CapitaLand Investment Limited (9CI.SI) Earnings Call Transcript & Summary

Good morning, everyone. I'm Grace Chen, Head of Investor Relations. It's good to see all of you here. I know we're well into February, but every year, during this event, it always feels like the real start to the year. I hope 2025 has been great for all of you. It certainly has been for us, and we will share more later. And to our viewers online, thank you for tuning in. We will be discussing our CLI's 2024 financial results. Many of you joined our Investor Day last November, we talked about our growth strategy. Now today, it's all about numbers. As always, we will have our Group Cs, Chee Koon, Andrew and Paul to take us through where we are today and what we expect for the year ahead. And without further ado, let's dive in. Andrew -- let me invite Andrew to the stage. Andrew, please.

Thanks. Thanks, Grace. Good morning, everyone. Thank you again, Lovely to see everybody. I will take about 10, 15 minutes to walk you through just a high-level sense from the senior management team about our performance last year. I do really want to focus about our commitment to grow the business before I pass it to Paul to take you through the actual numbers. Let's see where we are. Okay. So for 2024, I think we produced a pretty decent set of numbers. You probably have seen most of them by now. I hope you agree. Overall, PATMI was up. We delivered a good set of profit. I'm pretty proud of the way we were able to grow all 4 of our primary fee income-earning businesses. They are all up. And on balance, we're up about high single digits, which is what we said we were going to do, and we were able to deliver that in a challenging year. We said last year, we were going to focus on recycling perhaps at the expense of portfolio gains. So not committing to selling at the highest possible price, but to commit to bring capital down and redeploy that capital and build up dry powder for what we think is coming and the ability to redeploy that capital. And I think we delivered on that. We divested in excess of $5 billion and delivered a decent portfolio gain. Not maximum portfolio gain, decent portfolio gain, prioritizing capital recycling over profit, okay, for the strategic reasons that I hope you understand and will agree with us were important to do. We looked after shareholders with dividends and share buybacks, supporting the stock when we felt it was undervalued and with excess capital. So all of these 3 things, I think are testimony to listening to our investors, listening to stakeholders and making sure we execute and delivering on what we said we're going to do. As a result, the business, today, I think, is in good shape. Operating cash flow in excess of $1 billion. That's, again, recurring income that will see us through undoubted uncertainty that is coming, right? We -- every day, every week, there's a surprise, existential in nature. So we have to keep being ready to pivot, being agile, taking nothing for granted, and having reoccurring operating cash flow allows you to do that. Balance sheet is much better shape than it was a year ago. Gearing is down. And as you'll see later with Paul, dry powder is up importantly because this is, to our mind, a strategic advantage for us in what lies ahead and the ability to deploy capital to take advantage of interesting opportunities. So that's where we are coming out of 2024. I hope you agree with us. Please ask questions later on. You all know about the $200 billion target. I think we made decent progress both organically and inorganically. Organically, we grew FUM by $5 billion, both through our listed funds as well as unlisted product. And then equally, it's significant last year, something that many of you have been waiting a long time for, we've been able to deliver 2 strategic acquisitions, 1 in Australia and 1 in Japan, growing M&A -- sorry, growing FUM by a 100% basis of $13 billion, taking us to $117 billion, closer substantially to our $200 billion target by 2028. Another commitment that we made to you. Okay. Let's talk about organic growth. Last year, we raised $3.3 billion, both on the listed and private side. On the private side, we brought into the CLI fold 19 new capital LPs, which, to us, again, represents a significant step forward in growing our private equity franchise. So these are new investors who have taken a leap of faith with CLI in the early days of our journey and are agreeing with us in terms of the investment strategies that we are putting out, and the products that we are manufacturing. We were able to deploy $5.2 billion in gross value, both again listed and private. And these were principally along the 3 themes that hopefully you, by now, are familiar with what we want to pursue, disruption, demographics and digitalization. And here, you see a list of the products, both the public and the private side, that we are putting to work in supporting these long-run secular investment themes in Asia, principally, that we believe will survive and persist through whatever uncertainty the next 4 to 5 years will bring to us. And that's incredibly important to be able to stand with confidence in front of your LPs and tell them, doesn't matter what happens in the next 2 to 3 years, invest in the long term because we have the thought leadership and the execution capability and the teams on the ground to deliver target returns, whether it's core, whether it's REITs, whether it's value add, whether it's thematic, whether it's special sits, whether it's credit. Okay. I want to talk a little bit about -- that was the organic side, right? This is the inorganic side. And let's spend a minute on M&A. Now something we hear quite often is why are you guys taking so long? Why are you guys taking so long? So I want to give you a, hopefully, an analogy that will resonate. When those of us who know people who are getting married, marrying ourselves or have children who want to get married, when they come to you and they say, "Oh, I've met someone and I want to get married." What's the first question you ask them? Okay. How much money is maybe the first question. Second question is how well do you know the person? Because this thing usually is forever. Now you can spend a lot of speed and expedite and execute the heck out of it. But at the end of the day, when you are getting married, like an M&A too, you've got to spend time to get to know the person you're going to get into partnership with. Otherwise, all of the effort, all of the capital you deploy is why it's not going to add up too much. In fact, you will destroy value. We all know that most M&A doesn't work out. So both SC and Wingate were products of a very long journey that lasted more than a year. I've lost count a number of times Chee Koon flew to Australia to meet with Farrell and wherever Suchad was, we made efforts to go and see him. Janine and Paul are basically Australian citizens now because they spent a better part of last year in Melbourne, making sure that we could work with our new partners. And while it takes time, I think that is absolutely fundamental because if this thing doesn't work out, we owe this to our shareholders and our stakeholders and you guys. So I speak on behalf of the team when I say we will rather take longer and make sure we get it right rather than rush into the M&A for the sake of a headline because we said we're going to buy some stuff. So this is both a product of all the 1 year's work, and we are fully confident we're going to make this thing work because we spent the time getting to know our partners. We also -- I would like to think our strategic and our choice of partners, Japan up, $8 billion; Australia, up $2 billion. And this is bite-size with a trajectory to grow. Lodging in Japan, particularly and, of course, credit in Australia, which we see are big growth markets, again, aligned to our thematics: disruption, demographics. So I hope you can see there's a method to what we are doing in M&A. There's more to come. Janine has thrown her Australian passport away for now. She's now got other passports. She's not going to tell you where. But trust me when I tell you, she is turning over stones in lots and lots of different places. We are doing the same thing that we did with Wingate and SC. We're being very careful, very considerate in making sure we partner with the right guys. There is no shortage of candidates. And again, it goes back to the point I was making about having dry powder and having the balance sheet as a strategic asset. Now is the time. Okay. Growth with balance and focus, again, method to what we are doing. We talked about, 2 years now, we need to -- we acknowledge we are heavy, we are heavy in China, principally. So here you see on the left, where we were in '23, where we were last year, and where we've said we want to get to, right? So what's good? What's good is China's come down 31%, 26% in 1 year as a share of FUM, and we want to get that down to 15% to 20%. I will concede that this movement is a result of growth in other markets as much as it is in a conscious decision to reduce China. We also say that China is not easy to bring down. It's not a fire sale. We have good assets, and we will reduce capital employed when it makes sense to do so and when we can convert that capital employed into FUM and FRE in our China-for-China strategy. So Tze Shyang, again, has an incredibly challenging task and one that he is embracing every day to find the right partners in China to convert dollar to RMB, and we can tell you we may have sold and we sold at market, but we converted them to FUM and that's fee income for us because that's the strategy. We hope you understand. This year, we should see some concrete evidence of that. The other big one for us is India. Now India, 7% to 7%, not where we want it to be. So this year, expect us to execute on India. And I don't mean to put -- actually, I do mean to put pressure on Sanjeev. He knows he doesn't need more pressure. He knows this is a big year. We celebrated 30 years in India last year. All eyes on India. The time for India growth is now. And we have every reason to be successful in India. We've got the right team. We've got the legacy. We've got the track record. We are in the right sectors. So I'm very confident in India, and we will execute this year. And then you see that growth in core -- growth in Asia, right, from 11% to 20% in Australia, Japan and Korea. So the other markets where we were previously punching underweight, we are now getting to that point alongside SC, with Wingate that we can now say to us confidently that we've got a bona fide AP presence that allows us to grow products across the region. Okay. The other markets we can leave to questions. Now right-hand side, this is sectors, thematics focusing along the 3 Ds that we talked about. We've decided to show you what we are focusing on in 2025. This is private equity product that we -- is on the launch, is on the shelf, ready to go. APAC/India DC, APAC Credit, APAC Self-Storage, APAC Lodging, India Logs, Southeast Asia Wellness and China RMB, okay? None of these are surprise to anybody. They are consistent with the thematics we are setting out. They are consistent with the strategy. They're consistent with what we see as a house as long-term secular investable trends. So look for this product, and this is what we need to execute around in 2025. Capital raising target, deployment target, you will ask. I cannot give you the in-house number other than that is aspirational, but you should look to see us do the same as last year or better because that's what growth is. If we don't do that, then we didn't grow. Lodging management, very strong pipeline and strategy set up by Kevin and his team. We are on the way to $500 million in revenue. EBITDA margins will grow with scale and with execution. So expect profitability and EBITDA to stay on course or not improve as the business scales up. Openings pipeline on track. Commercial management. Focusing on third-party contracts. You can see the growth in our ability to sign very asset-light third-party contracts, again, a testament to our track record, our execution, our ability to drive scale, our ability to include people in CapitaStar, et cetera, et cetera. So the 4 pillars: Funds, REITs, LM and CM, generating single-digit growth organically, high single-digit growth organically, expect to see the same from us, right? That's our track record. That's our run rate that we want to continue to achieve. I'll end on this one, which is, to me, incredibly important and I think, separates CLI from many of our peers today. Balance sheet is a strategic asset, no question about it. Because we've been diligent in getting gearing down, gearing -- Paul will share that with you later, lower gearing takes the sting out of high interest rates. So we've got a benefit there already from our peers. Now what does it also do? It gives us dry powder. So if you look at the gearing headroom, we've got roughly $4 billion to $7 billion in dry powder, just on gearing alone. We've set aside about $1.2 billion as strategic capital for our new partners as a commitment to them to grow their businesses because we believe in it. We've set aside $500 million to develop our credit business by warehousing good products that will roll into Asia credit, Australia credit and credit in other markets, Korea. We've already spent $0.5 billion in the M&A of both Wingate and SCCP, expected to complete very shortly. We've also been seeding assets. We have seeded a piece of DC land in Japan that is now the seed asset for our Asia DC fund. We've seeded a hotel in Tokyo, Shinjuku area, which will be -- which is a seed asset for CLARA II. And again, the ability to seed using balance sheet is something very few GPs can do today. There's just no balance sheet. So if we find something that's interesting, and we want to use that to seed our funds, that's a distinct advantage for CLI, where others have to go and look for the capital outside. We don't need to. We can deploy first with the conviction that capital will come. Obviously, if capital doesn't come, we fail. That's a different issue. But the ability to get the asset incubate and then use that to roll out product gives us a distinct advantage in this market. So if you see what we've committed already from the headroom, the dry powder is $2 billion to $5 billion, which is not insignificant. It's something that is a strategic asset. I say again, and Chee Koon has made it very clear, the Board has made it very clear to us, let's use this strategic asset today. So I hope that sets the stage for what should be an eventful 2025. It is investing for growth. We are not investing defensively. We are not taking steps to protect ourselves, et cetera, et cetera. We see this as an opportunity for CLI to separate from the pack. Okay. Why don't I stop then hand it over to Paul to take you through some numbers. Thank you.

