City Developments Limited (C09) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, friends from the media, analysts, bankers, investors and fellow CDL colleagues. My name is Belinda, and I'm the Head of Investor Relations and Corporate Communications at CDL. On behalf of CDL management and my fellow colleagues, a very warm welcome to CDL's briefing on its unaudited financial results for the full year ended 31st December 2023. Now this is a hybrid briefing format with both in-person here at the M Hotel Singapore and also those joining us locally and internationally virtually on the live webcast. Now, thank you, everyone, for being here this morning. For today's briefing, in line with CDL's commitment to environmental sustainability, we will not be providing any printed materials. Now instead, we encourage you to scan the QR code on the screen to download the documents that has been uploaded on our CDL website and also on SGXNET this morning. They would include a copy of the detailed financial statement, a copy of the press release summarizing some of the key highlights, a presentation deck that the management team will be partially going through this morning. And for our guests joining us virtually, you will also similarly be able to download the documents which are available on the CDL website. I would like to introduce you to the CDL management team, they're on my far left. Now in the center, we have Mr. Kwek, Leng Beng, our Executive Chairman; Mr. Sherman Kwek, our Group CEO; Mr. Kwek, Eik Sheng, our Group COO; Mr. Chia Ngiang Hong, our Group GM; and Ms. Yiong Yim Ming, our Group CFO. The format of today's briefing will be in 2 parts. We will kick off with a presentation of some of the key highlights of our performance, then followed by a Q&A opportunity. Now without further ado, I would like to invite Mr. Sherman Kwek, our Group CEO, to kickstart the presentation. Sherman, please.

Okay. As Belinda is sorting out the technical issues, I just wanted to say good morning to everyone. Hard to believe a year has gone by and now we're into 2024. Thank you, everyone. I know all of you have been -- had a very busy morning. There are 3 briefings going on. So I appreciate the effort made to rush over to attend ours. I have to say I'm still a little bit jarred by the fact that Belinda was playing the video that we recorded for our 60th anniversary. And it's always weird to see yourself up on the screen and speaking. So thanks for that surprise, as I should call it. It's really thrown me off hook, right? So I almost took this up as the mic, although this is a light. So, yes. But -- so if I don't present well today it's because she messed up my rhythm.

See, the presentation, I was so scared of your presentation this morning. Sorry. Pros and...

