CapitaLand Ascendas REIT (A17U) Earnings Call Transcript & Summary

Good evening. Welcome to CapitaLand Ascendas REIT First Half 2026 Financial Results Briefing. I'm Johanna from the Investor Relations team. Thank you for joining us today in person at Capital Tower and remotely via Z. Please note that this briefing is recorded and will be made available on our website. We will start shortly with a presentation by Andrea A, Director of Investor Relations, followed by questions and answers with our management team. I'm pleased to introduce the panel this evening. Mr. William Tay, our Chief Executive Officer. On his right, Ms. Koo Lee Sze, Chief Financial Officer; Mr. James Goh, Head of Portfolio Management for Singapore; Finally, Ms. Serene Ong, Head of Investment and Portfolio Management International. [Operator Instructions] With that, I'll hand over the time now to [ Andrea ], who will take us through the highlights of the briefing.

Thank you, Johanna, and thank you, and welcome to everyone joining us online and physically for [ past ] year results briefing. [indiscernible] delivered a resilient set of results for the first half of 2026. Distributable income was higher by 8.6% year-on-year at $359.4 million, while the DPU remained stable at [ $7.482 ]. The higher distributable income was due to the acquisitions completed in 2025 and 2026 as well as the better performance from existing properties. So these two factors more than offset the impact of about $500 million of divestments completed in 2025. On portfolio metrics, the portfolio occupancy is 89.1%. So this figure includes two new properties that were completed in the second quarter. So they are [indiscernible] Logistics Center in the U.S. as well as 27 IT in Singapore. So if we are to exclude these two newly completed properties, the portfolio occupancy will be 90.3%, which is at a similar level to the previous quarter of 90.5%. Rental reversions remain positive. So for the first half of the year, the average portfolio rental reversion is 8.5%. This reflects continued demand for our quality properties. And for the second quarter specifically, the rental reversion is 5.2%. On capital management, the gearing declined to 39.7% from 42% in the previous quarter. This followed the equity fundraising in the first half. To recap, the equity fundraising was to fund acquisitions and we repaid some debt. So it was a $600 million private placement as well as a $300 million preferential offering, both of which were well oversubscribed. So for the first half of 2026, the cost of debt is 3.5%. This is a similar level to the first quarter and 20 basis points lower than in the first half of last year. Our portfolio rejuvenation strategy remains central to how we grow and enhance the value of [indiscernible] portfolio. So it's anchored on accretive acquisitions, selective redevelopments and developments as well as disciplined divestment. For the year-to-date, we have executed on all three. In the first half of the year, we completed more than $1.1 billion of acquisitions and these are 9 quality properties in Singapore, the U.S., Europe as well as Japan. So as mentioned, we completed the redevelopment of 27 [ IBC ] as well as the development of Somerville Logistics Center. And lastly, in July, we announced that we are divesting in Kim Chuan Telecommunications Complex for about $200 million, which is 2x the original purchase price as well as a 32% premium to the independent market valuation. So this sale price is meaningfully above the book value and reflects our ability to unlock value from the portfolio. On the financial performance, comparing the first half of this year against the first half last year, gross revenue and NPI increased by [ 6.7% ] and 6.2%, respectively. This is due to acquisitions completed last year as well as this year and the better performance from the Australia portfolio. So as mentioned, [ it ] has offset the impact of the divestments completed in 2025. The distributable income was 8.6% higher and DPU remained stable at [ $0.07482 ] after accounting for the larger unit base, mainly due to the equity fundraising in the first half of this year as well as the first half of last year. Comparing this first half of this year versus the second half of last year, similarly, gross revenue and NPI increased by 2.8% and 2.2%, respectively. Similarly, acquisitions as well as the better performance of the Australia portfolio drove the increase and offset the impact of divestments. Distributable income increased 3.5%, but DPU was slightly lower by 0.6%. It's mainly due to the larger unit base. So actually declared and paid an advanced distribution of SGD 0.375 on the 30th of April. So for the period from 2nd of April to 30th of June, we have declared a DPU of SGD 0.03732. Unitholders can expect to receive this distribution around the 8th of September. In addition to the properties that we have acquired in the first half of this year, we are in the process of completing the acquisitions of two logistics properties in Singapore for about a total purchase consideration of about $600 million. So this brings the total year-to-date acquisition value to about $1.8 billion. Going through the list of these properties, you will notice that 10 of the 11 acquisitions are actually logistics and data center assets. So these are asset classes that plan was to continue to invest in. And about half of the value of the acquisition value are properties in Singapore, so which -- because Singapore is a key market for our plan. And even as we build a globally diversified portfolio, Singapore is a geography that we continue to invest in. So just to recap, if we were to