Frasers Centrepoint Trust ($J69U)

Hello. A very good morning to everyone. Welcome to Frasers Centrepoint First Half FY 2026 Results Briefing. I have with me today the management team, Mr. Richard Ng, who is our CEO; Ms. Anne Kang, our CFO; as well as Ms. Pauli Lim, our Managing Director for Investment and Asset Management. I'm sure we have lots to cover today. So without further ado, can I pass it on to Richard to start the briefing, please.

Yes. Thanks, Judy, and a very good morning to all of you. Thanks for joining us this morning again, and I figure that you guys probably have some time to go through the deck. So we this is going to run through and perhaps can spend a little bit more time on the Q&A part of it, all right. Jud, let's go.

Yes.

Okay. One, once again, I'm very happy to share a set of strong results that we have delivered for this first half, if you look at all the numbers here, if it's all positive, has grown, has improved. Revenue, of course, came in pretty strong, more than 20%. NPIs likewise more than 20%. Even for DPU, I mean we go by 1.4%. And if you look at the operating metrics as well, tenant sales have gone -- increased by 3.2%. Traffic has gone up occupancy is, again, very resilient, very strong at 99.8%. Rental reversion is also at 6.5% for this first half, right? In terms of the capital management side, Andy will go into a little bit more details. But just on a broad perspective, our leverage is about 40%. And for this quarter, our cost of fund is about 3.2%. Okay. Next, we're going to touch on the broader perspective. The macroeconomics in retail market in Singapore are not going to drill too much on the economic indicators you guys pretty much aware as much as we do. But let's maybe perhaps look at the sales numbers. So for retail sales in Singapore as a whole, we are looking at just January and February because as you are aware, typically, the thing step is a little behind time, so we try to compare on the same period of time. And you know that January, February is an average of -- depending on which month is the Chinese New Year. So for this, we normally put it 2 months together. So on the average, Singapore retail sales grew by about 3.4%, and SAT is actually ahead of that at 3.5% and if you also strip out the rest and just focus on the F&B because there's a lot of conversations around this particular sector, the broader market saw a 1% increase, but for SET, we actually delivered a 1.7% increase. So that's where perhaps one of the difference, right? I mean, you read a lot about F&B operators shutting and so on. So it is not the fact that it's not across every mall, but maybe some are more affected than others. This is, again, strong numbers that you can look at in comparison with the broader market perspective. In terms of rent, for this quarter-on-quarter, suburban prime retail rents grew by 0.2% and year-on-year grew by 1.4%. Okay. Next, in terms of financial highlights. I will then hand over to Andy.

Yes -- thank you, Richard. Good morning, everyone. I will go through the financial performance. The gross revenue for 1 half FY '26 stood at EUR [indiscernible] million. which is an increase of 20.3% compared to the same time last year. The increase was mainly due to the Northpoint City South wing acquisition in May 2025 last year and also higher passing rent across most malls, this was partially offset by the AI and outcome Mall as well as the divestment of issue in September 2025. Property expenses for one half '26 is 20.5% higher compared to one half last year. Excluding the effect of Northpoint City staffing and Algoma, it is comparable to the corresponding period last year. So accordingly, our NPI for this one half is higher by 20.2%. There's a lower distribution from joint ventures for the one half this year due mainly to the absence of the one-off dividend compared to the same time last year. The BPO at for one half is at [indiscernible] , which is 1.4% higher than last year. So this excludes an amount of $4.6 million, which has been retained for general corporate and working capital business. Next slide, please. There are no significant movement in balance sheet position compared to 30th September 2025. The NAV and adjusted NAV increased to $2.25 and [indiscernible] respectively, mainly because of the effect of the mark-to-market recognized for the diritfinancial instruments. Next slide please. Okay as at 31st March, our agreed leverage is at 40%, which is a 0.3 percentage point over the last quarter. Interest coverage ratio remained healthy at 3.59x. Average cost of debt for the 6 months is at 3.3%, but for the quarter, it is 3.2%, which is an early basis point drop from last quarter. We have refinanced all the loans in FY 2016 this quarter as well as also partially refinanced some loans in FY '29, therefore, extending the weighted average debt maturity to [indiscernible] years at the 31st March. The hedge ratio is lower at 66% due to the [indiscernible] . Slide 11 yes, so there's no refinancing rise in FY 2026, as mentioned earlier, I think we did a refinancing for borrowing, which was previously due in FY 2029 by pushing it to FY 2031. With that, there is no more than 30% loan due in any one year. The next slide, please. So the DPU, [indiscernible] for the first half will be paid on May 29, 2026. So I'll now turn over to Poli for the highlights.