Pros. Yes. Are we ready to commence? Okay. I can also use this right? That's even better. So Belinda has given me new challenges. I can only move forward, I can't go backwards. So yes, so I better make full use of each slide. Not to worry. I think today, we'll keep it brief, and we want to leave more time for Q&A. And as per the last briefing, I think we decided that in order to keep the presentation short, it will just be myself presenting the overview and strategic initiatives as well as after me will be Yim Ming presenting the financial highlights. The ops review is just for your pleasure reading, I mean -- and we're not presenting it now. This is actually from our Haus on Handy project. It's the conservation house at the top of the hill. Very, very pretty. We can organize for you to see it if you would like to. Key milestones for last year, I think we had achieved the highest revenue since inception in 1963. This was primarily driven by our EC project, Piermont Grand in Punggol. As all of you know, under prevailing accounting rules, when a EC project completes, you recognize the revenue and profit in entirety. Also, we divested this land site in Japan, in Shirokane, a very prime location. We had 5 projects that completed last year, over 2,400 units, put a lot of strain on us. I'm not sure you all realize how much effort goes into doing handover to our buyers. And so really, our property development team had a very, very hectic and busy year handing over these 5 projects, all of which are fully sold out, except for Boulevard 88, which is about 91% sold. On the living sector side, we continue to expand. We acquired 31 PRS assets and developments. So in the U.K., we did 2 PRS developments in Manchester and in London. And then in Japan, we did 29 new acquisitions, 25 in Tokyo. We finally filled in our missing link in Tokyo and then 4 more in Osaka. So it brings our total portfolio up to 38. So with 35 in operation and 3 still under development, but completing this -- physically completing this year. Then, of course, we still have our PBSA that we had acquired the year before. We acquired 6 then. So that gives us our current portfolio of about 4,800 units across U.K., Japan, U.S., one project in the U.S., Sunnyvale and Australia, as well as 6 student accom assets with 2,400 beds in the U.K. And lastly, on the hospitality side, we also continue to expand our footprint, acquired 3 hotels, one in South Korea, in prime Myeongdong location, one in the heart of Brisbane on top of Central Station and the other is a hotel in Osaka, also in a very prime location next to the luxury fashion district as well as the walking district. And of course, we had 3 new hotels that opened up. One is M Social Suzhou, one is M Social Phuket and one is The Singapore EDITION hotel in Cuscaden Road. Key financial highlights. While we had record revenue, but obviously, if you look at the far right of our profit after tax and minority interest, we didn't quite measure up to the year before. The year before was $1.3 billion, but I think all of you already know why we had very substantial divestments in the year. So therefore, it kind of skewed the numbers quite a bit. But if you look at -- if we exclude divestment gains and impairment losses, you will see that actually, our operations across all segments have actually shown strong improvement and resiliency. Our RNAV has grown quite a bit, and that's mainly because we were very acquisitive last year. For this year, we're doing a full year dividend of $0.12 per share. So we hope shareholders will be happy. We have committed since 2018 that we will try to maintain at least a 1/3 payout ratio every year. So I think we have exceeded that with 36%. And of course, share price performance leaves quite a bit to be desired, but I will detail how we intend to close up the gap with our RNAV. I won't dive too much into this slide, property development side, we sold 730 units last year with a sales value of $1.5 billion, quite a bit less than the years before. But we're still glad, I think, for this tally. We had 2 launch projects last year, Tembusu Grand in Katong as well as The Myst in Upper Bukit Timah, both has sold well to date. And the overall Singapore resi market obviously has gotten a lot tougher. Costs are still very inflated compared to prepandemic levels. According to the URA official stats, we have also seen the overall new home transactions have come down. So for 2023, it was around 6,400 down from, I guess, recent year's peak was 2021, it hit 13,000 units transacted. This excluding ECs, then I think 2022 was about 7,100. So last year in '23, the volume did drop lower, but prices still held up well. In fact, notched an increase according to the URA residential price index, I mean last year, private home prices rose about 6.8%. So I think this sector is still quite stable. Obviously, it has suffered again from what I mentioned cost increases and last year's imposition of the 60% ABSD against foreigners was also quite tough to swallow because it really meant that most foreign buyers have more or less evaporated from the market. China, we don't much talk for now because our existing residential inventory is almost fully sold. Same with Brisbane. We have 2 projects there in Brisbane, same in Australia, sorry. We have 2 projects there in Brisbane that are also over 80% sold. On the hotel operations side, I think this has been a theme that we had expected. There was very strong recovery last year, and we hope that it will continue forward into 2024 and beyond, notwithstanding all the global macroeconomic uncertainties and geopolitical conflicts. But average room rate was up over 10%. Occupancy was up more than 8 percentage points, close to 9 percentage points. So that gave a 25% increase in RevPAR, revenue per available room. So a really great year for hotels. Investment properties wise, we still continue to be very resilient on Singapore, especially our occupancies are very high for our office and retail portfolio. For the U.K., actually, our office and retail portfolio is still strong. The only problem is that you would have seen, we took some impairments for our office portfolio in the U.K., and that's really because of cap rate expansion. I mean, properties around us were all trading at a much higher cap rates than normal. So then -- so therefore, we had to put in some impairments as well based on valuations. But actually, the underlying office -- our office properties are actually still doing well. On the living sector side, we achieved a full completion of the junction, which is in Leeds, the fourth largest city in the U.K. We did it over 2 phases. So the Phase 1 is almost completely filled up, and Phase 2, finally, we achieved the completion for that. So now we're ramping up the leasing, but it's been very well received, 665 units. So it's a very big project and a good amount of commercial space as well. And of course, you can see for our student accom portfolio, I mean, 97% occupancy and still doing extremely well. On the fund management side, I'll have more details to share later. This typical slide, we always put up, asset size sits at $24 billion. Of course, we fair value all of our IPs and revalue our hotels, it will go up to over $30 billion. And this shows how the -- geographically, it's split up, not too much change. Singapore is still about 52%, while the rest of our other assets are split across other geographies like the U.K., China, U.S. and Japan and others. GET strategy, all of you are very familiar with growth, again, just means building our development pipeline and recurring income streams to really strengthen our financials enhancement, enhancing what we currently own and driving operational efficiency in the processes that our teams undertake and transformation, transforming through new platforms. So starting off with growth first with G. This was what I alluded to in the first slide last year, we were very acquisitive. We invested $2.4 billion, and this is just our share in all these acquisitions because some of them were joint ventures. But I think we're very proud of the acquisitions we made. We capitalized on some of the price dislocations that arose. So we took a fairly contrarian approach last year when our pricing was under pressure. There were some distressed sales. Sellers really wanted to clear some assets and so we acquired. Obviously one of the big ones was St Katharine Docks, that office and retail complex in the U.K., next to the Tower Bridge and Tower Hill. We have 4 funding projects for 1NQ, which is in Manchester, and Morden Wharf, which is in Greenwich, London. As mentioned earlier, we acquired a hotel in Korea. In China, we went back into Suzhou, which we are very familiar with and acquired a land site there. So that will have 6 towers of -- 6 residential towers, and then 1 Sky High Tower with the office and a small hotel at the TOP. And then, of course, in Singapore, we acquired Champions Way in Woodlands, a very well located site as well as, of course, a prime site in Toa Payoh Lorong 1, along with our JV partners, Frasers and Sekisui House. And in Japan, the hotel in Osaka. I mentioned the PRS projects across Osaka and Tokyo, and then in Australia, finally, the hotel. Won't dive into this much, again, just shows you our global living sector portfolio. We've really grown it. And I would say the GDV now is about $2.6 billion, 4,800 PRS, which is multifamily units and 2,400 PBSA units, and overall occupancy for the entire portfolio is above 90%. For those in operation, there are a few in the pipeline that are being built. Launch pipeline for Singapore for next year, about 1,800 units. And we have this formerly called Central Mall and Central Square. You may remember, we acquired Central Square, which was next door to our Central Mall development from Far East Hospitality Trust and then we amalgamated it together. And of course, went for a strategic development incentive scheme, received a 67% GFA uplift. And I named it after one of my favorite sports in New York, where I used to work and live for many years, Union Square. So we will be