Thanks, Andrew. Good morning, everyone. So I will actually be pretty fast. What Andrew hasn't realized is I've done this financial presentation for 3 years now. And I've actually somehow managed to put all of the slides into Andrew's section, and his section is now longer than mine. Works very well for me. Okay. Financial performance for last year. So last year, total profits for us were up 165%. This is the numbers all the way on the right side to $479 million. The drivers for that, starting on the left, is the shift in our operating profit numbers. So overall operating profit numbers came down 10%. And as you can see where the makeup of that was, it came down because our real estate investment business, which is our ownership in properties and REITs and in funds, that portion came down. That was largely driven by the divestment of a number of assets, namely ION, U.S. multifamily, 3 hotels, which we sold to Ascott Trust the year before. This is generally how we see the trend going. I mean this component will become less important for us. It may not have as much movement. I mean part of the movement this year was also because of interest costs. The last 2 years, interest cost has been higher. So if interest costs turn this year, that number may not slide as much with the divestments. But the operating or the fee business operating profit went up 10%. So it was good growth for us. Are we satisfied at 10%? No. Ideally, this is 15%, 20% type growth, which is what we would like. But the idea is the proportions are shifting correctly. And we -- during Investor Day, we also talked about this, getting this operating profit up to $1 billion. That's still the goal. So while the proportions are shifting, the most important for us is absolute growth in that number. The middle bar, the portfolio gains, portfolio gains up slightly. The reason it's up slightly is even though we divested a lot more last year, last year gross divestments $5.5 billion, the average divestment premium was about 5%. The year before, we divested a lot less, but we had a much higher divestment premium of about 16%. This, for us, was part of the shift, right? We are actively recycling because we see that there are going to be opportunities for us to invest. So we want to be more disciplined on making sure that we recycle what was on the sheet. That's why it's only up slightly despite the bigger divestment number. And then on the right-hand side or the third bar, you can see our revaluation, and I'll spend a little bit of time going through the revaluation by country. But obviously, the revaluation drop-off was much lower than the year before. We did still have some weakness in some markets. India and Singapore made up a lot of that, still weakness in Europe, U.S. and China. But what you'll see here, which you won't see on the country split is this also include a deconsolidation of CapitaLand Ascott Trust. So we did make an announcement in December on this. But in this particular bar, the impact of that is about $82 million, really just a flushing out of FCTR for us. So it's a noncash issue, but it does impact our portfolio numbers here. So you put that all together, I would say our operating numbers are still strong from a fee business and relatively healthy. And then obviously, with the lower revaluation loss, our overall number is up quite healthily. So on the most important part, which is really our 4 fee verticals, which Andrew was sharing a little bit about what is going on, you can see where the growth came across the 4 segments. So if you look at us over the last 3 years, this was a relatively good year, right? We had growth across all 4 verticals. If you look at us over the last couple of years, we've always had a little bit of up and downs. As mentioned, we would like the growth to be stronger, but we did see, on the listed side, particularly with some of the REITs making bigger acquisitions, we saw some improvement there. Our hope is that with interest rates hopefully past peak and coming down that we'll see a little bit more activity here and this will grow as well, together with ideally new listings or contributions from some of the M&A. On the private funds, still a small contribution, though it did improve nicely. This part, in particular, the M&A will help. And we should see a little bit more growth in the fee numbers, particularly on the revenue side with those acquisitions, assuming they're complete in the first half, we will see that contribution really in the second half. Lodging management this year compared to previous years, looks a little bit lower. That's partly because we had a handful of one-offs. We had a little bit of write-backs. We had some termination fees and we had [indiscernible] previous year. So it skews the numbers a little bit. So we've tried to split that out a bit so that you can see what was run rate versus what was one-offs. On a growth basis, it grew about 12%, excluding the one-offs. We think a double-digit growth rate is about right for lodging. I think the team did a good job last year. Despite the drop-offs, we did still see an increase, and we expect it will continue to grow at a double-digit run rate. And it doesn't necessarily come from revenue from a per available room rate or occupancy for us. Really the growth for us is from signing more management contracts. And as Andrew had on his slide, as long as we are signing 10,000, 12,000, 13,000, 14,000 new units and opening new units, you'll see that growth rate for lodging continue. And then commercial management had a big jump. To be fair, the jump is partly due to a restructuring of fees that we had. Those of you who are invested in CICT know it was just a technical change in how the fees were. So it's not so much of a profit impact, but it had a growth rate. Excluding that, it is still a good single-digit -- mid- to high single-digit growth rate, which is what we like from commercial management. It's not meant to be growing as rapidly as private funds. If we're getting good steady increase, we're actually very happy with that. So overall, 9% growth rate up. Notably, margins are up as well this year. We have the improvement and scale in some of the businesses like lodging with more activities on the private funds and listed funds that improved our margins. So margins at about 50% overall. That is a pretty good ratio for us. I think we will stay in that range, high 40s, 50%, assuming that we continue activities. So that was the fee business. On the real estate investment business. So this is our ownership stakes, as mentioned. This one gets, to be fair, a little bit harder to explain in a sense that we deconsolidated class last year. So next year, I think Suchad and I are going to have a hard time explaining to everybody why our numbers look so different. But that's because when we deconsolidate the impact of class, what you'll see is, well, on a -- and I would say, more from a profit viewpoint, as you have seen, our real estate investment profits largely stable, has come down a little bit due to the divestments. But this includes consolidation of class. And the swing is actually quite substantial on our numbers. On an EBITDA basis, it is an almost $400 million swing. No impact to profits, whether we have class or not. But when you look at this chart next year, I say this in advance because I know all the analysts are going to ask me, it doesn't impact very much. But -- from a profit bottom line viewpoint, but it will impact what we show in these charts. So I just want to highlight on the right-hand side, which is our by-segment real estate investment business. As you can see, the balance sheet component has come down. We think it may come down a little bit more with the divestments. But as Andrew mentioned, this year is really, I would say, for us, the theme is really about investing for growth. And as we invest in warehouse, so for instance, last year, we warehoused our Australia credit program for a while before syndicating it out and raising funds for that. That generated a 10-plus percent return on balance sheet for that investment. So we still expect that the warehousing and some of the efforts we're making on investment will make up some of this balance sheet contribution. So we don't expect that to slide off as much in the coming year. So we're still reinvesting that component. The private funds component will grow just by virtue of the fact that we are investing more behind some of our new funds. So that component will start to creep up over time. We would like it to be a larger number than it is right now. And then the one where you'll see the big shift is the listed funds component. So the list of funds component here is really the Ascott Trust component. So that 4 -- the $723 million, it will drop by about $380 million. So the big drop off next year will really just be from a deconsolidation effect. We'll still have CapitaLand Malaysia Trust consolidated on the balance sheet, but that is not as much of a big swing. Class was actually made quite a fair bit of difference for us. So that proportion will come down. But then what you'll see is a little bit more of an even contribution tied to where we have our