Thank you, Annie. Good morning, everyone. I'm very pleased to share a very strong set of operating performance for our portfolio. So on this slide, you see the occupancy. Portfolio occupancy on a year-on-year basis has improved by 1.7 percentage point to 99.8% as at the second quarter of this financial year. Just a deeper look into how the various assets have [indiscernible] you see that all our malls have delivered 100% or almost full committed occupancy. And the high occupancy and the positive rental reversions that I will show in a later slide, are supported by very robust trading performance of our retailers as well as good demand for quality spaces in suburban -- within the suburban space. Next slide, please. This slide shows a very strong broad-based improvements in top line and net profit across our portfolio. And this is the result of the -- our continuous efforts to drive not just revenue productivity, but also to optimize our cost in the face of inflationary pressures, right? You see that in terms of the NPI margin, our portfolio is actually yielding our NPI margin of [indiscernible] , and that has maintained is not improved on a year-on-year basis right . Okay. Next slide, please. Shopper traffic sales also shows a positive picture, right? Both traffic and sales have sustained growth from previous years into this financial year. And this is largely attributed to our focus on in more activation and also driving repeated visitations, right? And all this focus on bringing people back to the mall doing the sales conversion is yielding results, right? We see good sales conversions as demonstrated by the improvement in sales in tandem with the growth in shopper footfall. Next slide, please. Okay, rental inversions. Happy to say that we have -- we are tracking ahead of our projection of mid-single digit at the start of this financial year. And if we look at the performance across the malls, again, we do see positive rental reversion across all our malls. And on top, that also across all our trades for the first half of this financial year. And the other metric to highlight is tenant retention, very strong tenant retention of 87%. Again, this is a testament to the trading health of our existing retailers, right? A little bit of flavor on where some of the leasing demand is coming from, we do see good traction coming from the top 3 trades would be F&B, [indiscernible] healthcare, fashion and accessories. And again, these 3 trades are 1 of the top 5 within our portfolio. So again, this is -- demonstrates how strong the portfolio is and how resilient the trading performance of the portfolio is. Next slide, please. Okay. Lease majority profile, you'll see that the bar -- the lighter blue bar of 26% shows the amount of stock that is due for renewal or new lease as start of this financial year. On a to-date basis, we have devised more than half of this stock that is due for renewal. So it stands at about 11.6% as at the first half of this financial year. And a proportion of this comprises anchors and mini anchors, which have been large [indiscernible] so that gives a little bit of comfort in terms of what is the leasing risk portfolio in the remaining part of this financial year? So the other metric you see that there is no tall stack in the immediate 2 to 3 years, right? The lease expiry profile is quite even. So there's no concentration risk. And in terms of the well at 1.7 years is respectable in the context of our average 3 years lease. Next slide, please. Okay. This slide, we wanted to demonstrate that we still -- we are still cognizant of the fact that we need to bring segment to our shoppers. So over the course of this first half, we have brought into our portfolio 48 new portfolio tenancies, right? And this is across various malls and also various trades, right? And I believe some of you would have heard about the exit of GB, the cinema from [indiscernible] Plaza. So happy to provide a little bit of preview of what we are doing for that space. So in line with the emphasis of bringing experiential and play into our malls will be bringing in venture which is an indoor active sports part. It will be first in Singapore. So we are very excited about the repositioning plans that we have for the space that is to be vacated by GB. Next slide, please. Okay. I think for the next 2 slides, it's just a flavor of what we are doing to engage our shoppers and also to bring the -- to enhance the experiential elements, right, activating our malls continue to be a key focus. And it's our responsibility at relator to bring footfall to sustain the performance of our [indiscernible] so this remains a key priority. And we believe in leveraging the strategic locations and connectivity of our malls within the Heartland to position ourselves as a key community hub, right? So a lot of the activities involved. Place-making involve engagement and reaching the experience of our shoppers. Next slide, please. Next one. Yes, Okay. Another key partner for us would be our retailers, right? I think there's a lot of talk about cost inflation, impact to sustainability. This is a topic that is top of mind for many, especially with the the war that is growing in the Middle East, right? And as landlords, we are committed to work with our retailers for them to trade better. So here, you see some examples of what we are doing as landlords to work with our retailers to help them manage their costs and also to help them tap into a segment of the population, the silver population, which is actually growing right? So all this is with the view of ensuring the sustainability of our retailers, ensuring the productivity of their space. Next slide, please. Okay. In this segment, I will touch about our pillar of strategic growth, enhancement growth. through AEIs, right? So happy to update that [indiscernible] AEI is progressing well. To date, we have garnered about close to 90% of leases for the space that is affected by the AEI. And the overall AEI is on track to complete by the end of this financial year. So you see on this slide, we have provided a sample of some of the retailers that have signed with us and will be coming to a mall. And many of these are actually new to mall. So if I look at the average of options that are new to more we're looking at about close to 1/3 of the more being refreshed by new retailers. Next slide, please. You will recall that in the last quarter update, we were very happy to share that the AEI for -- next is coming to fruition. And over the past quarter or so, happy to update that it has actually made good progress with about 40% of using precommitment just for the Phase 1, right? And another 28% is in advanced negotiation. So this brings us to close to 70% of the spaces that is undergoing the AEI, largely the [indiscernible], right? And that will be coming up at the end of this calendar year. So good leasing traction, good progress in terms of the AEI works, right? And [indiscernible] is now doing its final sale over this weekend, a lot of good deals. So please come down to the mall and support us. Next slide, please. Okay. With this, I will hand over to Judy to take us through the ESG section, thank you.