launching the residential probably in the second half of this year. Champions Way in Woodlands, that will be second half of this year as well. Toa Payoh probably right at the beginning of next year. And of course, Newport Residences, which is our former Fuji Xerox Towers, which is a component of the former Fuji Xerox Towers then, we are still monitoring the market conditions to see when it would be appropriate time to launch that. And we have no ABSD pressure there. So these are the projects I mentioned earlier that we completed last year. And really kudos to our team for diligently handing over more than 2,400 units. On to E, enhancement. So we have been doing asset enhancements in our portfolio. I think we have to continue to maintain our competitive position for our priced assets. So one is Jungceylon. This a very sizable mall in Phuket. As I mentioned in earlier briefings, the mall actually has done really well for us. Pre-COVID, every year was an increase in property -- net property income and revenue. And so it's really done well. So we decided it's time to invest in it. It's very worn down. So we did a very big AEI. And finally, now we have completed and we have already achieved committed occupancy of 90%. And Thailand, as you know, has also -- especially Phuket relies heavily on tourism, has suffered quite a bit during the pandemic, and they were quite late to open up as well. But having said that, we are very encouraged by this Lunar New Year that we had just experienced where shopper traffic was nearly triple that of the same period last year. So that was nice. And then, of course, our flagship mall. We don't have many malls in Singapore but our flagship mall is City Square Mall, and also has done well for us, and we've decided that we're going to do a big AEI. We've already commenced on the Phase 1, and that's actually completing within the next couple of months. Phase 1 is more for the basement levels, including the food courts and all that. And then Phase 2, which will be the rest of the mall, we'll be completing first half of next year. And you will see that actually doing the AEI, we also took the chance to see how we could decanter M&E facilities so that we can increase the NLA, which we did. We increased the NLA by 26,000 square feet. So that will translate into a strong value for the mall as well. And already for this space under Phase 1, over 95% has been leased. So these are the redevelopments. I mentioned earlier, Union Square, formerly -- technically, it's 3 properties like Central Square, Central Mall Office Tower and the Central Mall Conservation Block. So all this will be redeveloped into residential and office and a few other exciting concepts. So we'll share more when we're ready to share the details. But so far, looking really good. And on the office side, we have an interested tenant that's looking to lease the bulk of the office. So I think if we can get that in, that will really give us a great return on this project. Same for Fuji Xerox Towers. We are redeveloping it as Newport Plaza, and that will have the various components that's listed there, the residential, the service apartments and the commercial. So -- and that has -- we obtained a 25% GFA uplift under the CBD incentive scheme. New hotels opening last year, M Social Suzhou, which was the final component opened under our Suzhou HLCC, Hong Leong City Center. Reason being the hotel was -- the construction of the hotel was delayed and the fitting out was delayed during COVID. So maybe it was a good thing, it didn't open before then. So now it's open and slowly we're ramping up the operational performance. M Social Phuket is a revamp of the hotel that abuts our Jungceylon mall I presented earlier. So we have 2 wings that abutted. And so these 2 wings, 400-odd rooms are now being rebranded -- refreshed and rebranded as M Social Phuket. And of course, The Singapore EDITION, which I had mentioned earlier, first edition in Southeast Asia. And also we took the chance to revamp our Grand Copthorne Waterfront Hotel in Singapore, not only the guest rooms but also the conference center, which it's been very famous for. M Social brand expansion. This has been the brainchild of our Chairman, who came up with this brand and really positioned as more of a lifestyle brand catered for people who want to see and be seen. So right now, we have 6 operational hotels and 3 more in the pipeline. The one in London is a conversion of an existing Millennium, then the one in New York is also a conversion of an existing Millennium. The one in Sunnyvale, California is a new build. So all these are the exciting ones that will be coming online. Sustainability. As always, that CDL has embodied sustainability as part of our ethos for close to 30 years. It's important we do our part for the planet to ensure that our future generations have a decent place to live in. And I'm glad that we continue to notch up all the many accolades in many of the rankings around the world. And of course, we have made our net 0 carbon commitment split into 2 phases, 2030 and 2050. So we continue to work towards it. Now of course, on the governance and transparency side, we have also been ranked fifth. Now on to transformation, the part that I think is very, very key, that has always been the lever that will push CDL to next level. Yes, as we had mentioned, I think 2023 last year was absent of very significant divestment gains. But we -- it's not like we didn't do any capital recycling. We still sold quite a lot of stuff. Total sales proceeds over $600 million. And also the good profits. I mean, our total gain was over $250 million for this bunch of properties. But the truth is it can't compare to the year before, right, in 2022. 2022, the one hotel itself, the Millennium Hilton Seoul was -- the sales proceed was already over [ $1 billion ], right? So -- and then when you add on the deconsolidate -- the gain on the deconsolidation of CDL Hospitality Trust, you add on the proceeds from the 2 collective sales that occurred, Tanglin Shopping Center as well as the Golden Mile Complex. So that year was a huge year, right? That's why we had a $1.3 billion PATMI. So obviously, we understand that we need to continue to accelerate our capital recycling in order to bring our gearing down. As we buy new, we have to make way for it by selling old, right? So -- and many of our existing assets sit on our books at a low carrying cost. So I think we have a lot of ways to unlock value and monetize. My team is going to cringe when I say this statement. But I think the target I set for myself and the team, okay, and I hope we get there, okay, is I hope to achieve at least $1 billion of divestments this year in 2024. So a big target are thrown out, Eik Sheng, it means the chart, I think let's all work towards it, okay? So portfolio harmonization and optimization. We continue, I think, to look at how we can optimize our hospitality portfolio, which we had privatized in November 2019. So you will see that we have done some divestments over the years, Millennium Hilton Seoul in 2022 and then last year, Millennium Harvest House in Boulder in the U.S., Colorado. And of course, we deconsolidated our REIT, which brought a lot of benefits to us and to our shareholders. We also recently did an off-market buyback of preference shares, which I think is good for shareholders and for us, too. And of course, we continue to drive operational efficiency. We take innovation very seriously in CDL. We have a dedicated innovation committee, and we continue to see how we can improve our operational efficiency as well as deliver better and more innovative products and services to our customers. My last slide before I hand to Yim Ming, fund management. Very important to us as well. Yes, our AUM hasn't quite grown at the pace that we would like. We are currently at USD 3 billion. And just for clarity, we only consider AUM if it's -- there are third-party investments in it, and we don't take into account assets that are fully held on our balance sheet, right? So we're very strict on how we count AUM. We had intended last year to reach USD 5 billion, and we would have reached there if we had listed. As you all remember, we were trying to list our 3 -- our 2 U.K. properties back then, together with our -- another partner who is going to list their properties. So we're going to list that REIT in Singapore with 3 U.K. commercial properties that would have added at least USD 2 billion, if not much more than that. That didn't materialize. So our AUM kind of lagged a little bit. And as all of you know, capital markets have not been particularly receptive or favorable over the last 2 years. But nonetheless, I think we are going to push forward now. We certainly want to do more strategic partnerships, and I have one in mind that I'm sure I'm going to get questions on today that we recently did for a development that we had initially developed in Singapore on an island. So -- and then, of course, we also want to grow existing platforms. We have our CDL Hospitality Trust. We have IREIT, which we are the 50% manager, along with TKO from France. And of course, we have a HThree City, which is our office fund that we're also part of. So we want to keep growing existing platforms. And I think most importantly, we've been very acquisitive. Last year, as I mentioned, we made $2.4 billion of acquisitions. So we now have a lot of assets on our balance sheet that we can suitably package into public or private formats. So whether REITs or private equity funds, we have a lot of room now to play with because we have already warehoused many of these assets. So whether it's new multifamily private equity fund in Japan or it's a sustainability fund, office fund or something, we have a lot of levers we can pull. So I intend to kick that in the high gear as well starting from this year. So I think this is how we intend to really accelerate our capital recycling, bring down our gearing and ensure that CDL is well poised with stronger recurring income streams moving into the future. Thank you, everyone. And now I'll pass it over to Yim Ming.

