore market. Goh?

Yes. And if you were to break down in terms of asset classes between BP and logistics, typically, our logistics assets are still below market across almost all the geographies. So as you can see from the rental reversion data, a lot of it is really supported by the lock improvement in rents.

Maybe just to follow up, do you have a number of how under-rented is your portfolio by geographies?

Typically between 5% to 10%.

Across all geographies?

On average, yes.

Maybe moving to my next question. In terms of redevelopment, could you give us any update? I think you have one in U.K. Any update on your data center redevelopment and your Singtel data center as well?

U.K. data center, not much change. We are still waiting for the confirmation of the power, which we expect in the first half of this year. So we hope that we can start development probably in the next -- after that, probably about next 12, 18 months to start development. Singtel as you are referring to Tampines. That's one, which has actually expired since last year. There is also another one, I think you probably know about the Kim Chuan is like it will expire this year, in fact, next quarter. So these 2, we will continue to look at our opportunities for development. We are still working out the development plans. For the one in Tampines is we are looking at trying to get higher plot ratio. So that's the considerations that we have before we decide whether to -- what's our next step for that project.

Just a follow-up. Kim Chuan, are you maintaining getting more power? Or what's your plans for that data center?

Today, context in Singapore, we are not able to increase power if there is no existing data center operator on site. So unless we work with another operator who will apply for a CFA 2, then there's potentially that they can come into any other site. So we definitely have to work with an operator.

I think just now, Derek, you raised your hand.

William Derek from DBS. Just 2 questions. First one is looking at your portfolio, right? I'm just curious about -- you talked about U.S. being a little bit weak, especially for offices. Could you give us a bit more color? Is there any leases that we should be watching out for, for the upcoming year that could be coming up and that you see some form of downside risk from that perspective? And going into, say, this year, given where interest rates are, where are you hunting for acquisitions? Just curious on that.

Okay. So on U.S., if you look at our lease expiry profile, you'll realize that only about 2-plus percent of our income is up for expiry next year. So in terms of the potential downside or the financial income that's at risk is a miniscule next to nothing. But what is going to happen is we actually have got a few large leases in the logistics space that's coming up for expiry next year. Typically, they are large sheds, but the per square foot rents are much lower than your BP space. So the income contribution is much lower. As we have all witnessed post COVID where there was this frenzy from 3PLs and end users to lease up all of the spaces where we were reporting like 100% occupancy rate. We have now reverted back to the norm where the market remains healthy, but the lease-up period would last anywhere between 6 to 12 months. So while the market remains healthy, we think that the occupancy is going to be a bit bumpy. So the headline occupancy that we're going to report over the next couple of quarters, you might see there might be a dip. But in terms of financial impact, that would be pretty minimal.

On your second question about where the market is because of interest rates, we have maintained that Australia is one market that we can acquire accretive. If it's new market, Korea continue to be non-accretive. We mentioned that we have always been observing Japan, Korea, but Korea is the same as Australia, given where interest rate is. We are actually very keen to continue on our current markets, Singapore, Europe, U.S., and we will continue to hunt in these locations. And if it's Europe, obviously, it's greater Europe, not just in the U.K., I also mentioned whether it is the data center. We look at data center and logistics in Europe. So it's not in the existing -- just in the existing market, but new markets like Madrid, Frankfurt, Dublin, the other European cities. That also include logistics. I think we have also been -- I also mentioned that we've been looking at observing Japan market, given where interest rates are in the past 1 year and then with rental -- positive rental growth, that's been a market that we've been looking at. So we'll continue to monitor. But yes, if you're looking at from an interest rate point, Japan interest rate also has the right reason, right? So we will be looking at this market and see where the cap rate has expanded because if you were to acquire at what has been transacted in the market in the last 1 year, 3.5% to 4%. I think there is still accretion, but it's fairly tight. So we will see whether we can get better deals out of some of these in Japan market. Other than that, I think Singapore continue to be attractive, definitely because of where the tighter is as in leasehold. And we have been trying to refresh our properties if you look at what we've been trying to do. Acquisitions that we have done, they're all mainly younger properties. Even in Singapore, they are brand-new properties, while lease could be 22, 23 years left, they are all newer properties, better specs. If you look at our acquisition in U.S., we have done one DHL Indianapolis last year and 2 weeks ago, DHL Columbus. With these 2 acquisitions, our modern specs warehouse in U.S. is already more than 50%. So that's how we want to refresh our property, which is why I also mentioned development is one key strategy that we want to do as well as AEI and redevelopment. I hope I answered your question.