capital deployed. Valuation by market. So this year, we saw India do incredibly well, logistics and data centers. This is partly our pass-through through CLINT, partly also what we have on balance sheet or through the funds. Singapore, similarly, those of you I'm sure who follow CICT and Ascendas REIT would have seen that increase, which is the next uptick in these 2 markets. That was obviously offset by the drop in China. So this year, our valuation drop in China of $317 million, this is obviously lower than the year before where we had a $500 million plus drop-off in valuation. So we do think from a valuation viewpoint, this is near bottom for us. Single as certain specific assets may have some shift up or down, but we are not necessarily expecting a lot more losses from there. Obviously, in the market, there have been transactions on some of this where we've seen some up and down depending on the assets. I think similarly for us, certain assets, we are willing to sell below book certain assets, we are expecting to sell above book. So there will be a little bit of trade-off going forward. But obviously, this was the big movement on balance sheet. On a net basis, down $179 million. As I mentioned, the difference between the earlier slide on that was really just the class deconsolidation. On divestments, we've talked about this a fair bit. I think maybe the thing to highlight is we divested $5.5 billion last year, gross asset value of 4.6% effective method more to us in many ways because that's what we can recycle. The focus for us going forward now is we're not stopping on divestments, but divestments are now a lot more -- less critical for us because now we've got a lot of debt headroom, and we've made progress on that front. So the real focus for now is investing, not long-term things to keep a balance sheet, but really investing in platforms through M&A or warehousing, seed assets or portfolios, which will be the intent on the use of capital. So you'll see us, to some degree, deemphasize recycling a little bit more going forward because the real focus for us is for growth. That's not to say we're not focused on recycling. We still have a fair bit of assets on balance sheet. On the top left, you can see our balance sheet exposure. So we've dropped from that $8.6 billion to $4.3 billion. Those of you who know us quite well, quite astutely have pointed out a fair bit of that is still China, about $3.5 billion -- $3 billion to $3.5 billion of that is China. The intent is everything on balance sheet. We are still at least legacy-wise on balance sheet, the intent is still to recycle or divest that over the next 3 years. That's still part of the plan. But this number -- the balance sheet number will go up and down as we warehouse assets. So you may see increases at times, similar to the Japanese data center, which was announced earlier this year. The number was quite a big number, I think, SGD 944 million. Obviously, it is meant to go into a fun way, way earlier than that. So we don't expect that much expenditure. But because of warehousing like this, we will see a creep up in certain cases on the balance sheet number. So this one will move up and down a little bit more. Private funds went up because of some of the new funds launched, we took a little bit of stake. This number potentially will come down as we -- as some of our older funds ramp up, but this number should be fairly stable for a while. The one that may surprise you, obviously, is the listed funds stake went up this year despite the deconsolidation and some of the sale of Ascott Trust units. Similarly, with the DIS or the distribution in species, this will come down. The creep up was really because we wanted to support our REITs. So some of them when they did equity fundraising, they did preferential offerings, we wanted to take our pro rata share. In the longer run, we are expecting that we'll become more efficient here. Our preference, I know the REITs who are here, our preference is that they grow so fast that we don't have to sell or give away any units and our percentage comes down naturally. That would our preference and then we're happy to hold it at this number. But assuming that, that takes time, this number should decrease slightly in the coming years. And then just the last couple of slides. One is on our capital reduction efforts. What has that meant to our balance sheet? So balance sheet is now gearing at 0.39x. This is the lowest it has been in, I'd say, 2 decades potentially. This is, for us, from our viewpoint, very strong. We feel that we have a headroom for 2 things. One is we can afford to do a lot of investments, a lot of growth, which is why at the bottom, when we look at our debt headroom, if we go to 0.7, 0.9, we believe we've got $4 billion to $7 billion of flexibility there, if we're willing to do that. Obviously, these numbers will move up and down as we sell and divest more assets, we'll have also more headroom as we make investments and as we do our distribution, obviously, it will come down. But we wanted to give you an illustration of how we are thinking of our capital and how we can deploy that. Maybe 2 other things just to highlight. One is our operating cash flow continues to be strong, and this is something we're quite comfortable with the shift to being more of a recurring income basis business. The cash flows from the fee business and the cash flows from our very stable REIT investments actually build a very nice anchor for us as we're thinking of longer-term growth. I would say the debt headroom and recycling together with the cash flow is the reason we're comfortable on our dividends. Would we -- certainly, we would like our payout ratio to be lower. We'd like our profits to be higher. But when we look at what we are willing to do, we've maintained our $0.12 cash dividend this year, we are proposing, this has to be approved by shareholders, but we're proposing a $0.12 cash dividend and a $0.06 distribution in species or approximately $0.06 of CICT units. Two reasons. One is we think our cash flows are strong enough to maintain a good dividend for shareholders. That's the cash -- core cash component. And secondly, we are looking to reduce capital. We are still trying to improve our return on equity. We can do that through multiple ways. We can do that through increased dividends, through giving distribution species through share buybacks. The idea is partly to reduce that capital base for us to help improve our return on equity. This is not a large component. I mean, if you look at the distribution in species, it works out to about $300 million. Ideally, we're investing up to $4 billion to $5 billion. So this is a small component, but we do think it's also a way for us to reward shareholders who have been with us for a while. Hopefully, most of you have been with us for a long time, but we also want to keep this as part of a longer-term running dividend policy for us, which is why you'll also see the one other bullet point is that adjustment on our dividend policy from 30% to a 50% minimum. We are above 50% right now. But when we look at ourselves the longer term and we look at our cash flows, we believe that we can maintain our numbers quite comfortably. And we believe that something like the distribution in species is a good way for us to return capital, also helps our REITs improve free float. And we've actually seen -- through previous distributions, we've actually seen an improvement in daily liquidity and turnover for some of our REITs as well. So we're quite positive on doing this a little bit more going forward. And then just -- and this ties to the earlier slide. I think for us, from a financial viewpoint, how we look ourselves, the trend for us is we are -- the pivot for us into being a real asset manager continues. Less and less of our income will come from the real estate investment business, though we -- from an absolute profit-wise, we expect to grow. The important thing for us is really growing the perpetual and the fund fee income because we think from a valuation viewpoint, we are trying to get the market, obviously, to look at us understanding that the model has changed and that we are really a price to earnings or a multiple type business that you will look at for most recurring stocks rather than a legacy price-to-book investment -- property investment company. So that's a change for us, which is ongoing. We're quite pleased with the direction. Now I think the real core for us is to really grow the absolute profits and keep this proportion. So this is just to summarize, I think, last year for us, and we've been through a fair bit of this. I would say the main thing for us is, besides the growth in recurring income, the FUM scaling across the markets, we've been talking about Australia, India, Japan, I would say it's really that top right for us. I think this year, we're really focused on now that we've got a lot of this capital bank, how do we invest that and where are we going to see that growth come from. And on that idea of where that growth is going to come from, I'm going to pass the time over to Chee Koon, who is going to talk about our outlook for this year.