look back to December 2022, the Singapore portfolio value was about SGD 10.1 billion. And as of today, currently 30th of June, it has increased by about 30% to SGD 13.1 billion. So we have continued to invest strategically in Singapore. And then since 2023, it's about $2.7 billion of acquisitions. And just in 2026 alone, we will be completing about SGD 883 billion. Going into a bit of details about the redeveloped asset, 27 [ IP ]. So we doubled the GSA as well as the NOA. And at the same time, we have also transformed the property into a modern business space asset. So it features your efficient column-free floors [indiscernible] We have also added amenities such as Sky Garden and end of [ triage ]. The property is BCA Green Mark Platinum certified and it's going to be directly connected to the future Jurong Tower MRT station. So it's very close to the Jurong Lake District, which is envisioned to be the largest business district outside of Singapore's Central area. The current committed occupancy is about 19%. We are in discussions with our prospects and dates are ongoing. So approximately 20% of NLA is in discussion. Logistics Center is a modern logistics asset in Charleston, South Carolina. So this asset widens and diversifies our U.S. logistics portfolio, which is mainly currently in Midwest. So marketing is in progress and similarly, build and lease discussions with prospects are ongoing. The current list of ongoing projects at the end of June is 5 with a total estimated cost of $507.2 million. We are working on a couple of other redevelopments in Singapore as well as overseas, and we will be sharing more details in future quarters when the details have been finalized. Just to highlight a new asset enhancement initiative that we are doing in Australia. So this AEI is at 1–5 Thomas Holt Drive. This property has three buildings, and we are currently doing some asset enhancement work at one of the building besides refreshing the lobby, adding new amenities, we're also making the property more suited for multi-tenant occupancy. The AEI is going to cost about SGD 10 million and will be completed in the first half of next year. Moving on to capital management. As shared earlier, the gearing has come down to 39.7%, while it may be slightly higher than 6 months and 12 months ago, it's mainly because of higher borrowings to fund investments, while our total assets have also increased to about SGD 20.9 billion. The adjusted NAV per unit has also increased to $0.24 as of end June. Our financial metrics remain strong. So the ICR is 3.5x. Our percentage of fixed rate debt is 70.1% and our debt maturity profile is 2.5 years. On natural hedge, we maintain a high level of about 73% for overseas investments. With our latest investment into the Japan data center, we want to refresh everyone's memory that [ train ] portfolio now is diversified across 5 developed markets. So Singapore remains the majority at 65%, Australia, the U.S. and U.K., Europe, which contributes about 9% to 12% [indiscernible] currently is at 2%. In terms of asset class, it remains well diversified across the three main segments, which is business space and life sciences, logistics and industrial and data centers. I'll move into occupancy. So we'll explain a bit about the individual geographies occupancy, starting with Singapore. So the overall Singapore portfolio occupancy is 90.1%. This includes 27 IBP, which is in the leasing phase. If you have to exclude 27 IBP, the overall portfolio occupancy actually remains stable quarter-on- at 90.6%. For the U.S., similarly, the decline quarter-on-quarter was due to the addition of Summerville Logistics Center. If you have to remove this newly completed property, the portfolio occupancy actually remained stable at 85.9%, which is 20 basis points higher than the previous quarter. This was mainly due to some new take-ups in Portland and Kansas. In Australia, the decline was due to a lease expiry at 1–5 Thomas Holt Drive. So this is the business space property in Macquarie Park in Sydney, where we are doing the AEI. So conversion works are underway, as I explained. And actually, we have already found a commitment for the 60% of the vacant space, while we continue to market 40%. Otherwise, the logistics portfolio in Australia, the occupancy remained stable and healthy at about 94.9%. Lastly, for U.K. Europe, the occupancy remains stable at 93.1%. There is a property that we had shared last quarter that we are going to be redeveloping. So it has been decommissioned this quarter, meaning the third Q, and I will be sharing details for the future coming quarters. So if you were to exclude this property, the occupancy actually remained at about 98%, 99%. On rental reversions, it remains positive across all asset classes and geographies. And more importantly, we have revised the guidance to the positive high single-digit range. Previously, it was mid-single digit. I'll move on to closing. So in terms of outlook for global environment, according to the IMF, GDP growth in 2026 is expected to be slower than 2025. But for us, [indiscernible], that's why our strategy remains relevant. For our portfolio remains diversified across 5 developed markets and these markets have healthy fundamentals. So more importantly, with our strong balance sheet, we have ample financial flexibility, portfolio remains resilient. And with our clear growth strategy, we believe that CLAR is well positioned for stable and sustainable returns. That brings me to the end of my presentation, and thank you for your attention. Before we move to the Q&A segment, I would just like to pass the time over to William for him to share a few words.