Okay. Thank you, gentlemen. Morning, ladies and gentlemen. Allow me to go through the financial highlights quickly. So this slide looks at a PBT of each of the segment. So on property development, I think Sherman has mentioned, our star performer as usual. 2 projects that contributed greatly was our EC project, Piermont Grand and of course, our Shirokane land site. So these 2 projects contributed $1.5 billion to revenue and $276 million to profits. So notably, we also made allowance for foreseeable losses for our development projects. This is largely for our project in Shenzhen. So this is our Shenzhen project. I think what's really left for sale is largely office, which is -- which we developed for sale. I think office market is fairly weak in China at the moment, particularly in Shenzhen. So on grounds of prudence, we have made a provision for that. Hotel operations saw a top line increase of 9%. Global RevPAR increase is 25%. However, the much lower profits for this segment, I think Sherman has mentioned, is the outsized divestment gains in 2022, which I won't repeat. So notably, I think for this year in this segment, we also have divested 1 hotel, which is the Millennium Harvest Boulder for a gain of $80 million. Notably, the sale price for this hotel was $94 million. So this again demonstrates that many of our hotels are carried at low book cost and can generate good profits on divestment. Additionally, with the rebound in the hospitality industry, we also wrote back impairment losses of $54 million, largely for the U.S. properties. So these reversals are supported all by external valuations for the hotels. In terms of investment property, top line increased 32% with basically acquisitions from St Katharine Docks, PBSA portfolio and PRS portfolio. However, this segment recognized a loss in '23 vis-a-vis a profit in 2022. So again, 2022 has outsized divestment gains, whereas in 2023, I think the -- is also impacted with 2 things. I think number one was the impairment losses that Sherman had mentioned. This is largely for our properties in U.K. as well as again, Shenzhen. And of course, number two, the higher financing costs, which hit this segment fairly heavily, particularly for our U.K. properties. So excluding divestment gains and impairment losses, EBITDA has actually improved 27% in line with revenue. Other segment relates to mark-to-market losses on our financial investments. So if you notice the higher loss in FY 2022 is relates to the full write-off of our exposure to Sincere previously. Okay. This looks at RevPAR by region. So I think the batch speaks for itself. So it's clear that all regions improved versus 2022. The strongest outperformer being Rest of Asia, as China, Hong Kong as well as Taipei hotels all did very well and fully opened up. The same for our New Zealand hotels as well, although they have not reached pre -- 2019 pre-COVID levels. So overall RevPAR, I mentioned, is 25% against [ '22 ] on a constant currency basis. So we elaborate further on hotel segment, star performer as well. So it did well both in occupancy and ADR. So particularly, room rates have exceeded 2019 levels significantly by 22%. I'm sure we offer you the pinch when you go for -- book our hotels today, right? So with this increase in ADR, GOP margins has also better -- has also improved, so -- with the flow-through. So the GOP margin increase is largely led by the Asia markets. So the union buyouts in New Year also improved the GOP margins as well. Okay. Next, let us move on to revenue by segment. Repeatedly, we have said we have achieved record revenue of $4.9 billion. Last highest was $4.2 billion in 2018. All 3 core segments saw increases in revenue. Property development is the biggest contributors at 57%. And of course, all 3 segments has also improved in revenue. Next, we'll move on to EBITDA by target. The group always target a $1 billion EBITDA for healthy cash generation. So these bar charts at the bottom has removed divestment gains and impairment losses to better reflect the operating performance of each segment. So you can again see that all 3 core segments actually saw an increase in EBITDA. So this is one metric that the group looks very closely at. Now we go on to PBT by segment. PBT is impacted by financing costs and depreciation. So financing cost has gone up by about, on average, about $200 million for the group. So it sounds like broken record as well. We depreciate our assets vis-a-vis the fair value model. So with the 2 big cost component, which is financing cost and depreciation, reported PBT dropped by 75%. That's, of course, coupled by the outsized divestment gains in the previous year. So actually, if I were to exclude the divestment gains and impairment losses, the group's PBT actually increased by 90% in FY 2023. And if you can see this chart across all the 3 segments, again, property development is our star performer. Hotel operations increased 71%. But if you are wondering why is the bar so short, it's really because the financing costs that we have taken on the privatization of M&C back in 2019 has eroded the profits of this segment. So of course, for IP, it's reported a loss because of financing costs as well as impairment losses. I'll move on to balance sheet. I mean the group is cognizant that operating resilience is the most important in today's market. So having a strong balance sheet is vital. So gearing has gone up to 61% versus 51% last year. This is really because of the huge acquisitions that we have made in FY 2023. I'm very thankful to the lenders in this room that's always supported CDL. Total cash stands strong at $2.2 billion and available facilities is also very healthy at $3.6 billion. Average borrowing costs went up 2.4% in 2022 to 4.3% in '23. This is in line with our projections, and we do look forward to more favorable rate cuts. I guess the question is when. So notably, in January '23, we did a $285 million MTN program with 2 local banks at 3.712%. So you look at the 5-year MTN, 3.712% vis-a-vis an average cost of 4.3%, I think we are hopeful that this rate will obviously have hit its peak hopefully. In terms of fixed rate, we are at 45%, including loans denominated in yen and renminbi, remaining loan portfolio that's really, really floating to us, it's about 50%. I think this is a level that we are very comfortable with as well. Lastly, in terms of debt maturity, 2024 comprises 33% of the debt maturity profile, of which 9% are short-term loans and bank overdrafts on cash pool arrangements. So what happens is the groups has hotels that's geographically dispersed. So we have a cash pool arrangement with financial institutions that extend overdraft facilities to subsidiaries backed by deposits of other subsidiaries within the cash pool arrangement. This is really for efficient cash utilization. For the loans in the first half of 2024, I think refinancing and repayments have been arranged accordingly. For the second half of 2024, we'll be working with the lenders. So my last slide. On foreign exchange, we adopt a natural hedging policy. We do not take speculative positions. So since -- with the recent overseas acquisitions, we have always taken bank loans to kind of hedge the foreign exchange exposure. So you can see that in the key geographical markets that the group operates in, we have a fairly effective hedge about 72% natural hedge. So with this, I hand over back to Belinda. Thank you.