So good morning, everyone. I just have a couple of slides on the ESG part I mean, as you guys know, Frasers property as a group is very focused on ESG. And along with that, one of the initiatives that we always have been embarking on is that community engagement, ensuring that our malls are vibrant social hubs where our shoppers and community can connect through various initiatives. So throughout the year, through targeted place making from the testive events to the various health and sustainability programs, we continue to strengthen our engagement with the community and across various customer segments. There's been a lot of talk about cars as well given the inflationary environment. We just wanted to kind of feature a couple of the initiatives that we have embarked on over time. I mean this is not something that is just drawn up overnight. For example, essentially, it demonstrates how we are driving operational and cost efficiencies through leveraging technology as well as ESG initiatives. So one of them, for example, is our smart facilities management, where we're integrating both cleaning as well as security services with an outcome-based approach to reduce costs yet at the same time, deliver good performance to our mall operations. And on top of this, of course, leveraging AI, very, very common now a days across asset maintenance as well to increase that productivity and again, on our lifts as well as escalators as well, there's a lot of remote monitoring and diagnostics implies. So this helps to then support predictive maintenance again, all in line with achieving operational savings. Okay so on the energy side, lots of questions on that recently, pleased to share that we are fully hedged in terms of our electricity costs, for FY '26 and partially for FY '27 as well. And of course, over the past few years, we have been putting on much this [indiscernible] energy on our malls itself. That's like a 3x increase, for example, just in FY '25. So all of these measures put over the longer term has actually helped us to support the operational and cost savings. And all in, of course, these efforts also support 100% in terms of our win financing and in terms of our properties as well, 100% are green certified at the moment. All in all, underlying our strong ESG credentials. I'll next pass on to Richard, who will cover the looking-ahead section. Richard, please?

Yes. Thanks, Judy once again. So as my colleague has shared, for this first half, we have, in fact, delivered very strong results, thanks to everybody's effort from the asset management team, the property management team that has worked very hard on the ground and it has shown through the numbers that you have seen. So looking ahead, I think the question will be how do we sense the market, what are we looking for and where we are going for the next 6 months. So this is where we kind of want to share some of our views as well, right? Next slide, please. So fundamental is -- fundamentally, if you look at our business, right, it is about numbers so as Pauline mentioned, we continue to want to drive traffic to the mall and driving traffic and then thereafter, we try and do a conversion. So we have been doing very well on that front. Our shopper traffic has continued to increase and that has also contributed to the increase and improvement in sales for our tenants as well. So that's what we have been doing underground. But on a macro perspective, again, it's very important for us to look [indiscernible] in terms of numbers as a whole, it's growing. So happy to share and some of you would have seen some of these numbers across various media, various announcement, speeches and so on, that our population is growing, right? We know that we have crossed the $6 million mark in place it's about $6.1 million as of June 2025. That's a growth of 1.2%. So historically, in the last 10 years, the growth -- average growth rate has been at 1%. So while we don't produce enough, but we do still able to increase our population by about 1.25%. So that is good news for us, a business like ours because we won numbers, so the more people are available in Singapore. The chances are they would probably shop in one of our malls. And at the same time, if you look at going ahead based on the master plan that has been shared previously, over the next 6 to 7 years, we are looking at about 145,000 housing units, both public and private that would be constructed, right? So again, these are big numbers. And so far, we have been kind of monitoring what is the progress like between 2022 and 2025. Again, those [indiscernible] that have been announced, about 25% of them are actually near our mall. So again, this is where we are waiting for completion of this plant and the catchment market is going to grow for us, right? If you look at slightly in the shorter term, 2025, 2027, we are looking at about over 50,000 inch TV flats going to be built, so like what I said, big numbers, and these are the numbers that's going to continue to sustain the growth that we are seeing at our mall. Next slide, please, yes. Right. So again, going back to the fundamentals of numbers. So you have population so that gives you the numbers, the traffic, then what about spend, right? So this is, again, the one not only numbers, comes through the mall, but we also won the numbers that comes with spending ability. So again, this stat has been widely shared that the median household in Singapore has, in fact, exceeded 12,000 mark for the first time. So as the population median income growth, the propensity for them to spend has also improved, right? Again, that is also fundamentally supporting the sales across our portfolio. So not only individually, they are doing better in terms of the pay and income, but I think the government has also been very supportive, very progressive in terms of coming forward to help as and when they see perhaps there are some challenges in certain sectors of the market or certain sector of the population. So again, nothing new. You guys would have seen this by putting it a little bit more in terms of perspective, right? So CDC vouchers, $500 is going to be distributed in June instead of January 2027. As we all know, right, I mean, this has got an impact for us, for our malls because half of that can be used at our supermarkets, the other half, of course, can be used at the various HTV outlets and also hawker centers and so on. But even despite the fact that 50% are not able to be used in a mall, we do see knock-on effects. Similarly, even the 50% that is so-called available for supermarkets, right, you normally see a knock-on effect. And what do I mean by that? What you see is now the household has additional $500 to spend, right, which in the past year would really would have spent on supermarkets like what -- or markets or [indiscernible] centers and so on. But now with this [indiscernible], meaning that the $500 that you have previously kind of allocated for the same spending can be used for other things, right? Perhaps a little bit more non-necessity perhaps, maybe in terms of fashion accessories in terms of footwear and so on. So there is actually a knock-on impact. So it's not just strictly mean that goes to supermarket, and that's it and nobody else benefited. But based on our data, we are seeing that every time when there's a distribution of CDC vouchers. We do see some knock-on effect. And that is where the team again will look at how can we get the tenants to be -- to participate to be involved in any of such activities. So beyond the CDC vouchers, there are also cash payments. They are also use that has been earmarked, so if you look at just on a very broad perspective, you add up all this roughly, household could get up to about 2007, right, depending on the housing type and so on, so potentially up to 2007. So again, not only income is growing, but there are also additional sources of funds that this population catchment that we are serving can tap on. Next slide, please. And fundamentally, if you go back to basic, right, what are we all about, right? It's really about basic necessity bread and butter that you need essentials that you need on a day-to-day requirements. So again, focusing very much on Essentials. Our essential services made up about 54% of GRI close to 50% of our NLA space is actually occupied by this type of trades and products. Growth in demand drivers, we spoke about there's now population, housing growth, medium income growth, government support, so with this basic essentials, growth drivers, plus, of course, demand supply, right? I mean if you look at the supply side of things, over the next 2.5 years from now to 2028 we are looking at about just slightly below 180,000 square feet of suburban space. And in fact, none of them are actually the type of malls that is comparable to our portfolio, right, about 90,000 square feet and so on, and some of them are actually smaller spaces. So this is where you see how we believe that we're continuing to stay resilient. We continue to see that tenants in our malls will be able to do well, right? Fundamentally, [indiscernible] essentials strong growth drivers, limited supply. Next slide, please. So if I could just sum it all up, what are we looking at? Where are we focusing on? I think pretty much, we have not gone out of what we have been always been focusing also enhancement growth. Pauline has shared, I mean, we are very happy with the progress we have made at AlcanMall. And again, excited with the fact that NEX is going to start physical work, but even before the physical work has started, right? The traction in terms of leasing for the space that is going to be worked on has been pretty strong, $0.48 and again, 40% and another 28% that's already in an advanced negotiation, very strong numbers. Acquisition as part of the growth we have continue to be disciplined. We look for opportunities that fit our strategy. Again, as I always said, acquisition is opportunistic, right? It's not something that you can really plan for, right? And the third leg is organic growth. This is bread and butter for us. We continue to work very hard trying to see how we can further improve the performance that we already have very strong performance, drive traffic, drive sales, and that's where you could again be able to get the rental reversion that you're looking for, right? Supply is very muted. So that kind of underpins the demand for spaces at our malls. Judy also mentioned about beyond looking at the revenue side, we are also very focused on the cost management perspective, right? So proactive property management in terms of looking at cost management in terms of actually looking at cost mitigation as well, right? So sometimes you may not see an immediate improvement in terms of the OpEx, but the question is what happens if you don't do it so sometimes it's about cost mitigation, cost avoidance. And the last bit is about Annie and her team has been, again, also working very, very hard on managing our capital. So we see a lot of progress in that area as well. I mean the overall cost of fund has come down. So again, we -- about 60-plus percent hedged. We'll continue to monitor the market and would look at hedging if and when it becomes something that is positive for us. So with that, I will kind of wrap up our presentation. So happy to move to the Q&A section. So Judy, back to you.