Thanks, Paul. I think Paul and Andrew have given a very clear overview in terms of the business, what we have done. I think it's quite clear what we need to do going forward is just focusing on strategy, execute in terms of the fundraising, looking for good deals. And quite happy to at least say that from the team perspective, a lot of it depends on the team makeup. I think we have set up the teams in place. I think the commercial management team, no problem. The Ascott team is there. Listed funds team, yes, there are some changes in terms of the CEO, but I hope you feel that we continue to make sure that we have a good pipeline of talent to be able to helm the different vehicles that we have built up. And the private funds, I must say that -- I mean, most of you have known that I concurrently also have the role of CEO of the private funds business. I'm spending a lot of time in terms of thinking about product, thinking about and spending time with LPs and quite confident to say that we save more interesting activities and outcomes this year because, I mean, I think in terms of the product, in terms of the way how we look at assets, it becomes interesting. Three key points before we go into Q&A. One is that the real estate industry, I think all of you sit here know that it's been pretty much quite challenging in the last few years, high rates, not just with rates going up, but it went up so fast and stayed there for so long and of course, affected transaction activities. But we are starting to see interesting opportunities coming up. I think because some of the banks and private lenders are losing patience. And that becomes interesting, especially with all the teams that we have built up in the different countries. Seeing opportunities, looking at how we can look at some of these interesting things and convert them into real opportunities. If we like the deal and if the capital -- if we don't have other LPs that's immediately available, we like the returns, we are quite prepared to do it on the balance sheet as a way of proving that we can be sharp investors on our own. And to be honest, actually, if you can find good deals and generally well downside protected, it's not difficult to find LPs to come along with you. So that's point number one. Point number two is we cannot take away from the fact that geopolitics has taken center stage in investments and capital allocation decisions. We have many partners and major MNC tenants, conversations with them. Originally, everybody was thinking about rushing to do the supply chain adjustments. Given what's happening in the news that's coming out from DC on a daily basis, for people who have not made some of these long-term commitments, people are holding back, taking a wait-and-see approach that's real. I mean, I'm sure all of you are hearing different stories about that. So that's why investing on the right teams, investing on the right asset classes becomes very, very critical. We like -- we still like the DC teams. That's something that we will continue to do, focusing more on the cloud data center than the AI-enabled data center because at this point in time, we are still not quite clear what DeepSeek, the entire DeepSeek would mean. But DC as a whole in terms of demand for DC in terms of digitization, digitalization in terms of EV, IoT, the use of data center, use of data, I think that will continue to stay. So data center, there will be demand for it. We just need to make sure that we choose the right asset class in the right countries with the right capabilities. We like self-storage. We like private credit. We like special sits team focusing on higher returns. I mean, looking at interesting things that the team is doing. We like the India story. There's a tremendous pressure on my -- on Sanjeev here in terms of getting things to crank up because I always visited Sanjeev to make sure -- I mean, India is such a big country. We need to deliver much more significant FUM. Otherwise, India will not have -- the India team will not have a place on the discussion table. So there's a bit of pressure on you, Sanjeev. But I think we are quite confident. The last point I want to say is that we fundamentally believe that interest rates will stay higher for longer. We do not believe that the interest rates will go back to what it was. And what it means is higher cost of capital. There will be demand for higher returns. So the distinction between alpha and beta returns becomes all the more critical. So having the right teams on the ground to be able to hunt for off-market deals, mispriced assets, asset below replacement costs, having the operating capabilities to turn the assets around or be prepared to work with operating -- strong operating partners to turn the assets around, find exits becomes extremely critical. And that's what we have been doing. Of course, you can't do everything ourselves. That's why we embarked on strategic acquisitions like Wingate, like SC Capital to bolt-on in -- whether it's in verticals or in markets that we need. And you will see us continuing to do that. Andrew has explained how we look at M&A. I think it's an important part to help us in our growth, but we are not here just to buy AUM for AUM's sake. At the end of the day, we hope to be able to invest in the platform. It doesn't matter whether it is $5 billion, whether it's $20 billion. The key is when you invest in the platform, can you help it to, say, double its growth or triple its growth, then it's meaningful. Because remember, whenever you buy a platform, you are paying X times multiple. Assuming it's 10x multiple, that means you're paying the earnings 10 years in advance. And we -- unless you're able to drive the AUM growth through working with the team through helping them to drive additional fundraising, I mean you're just paying for a platform that is not accretive to the platform and to their shareholders. So I just want to leave these 3 points with you, then we can have more interactions over the Q&A. Thank you.