Thank you, Sherman and Yim Ming for the presentation. We would now like to move to the second part of today's briefing, which is the Q&A. Please feel free to ask your questions. My colleagues are standing around the room with microphones. And if you have any queries, please raise your hands, and they will come to you. For those who are on the webcast, you may also post your questions by clicking on the question tab. Before asking any questions, may we please ask you to introduce yourself and also the organization that you represent. I really see a hand right in front. So I'm just going to go dive straight in. Mervin, would you like to post the first question, please?

Mervin from JPMorgan. My first question in regards to the asset recycling, that [ $1 billion ] target. Was that mainly composed of? Is it just the U.K. offices, which means that [ $1 billion ] seems not very ambitious at all? And your thoughts on -- because I noticed there's 2 new subsidiaries in U.K., REIT subsidiaries. Are you also considering selling some of the rental housing PBSA? And what's your thoughts in terms of Stag Brewery site, whether you're looking to dispose of that? Maybe a question for Yim Ming. I remember the Chairman said that the interest rates can't go up forever, a few probably last year. Any guidance in terms of where you think the borrowing costs could drop down to based on the spot rates that you can see in the upcoming refinancing for this year?

Mervin, thanks for your question. Actually, the target I kind of set there for us that I hope we will exceed of at least [ $1 billion ], I mean that actually doesn't factor in any U.K. office because I still think that probably the best format for our U.K. office portfolio, which has now reached an institutional level, right, of GBP 1 billion is probably a REIT at some stage. So I don't think the capital markets are going to be that favorable this year for retail, at least not from what I can see. So my target has not included that inside. There's a variety of stuff that I've included inside some of which you have mentioned. It could be PBSA in the U.K., it could be PRS in Japan. I mean, there are a variety of things I have inside, of course. And then there are various assets that we are looking at throughout our portfolio that we feel are noncore and those we will look at towards achieving our target. And of course, as I mentioned earlier, on the fund management, there are strategic partnerships as well. We may also consider selling core assets, not a 100% stake, but maybe a partial stake in it into a fund-like structure that we will then manage. So all kinds of things we're looking at. We do have a firm list I just don't want to share it for now. But hopefully, as the months go by, you'll see things materialize. I mean, hopefully, it will be weighted to the back end of the year. I mean, I want to see this constantly evolve throughout the year.

So on the [ TISC ] listing, we have listed 2 companies on the stock exchange. So I think they are really more for tax structuring purposes. So you noticed the Royal Assent was handed down on 22nd of Feb. So we've kind of made it just in time. So I think it's for 2 things, of course. Number one, for tax structuring purposes, for tax efficiency. As we know for REIT taxes, it's slightly lower than normal corporate tax in U.K., which is at 25%, but seriously, who knows after the election is what it will be. And of course, the second part is we wanted to demonstrate that we are structured ready. So really when -- whichever fund management platform, private or public that Sherman is willing to take, I think that at least we're structured ready. That's on the front of that. And then you remember the Chairman says that exchange rates -- sorry, interest rates can't go up forever, I hear this every month. But yes, so at 4.3% right now, where we recently issued our MTN at about 3.7%. I think we are hopeful that 4.3% is hopefully the peak of where we are. So we do hope that it will close in this year towards the low end of falls. As for the rate cuts, I think like many of you, we're probably not expecting any much. So hopefully, towards the June meeting.

Okay. Can I have the next [indiscernible]? Okay, maybe I'll go to Vijay first, and then I'll come to [ Felicia ] maybe. Vijay, why don't you take the second question?

Vijay from RHB. I have 3 questions. Maybe I'll take it one by one. Firstly, in terms of acquisition, do you have acquisition target for this year? You mentioned divestment target. And last year was a bit heavy on acquisitions. Maybe do you have an acquisition target for this year? And how do you look at net gearing perspective? Your gearing has been going up and your interest cost is eating up a lot of your revenue growth. So what is your target gearing for '24? That's my first question.

Okay. Vijay, I'll tackle the first question. We don't usually share acquisition or divestment targets, although I've just thrown out the divestment target for 2024, I think going forward, I mean, we may consider in future potentially, we do have internal targets, but we don't usually disclose them. But I may consider disclosing to you, I think, how we look at the acquisition and divestment pace. Obviously, last year, as you have mentioned, based on what I said, I mean, it was a very acquisitive year, $2.4 billion of acquisitions, mainly because we just saw a lot of great price dislocations where we could really capitalize on things when market conditions were not favorable. I think this year, certainly, there will be a greater focus on the divestment side. We will still acquire when we see good deals to be done. And obviously, we still will participate in land tenders, for instance, in Singapore, but the emphasis is certainly going to be on capital recycling for the year. In terms of gearing, yes, we moved up 10 percentage points, right? We were at 51%. Now we are at 61%. It is -- I mean, it's not the highest we've been to, I mean, and certainly not the highest for property developers in Singapore. I think you have some developers that are [ 90%, 100% ], rest assured, we're not going there. I mean I don't think we ever want to cross, for instance, 70%. But that's not to say that we are going to get there as well. I think it just depends on how fast we get our capital recycling in. But I'm hopeful that I mean we stay within this 60% to 65% for the time being. You're absolutely right, Vijay, I mean our net financing costs have really eaten up our profits, right? Our net financing cost was about $200 million in 2022. And for last year, it was $400 million, right? So it locked off an additional $200 million of my PATMI, right? I mean it's really, really heavy burden on us, right? And most of our acquisitions are debt funded. So that further compounds the problem. But having said that, I think last year was a good year for us to make the acquisitions that we have made just because I think we've got really good metrics for it. Like as I shared earlier on St Katharine Docks, right, I mean we got it at over 7% yield, right? So at least that's not even a negative carry there. But the key, I think, for us, I think, going forward is to ensure that we manage the capital recycling and accelerate it as well as obviously up to our dear CFO, Yim Ming to ensure that we start to refinance as well at a lower rates. I mean I think the expectation is that rates should start to come down in the second half this year is something I think the global economy really needs. I mean, anyone who owns a mortgage in this room also knows how painful it is to suffer from high rates. But the expectations that things should improve this year across the board.

Okay. My second and third question, I'll just ask it together maybe. CDL seems to be a bit contrarian in the U.K. market. I think you have been aggressive -- a bit aggressive in the last 2 years when others have been selling. Maybe can you share your strategy in terms of what are your thoughts in U.K. market? Would you be still be considering this as a pivotal market in the next 2 years, 3 years? And my third question is in terms of Singapore. Can you share a bit more color in terms of your land banking strategy? The outlook seems to have softened a bit. Would you be still buying a site, especially in high-end segment where you have a project? And can you also share a bit of color in terms of the margin assumptions which you are making, especially with rising construction cost in enrollment?

So far as U.K. is concerned, my belief is that we should be present there more active. Firstly, in the states, they have endless problems. And in EU, they have also problems. So what do people do? They come to U.K. U.K., I believe it's not difficult to do business there because it has a lot of potential, especially to deal with the British. They are always all right, Jack. So I am very confident in the U.K. In Singapore, I think we are going through a period of helping the not so rich. This is good for Singapore. But in the longer term, the world is upside down. And my preference will be in United Kingdom because EU, whatever they do, they still have to go to U.K. U.S., whatever they do, they still want to go to the U.K. Singapore, we all like to go to U.K. because we think there are opportunities. I go in when nobody dares to go and I come out when everybody want to go in. That's my philosophy.