Thanks for coming. We actually introduced [ Seren ] just now. So she's taking over the international portfolio management. So we also have split the investment. So international will handle investment as well as portfolio management to see end-to-end from investment to portfolio management. Singapore investment now is vacant. So you will take care of the investment as well as the business development here in Singapore. So this is just some of the new structure that we are embarking for the rest of the year and forward. Just a few comments. You have heard Andrea mentioned we have done $1.1 billion of acquisition in the first half. So we are on track to do $1.8 billion. If you recall, we still have [ $6 ] million 2 properties in Singapore to be completed. We expect them to be completed within this month. So I think in terms of growth, we are on track and it will be income generating once it's completed. So we have actually done about half in logistics from this as well as half here in Singapore. It does show you that we are focused on Singapore as well as two asset classes, logistics and data center. And in second half, other than the two that is completing -- two assets that we'll be completing, we also be seeing contributions from the new developments that will come on stream. So JINRO will slowly gain give us more income over time. It should start coming in second half as well as next year. Number two, IBP, we have about 19% leased up, 20% in advanced negotiation. I think year-end, we probably can hit about 50%, 60%. But bearing in mind, it does take time to fill up space in the business park space. Typically, we look at 2 to 3 years to fill up space. But this being a new project it does give us confidence. The leases that we have signed so far, they are all new to CLAR, a mix of relocation as well as expansion. So this is actually good news for us as we actually introduce new specs in IBP, we can actually capture new demand. We are confident to be able to close those as under negotiation. If I go back to JINRO, I think you have heard me mention as well that we have about 81% occupancy. In segment since the day we actually announced our TOP about 76. We went up to 81%. We now have another 13% of space under advanced negotiation, and we hope to be able to close that in the next 6 months. So again, that is actually new income generated. Summitville Logistics, which is in the U.S., we have completed marketing is on track. We hope to be able to start to sign new leases and there will be income generating as well. So the newer developments and redevelopments, you can see that as we talk about a cycle of decommissioning and a cycle that comes online with new income. I think this is what we try to do. We continue to look at redevelopment. Andrea mentioned in U.K., we do have one warehouse that was vacated vacant since first Q, but we have actually decommissioned. We will start work in the next 3 months, okay? There will be more details to be shared. The other point is that the first half, I think the key is actually the [ enlarged ] units, which the numbers have shown. Despite enlarged units, the DPS is stable, which means that the contribution for those acquisitions are flowing in, and we have two more that's coming up in this month. The other point is also the concerns over lease nonrenewal, which is Singtel in Kim Chuan. We are actually able to divest them at a very good premium. So that's the gain that we flush out and we start to see that this will be completed perhaps in 3 -- 4Q this year, okay? So the key looking at is the renewal income coming in. The other one big one, I suppose, before you ask, some lease renewal that will be up, I think all of us are expecting shopping building. As I mentioned, lease has been in negotiation. We are finalizing the lease. So you can say that it's fine. So there's also one key renewal that we will do with a large rental reversion. So some of this we are confident of doing that, which is why we have raised our guidance for rental reversion to be high single digit. So these are the few key things that I will raise then we take questions.