Thank you, Chee Koon. Please, Andrew and Paul, please join Chee Koon. Okay. Before we take the first question, I just wanted to let viewers online know that you can also send in your questions via the Zoom platform. So please do so if you have questions. And with that, we're happy to take the first question. You've got Mervin, always the fastest. Mervin, please have a mic to Mervin in the middle.

Mervin from JPMorgan. Yes. Congrats to Chee Koon and team. I think operating stats are pointing up, FUM growth, fee income, balance sheet, gearing down. I've got a few capital management questions. I had some questions from investors this morning. Just in terms of the $0.12 DPS based on second half EPS, it looks like the payout ratio is more than 100%. I appreciate it's not full cash. How should we be thinking about that $0.12 this coming year, given that you're losing some cash flows from ION over the next 12 months? Second question in terms of buybacks, how you're thinking about that in relation to ROE and ROE or how you think it would be mid-single digits, or do you think you can drive it further from here? I'll stop here.

Thanks, Mervin. So I think on the dividend payout, obviously, we've looked ourselves largely historically, we've always looked ourselves as cash PATMI. On a cash PATMI ratio, it's about 81%. That is, to be fair, a little bit higher than we would like it to be as well. But when we look at our projections going forward, we look at operating cash flow of over $1 billion, given the investment, the income from the REITs and associates and joint ventures together with our operating income from the fee business, I think we're quite comfortable. So we look at that as a sustainable cash flow for a number, the $0.12. I think, obviously, we can't give confirmation on dividends going forward because it's all subject to market conditions. But I think from a projection viewpoint, we look quite comfortable with our cash flow. On the second question on capital management, on ROE and share buybacks. So share buybacks are still certainly one of the tools in the arsenal that we look at together with dividends or dividend in species as well. But I would say this year for us, in particular, what we are focused on is looking for -- and we have been doing this for some time. But so this year, we're being executing looking for investments for growth. So if we are investing for growth, if we can find good opportunities that can generate double-digit ROE return for us, both from the fee income business or even from holding on balance sheet, I would say that is the main focus. So will we still continue to be active in terms of other aspects of capital management, dividends, buybacks? Yes. But the main focus for us and main use of capital this year is really going to be on investing for growth. Longer term, we're still targeting for a double-digit ROE. It may just take us a little while to get there, partly dependent on how fast we're able to deploy effectively.

Just to add on to Paul's point. A lot of it depends also on our fundraising ability. I think that the machine has been set up. We should see a lot more interesting things happening. And to be honest, once the machine starts, you'll find that you are using -- raising a lot more third-party capital, use a lot more -- a lot less of your own money, you have a lot more flexibility to do things. And that's what we want to be able to do that. But in the meantime, keep the flexibility to build the capabilities. I mean, I'm not sure -- I mean, I spend a lot of time talking to different asset managers around the world. Today, many of the asset managers without balance sheet are actually facing pretty serious challenges. And having this strategic capital, of course, we need to make sure that we properly account on how we use the balance sheet, proper capital management and make sure that when we deploy, we can deploy at a rate that's higher than our cost of capital. I mean that's the discipline that we have. And we can use it. It can actually help to make the difference in the market that many managers are feeling the stress at this point in time. Take the advantage to really build the capabilities. And as the market continues to improve and the fundraising capabilities continues to come to unlock, you will find that you will be in a very, very good position. So that's how we are looking at the market at this point in time.

Okay. Tan Xuan.

Xuan here from Goldman. First question is on the on-balance sheet assets in China. What's the average LTV? And I'm asking because I've seen some international players actually hand assets back to the bank. So under what scenario will CapitaLand consider that as an option? Second question is on cost rationalization.

We have a lot banker friends here.

Yes. So how much of the cost rationalization has been done? Is it in the 50% EBITDA margin? And why is the guidance to be flat despite ongoing efforts?

Okay. I guess this one is me again. So on the China assets, I would say, on average, where typically most of our China assets are between 40% to 60% LTV. It's a mixture of onshore, in certain cases, onshore, offshore. Given where valuations are, we are certainly not expecting to hand back keys on any of our assets. Certainly, I think if you look at historically for CapitaLand, that's not something that we generally do. I think that's very much more of a Western asset manager profile that it's a little bit more -- and you'd see that a little bit more in those markets. It's a much less common in Asia, particularly, I would say, for a player like us, and maybe this is also to reassure the bankers who are here, that is not something we wouldn't really consider. On the part of the margins. So the cost rationalization or cost optimization efforts have started. So I think like management don't know, but a lot of them will lose some of their free subscriptions to newspapers. We are making some efforts on that. Most of that effort only kicked off late last year or a bigger push of it started second half of last year. So we won't expect most of those savings flow through, actually, probably on a run rate basis, not until next year. This year, we'll see some of that savings. I think during Investor Day, we had talked about a $50 million to $75 million target savings. We would only expect to see a portion of that come in this year. And then we are hopeful that in -- by the end of second half of '26, we start seeing the full flow-through of that. So that's still work in progress. So because of that, you won't see as much of a margin adjustment this year. Partly also the uplift in margins for us was due to a good deal of investment activity from the REITs and some performance fees from the private funds. Depending on whether we see that component that will help boost margins, but we don't necessarily always count on that in our budgeting.