Thank you, Chairman. You can see he's a big believer in the U.K., having also spent many years there. And to be more sector-specific, I think we are still very optimistic about the U.K.'s future, even after Brexit, we all know that the U.K. plays a very significant role and cannot be totally so-called segregated aside or left up. And office sector, obviously, is going through some rumblings as well as it will be the case, right, now with a high interest rate, high inflationary environment. But as our Chairman had alluded to, right, if you look at the office sector is nowhere near the U.S. office sector, which is itself is going through a shakeout that all of us are thankful not to be part of. But I think U.K. office demand will start to stabilize and will strengthen over time as well. And on other asset sectors, the asset classes that we're in, such as PBSA, which is a purpose-built student accommodation, still, you've seen numbers for yourself, right? It's still very strong. I mean rents are strong. I mean, occupancies are very high. I mean, I'm sure you know many friends that still continue to send their kids to the U.K. for education just because the economy is not great or there's some political changes in the U.K. I mean, parents still don't stop sending kids over there, right? I mean U.K. still offers very good quality education. So likewise, I think for the PRS or as we call it, multifamily, as some of you call it, I mean, same thing. I think that's a global theme, right? I mean we expect that the multifamily segment will continue to strengthen and grow, not just in the U.K. but in Australia, in other countries. In Japan, it's growing strongly. I think as housing prices remain high and labor mobility is also very high, right? People not very mobile. They can move and live anywhere in other cities or countries. I mean a lot of people are turning to renting to avoid paying a hefty mortgage, taking on a happy mortgage or down payment. So I see this as a continuing trend. So -- and U.K. definitely has a strong favorable business environment with a sizable population that is, again, mobile moving between cities, right, whether it's London, Leeds, Birmingham. So I continue to be quite bullish on the U.K. outlook. But having said that, this year, obviously, as I said, I think the focus, the emphasis will be more on capital recycling. Land banking in Singapore, yes, as mentioned earlier, when I presented, things aren't quite as -- things aren't as smooth as they used to be. In fact, every year, the difficulty keeps increasing. We have new cooling measures, and of course, costs have gone up, land prices still remain high, and most tenders for good sites are usually very ferociously combated. So it's not easy, but I think we will continue to replenish our land bank. We try to keep our margins high. Really, at the end of the day, your cost is going to be fairly fixed as cost stabilized now. So it's a question of what are your projections for the ASP, right, for the average selling price. But we still try to be disciplined and keep to certain margins when we bid so that we don't continue to see a margin erosion. And this year, we will certainly still participate in some selective land tenders, but certainly, we're going to be very selective. And obviously, there are some very big ones coming up. So we'll see how things go.

Okay. Thanks, Sherman. I'm going to pass the time over to some of the media folks. So Felicia, first, and then later, I'll take [ Dexter ]. Felicia?

So a while ago, we saw that [ Facebook ] was giving up space in South Beach, which you guys have stake in. I wanted to know what is the impact and whether you have found a replacement tenant? And my second question is, are you able to reveal how much CDL has invested in the U.K. collectively? And what's the current valuation versus the purchase price?

Okay. So Felicia, I think came out in the paper said the Facebook not renewing the lease, but they still have a long way to go. So in fact, I think as my manager mentioned in the press earlier, 2 of the floors are more or less committed and a few more already looking at taking up the space. So we are confident with the location and the reasonable rent that we are asking, we should be able to fill up quite soon. Yes. Thank you.

Felicia, just to check, you're asking about our total investment in the U.K. and what time period is this over just 2023 or since 2012 or 2013. So basically, a -- like a sort of 10-year, 12-year period, is it? Okay, we'll tabulate it for you in a second. We have a lot of stuff over the last. We'll come back to you at some point. Okay. Thank you.

So Felicia, just very quickly, in terms of total assets, we have in the group is about $24 billion. U.K. market right now is about 19%, that's about [ $4.5 billion ]. So this comprises a few parts. Number one, of course, the hotels that we have had at historical cost, those were acquired many, many years ago. Number 2 will be the U.K. commercial portfolio that we acquired from 2018 onwards. 2018, we acquired 2 plus SKD. That's in the range of U.S. -- I think that's in the range about [ GBP 1 billion ] thereabouts. Then of course, we have the living sector, which is the PRS as well as the PBSA that we are progressively building, that's close to about another [ $1 million ]. So valuations are inching slightly above for the PBSA portfolio as well as the PRS portfolio. For the U.K. properties, I think we have taken some impairments largely for the 2 that we acquired in 2018. That's really for Old Broad Street as well as Aldgate. St Katharine Docks, I think we acquired this year in March 2023 at a very good cap rate. So I think that's fine.

Okay. Maybe I'll move on to Dexter. Dexter, would you like to ask your questions?

Dexter from Bloomberg News. Two questions. One on the Singapore property market. Obviously, you guys were early proponent of just kind of luxury apartments, things like the sale, for example, with 60% ABSD, especially hitting foreign demand, like do you see this model, especially appealing to luxury apartments, appealing to foreign buyers sustainable going forward? And is that something you guys would eventually pivot away from? And the second question on property development specifically. Obviously, you guys mentioned a bit about fund management just now. Quite a lot of developers obviously struggling with the margins. Are you guys looking to kind of pivot away from developing towards more fund management kind of activities in future going forward?

Thanks very much. What was your name, sorry? [ Collin ], is it?

Dexter from Bloomberg.

Dexter from Bloomberg.

Yes.

Okay. Dexter, you're right. I mean we have certainly undergone a fairly rough time. And as I mentioned, when I presented last year's imposition of the 60% ABSD on foreigners was not too helpful, especially for luxury developments, I mean, for nonluxury developments either in RCR or OCR, I mean, usually, you will see less than 10% of foreigners, a very small percentage usually. But for centrally located projects in Downtown or Orchard Road kind of Cane Hill kind of location, I mean, you're looking at a fairly sizable amount of foreigners to support it. So it's not that we -- it's not that we will stray away from these projects. I think if the right project comes up and the metrics are good, we could potentially either tender for the land or do a private acquisition or collective sale of it. But you just have to -- the numbers just have to work out. So -- and again, there's -- it's not to say that luxury projects was definitely underperformed at the moment. I mean if the luxury project has done well enough, I think there will be a fair amount of buyers for it as well. An example is our Boulevard 88, right? I mean there was still a very healthy amount of -- a very large proportion of Singaporeans that bought too. It wasn't just fully dependent on foreigners. But as mentioned earlier, foreigners do make up a sizable proportion of the buying base when it's a luxury project. So just got to be cautious, but it doesn't mean we won't ever do it again. And same with the land tenders, I think we will continue to participate in land tenders. I think we will bid in a disciplined manner with our margins and our estimates in mind. But we want to accelerate our fund management, but doesn't mean that that's going to be at the expense of our development side. Our development side is still very important. And of course, aside from Singapore, as you've seen on the chart I put up, right, we are also undertaking development in China, in Australia, in the U.K. So we've also gone overseas to accelerate our development pipeline. And there, margins are still very healthy.