We will start with [indiscernible] with JPM.

All the results were quite good, very resilient considering the headwinds from Singtel exit, FX and the place. I know you cannot talk about targets for the second half. Maybe you can help me in terms of thinking process for second half. I'm thinking maybe second half will be stronger the two acquisitions you mentioned to get the completed the strong reversions and the like. But obviously, some of the slippage in occupancy is due to the fact we have new buildings coming in. But how are you thinking about that year-end occupancy should we -- on an overall basis, do you think we can get back up to the low 90s level maybe some comments on that. In terms of , obviously, [ C ], any updates on development there? And then obviously next year, some of your Francisco buildings, any updates in terms of renewals of replace?

Just those I mentioned, I actually give you some of the snapshot of the drivers behind future earnings, mainly the two acquisitions. I think that's huge given the fact that Midland. And if we can close this month, we have at least 4 months of our income, and that's quite huge compared to the rental that we have lost in Kim [indiscernible] You know the numbers in our annual report, say $10 million a year. The next two acquisitions that will be completed is more than enough to offset 1 bps in terms of rental loss. Occupancy, I think will stay stable. Main reason is because of the new assets that we turn on recommissioned. These are big assets. As we add the GFA back into our base, take, for example, 27 IBP, we have almost doubled the entire GFA. So a 20% occupancy is high compared to the older building because it's enlarge building. Number two, maybe just a little bit more details on that. Before we carried down, the rental was about [ $3, ] [ $283 ] for that area in IBP. Where you at a point in time because it's low occupancy is about probably 2.5% to 3%. But now with a new completed building and new specs today, perhaps the rental -- market rental is about $350 in the area. We are hitting mid-single digit for $5. So that gives you a sense of why we want to do redevelopment because it's a newer spec, newer locations, it gives us the ability. If we just -- if we don't do any redevelopment, IBP will be -- it is where it is, say, 3 years ago when we're competing with all buildings. So it does give us some ability to get a better mix. And we believe that being a new building, it can attract new demand. As I mentioned, all the leases that we signed are all new demand. We have companies from engineering, health, such companies. They're all new to us. So occupancy-wise, because as a large building, as I mentioned, even [ 27 ], we hope to be close to 50%, 60% by the end of the year but there will still be vacancy about 50%, which will then drag down the overall portfolio occupancy. But we believe the overall portfolio occupancy will still be stable as we start to renew other leases, right? [ Key Park ], which is in [indiscernible], no news yet. We were hoping that the government can give us an indication with regards to the high limit. We are still hopeful that because they did say it's 3Q, so we're hopeful that it will come within this quarter. And our plan there, as you have -- as you know, is obviously, higher a higher limit, we will ask for higher floor ratio and hopefully, a redevelopment or that, if not, what else can we do with the asset will be considered. SF, we have started marketing. So I think our key concern is the one that is leased by the colorful company. I still can't say the name, but yes, we have started marketing. We believe that there is good interest around in SF. We understand that the vacancy is still high, 40% vacancy around in that area, in the Bay Area and the SF. But because it's a new building in terms of direct competition, it is probably vacancy of 13% to 15% and this is still a fairly good building and our tenant or sub-tenant has actually invested substantial amount of pickup. So we've been seeing -- we've been hosting site visits. It's a very positive site visits. So there are actually demand, not just one site visit, but various site visits, including some prospects that have seen the space multiple times. So we believe there are some good interest for that building. Second half.

Can I have the next question? [indiscernible] from CRSA.