So this is an important exercise. I mean we aspire to grow to $200 billion. At least that's an aspirational target. I mean again, it's aspirational target. We want to make suer that we do it, it's because we invest well and we can raise a lot of money. But when we do that, we want to make sure that we keep our cost as manageable as possible so that as you grow more fee income, you have more flow-through. At this point in time, I mean, just to give you a sense, we do have shared services and bits and pieces, some in -- a bit in India, a bit in Vietnam, a bit in China. So there are ways to look at some of those things that we can do together to enhance the synergy. And as we continue to look at platforms, especially in some of the capabilities in the developed markets, there are ways where we can bring together the back end and the middle offices of some of this institution. I mean, they can continue to be entrepreneurial and run their business, but areas that we can find cost synergies, that, I believe, is a good way to drive EBITDA flow-through as we look at some of these acquisitions. But we need to make sure, at the whole -- at the center itself, we have to be strong in terms of our tech infrastructure, our financial systems. Our work processes has to be seamless. So as you do more bolt-on type of deals, there is better flow-through at the margins. Yes.

Brandon? And then we go to Don after Brandon.

Brandon from Citi. Just on the warehousing of assets. Is this going to be pretty much recurring thematic that you are doing? And how do you see that impacting your ROE? And will you start becoming more like the old CapitaLand Limited or even your CapitaLand development? So that's my first question. The second question would be on the [ payout ] in your listed REITs, how should we look at your avenue in doing this because we've seen you divesting some REITs in open market, some year, giving our DIS, and obviously, that impacts our ROE. So how should we look at that going forward? Yes.

I'll take the first, and then maybe I'll pass it to Paul for stakes. No, the short answer is thank you for setting me up so I can walk through. It's not going to be CLD, and it's not going to be old CL 2.0. The difference is the means to an end is different. In the old days, we buy, we hold forever balance sheet, right? The difference today, which is fundamental, is the means to an end is because ultimately, this gets turned into FUM and FRE. So if I've got 100% capital out, in order for us to agree to do that, we have a product partner, one of our fund managers, one of our REITs. We have a country that says this is the right investment at the right time, and we all sign up to this. And within the next X months, it's got to come off. Otherwise, people are held accountable. That's the subtle but fundamental difference from 2.0 to 3.0. Does that make sense?

[indiscernible] at most 12 months.

Yes, ideally, ideally. Because you don't want it to turn into IT on balance sheet, then it starts to show up here, and it doesn't look right. You want it to be a strategic move where you are spending that dry powder, but within a period of time, the dry powder is used to convert it into what we all want, FUM and FRE, the capital comes back down from 100 to 10. And we take that 90% that we get back, and we send it out again, right? That's the name of the game today. So before, your 100 buys 1 asset. Now my 100, I can buy 10 assets, if I do that right, and it's all scale. And if we do our cost properly, that scale does not come at the expense of a tenfold increase in cost. It comes perhaps at maybe two, threefold increase in costs or even less. Then you really talk margin expansion and then you really talk big boiling where the best-in-class guys are running in. Makes sense?

Yes. Maybe just add to that. So it is 6 to 12 months? Just in case the fund managers here think we have 12 months, 6 to 12 months. But it's something that we've done before. We -- obviously, life [indiscernible] was on balance sheet for a short while. It's gone into our lodging fund. We had Capital Square Beijing going to a renminbi fund after being on balance sheet for a short while. Australia credit fund or the credit program on balance sheet for a while flipped into a fund. So I think for us, this will be an active component, and it's part of what we think having the strategic balance sheet is full. On the listed REIT side, so the numbers now, we are actually pretty comfortable in many ways. Now we have a class at 24%, Ascendas REIT at about 18%. Actually, most of our REITs are now in that range of 18% to 24%. So actually, if truth be told is we're fairly comfortable with our holding level and the contribution that they have to the P&L. We do want to become more efficient. That's why you've seen a little bit of movement here and there. So for instance, the distribution in species, how we consider it, we're not -- it's not something that we are planning to do to CICT 3 years in a row, that sort of thing. I think we are being very selective and targeted depending on each REIT. So as some of the REITs grow, we would not expect necessarily to need to sell or DIS any of their units because over time, as they grow, our stakes will naturally come down even further. Some of the considerations we have is, for instance, for example, for this DIS, one of the reasons we are comfortable doing CICT was because we've tracked historically how they've done every time we've done this, right? We've done this with CICT before. And we've seen that their recovery time because the free float of the stock is more than $10 billion. Actually, on a daily trade, it recovers very quickly. So because of that, we were comfortable, I think, in this instance, doing that. So I would say we are open to multiple tracks, whether it is, we can find a strategic investor as in the case of CapitaLand Ascott Trust, somebody willing to take a larger stake. That is our preferred mode. We are also open to direct sales on market or the DIS. So I don't think we're locked in. I would say the fundamental driver for us is when we look at each of our stocks, we want the share price to do well. And you can imagine the REIT CEOs tell us also multiple times they want the share price to do well. So we're very conscious of that. So I think going forward, you will see these stakes come down. You will potentially see more distribution in species, but I think we will be very measured on how we do.

Paul, maybe just in relation to the DIS, we have a question from an online viewer, David, too. The question is, would management consider a dividend policy that includes an interim dividend payout?

It is something that we have considered in the past and have discussed. I think it is certainly a consideration. At this current point, as the business is still transforming and we are stabilizing, our preference right now is to keep it to a single dividend during the year. But I would say in future years, certainly, that's something we may consider changing.

Okay. We will jump to Donald?

Donald from Bank of America. I have 3 questions. Please don't mind me. I have one for each of you. Andrew, earlier, you called out China and how we might see more evidence of recycling divestments this year. We've heard this before last year. It was the same narrative. So my question to you is what has changed for you to be a bit more optimistic this year on a year-on-year basis?

I'm looking at Tze Shyang. Can someone get Tze Shyang a mic? I'll make a high-level comment, but the expert is sitting in the room. So I'd like Tze Shyang to just give you a flavor of the change in the complexion in the China landscape. Last year, we tried. It wasn't for lack of trying. But the reality was every time we looked at divestment or reduction, it just did not -- we didn't feel comfortable that the conditions were there. It was too unstable. We didn't have enough visibility. What we sense is happening now, based on recent events is the party, the government is turning its attention to the business sector, which is something we've been waiting patiently for, for a long time. And we wanted to be able to call a floor and have confidence that the worst is behind us. And so when it comes to talking about buyers and sellers, if we can all agree that the conditions are at least stable enough to come to a sensible willing buyer, willing seller basis, that gives us an environment and a marketplace to transact fairly. And I don't want to jinx it, but I think we have those conditions coming into focus this year. It was much murkier last year. So even on monetary policy, in terms of fiscal policy, the government seems to be taking steps to stabilize the economy, and that trickles down to real estate. So the marketplace is taking shape, and then we have to then decide, on an asset level basis, which assets are right for us to do so. We have a list. We have a list of partners. In some cases, we've told our partners, why don't we come back next year and talk again. So I'm -- we are cautiously optimistic that we won't have to come back to you next year and say, sorry, conditions weren't right. We know we said what we needed to do, et cetera, et cetera. Let me stop that. Maybe Tze Shyang can give you much better color on where we see the complexion in China today.