Yes. Thank you, Chad. We've got a number of analysts already lined up to ask questions. So without further ado, let us start with Terence from JPMorgan. Can I invite you to unmute yourself.

Morning Judy and it and team. Just wanted to ask on perhaps 2 sets of questions. Actually, congrats on the good results. Number one, on the financial side, could you talk a little bit more of the $4.3 million that was retained and what the plan or will they be distributed in the second half of the year? And also, any updated cost of that guidance for the year? And then I guess on the broader picture, this potential divestment of White Sands, maybe if management could walk us through what's the thinking behind it? And how if any asset sale were to take place, how would these funds be redeployed? Are you looking at acquisitions? And would this be Singapore or overseas? .

Okay. Terence, I will take the second question and then perhaps any could help out in the respond to the first question. So as you have seen the announcement we put out, I mean, I mean some time as the media [indiscernible] of news and they make a big deal of that -- we are in talks, right? Just like -- most of our past transaction also is that sometimes we started talking. But as the announcement has stated, is still a conversation discussion. Nothing has been fixed, nothing has been concluded. So again, when things are done, things are really formalized that's when we will come up forward and shared with all of you, right? But as of now, it's conversations and discussions. So there isn't anything definite at this point in time. So your lead up question is what could we do, right? Again, like what I say, sometimes investment divestment are opportunistic, right? So if there are interest in our mall, and we think that may be we could look at something that's aligned with what we have always and visage for an asset like this when it comes to maturity, and we do get somebody who knock on our door and say, look, this is something that potentially, we could do, then we will set the conversation, right? So again, opportunistic happens, then we can start looking at for a start our headroom will improve because they are gearing down to about 36% kind of range. So that gives us a little bit of headroom to then pursue opportunities when it comes our way, right? So it's not something definite that we're looking at [indiscernible] and how we're going to deploy the fund immediately. So again, it's all opportunistic.

Sorry, maybe just to clarify, if you were to redeploy, I mean, would it still be a dominant mall in suburban Singapore? Or would you consider other things like downtown overseas other asset?

Yes. Okay. So the question is about maybe in terms of overseas, maybe a little bit straightforward, right? So the question is will we go overseas, but at the same time, we also ask ourselves, are we able to find good assets that has got similar attributes like what we have. And after you kind of do your risk-adjusted return can you find opportunity that's better than what we can get in Singapore. I think probably not at this moment. That's the reason why we will continue to stay focused in Singapore, right? So that is quite clear for us. It needs for this period of time -- during this period of time in the foreseeable future. Whether we, again, do something in downtown or do something suburban again, depending on what's available, if you do know something that's available, perhaps you can share with us. But at this point in time, we don't really I'm aware of anything that's available. Again, fundamentally, I think we look at how does it fit into our portfolio, right? Whether does it add value, are they having the same kind of attributes that we think this is value in the longer term, something that we believe is sustainable. And if it makes sense, right, we can always look at it...[indiscernible].