Okay. I have one question in front. Maybe I'll take the question from Rachel.

A few questions from me. I mean, maybe just start off with PRS and living sector, I think, has been growing very strongly for your portfolio size. Just wondering, is it big enough for you to look at the portfolio and big enough for you to eventually list it out in the future? Second question is really on share buyback. What are your thoughts looking at the share price now, can you execute the share buyback soon? And my last question is on -- what are your thoughts on Jurong Lake District? Is it something that you would consider to JV, take a small stake with some other developers to develop that? Yes.

Rachel, good to see you again, and thank you for the good questions. I think the first one was on our PRS or PBSA sizes, all that. I think, yes, certain parts of it, I mean, I think we have grown it a good enough scale. I mean, for instance, with our Japan PRS portfolio which now we have 38 properties. I mean that amounts to something around JPY 70 billion, okay? So I would say, sizable enough. I want do a private equity fund. I mean, when you add in some leverage, definitely sizable enough to do. And same I think -- and of course, we can also package things across asset classes or whatever we need it to. It depends on the investor appetite and of course, the geography as well, whether it's a country, specific fund or whether it's a regional fund. So there are various things that we can do. And we have already -- and these are not just talking motherhood statements, we are already in talks with people. And there's been a fair amount of investor interest. So that leaves me -- that gives me quite a bit of confidence and optimism. Share buyback, really, we think that our share price is at a ridiculously low level and we have -- we have considered starting the buyback many times. And each time we hold off, I mean, again, if we do the share buyback, it's not because we are trying to so-called improve or strengthen the share price. I mean the main rationale for doing it is because investing in your own shares, which are deeply undervalued is as good an investment as any other, right? So it's something we've looked at many times, and we're really at levels that we can already start the share buyback, and we have already earmarked a fairly sizable quantum to do the share buyback. But I think we have just held off for the time being and it's a good question. I do not know when we'll put it into play. And obviously, the share price has gone through quite a bit of a tumble. So it's definitely making the value proposition even more attractive for now. So it's something we're still considering. But I can't say with certainty when or if we will do it. Lastly, for JLD, for Jurong Lake District, certainly, we are very interested. I can't share too many details, but we are very interested. We've been looking at it over the past year. I mean it is -- Singapore is trying to position JLD as the second CBD in Singapore. And the government has invested a lot of money into really enhancing the district, building out the infrastructure, beautifying it and, of course, giving it new connectivity. So I think JLD is going to be a very, very promising precinct. That's going to be full of future potential. So we are interested, yes.

Sorry, just to jump in, on the first one about the REIT, I think you also need to bear in mind, we do have a CDL Hospitality Trust already, and they also do acquire PRS and potentially PBSA as well. So I think that's another option that we do have. And also on the share buyback, I just -- I mean it's always a trade-off, right, about which -- whether you only use the cash to buy shares or do other acquisitions. And I think last year, we have been very acquisitive, and I think we still need to take into account our gearing as well. So I think these factors all play a part in deciding whether we're going to start the share buyback. Yes.

Okay. Is there any more questions on the booking, Mervin? Any more hands? Okay. All right. I'll pass it to [ Yew Kiang ] first and then after that, Mervin, you can close up with the last set of questions.

Right. Yew Kiang from CLSA. [ Two ] -- just on data points like your PRS, what's the asset yield for Japan and, say, the U.K. currently? And then also on the U.K. commercial portfolio that you have, what's the sort of NPI yield currently? Yes.

So for U.K. PRS, I mean, we only have one that's completed, but you're probably looking at about 5%, slightly over 5%, okay. On so-called Australia, you're looking at probably above that. I mean Australia, we have 2 PRS projects, but they're under development, 1 in Melbourne, 1 in Brisbane. When it's completed, we expect the yield to be probably about 5% or around 5%. Japan is lower, obviously, because it's still a very investor -- a very attractive market and a lot of investment has been pouring in Japan for these recurring income assets. Japan, for Tokyo, you're looking at about probably about 3% or thereabouts. I mean, obviously, there's some aggressive investors that have gone below 3%, even in the 2s. We haven't. But you're looking probably about 3% or slightly above 3%. In Yokohama, which is a suburb of Tokyo and a strong feeder in Tokyo, I mean Yokohama, you're looking at about probably high 3s and then high 3s to around low 4s. And at Osaka, you're looking at probably low 4s to high 4s depending on when you had acquired the asset. So I would say, blended together, we're probably looking at about 4% for Japan, but I'm borrowing below 1%, right? So I'm having a great spread there. So...

The second question on divestments, right? The $1 billion that you have, like, would it be fair to say that given that the hospitality segment has sort of like picked up, and then this is probably a good time to sort of capture some of the gains and divest some of this, like is this an asset class that you'd be considering more focused on?

I'll turn it to our hospitality expert, both Chairman and Eik Sheng, are we going to further deepen our hospitality exposure and footprint with acquisitions and stuff.

Obviously, we will do so whenever there is opportunity, because from day 1, I've learned a lot about hospitality business, at least in my blood. So I will try to target it with a zoom, and then all of us will be happy.

Yew Kiang, I'm not sure there is a question more about are we going to sell hotels? So...

Okay, well, let me answer this. All hotels are bought at a cost. If we were to sell one, we can make fantastic profit. But it's not in my nature to sell good asset. We have about, I think, 200-odd hotels, they're all at costs. So one day, you'll be very happy with me when I sell everything, I say goodbye.

So to add on to that, we are looking at selective hotel divestments. But at the end of the day, you have to remember that Millennium and Copthorne is a chain of hotels, right? It's a brand that our Chairman has painstakingly built. So it's not likely that we're going to sell the entire portfolio or even some of the core -- the key assets, right, in key gateway cities, but there are a lot of noncore non-gateway assets that we are looking at as well. So it's something we will -- we are -- it's certainly on our radar. Eik Sheng, do you want to add on to that?