Okay. Can we move on to the next question? May I have the question from this lady, please? Yes, [ Jesse ] from Business Times.

Okay. Maybe 2 questions from me. So I'm kind of curious about the Telepark data center. My understanding is that it's being redeveloped. Do we have like a time line of when redevelopment works will probably start? And in the meantime, I'm guessing the tenant has moved out completely. And secondly, I mean, occupancies are quite strong across the board. But I do note that for some of the Singapore properties, some of the older business parks occupancies could be a bit better. Could you maybe share some ideas of what Ascendas is doing to increase occupancy?

Thanks, [ Jesse. ] I'll take your first question, and James can take on your second question. The property in Telepark, we are looking at development plans to increase plot ratio. If you're looking at a time line, now we are looking at where the government's consideration in terms of height limit. I think the government has mentioned that with the air base being moved and as well as flight technology today, they can look at freeing up a lot of air space, which means that buildings can go higher. So this is the reason why we've been asking the government to consider some plans for higher plot ratio. I also shared before, when it's not part of the permitted master plan parameters, it does take a bit longer, easily a year to get any of these plans being approved. So I will say that we probably take this year to do all this planning. Possibly, if there's a development or any other options that we are looking at, we will look at it after we get the confirmation of what and what we can build on the site or maybe next year.

So currently, I mean, am I going to -- like should we assume that occupancy is what is reflected in the supplementary information?

Yes, yes, yes. So for those who are under plan for redevelopment, we also shared that there is no reason for tenants to come into the site, and we will not actually be actively marketing it because if it's slated for development or redevelopment, tenants comes in and subsequently relocate, there's a lot of disruption to their occupation. So we have I think, for example, U.K., when we decided to develop one of -- redevelop one of the site that's just vacated, it's part of our plan that we know that the occupancy will fall away so that we can then prepare the site for development.

On your question about Singapore legacy BP spaces, I suppose if you look at the different subclusters that we have and where perhaps the occupancy is a bit lower would be one at the IBP cluster, which is in Jurong. We are currently at about -- on average about 50% occupancy. And the reason for that is several fold. We are progressively redeveloping the assets there to take advantage of the new MRT station that's going to come up. We have got 27 IBP that is currently under construction, very close to TOP, and that would have a direct linkage via pedestrian walkway or bridge to the new station when it opens. So what we are also planning to do is progressively, we will be redeveloping the other buildings that's within a walking distance of the MRT. And in a way, you can think of it as a warehousing those assets, and you expect that the occupancy would continue to come down as a result. But again, given the diversity of our portfolio, we feel that this is a worthwhile trade-off because the future payoff is going to be much higher than if you were to try and just lease this on [indiscernible] spaces. Next, I move on to the other cluster, which is in Changi, CBP. That was in the news about 1.5 years back when there was a lot of concern, there was a lot of negative news flow about that place. If you look at how we have performed year-on-year, last year, on average, we were doing about 81%. This year, in December, we are at about 83%. So there's a slight 200 basis point improvement. It might not seem like a large number, but in a difficult and challenging market, we continue to outperform. And there are a lot of things that we are doing or have done, including applying to the authorities for change of use from BP space to FSS, which is education. We have got one of our buildings, 3 CBP, where we've actually done that. Progressively, we also have pockets of spaces within CBP that's been converted into such educational usage. So our game plan is really to continue to engage the authorities to get them to accept different or adjacent users such that then they can -- we can really revitalize the entire vicinity. And I'm very happy to say that the regulators are now a lot more open and receptive towards a change of use because they have also come to the realization that the legacy demand or users of BP spaces have largely reduced their requirements and that we really need to find new sources of demand to backfill those spaces. And they are really on board and helping us with that as well. So I hope I've answered your question.