Take your first question [indiscernible]. So the $4.6 million that was retained. It actually came from our strong underlying performance of the portfolio as well as on lower finance costs. So if we can for various orders, working capital, other initiatives of AIs and which also includes potentially release in the second half. So the other question was the cost of guidance, cost of debt, right? Yes if we didn't change our guidance that was provided last quarter. So it remains around 3.3%.

We've got Vijay from RHB. Can you unmute yourself? .

A couple of questions from me. Firstly, in terms of the one-off JV income last year. Can you remind us how much was it? And what was the recent [indiscernible] was given? And also, I want to know a bit on the debt cost at the JV level? And how is it tracking.

Yes. So the one-off dividend that was in last year. So I mean, there was some excess cash from -- that was kept in [indiscernible] which is the excess cash from -- which is no longer required. So we may assess the cash position and know that we can make a one-off distribution up to the shareholder. So it's one-off, so we don't expect to have this in this year. What was the other question again?

I mean [indiscernible]

We don't share specific debt costs at our JV level, but it's around -- there's no new refinancing for the JV, so it will be the same as what we have previously guided, which is around about [indiscernible] .

Got it. So if you can clarify, again, if we strip off the one-off income, your JV income would have been higher year-on-year.

No. The one-off income was last year this year not this year.

If I slip of the last year's one-off, would your JV income be higher year-on-year?

Yes. SP1 Yes. JV income is still higher year-on-year. .

My second question is last quarter, I think you mentioned something about cost waypoint transformation and then increasing the NLA and other -- maybe is there any update on it? And as it comes closer to [indiscernible] are you seeing some tenant impact or any conversations with tenants in terms of how they see this overall changes?

I think the quick answer is, Vijay, we don't see that. In fact, the occupancy cost at point remain very strong. We are still getting renewal reversion that is very healthy. And each time they sign is a 3-year lease. So that has not actually deterred tenants from signing. So again, I think the way we shared many times before, perhaps the view on this RPS has been overemphasized or blown. But if you have been operating in cost-save point for a very long time, we have been seeing this flow of people going to JV all the time, right? So it's nothing new. But perhaps maybe a little bit more, a little bit changed. But again, we shared before about the bigger picture. We expect more people to come to Woodlands because it's a connecting hub , we are seeing growth in population because as we speak, some BPOs just next to the mall is being constructed and will be completed soon. So by and large, we don't see any issues with our leasing strategy for cost rate point. In terms of how we're going to revitalize the mall or even we develop the mall and so on, not not redeveloped, but again, doing AEI on the mall, we are hoping to be able to share some plans because we have to go through certain planning application and also getting in some of the key tenants that we wanted to showcase that has kind of pushed back. So we hope that by the next quarter, we can come out and show some of those ideas that we have for our cost rate point going forward. So unfortunately, I'm unable to share details at this point in time.

Next, we've got Gerardin from BBS. Jardin. Can I invite you to unmute yourself.

Richard and everyone -- maybe just 2 questions from me. I guess, first, if we look at transactions in the market, I want to cut on, we certainly transacted as you look at the asset because -- in terms of quantum, it looks quite close you do sell right sense to redeploy it.

We -- of course, we look at all opportunities that are available in the market, then we start to look at the numbers, you start to look at and ask ourselves whether this asset fit in terms of attributes, right? So typically, we want asset that is well connected to key transportation hub like MRT station, but interchange the way the more the physical structure, the more can we still create value? What are some of the competition around that area? So when we look at all these attributes, we decided that [indiscernible] is not something that we believe can add value to our existing portfolio, so which is why we did not participate in view.

Okay. Very clear. Maybe just on the reversion, [indiscernible], still very strong. I believe the cinema backfilling as well as the AEI completions we have added to this number. So on a same-store basis, what would be a cleaner number.

Yes. Geraldine, just to be very clear, AEI numbers, those areas that we did AEI on is not included in this rebid, reversions are only those spaces, existing spaces so any subdivision work and so on, we do not strip them out because that's where you get numbers that is not stable numbers, right? So we strip out all those. So this is really a very key numbers.

Okay. Okay. So the AEI will be a bigger boost to the 6.5%.

Yes.

Okay. Maybe just on on the cinema closure at [indiscernible]. Having all this noise for the past 2 years, what is [indiscernible] pre cluster for further closures?

Of course, I cannot comment on [indiscernible] business strategy, but it affect that they took up a lease in Century Square that goes to show that they're still going to continue to operate in Singapore. Again, Tambaro Plaza is one whereby like what I say, again, is it because of certain proximity, they see that in that catchment market, having won a great world is sufficient. But for us, we look at it more as an opportunity, right? I mean, Tambaro Plaza JV has not been really key traffic drivers. It's not bringing in the level, the total we wanted. So we have been looking at this space, right? And I've shared with all of you before that even though they are operating, we are making plans for every one of the cinema spaces that we have to identify what could be the possibility. So if they decide not to renew, they decided to exit, we have the plan quite quickly, which is why when they announced that they are exiting and we are able to find backfill the space very quickly. And we are quite excited with this venture that's coming in because I think there will be something new to the mall something that we believe it's going to be able to drive more traffic than what Golden Village used to be able to do so.