Thanks for the question. I think Andrew is right. The key thing is we want to recycle, but we want to recycle right. We want to do things right by our investors, right? Last year, we saw a lot of conditions. It was all very fluid. The key thing is there's a lack of buyers. So when it's a buyers market and you are rushing into recycling, then you may not get the best terms. We are not distressed. You can see from our balance sheet, our operating numbers, we are very steady. So we were looking at doing the right things. Last year, we did recycle, too. We completed a deal in January of a Beijing office asset to SME with an insurance player. At the end of 3 quarter -- 3Q, we also recycled an on-balance sheet business part in Suzhou into another insurance platform -- sorry, a platform with an insurance player, all at a positive portfolio gain. I think it's credit, it's credit to us to be able to be in a position to do the right things. Are we not committed to recycling? No. Chee Koon gets on the call every 2 days and it's all about recycling because we have a plan in place and we want to execute, but we are going to do things right. Now the second part of what Andrew said is true. If everyone is following China, there seems to be some green shoots, right? The Beijing meeting with all the private entrepreneurs last October, that rash of monetary policies, and the hope is that come to NPC in a couple of weeks' time, there could be greater confidence in fiscal stimuli coming through. All of this does make a few a little bit more hopeful. And in China right now, we are in that global DeepSeek moment, right? Anyone who's invested in Hang Seng or in the China Stock Exchange will be feeling better right now. At the end of the day, we want to know that we have an even, very balanced negotiation with our sellers when we want to do any recycling because we want to do right by our investors.

Very sharp question. I want to say, we work very hard to want to make sure that -- I think we've communicated to the Street we wanted to do $1 billion. We didn't get there. It's not because we didn't try. We wanted to make sure that we could achieve that. We worked very hard. There are various reasons. Some is market conditions, some is just approval processes. At this point in time, even from the buying entity, just takes -- the timing is just so long that you sometimes have no control. Not trying to find excuses. I mean it is what it is. We did communicate that, that was the target. We didn't achieve that. It seems like based on the progress that we're discussing this year, things should be much better going forward. So that's what I want to tell you. I answer your questions squarely.

Very quickly, then maybe Chee Koon since you're on the mic. You also mentioned last year during the Investor Day, you called out U.S. as a possible destination for investment. When we look at the slides today, the focus is largely in APAC. So is the U.S. thing out of the window already? Or are we still looking to the U.S.?

No, no, no. U.S. is -- they're almost every month. Yes. Janine is almost camping there. But I just want to call out, I mean, the U.S. market is big. It is deep, it's complex. The asset management products are a lot more sophisticated than what we see in Asia than we -- what we have in Asia. So when we look at platforms, we want to be sure, again, what strategic capabilities are we going to have? Are we going to pay a fair price? And based on the products that they have, are we able to help to distribute because we want to be able to make sure that we are additive and we can help the platform to grow. So that's how we look at the lens. The market is big, it's deep, and we just do not want to rush. And as also mentioned earlier, there are managers that are facing difficulties. So we want to make sure that you invest in the right team that can help us to drive the growth, both for the platform and also for the group as a whole.

And maybe a very quick one, the perfect segue to Paul. You mentioned a cost-out program that you're looking to execute? Is there a number that we can lean on. Given that there's a lot of investments and expansions within APAC, U.S., it's hard to see how cost is going to come down.

Yes. So it's a little bit hard to read it through our operating numbers precisely. I would say, obviously, as I mentioned, the longer run rate target is about $50 million to $75 million. I think if we're able to see sort of $20 million, $30 million in savings this year, that would be great. You may not see it in the line items because some of the savings will come out of corporate activities. So the corporate line item will drop. I mean one of the things you'll see in our financial numbers -- is corporate balloon. The cost for corporate balloon this year, but that was partly because we had a $19 million write-off -- or not write-off, impairment for our ERP implementation costs. So we took that hit this year. But I wouldn't include that in sort of savings what we're looking for. We are looking at run rate savings before that. So we would consider how we are organized, how we are streamlined for growth, maybe where exactly all our office locations are, we have a multiple global presence. We're looking to see where we can optimize that. So you may not be able to necessarily narrow it down to any of the operating units because lodging is still growing, private funds is still growing. But hopefully, at least at some of these, when you look at our corporate numbers, that's where you'll see some of that reduction.

Thank you, Donald. We'll go to Derek and then to Wilson. Derek, DBS? Over here, please.

Just a few questions. My first one is on M&A. You have announced 2, but not really in-housed them fully. I'm just curious whether are you comfortable doing a third before they are really in-housed or digested. I'm just wondering on that front. So meaning capital deployment, are you looking for more asset type rather than platform type in the immediate term? My second question is on hunting for deals. Are you looking separately, let's say, versus your REITs? Or are you also potentially hunting together? Just want the thoughts about where are you in terms of buying at the real estate spectrum. Then my last question is, if I can, is on the India strategy. I know Sanjeev is stressed. But I'm just curious whether the India strategy is largely a platform strategy. Or is it going to be -- largely going to be still building up asset base? I'm just curious on that front. Yes.

Shall we take India first?

So I think your question is whether India is going to be more a platform-driven strategy, right, Derek? So I mean, if you look at our India business, the 3 asset classes, business parks, logistics and data centers, we do think that for logistics, in particular, we have a very successful platform. In a matter of 6 years, we are the third largest industrial developer in India. We are now at a point where we should start seeing monetization of our fund assets coming through. And we will do that by creating a new core fund. So that's definitely -- so I think the platform there is well positioned to not only do industrial core industrial, but also other ancillary industrial incremental asset classes. Data centers, again, we have a very strong team. Currently, the business sits within CLINT. It has been one of the big drivers of NAV growth. We feel that it's not getting reflected in the share price. But definitely, a strong team which helped us to get the hyperscaler contract going. And we think we definitely are now well positioned with that credential to add more assets and more pipeline for growth. And the last part, of course, business parks. We do think CLINT is the right vehicle for that. And we, on the other hand, have a development fund business. We have funds with GIC. We just, last year, closed a fund, which has Japanese capital partners. So that can keep feeding CLINT'S growth significantly in the years to come in addition to what CLINT does on its own.

Janine, numbers outside M&A?

Derek, thank you for the question. I suppose perhaps I will answer it in a more indirect manner. I think you have witnessed us looking at M&A for many years. And one of the landmark transaction that we have done in the past was the merger with Ascendas-Singbridge. And if you could recall, it was a very successful integration that was put together, the 2 teams within a short period of time after completion. So I want to give the assurance to everyone here that in terms of the integration even in terms of the alignment, as a group, we are very well run. We know the drill very, very well. And we have demonstrated through our execution in the past that they can be done. And if you look at the transaction, the 2 M&As, they are effectively in 2 different geographies. So we do have teams on the ground. These are different resources. So if you're looking at -- it's not just a few of us sitting here who is working on the integration. I think the whole company, the different divisions are all coming together to ensure that there's proper alignment, whether on the business side or even on the infrastructure or the support that we are keeping them.

And the question on whether the priority is to invest in platform or assets. I mean the idea is to focus on growing fee income. If we look at assets, it's really to buy assets to feed the fee income growth, whether the assets are ready to be securitized to form a REIT or to be injected into a fund. So that's really how we look at it. It's not like the old CapitaLand days where we will just buy and keep the assets on the balance sheet. We expect our investment teams to co-invest and the ability to set up the fund all these are tied into the KPIs. It's very clear kind of runway. At the senior level, we -- there's an expectation for us to co-invest as well. So that's a very, very clear alignment and KPI on what we need to do. Yes.