Thank you, [ Jesse ] and James. May I have the next question? Joy from HSBC.

First question on cost of debt. Can we get some guidance in terms of currency of debt that is expiring for '26 and if possible, '27? Second question on divestment. Can we look at the same pace or even more divestment in 2026? And in terms of sort of expectation on CapEx as well for '26?

I'll take the second question, and Lee Sze can take your first. So divestment, we have done $500 million last year. This year, we believe that we will work to around $300 million to $500 million in order to recycle and fund any acquisitions that we may come across. In terms of pace, we will -- we have some interest in some of the assets as well as some of our assets that we think that it will be good for us to divest. So we are definitely working on this. I think if you look at our track record, whether it is unsolicited interest or if it's an asset that we have pushed out to the market, we're always very keen to look at premium. So we definitely want to be able to recycle well in order to acquire better. Derek, I hope you agree with that. Have I answered your question?

And the CapEx for '23?

CapEx now, okay, in terms of our development and redevelopment about $700 million ongoing, we will have about $220 million, $230 million of value to be turned on this year, primarily from Singapore 27 IBP as well as the U.S. logistics. So that has freed up another $200 million for redeployment. I also mentioned that on a rolling basis, every 3 years, we hope to be able to hit about $1.5 billion. So with that, with the U.K. asset that we have slated for redevelopment. And then the question about Telepark and all this added on, we will still look at possibly the same traction. So now about $500 million, we will add on more because of $200 million will be freed up. So we add on more for -- until the end of the year.

That probably means if you are looking at acquisition, you will have to tap the market for equities.

Acquisitions, if you look at where we are in terms of leverage, even for our last acquisition with Columbus, in terms of leverage, hardly any impact, I mean, 0.1 or less. So if you come across big acquisitions because we are looking at between $300 million to $500 million, that's actually quite sizable already. Well, I recognize that like, for example, Derek mentioned, which is a fair point, our track record has -- for past 5 years, we have done about $1 billion each year. right? So if we do on the same trajectory, we may have to look at tapping the market, yes. But nothing -- obviously, I'm trying to say right now with the divestment, hopefully, we can actually be able to recycle this capital.

So the interest rate for this year is a reduction from 3.7% to 3.5% this year. So based on what we see, we expect it to be broadly around this range for 2026.

3.5%?

Yes. Then for expiry for '26 and '27, portion of SGD and the rest are AUD and USD.

So your SGD debt will come down and then your USD and Aussie debt will still go up. Is that fair?

No, it will not. It's refinancing, right? So you're asking which currency. So it's AUD and USD mainly for the '26 and '27 and a small portion of SGD debt that's due for refinancing.

So Joy, if you look at the tower, if you're asking for currency, I think Lee Sze has mentioned, part of it actually is foreign currency. Foreign currency against what we have contracted 5 years ago, easily 200, 250 basis points higher. So with the Sing dollar. Sing dollar, I think, is fairly stable from what we have done 5, 10 years ago. So that tower will still be higher cost than what we have contracted, which is a norm because every of these towers were contracted 5, 7, 10 years ago. So we will still be looking at refinancing on higher cost. But because with divestment, with new acquisition, new debt will come in as they are lower costs, hopefully, we are able to maintain, and we are all looking at maintaining about 3.5%. Hope that addresses your question.

Thank you, Joy. We will move to [ Mervin. ] You may ask your question from JPM.

William, maybe we can go to Slide 39. These are U.S. expiries. Just want to double check for the '27 expiries, is that all logistics? And maybe you can update us in terms of what's happening with the upcoming San Francisco office leases.

'26 are mostly logistics.

'27?

'27 is office, majority is office. 1 SF building will be in the '27 bucket.

And are they staying or...

They are staying right now.

Okay. Can we touch on one-off precinct. There's potential movement within [ A-Star ] heard that tenants moving Galaxis to ATP. Can we talk about the competitive pressures there once [ A-Star ] moves out, whether other people want to poach some of your tenants?