We've got Rachel from Macquarie.

Maybe just a few questions from me. Firstly, if I were to look at your tenant sales, could you give us some color? Is it mainly coming from supermarket? And have you seen any softening coming to the March year?

Yes. So the number is -- for the first half, we haven't really gotten the detailed number for beyond March, right? Because normally, the numbers come in a little bit later. So we only get it in May. But by ball observation, we still see a very strong traffic flow very busy at our malls. So we don't really see any softening from that perspective. What was your second question, sorry?

Is it mainly coming from the supermarket

Okay, maybe [indiscernible] can also help up, but I believe some of the trade categories have contributed that include your F&B supermarket is one, your beauty and health care. Of course, jewelry is one of the trade that is doing really good business. passion and accessories, I believe, is also one of those categories. Did I missout anything, Pauline?

Yes. So maybe, Richard, I will provide a little bit more flavor on that. So if you actually look at the slide that I presented earlier, in terms of tenant sales overall, we have actually achieved a 3.2% increase on a year-on-year basis, right? And with a further deep dive into the trades, maybe I will go with the, say, the top 5 trades within our portfolio. We see that across our top 5 trades by [indiscernible] the sales have actually improved or I think the only one that is maybe slower is fashion accessories. But even that, it's quite flattish. So I hope that gives you a little bit more perspective on how our retailers are doing.

Okay. Got it. Then my next question is on utility costs. I think you mentioned you have FY '26 then partially in 27, right? Just wondering how is the rate compared to last year's rate and 2027 versus 2026.

2026 all done. So 2027, we have done about 50%, right? So we continue to monitor the market. We still have another 50% to hedge. So like what I said, I mean, we can't really give you a fixed number right now, right? But let's say we take pretty extreme condition and say, look, if the forward rate goes up to about USD 120 per barrel. I'm talking about forward rate and not spot, right? So today, you look at oil price is about $100, $110, but that's forward. Forward rate is slightly different. Forward rate is where, again, is adjusted and the view is very different. So for example, yesterday, the forward rate is about $80, right? So never mind. So even if we assume the forward rate is about $120, right, the impact to our 2027 numbers, it's about 1% of the [indiscernible] so I hope that gives you a sense. That is, to me, is quite extreme because I'm looking at forward and not scale. .

And also another question on whether the utility cost has come down. I think we can stay quite definitively for FY '26 because it's hedge. It has come down from...

Do you have a rough [indiscernible] 5% less than 10% [indiscernible].

Do I have a rough Okay. .

Okay, maybe I believe our visit cost is about 9% to 10% of the overall OpEx. So probably the shape of maybe about 0.5% from there?

Yes, sounds good. right. Thank you. Yes. Then maybe just very quickly on the reversion outlook. I think it softened a little bit versus the last quarter, I think. So -- moving forward, do you see to see moderating down further? Or are you still expecting stronger reversions?

Yes. In fact, we spoke about this in our guidance has always been looking at about mid-single. In fact, it came in much stronger than what we have guided. Basic fundamentally is because our tenants at our malls continue to do well, which is why we were able to get that so we continue to guide that in a longer term, more sustainable basis, it's a middle single-digit number.

Next, can we have Terence from UBS. so unmute yourself.

Just a question on the dispersion in ramping power across your tenants. Just a question. I mean, there are articles online that say the local businesses are being priced out. Is this the case where you have Chinese brands want to pay top dollar for your higher visibility store fronts and perhaps the local ones who can't keep up.

Okay. If you ask me in terms of the ability to pay, yes, you are right that there are brands who come in, foreign brands that came in and prepared to be a little bit more aggressive, maybe perhaps that's their business strategy. They want to grow. They want to grow fast. They want to take position, right? But for us, it's not a case of always going after the best rent. So if you look at our malls, if you visit our more, you will find that it's well in terms of the trade mix as well planned, well put out. We don't have any specific single cuisine that is actually taking a significant number of outlets in a more because we believe that what we serve is a catchment market that consists of different races, people with different talent, people with different needs, and they don't want to eat the same thing every day. So we are very cognizant of the fact that when we plan our trade mix, we plan it in a way that we want to have the diversified well mixed kind of independent mix that we have. So the answer to you is, at least for our portfolio, what we can say, it's not always the case that we go for the top dollar. But if they are good, they are well demanded. That's what the catchment market are looking for. Yes, we will bring them in. But that has never been the first criteria because they can pay better than our local brand. So we will always take them first.

Okay. I presume that also means that this to people who pay top dollar isn't driving your reversions in a disproportionately

Definitely not, just to be very clear. .

Okay. And also, let's say, on some of these foreign brands, are there sales necessarily performing well broadly across because do work by some of these foreign brands and some of them are required sometimes.

So that goes back to my response Terence because again, some of them, they can pay, but is it really something that you want to have in your mall? Is it something that your hedgement market, your shoppers are looking for right? So for us, we are quite cognizant of the fact we want to bring in trade that can do well, trade that our communities are looking for. So are these in colleagues they do a lot of groundwork. They understand certain brands may work in Singapore and certain brands may not work, but maybe they can pay you, but it's not going to work, they are not going to be sustainable, right? So that's not the point that we are looking for. So what we do is we try to pick brands that we believe is -- can do well and can be sustainable. .