Okay. We go to Wilson. Wilson?

It's Wilson from Morgan Stanley. Just 2 questions. First is I'd just like to ask about your outlook for FUM growth for this year given your expectations for higher-for-longer interest rates. It sounds like there are some growth opportunities coming through on the private side. How about on the listed side? Like do you see an opportunity for your listed platform to grow, whether it be organically or through new listings? And on the second question related to that would be on the recently announced MAS market review, some of the new measures that came through, given CapitaLand's large presence in the Singapore market, both in terms of stocks as well as in terms of activity when it comes to secondary fund placements and fundraising, how do you see some of these new measures potentially impacting or even benefiting the overall group?

I thought Andrew was going to take that. So FUM growth, I think we look at it on 2 fronts. There's the organic component. I think for those when we look at the private funds, we expect fundraising to be stronger this coming year than last year. Last year was, collectively, as an industry, one of the weakest if not the weakest in over a decade for real estate private funds. So certainly, we expect that to grow faster this year. And we've got a number of new products that we think fit what the market is looking for. So for the private funds, we say where is acceleration. For the listed REITs, while we do have internal targets on that, I think it's much more market dependent. Obviously, last year, the transaction for CICT for ION also happened to catch a good market window. I think this year, depending on how interest rates go, that would be -- that would align -- that would temper our expectations up or down on that. Certainly, we would like to see a number of our REITs grow, and we know that they have investment opportunities that they are pursuing. But that one will largely be more market dependent. But overall, when we look at the FUM growth, last year, we had about $5 billion in terms of organic growth. I think, certainly, we would expect that number or higher in the coming year.

I agree with Paul. But I would just add that if you will have noticed, for those of you that follow our REITs, we've been actively -- all of the REITs have been actively managing their gearing. So that's twofold. One is to take cost down so that DPU is protected. But also if you look at it vis-a-vis, I think some of the peers, we are better positioned to deploy without having to rely on equity. So I think on a relative basis, which is where this is always important, we are well positioned as a listed fund house to take advantage of the opportunities that Paul speaks of.

The -- you will see the REITs taking active role to recycle their assets as well, reconstitute for assets that they feel maybe location or have reached the full potential, and they may take the chance to recycle, sell it at a tighter cap, and then buying asset that's still undergoing transits for leasing up. So those are the things that you'll find all the REIT vehicles looking to do if, for instance, there's pressure on the share price, not at the NAV, which makes it difficult for them to do some of the capital market-type transactions. So there are different -- I must say that, I mean, if you look at the assets within the REITs, generally, asset qualities are there, good location, and gives them a lot of flexibility to do. I can't remember cost -- how many -- what's the cost so how much last year?

[indiscernible]

Yes. Even though it trades at a discount to NAV, and that's how they continue to do to take the proceeds for sell at a tighter cap and then reinvesting. Yes. Yvonne, you want to share anything about what you are seeing on the private fund side, since you are new on your fundraising? After you say then you have the pressure to deliver.

Okay. Exactly 1 month into the role. I think in terms of fundraising, especially in the private space, clearly, we call this -- I know it's not a motherhood statement, but it is a golden vintage for several institutional as well as private wealth looking into private funds. Now I think then the question is -- typically, what we get is what's the allocation principle, let's say, if you compare to how LPs are looking into the designer products, right, whether is it going to be sector-specific, country-specific or is it going to be diversified or is it going to be providing liquidity, right? And there's a lot of discussions around that point on product designs as well as formation, which, I believe that given where we are today, together with Suzanne, we will be looking towards very exciting products that you see on the shelf soon.

This is why you cannot sleep when you work for Chee Koon when you are on a call. Maybe just to tackle Wilson's other question on the market review. So certainly, we're waiting for more details, and we are certainly hopeful that all will be done. We think the initial around has been positive. We do think the added flow and sort of the requirement for fund managers to put a certain amount into Singapore equities for the trade-off and tax benefits, we do think, in particular, will benefit our REITs, particularly the larger ones. We think there will be some natural inflows either through ETFs or into them, so they will feel the benefit. Certainly, we hope that for some of our smaller entities as well, we will make the efforts to market out to investors and family officers and new fund managers here to try and push the stock. So we do think there is positive impact. Clearly, as fund manager and as a big part of the market cap here, we would certainly like more to be done, as I'm sure every listed stock hopes.

So on the topic of new products, we do have a question from Jimmy, CICC -- our analyst from CICC. The valuation of the CREIT market continues to rise. Is the management considering to accelerate the establishment of CREIT to recycle our Chinese asset?

We are working very hard. We can only go so fast -- as fast as what the regulatory approval process in China can allow us to do. Yes.

We have time for one last question. Yew Kiang? Get a mic to Yew.

Yew Kiang from CLSA. I just want to understand on the -- Congrats on the Wingate and SC Capital partnership. I just want to understand, during the 1 year of courtship, right, what do you try to understand? And to me, it felt too short. I felt it could have taken longer, maybe because I'm not too familiar with industry.

Do you have kids, Yew Kiang?

I do. I do.

I pity them.

Yes. And also in terms of what are the things that you look for KPI when you look at them? And reversely, I would assume that there's a lot of suitors going after them as well. So why would CapitaLand be their top choice?

This is like talking about finding your marriage partner. I think chemistry makes a difference. So Wingate took us 3, 4 years. I know Farrell for some time before we decided that we want to do a deal and how do we structure a deal that makes sense. And we meet each other so often. I traveled to Melbourne, not just meeting him and the team, and it's not just meeting the team and getting our people to know their people. You need to enjoy being able to have a meal together, have coffee together, talk about products, talk about ideas, talk about new funds. And if you can enjoy even spending time and brainstorming on some of these things, it's not going to work. We wouldn't try. I mean, Suchad is not a new figure in the town. I mean, people do know him and various of us have interacted with him, so it's not new. So it's much easier to talk about. But some of the newer asset managers, especially in places like the U.S., some of them I've known them for some years, but it doesn't necessarily mean that you will do them. So that comfort level takes time. My wife always complain to me that from the time of getting to know her to getting married, it took us 4 years. And that's why we can only have 3 kids.

Okay. I think that's a lovely question and response to end this briefing. Chee Koon, any final remarks?

The significant number is 4 years and 3 kids.

Gentlemen, any final remarks before we do our wrap.

Thank you for coming. This is a year of execution, and thank you for the trust. And I hope through all the various actions that you do, we are not here just to grab headlines. It's not our intention. Of course, if we can do good deals and there's good headlines to -- for you write about, that's because it's a good deal and not because we are trying to push for growth at all costs. And want to make sure that other investors that invest with us can sleep peacefully at night knowing that the company is in a good shape, and we are building the company well long run for the team and for the investors as well. Thank you.

Thank you, Chee Koon. Thank you, Andrew and Paul. And that's a wrap. Thank you all for joining us. We wish you all the best for the rest of the year, and we will see you soon. Have a good day.