You can add on. Tenant is still with us. So if you look at the occupancy numbers, Galaxis, there's a dip. I think we all know that Shopee has downsized. They have renewed every -- the floors that they need. They have. Moved the Shopee Monee to SeaMoney to Rochester. So that happens -- while we have talked about it for many quarters, it only happened in the last quarter of last year. We are marketing those sites, the 2 floors that we have right now. We have pipeline, and I think we are on track to be able to lease them up. right? If you are asking whether there's any relocation musical chair, I think we face all the pressure all the time, including us poaching from other landlords. Even for Geneo I think there are other -- we also have mentioned that there are new tenants as well as relocation tenants that we have worked on.

Yes. Just to add on to what William has said, personally, I'm not too concerned, particularly for Galaxis. It has got direct connection to the MRT. It's got a fantastic retail offerings. So -- and it's just on the fringe of the CBD area. So personally, like I say, I think that we'll lease it. It's just a matter of timing and the right tenant coming along.

Final question from me. Quite excited in '27, '28 with some of your developments come on stream. So this should be a big boost to earnings. But you're doing more developments, it seems, which are much higher yielding than acquisitions. But can you talk about which markets look a bit attractive in terms of development or greenfield development? Is that U.S., more so or still Singapore?

If it's redevelopment more Singapore, where there's overseas opportunities depending on the expiry, just like U.K. data center is because of the tenant expire. And before they expire, we already put in application for higher power. The logistics that we are coming across -- that will come across in the U.K. because of potential expiry about a year ago, we started looking at that, and we planned that for redevelopment. Singapore continue to be attractive given the fact that if you look at all current existing projects that we have, the key consideration is higher plot ratio. And with higher plot ratio and we can build better quality, higher plot ratio, we can introduce, for example, Geneo, we have introduced complementary users. The amenities are doing very well. That actually is a good selling point given for tenants, I mean, employees of tenants. The other point also is because as we refresh our property, flight to quality is actually one key consideration that tenants has. While they -- while it's not easy for them to relocate because if you were to come into a new building, they sign on a 5 years, 10 years lease, that's actually attractive for them because they can refresh their own office space, their own users -- usage. And we've coupled with all these new work habits of work from home, flex office, for example, Geneo, I think we also have introduced a tenant who are able to do [ collab ] like co-working. So these are actually new solutions that we are bringing about in our development. So these are areas that we want to be able to continue. So Singapore will continue to be a place for us to look at development and redevelopment.

So just to clarify also, you said on a rolling basis, you have about $1.5 billion worth of...

Achieved about $1.5 billion. Yes. So you look at the projects that has been turned on, each year, we probably can turn on $200 million, $300 million. This was the pace that we have built up in the past 2, 3 years. We hope to accelerate that. We can then do more development. And hopefully, as the time comes to these new developments as we have commissioned again, we will have that $500 million kind of a rolling basis.

Thank you, [ Marvin ]. We'll have the next question from Dale from DBS.

Just wanted to follow up on what you just mentioned. When you do a redevelopment, you want to hopefully get more plot ratio, better use. So going back to the IBP example, what should we be expecting when you want to rejuvenate the assets there? What kind of ROI are we expecting? And then what's going to be changing there in terms of the kind of tenants you can attract?

So most of the business park and Singapore assets in terms of development, we'll still be looking at, say, about 7% -- for example, Geneo was because of the size of the project and the quality that we have built in when we first announced about 6.3%, but where we have landed in terms of the occupancy as well as the rental, it has improved. It's much better than 6.3%. If you take a development in redevelopment of 5 Toh Guan, we announced at that time was between 6.5% to -- sorry, 7.5% to about 8.5%. We have achieved today about 8%. So I think this is where the yield on cost is attractive for us to develop, especially, for example, IBP, as James mentioned, is near MRT station, and that's actually be a game changer for us.

In terms of the tenants that you can attract, do you expect it to be different from the kind of tenants that are typically there now?