Okay. I think as it stands, there isn't much of any underperforming trade.

Of course, again, different trades perform differently over the period of time. Again, sometimes it's the case of the product that they have, maybe after what people get tired of it, that you change whether it be local or foreign. It doesn't matter, right? Over time, certain brand, you can see that slowly the the no longer attracting as bigger crowd as what they used to. Maybe people got tired of the product or the services that they provide. Sometimes initially as the services within different [indiscernible] that you get will have also impact on the -- in terms of whether customers are coming back or not. So it cuts across whether it be international or local brands.

I don't know if you can help us simplify, I guess, if you look across your [indiscernible] categories in terms of how their sales are trending, which are the all concerning ones? I guess we can just business, but what else is there to think about on the downside part of things.

You want to take that ?

Yes. So Terence like what I mentioned earlier, maybe I wasn't very clear. If I look at the top 5 trades in our portfolio by GRI, and these top 5 trades actually represent more than -- I think close to 80% of the GRI within our portfolio. These trades are doing better. The only one that is maybe quite flat will be fresher accessories, right? So that gives you a little bit of comfort. Now in terms of which are the trades that we do see a little bit of slowing in and so forth is like what you correctly point out, the Cinema trades some of the entertainment-related trades and also maybe the smaller trades within our portfolio. So like, for example, in the books and so forth. So all in all, I think in terms of the overall performance, we take comfort from the fact that the bulk of our retailers, i.e., the top 5, they are doing better, right, on a year-on-year basis.

Yes. But I just wanted to chip in as well Terence. But even having said that, right, so F&B is doing well. But does it mean every single one of the F&B guys are doing proportionately well, right? So some are doing better, some are doing okay. Some may not be doing well. So that's where you do see that there's some consolidation, certain brands moving out or malls or certain brands as we change out, right, we will work on those that probably are not doing as well. So again, what Pauline is giving you is a broad category, but I just wanted to highlight that even within the same category, is disproportionate so maybe perhaps that can answer your question because you're probably wondering you read a lot about F&B closures and all this. So why is it that our F&B sector is still driving.

Got it. I guess my comment is that maybe the flip side of having limited underperformance across the portfolio is that there isn't much, I would say, change of our tenants to drive further improvements.

Not really show that we have a retention of 87%. So usually, it's about 85%, 87% so we changed out at least about 13% for this time around as well. So typically, we will try to do a change out because especially -- if they -- we don't see certain trade doing as well or maybe a slowing down, misses a segment that perhaps the shopper in that area is no longer looking for this product or this kind of basins we change out. And what we also try to do is to bring freshness to the mall, right? Retail center can never stay the same all the time, right? You need to bring in something new, something that is fashionable, trendy something that people are looking for because, say, for example, I mean, our malls are in home gold and issue in Woodlands, we won the shopper there to be able to also experience certain things that's new in the market instead of having to travel all the way to town to say maybe the latest yogurt or liters salad [indiscernible], that they read about they want to have, right? So the idea is about the ability for us to also bring in some of those brands that is generating a lot of compensations as well.

I think just to add on, the calibration is not just between trades, right, but it's also within the trade itself, right? So because we know what are the sales performance of all our retailers, right? And the focus is always on looking, okay, what is, say, the top 10% to 20%? Are there better options for that space? Is there something better that we can offer to our retailers. So I think -- I hope that gives you an answer in terms of how focused we are on refreshing the trades because it also comes back to the longer-term sustainability in the trading of our malls.

Next, can we invite Raison from HSBC. So unmute yourself to ask questions. .

Morning management team. I had 2 questions. Firstly, just a quick 1 on numbers here. I noticed that under other items or net tax adjustments, about $6.8 million. Just wanted to get a sense, is the [indiscernible] that's retained for general working capital purposes being parked under this because I think year-on-year wise, in the first half of 2025, there's probably some that's due to catering provision, but was it expecting such a big number?

Yes. [indiscernible] that's correct. $4.6 million is included in the $6.7 million.

I See -- got it. That's clear. And then maybe just moving on to the next question. Firstly, maybe on the cost rate point. Just wanted to get a sense with regards to how much you see as an imperative to -- or urgency to to embark on the AEI because -- and I mean, we are seeing JohaBaruCity Square already bring some AEI on the upper floors. And then given that the expiries -- the bulk of the expiries for the mall is probably occurring in FY '27. So are we going to wait until like FY '27 to expect maybe some AEI works or maybe you will be engaging your intertenants your metro like what you did ahead of time.

Okay. We set when we embark on any AEI, we will plan out and see what is the best opportunity time for us to do it and also working backwards to say, what are all the the planning process, the planning applications, the engagement of agencies and so on is going to take, right? It's not going to be like overnight that you can decide to do it. We plan to hit, right, so for RTS is going to open. It's not something that because it's opening so we must also complete our AEI on time. I don't think that's the intent. What we also want to do is also want to observe one to learn when that happens what is the -- any learning point that we can pick up from there, perhaps you can find -- continue to fine-tune our trade mix as well. But engaging with anchor tenants definitely something that we would do ahead of time, whether the certain tenants, we think is going to fit into the new cost save point that we are looking at because as we shared before, our idea is to transform [indiscernible] into more regionals, more instead of -- currently, it's more a mall that served just woolen catchment. So we want to expand the trade mix that has the ability to pull people from a wider catchment market, right? So it's going to be a regional mall. So with that in mind, what are the kind of trades, what are we going to put in not just the hardware but the software as well. So this is something that we are planning. And again, our AI is going to be done in stages, right? So the mall will continue to trade what we look at doing it in phases over time. .