Yes. Let me just share a bit more about the Boulder sale. Actually, we sold it -- we operated as a hotel, but when we sold it, it was actually on a basis that it would be converted to student accommodation, which is -- and they did take some time to get planning. And so I think we have said this before, we do review the portfolio and see whether some of these sites are highest and best use, may not be hotel anymore. There may be other users, and that kind of process takes quite a bit of time. So there are other sites we are exploring. This will take some time as we go through the planning. But in the meantime, I think what Sherman shared is that we are very committed to operating these hotels as -- especially in the key gateway cities, we definitely want to be there. And I think it's really more about enhancing the assets, which is why we have shared quite a few plans, especially in New York and London. These are the key assets that we do have, and we want to make sure we generate the proper returns from them. Yes.

Yes. I mean for those analysts that remember from many several briefings ago, I shared that when we privatized M&C shortly after that, I mean, we started embarking on the exercise, of course, slightly curtailed by COVID, but we have kind of placed the hotels into like 4 buckets. And for hotels that we want to divest, I mean, some -- as Eik Sheng has mentioned, some is the highest and best use is not necessarily hospitality anymore. It could be student accommodation. It could be a PRS. And then we will look at whether we have the expertise to do that in that market and whether we have a competitive edge, right, versus other developers. And if we don't, we'd rather sell it and pocket the gain. So Boulder is one of those. I mean, yes, we want to run PBSA, but right now, my portfolio is in the U.K., right? I don't know anything about the student accom market in the U.S. So we thought we'd sell it. We made a gain of $80 million, right, from selling Boulder. So it was something that worked out really well for us. But as Eik Sheng mentioned, this takes time because the guy wants to buy, the buyer also needs time to go and figure out how -- whether he can get the planning for student accom, all that. And when he was satisfied, then the deal transacted. So sometimes these may not occur as fast. But again, that's why I'm saying we will pace out our capital recycling. So there are some low-hanging fruits and of course, there are some things that require more gestation. But over time, I think you should see more action from us.

Okay. Thanks, Yew Kiang. I'm going to give the last set of questions to Mervin so that you can ask the last question.

Yes. Thanks, Belinda. Lucky last. Just want to follow up on this asset divestments. Hopefully, you can exceed that $1 billion. But is the priority to reduce gearing or will you be giving us, investors a special [ divi ] by year-end to reward them for their patience? The other question I have in terms of your follow-up, in terms of your comments about strategic partnerships and your comments about selling core assets. Is that working with other funds management groups and maybe even selling stakes in Republic Plaza, for example, if that's considered core? And then final question on the hotel side of things. Second half RevPAR for Singapore and U.K. seem to have -- growth has moderated. Are we expecting a similar type of growth for '24 for those markets or do you think the growth can actually accelerate with the return of Chinese tourists?

Thanks, Mervin. You had to end this session with a bang, right? So first question on divestments and special dividend. Yes, I mean we always try, I think, to reward our shareholders, right, for steadfastly supporting us. If you look on the year that we sold Millennium Hilton Seoul, I mean, we did make -- I think we did share the spoils of the war with our shareholders as well. And of course, we -- when we deconsolidated the REIT, I mean, we did a distribution in species to our shareholders. So we do try, I think, to share the upside. Of course, at the end of the day, I mean, what's more pressing is the company's needs. So we do need to obviously reduce our gearing. That is a key priority for our capital recycling and resultantly reduce our very heavy net financing cost. And at the same time, we want to leave -- although we have a nice cash, thanks to also Yim Ming, who really guards over it and safeguards it well. We also obviously want to leave enough dry powder for future acquisitions. So a variety of, I think, uses that we have from our divestment proceeds. But certainly, we do keep our shareholders in mind and do want to reward them with special dividends as and when appropriate. On the fund management side...

The partnerships for...

Partnerships.

Yes.

Yes, I mean, when I mentioned core building, I was thinking oh no, some of them going to think Republic Plaza or something. Republic Plaza probably not because we are really proud of the assets. Our flagship is where the entire CDL staff, management team and staff are all located. But we have other buildings in Singapore, whether office or resi or whatever. So I mean, there are other things that we can look at. And yes, you're right. I mean some of the strategic partnerships we're referring to could be that we inject it into a fund where we also continue to take a stake in it, whether minority or majority, and we have third-party investors, right? So making it more like a true external fund. So things like that will all be considered, and they are already in the pipeline, and I'm already in discussions with investors. So again, I hope throughout this year, we will be able to unveil more things.

Maybe just quickly talk about the hotel side. I mean those 2 markets you talked about, I think you're right. The pace of growth, I think back to recovery was very fast. And I think 2023 was also a outperformance year. I think for this year, it really depend on the type of events. And I think Singapore, of course, has been a shining example, right, with Taylor Swift and everyone coming down to Singapore. We had the air show as well in February. So I think if the pace of events continues, I think we, of course, do expect quite optimistic growth in Singapore's market. U.K., I think, pretty stable. I think once we come back to second quarter onwards, we have the whole Middle East boosting the numbers as well. I think the big question mark is whether China will start to return to both these markets. And I think nobody has the answer to that. I don't think we're very optimistic they will start to return so soon. But in the meantime, we've actually found other source markets to kind of boost those numbers. And I guess, when that market does open up, it will be icing on the cake as well.

Thank you. We've almost come to the end of our briefing. But I want to give the opportunity to the panelists and in particular, the Chairman, if he would like to just close with some closing remarks.

My task here is to find opportunities. I have been to Phuket. I know the in and out of Phuket. I know the Russian are there. I can create things for the Russian. My property there is first class, very good. You should go there and enjoy. I do enjoy myself. My task is to build relationship. The owner of Tanglin Shopping Center, Tanoto, his name is Tanoto. I met him actually a long time ago. We just recall, we met each other some time ago, but he has already forged a good relationship with me. We're going to do things together. You see the board, Tanglin Shopping tomorrow, that is him. He's in the paper business, but he doesn't know much about U.K. I'm going to bring him to the U.K. He will love U.K., I bring him to Hard Days Night. And just like many of you, he'll love the Hard Days Night. It's not so hard for me, but hard for other people. I also want to say to you that I am building good relationship with a lot of people. So I think we can do deals together. And nobody will be the loser. Everyone participating will be the winner. So I would like to say that my task is to build good relationship with people who are very influential. And they will bring deals to me, I'll bring deals to them, so we can be in joint venture. That is my task. So I would love to do all this to the advantage of everyone. Thank you very much.

Thank you, Chairman. So on that note on opportunities, partnerships, it actually comes to the end of our briefing. So on behalf of the CDL team, thank you for attending, and thanks to all our webcast audience for joining us. Refreshments are served outside. So do stay back and join us for a cup of coffee. We hope to see all of you soon, very soon. Thank you very much. Have a good afternoon. Thanks.