William, can you give some guidance of NPI margins by different segments because it volatile. I just want to get a sense of where you stabilize between the various logistics business parks and the other sector. And, how fast can we expect the lease up within your portfolio or how many of your assets can be redeveloped raising the those [ $3 ] or [ $5 ].

Okay. Maybe I'll let the portfolio managers talk about margin. But by and large, I think in terms of overall portfolio, our margin is about 70%. You're right, it does go up and down depending on occupancy as well as cost. But in terms of costs, it's still going up regardless of occupancy, but more or less stabilized. For example, electricity costs, our -- what we have signed, I think you know that we are contracted right up to end second quarter next year. And the rates that we have signed in terms of comparing to last year is about 9%, 10% lower. Next year rates, we expect to be about 30% lower. So for tenants from us do enjoy better rates than they were before. Primary reason is because of the bulk purchase that the group embarks on together with other asset classes and the size of us in Singapore didn't give us a [ age ] to be able to negotiate. And all the contract was signed before the war, which is why the hedging formula is actually very favorable for us. It will be good for our tenants, right? Perhaps on your -- before I hand over to that perhaps on your second question, still quite challenging, to be honest. But why we proceed to develop -- redevelop [indiscernible] IBPs, the primary reason is because it's going to be directly connected to the MRT station, right? And that actually gives us an edge because where the good connectivity, it does attract just what we've done with JINRO even in Chinese business part where OCC MRT station, it always has a better leasing and more attractive. So typically, wise in terms of how we foresee or predict or forecast occupancy about 3 years to be able to stabilize. But based on our pipeline today, we think that we could hit about close to 50% towards the end of this year. 50% means that we actually fill up the old building, The size of the old building. We will start to see more traction as tenants start to move in, right? That will be helpful. On your question about any other redevelopment opportunity, I think the most likely one will be across the road I shared before is [indiscernible] building. Some of the vacancies that we see in our numbers is also because we start to move tenants out. So A, we have brought down the tenants to about 20%. So we will be embarking on the redevelopment once we, I mean, start to fill up 27 IP. Again, that building will be directly connected to the MRT station. And we hope to be able to bring in just like JINRO, bringing more retail F&B offering to give a good attractiveness to that not there, which is 27 IBP and [indiscernible] IBP. So that's probably the closest. The rest of the building, you can say that we have opportunities around the science park, but the buildings are still fairly new, right? I think the key is that if we want to be able to get higher fraud ratio. And if a new infrastructure that's invested by the government in relations to MRT and connectivity, then we can actually ask for higher rental. If for any building that nothing has much changes, selling down, giving a new spec is tough to say, increase of $3 to $5, right? So there's some ingredients in the [indiscernible]

So on your margins question, I'll answer more generically rather than specifically by geography. because it really depends on the lease structure. If it's a triple net lease and single tenanted, those margins tends to be very high, typically above 90%, sometimes as high as like 97%, 98%. If you talk about a multi-tenanted building on average is in the 70s, can be low 70s, mid-30s, thereabouts. And if you talk about data centers, data centers margins tend to be lower on the headline numbers largely because of the high [indiscernible] right? We record both the [ ELC ] electricity revenues as well as the OpEx. But if you strip that out, again, it normalizes, again, depending on whether it's a [ color ] or if it's -- so really, our numbers, if you look by country or at the group, it's really a blend of these three separate components. I would say, by and large, margins, particularly for multi-tenanted buildings have more or less stabilized because previous years, post-COVID with the hike in electricity, I think a lot of -- across the industries, everyone saw their margins compress largely again because of the higher revenues being recorded and at the same time, higher expenses. So we are more or less past that. So yes, I hope that answers the questions.

We will move on to the next question. [indiscernible] from UBS.

Just two quick questions from me. I think firstly, I like you mentioned JINRO, since the very positive start, it has kind of stopped. Just wondering what's happening there? And you're saying that you have advanced negotiations with further tenants. How are asking rents now versus what you signed at the onset? This is my first question. My second question is with regard to your portfolio rejuvenation calculation. Now that we have done about $1.8 billion in acquisitions, what should we be expecting for the rest of the year? Should we be looking at more selective divestments? Or are you still pursuing acquisitions at a big rate.