And sorry, Richard, maybe I'll just add on, right? I think our perspective for the enhancement of cost rate point is not just a response to potential risk. There is a lot of opportunities from the infrastructural changes in the north. And with this AEI, we are seeking to tap into these opportunities. So it's not just a reaction, right, to the RTS, but we do see tremendous opportunities. .

Right. Maybe just one final question on the acquisition. I noticed that on Slide 32, you actually added that new [indiscernible] acquisitions -- so I guess, probably are turning a little bit more acquisitive. Just wanted to get a sense in terms of your preference for maybe, let's say, if you get presented with a partial stake in a very strong dominant regional mall versus your -- like just maybe a 100% stick in a neighborhood mall because we do know that [indiscernible] transactor at a pretty cheap valuation. So I guess you'll probably be looking more at a strategic fit for the portfolio rather than just pricing a little.

Yes, definitely. I think for us, we look at it from a long-term perspective. I'm not sure in terms of the buyer for I 12, what is your plan for that asset, right? But for us, it's a long-term game. It's a long-term fall. We have -- in fact, we have sold some of the smaller assets before assets that it did not fit into our portfolio. So again, we are very mindful about acquisition, a disciplined approach something that we feel that's going to value add to our portfolio. Otherwise, it doesn't make sense, right? I mean we are just buying for the sake of buying. Again, sometimes headline numbers may not be showing the full picture, right? I mean why is it at that price? There must be some underlying reasons for that, right? So for us, it's about ability to contribute and add to our portfolio in a meaningful way. accretion is so one we look at maybe -- even if it's not immediate, it has to be one that we believe can give us that within a short period of time, so all is a consideration. And fundamentally, even the infrastructure is important for us because if you look at our strategy, it's always about having malls with strong catchment, strong catchment, strong ability to spend at the mall because in a meaningful way, even though it's basic necessity, but we still need people with the propensity to spend for that category of products that we have. So definitely, yes, we will be very focused on anything that we consider. And as I shared, this now when it was available, if you look at it, cost. I mean it's our job is our duty to look at every opportunity that's available. But whether we proceed or not that is another question.

Can I invite Derek from Morgan Stanley. Unmute yourself to ask a question, please.

Just 2 follow-ups. Just on METRO, the lease at a cost save point. When exactly is it expiring? And if there's an early preterm, does that jump-start AI commencement? And on cost of debt guidance, just to clarify, there's still 3.3% even until the quarter's cost of debt is already 3.2%.

Yes. I will leave the financing question to Annie. So if you ask me about the tenants in our mall, whether it will hamper our planning, the show answer is no. Because what I say, I mean when we undertake AEI, we always do it in phases, and we can do has different parts of the more to prepare and so on. So it doesn't really always have to the one whereby we have to wait for a certain leads to expire and so on, right? So it's not conditional on metros lease per se.

Exactly do they expire?

Okay. I can't give you a definitive because it's a nonpublic information. And camera, we're very happy if we share that Yes. So really, I mean, the only thing that we can give comfort is our AEI is not determined by the expiry .

Okay. .

Yes, Derek your question, yes, although the quarter is 3.2%, you know that the year 5-year IRS is pretty high. So I mean -- if we were to have new hedges this will actually be not at the current low or as well. So I think given that 1Q is a [indiscernible] if you kick concern 3.2% for the rest of the quarter, it will be around 3.02%.

Next up, we've got Dan Chen from GF.

Can I ask about the distribution that's held? If I recall, this is the first time other than cold you're recording distribution, right? Is this also a function of gearing? And can you walk us through when we go into second half, what is the decision process in determining whether the [indiscernible] is out.

Okay. I don't believe that this is first time, I think we have done it before within the year, maybe in the first half, we retained and then we released in the second half. So -- it is not -- definitely not the first time, at least during my time if I remember right? So again, it depends on where we see potentially there could be just for short-term basis and then the decision to decide whether we want to distribute the end of day. Again, there are many areas that we can look at in terms of how our performance continued to show for the next 6 months, whether there's really a need for us to keep this amount of money or whether this amount of money, it's used during the 6 months itself. So there are many considerations that we will look at. But if you don't need the money and we can deliver what we wanted to do, yes, that's something that we will be able to distribute at the end of the year.

By needing money, you -- are you also considering gearing -- and I think --

Because this $4.6 million is not going to move much in terms of gearing. It's not from a gearing perspective. [indiscernible]

Okay. So on a full year basis, going forward, I think 100% PL ratio is still a fair assumption?

Yes.

Thanks, everyone, for your questions as well as time today. I don't think we have any more questions from the ground. So thank you again for joining in FCT's First half 2026 Results Briefing. If there are any further questions, feel feel free to reach out to me and have a great day ahead. Thank you.

Thank you again, bye.