Variety of tenants, okay, if the traditional BP tenants will be attracted to new buildings, just like Geneo, we have demonstrated, there are relocation. We can -- it's 1 million square feet, it's huge, and we can get tenants, both new and relocation tenants. So I think that's where it's attractive for existing traditional BP tenants. And what James has mentioned, we are not just looking at traditional BP tenants, given the -- some of these good locations, take, for example, IBP near MRT station, we definitely will try to see whether we can incorporate other usage. So potentially part of the higher plot ratio will be asked for what use to bring in other tenants to be able to have a better ecosystem.

So potential to double plot ratio.

Don't know yet.

Okay. Okay. Then my second question is on the Kim Chuan data center. Yes, so like you're saying they'll be expiring soon, right? So what are the plans? Like you mentioned also that the CFA 2, that will probably affect whether you are able to redevelop or use it for data center again. So what should we be expecting for that site and as well as I think there's another one coming up next year, right? This is the last one.

Yes. So for -- I think I mentioned for existing data center, there is no way we can push ahead to redevelop a data center. We definitely need a CFA license. It's either we partner with somebody or obviously, obviously, we try to apply on our own, right? Our current position is -- we prefer to work with operator for these 2 sites, but it's actually challenging, given the fact where the government has announced about where they want the new data center hub to be. So even a new data center operator were to be able to be awarded a license, I think the government also will encourage them to go to Jurong Island, right? And for Telepark in Tampines, the underlying land use is commercial. So to be honest, I think it makes sense for us to redevelop or to look -- or look at commercial development, not a data center. Kim Chuan is existing data center. But because of the restriction of getting new power, the alternative will be industrial. And if you look at high-tech building industrial, they are probably similar in terms of core and shell in terms of rental to a data center. So there is hardly any trade-off because a core and shell where we leased out to Kim Chuan is almost like a high-tech development.

Okay. Okay. Got it. But just to recap, I think with the last acquisition, sponsor now also has some data center operating capabilities, right? So they could also be someone you partner with in terms of data center.

Yes, yes. That's one other option, one option. As I mentioned, we can apply on our own.

Thank you, Dale. We'll just ask one question online. There's a question about what is management's plan to increase distributable income and DPU?

Maybe I'll try to answer that. I think the question was about the expansion of the enlarged unit base. Probably just to clarify, we did the EFR last year at beginning of June, but we managed to complete the acquisition only in August. So I think there's a small time gap. And that's why it resulted in a slight dip or a 1% drop in DPU. So if -- I mean, of course, we can't, but if we had been able to do it, DPU would have been stable, same as last year, slightly because we do the EFIs actually to fund DPU accretive acquisitions, right? So it will be accretive. That answers the question.

Okay. Thank you, Lee Sze. We'll move on to the next question, which is [ Jesse ] from Business Times.

I wanted to clarify this earlier. So apart on Shopee, right, just to understand, so currently, they only have space in 5 Science Park in Rochester, right? And the 2 floors and Galaxis. So the 2 floors you mentioned, which they -- we are marketing those sites, the 2 floors that we have right now, we have pipeline. I think we're on track to be able to list them properly. These 2 floors are at Galaxis?

Galaxis.

Okay. Okay. But this is not a downsizing, right? This is just moving people around or...

It's a downsize in Galaxis. SeaMoney is not considered business park. So when they are given the license to be able to go into financial institutions, they have to go into a commercial building. So they have relocated that part of their business to Rochester Commons, which is a commercial building.

Right. And then the 2 floors are being backfilled.

Will be backfilled.

So we can say Ascendas is confident that they will be backfilled.

Yes.

Thank you. We're almost at the hour. So if there are any final questions from the audience, you may raise your hand so that I can call out your name and you may ask the next question. Okay. If there are no further questions, then we will end this results briefing. Thank you, everyone, for joining online as well as physically. We wish you a good evening ahead.

So I bring this to a close. I just wanted to thank the investment team, asset management team. If you look at our 2025, it's a very busy year for us. And the staff here in CapitaLand Ascendas REIT as well as our asset managers, property managers has been working very hard. Thank you so much. Thank you.