Thanks, Dave. Good question on the -- thank you for that question on JINRO. As mentioned just now, we haven't really improved the occupancy for about 6 months to 9 months where we first announced the completion of project, the 76% committed is very real. You probably have seen our opening and who is the tenant, our anchor tenant. They are mostly life science and final sticker and our anchor tenant is government. So they have taken most of the space, they're all picking up. They will start to move next year. During this time, while we are handling all the fit out and handing over the sites, we still continue marketing. I suppose your expectation is that rental should go up, which is what we have asked for because now that we have hit about 80%, 81% typically, as you look at the entire pricing strategy, we may give more rent free as the first come in subsequently when it hit stabilize, obviously, we ask for what the market is asking. And honestly, JINRO and our newer buildings today, they are leading market in terms of rental. So we'd like to be able to close higher than where it is. And out of the 19% vacancy, we have 13% right now in the [ advised ] negotiation. So we are hopeful that it will stabilize at high 90s towards the end of the year. On your question about investment divestment, we are still focused to close the two assets that we have acquired and not have acquired. As you know, in Singapore, we need to go through regulatory approval. In this case, it's actually JDC. So we are hopeful that this consent will be given to us very soon. Even for our Kim Chuan divestments because it's not JDC, we still need to approve. So there will still be regulations that we need to go through. So in terms of investments, I think we still look at investments, but this is probably not the key for us right now for second half. What I would say that our focus is more on divestment. As you have heard me mentioned, we have about $300 million to $500 million divestment. Kim Chuan, this asset divestment came very fast, where we got a good offer. We took it but we are still working on the $500 million divestments. So if there is good interest, we believe that we can push the divestment up higher. If not, at least I think we have good interest for at least about $300 million to $500 million right now, which we will work on. That will be helpful for us in a few things. Number one is to leverage in terms of our debt to EBITDA and in terms of ratio to be able to bring it down even with the two assets to be acquired the divestments, I think our leverage will stay about 40-ish. So we hope to be able to bring it down, which is key for us. And we still want to be able to focus -- we do focus on reconstitutions -- when there's opportunity for development, redevelopment, we will push there's interest for divestment, especially in this market as in Singapore and overseas. Europe and Singapore continue to see capital flow, which we hope to be able to capture some of this capital with some divestment. As you have seen in our Kim Chuan's, we can actually divest in a very good premium, which is good for trust.

We move on to [indiscernible]

A couple of questions from me, maybe I can take it one by one. Firstly, in terms of U.S. Summer Logistics, I mean, this was a speculative on your end. How is the demand like when can we see this building reaching occupancy for it? My second question is in terms of your earlier fundraising, I recall you mentioned two acquisitions. I think one you have done is the logistics asset, if I remember correctly. Is there one more acquisition [ pinting ] or is it not is it not going on at this point of time? My third question is, if I notice on your financial statements, the credit loss for this year has gone up from [ $1 million ] to [ $3 million ], not a big number, but are you seeing some increased tenant defaults or payments? And if so, which market and what reasons?

So essentially, I think typically, when we stabilize the asset, we look at 9 to 12 months. So given that the asset has been completed in April, so phasing is underway. And market demand is strong. We have seen -- so [indiscernible] has announced that they have done -- they have announced a U.S. manufacturing plant. And then also setting up the plant, which will additional supply demand. So we are hopeful that in the coming quarters, we can announce something.

I mean 100% occupancy at the single tenant...

[indiscernible] Because the market demand currently the market is probably in the units. So we probably have to subdivide the [indiscernible]

So Charleston is it's not a big market. We went in with the idea that it is actually -- there are manufacturing industrial activities. And you have heard us mention when we or even with time, typical leasing up is very short. It was very bullish logistics market. But having said that, we have actually put in -- we have actually expected that because it's a smaller market, we will need time after completion to be able to fill the space. It's 0.5 million square feet, 0.5 million in the market. It's not huge, but each of the tenant that comes in could be 10,000, 2,000. So it's a multi it's likely to be a multi-tenant facility, not a single tenant. But the key for us is that as we look at logistics, especially U.S. and even in Europe, you heard me mention that we want to be able to build modern warehouses. As we acquire new modern warehouses, we also want to be able to develop modern new houses. So for this is speculative, but we have picked a location or rather city that is well connected both by the shipping route as well as. So we are hopeful to be able to be. On your second question, yes, we did say that during our IFRS 2 new acquisitions. We have announced one, which is the Tuas Logistics, which is the bigger one. The other one, actually in our use of proceeds that we have actually reallocated, we are not proceeding that. Primary reason is because during due diligence, we are not comfortable. So we have decided to drop that -- so the bigger million is we're hoping to complete this one.

I'll take the question on the provision. Generally, for provision, we look at arrears and we also look at our security deposits that we hold. And we only provide on a quarter basis and we are very prudent and we only provide if arrears is more than above security deposit. So this number is a combination of two countries, mainly in the U.K. and Europe area it's just a provision, but the team will still continuously engage tenant. And if we need to restructure some of the payment schedules. Otherwise, it will still be in control.

Give some of which sector tenant sector kind of thing?

Yes, mainly in the logistic.

[indiscernible], having said that there is no clear indication in terms of whether rental default or bars. Our cash collection is still very healthy. But as typical in such a big number of leases that we have. We obviously have leases that may have late payment. So as a process-wise, once the late payment, that demand [indiscernible] is quite common, right? So nothing that has backed up in relations to whether -- if you're asking towards which sector or which industry is facing a stress, I don't think there's clear indication for us that any of the tenants are in any way difficult in terms of that business. Maybe just to add on to that, [indiscernible], as we hear about the new tariff being reintroduced, we did our rounds, I don't think there's anything of key concern to any industry. As we mentioned previously, majority of tenants here in Singapore for example, our lease renewal to the rest of second half of the year is less than 10% in 10% is 500 leases. The main one, I think I mentioned to you, [ Shopee ] is one key one. The rest, I think we will be able to see the leases being renewed. But payment-wise, I don't think there's any key concerns.

And we'll have the next question from [ Rachel ].

Maybe just housekeeping questions on the remaining properties like 5, could you give us some update? '27 IBP, you said $5. Is it above your underwriting? Where is income coming through and those? And then my second question is on interest cost guidance. Are you changing your interest cost guidance? And the remaining -- I think you have done some refinancing, right? So the remaining at what current CRB.

Okay. Thanks, Rachel, for up occupancy question. So I think it's good for us. So you heard that it's another project that we are past the $1 rental. This has gone up to above $2. So we are hopeful to be able to close, I think, by the end of the year towards full occupancy. [indiscernible] occupancy, I think be -- so yes, I think we are on track. We are happy with our investment in 521. Similarly towards [indiscernible] hub that we have taken on new construction. Interest is there. So we are talking to some interested prospects. We are hopeful that -- if all turn out well, we will get some pre-commitment. But again, if you know ourself, we're not going to commit to any occupancy. So even if statistics that you see you will until you get TOP. So I think for logistics, it's quite clear. While we think that it has stabilized here in Singapore, it's no longer that bullish. But good assets, I think we can command the kind of rental that we want, especially being in [indiscernible] [ 37 ] IPP, we believe income will start to come in towards perhaps towards second half. Just a JINRO [ year ], we believe that slowly as country starts to move in, we start to see rental perhaps 6 to 12 months down the road. Underwriting I think it's above our underwriting. Frankly speaking, even when we did our redevelopment, I don't think we would expect that we take $5. I mean, similarly to JINRO, asking me, is it $5 even JINRO last time they asked me is $5 or $6. Again, I mentioned that it has crossed beyond that $5, $6 even for JINRO. So it's above our underwriting. Interest cost guidance...

That cost will still be expected the 3.5. As for the refi for this year is...