Keppel REIT (K71U) Earnings Call Transcript & Summary

Good morning, everyone. Thank you for joining us today for Keppel REIT's First Half 2026 Financial Results Briefing. I am Charmaine from the Investor Relations team. Before we begin, let me introduce the management team on this session. We have Mr. Chua Hsien Yang, Chief Executive Officer; Mr. Andy Gwee, Chief Financial Officer; Ms. Teo Xuan Lin, Head of Investment; and Mr. Jason Chua, Head of Portfolio Management. We will start the briefing with the presentation by the management team, followed by a question-and-answer session. I will now hand over the time to the CEO, Hsien Yang.

Thanks, Charmaine. Good morning, everyone. Thank you so much for joining us today. I think before we walk into the results, allow me to provide a quick update on the operating environment. Across our key markets, prime office demand has remained resilient, supported by number of structural demand drivers, including technology and innovation-led companies, continued flight-to-quality, leasing activity and also growth from key sectors such as banking and finance, wealth management and professional services. At the same time, the flight-to-quality remains a key theme across many of our markets. Our businesses are taking a more measured approach to leasing decisions amid broader macroeconomic environment, we continue to prioritize well-located, high-quality office buildings that offer a strong workplace experiences. The growth of AI and its implications for office sector continue to be widely discussed. AI is likely to support office demand, as its adoption drives business growth, productivity and also innovation across a broad range of industries. As businesses adapt to new technologies and evolving workplace requirements, we continue to prioritize high-quality office environment to support collaboration, knowledge sharing and talent attraction, reinforcing demand for premium assets in prime locations. Together with ongoing flight-to-quality trend, key structural demand drivers continue to support demand for prime office assets. Against this backdrop, we continue to actively manage our portfolio to benefit from these structural demand drivers and a preference amongst tenants for premium, well-located office space. I think we have shared since earlier this year that aside from focusing on asset management, we'll also be working on potential divestments. I'm pleased to share that this morning, we announced that we have entered into an agreement to divest our interest in KR Ginza II in Tokyo. The sale price of JPY 11.5 billion for 100% interest in the property represents an attractive 28.4% premium to the property's purchase price in November 2022 and a 9.7% premium for the property's valuation as at 10th of July this year. Keppel REIT is divesting its 98.47% stake. Keppel Japan, which owns the remaining 1.53% is also divesting its stake. The buyer is a listed real estate company in Japan. This divestment demonstrates our ability to identify strategic investment opportunities and unlock value at the right time. We believe that the timing for this divestment is opportune, especially given that the exit cap rate is attractive. And the current all-in interest rates in Japan are actually at higher than the cap rate based on the selling price. This divestment allows us to crystallize value and reduce our portfolio gearing, reinforcing our commitment to delivering sustainable long-term unitholder returns to our shareholders. Moving on to the 2026 key highlights for the first half. NPI rose 13.1% year-on-year, driven mainly by contributions from Top Ryde City. Excluding Top Ryde, the NPI increased 2.5% year-on-year, reflecting continued growth across our existing portfolio. Share of results of joint ventures was 37.2% higher year-on-year, mainly due to the addition of 1/3 interest in MBFC Tower 3. Excluding the acquisition, the share of results of joint ventures would have increased 11.6%, largely due to higher rentals and also lower borrowing costs. Distributable income from operations grew 25.2% year-on-year, driven by contributions from Top Ryde and the additional 1/3 interest in MBFC Tower 3 as well as improved performance from our existing portfolio. Excluding contributions from Top Ryde and then MBFC Tower 3 acquisitions, distributable income from operations increased approximately 4% year-on-year, reflecting positive organic growth across the portfolio. As of 30th of June, our leverage stood at 40%. Weighted average cost of debt was 3.27% per annum and total borrowings on fixed rate was 62%. Assuming the proceeds of KR Ginza II sale are included in the gearing computation on a pro forma basis, the gearing will be at 39.6%. The portfolio's resilient performance reflects the strength of our Singapore portfolio and growing contributions from Australia, supported by active asset management and strong leasing execution across both markets. As at 30th of June, on a portfolio basis, our committed occupancy remained high at 96%, and we achieved a strong rental reversion of 12.8% for this quarter with the Singapore portfolio recording approximately 10%. The portfolio WALE remained long at 4.5 years and a WALE of our top 10 tenants was at 8 years, reinforcing our income disability. Through proactive leasing efforts, we have committed over 1.1 million square feet of space during the period. I'll let Andy bring you through the key financial highlights next.

Thank you, Hsien Yang. In the first half of 2026, property income and net property income increased by 16.7% and 13.1% year-on-year, respectively, and that's mainly due to the contribution from Top Ryde City. Excluding Top Ryde, the existing portfolio also performed better as a result of higher occupancy and stronger AUD, Australian dollar. Share of results of joint ventures increased 37.2% year-on-year, mainly due to the additional 1/3 interest in MBFC Tower 3 as well as higher rentals, lower borrowing costs and stronger AUD for the existing portfolio. Borrowing costs increased 5.4% year-on-year, and that is due to the drawn -- loans drawn down for the acquisition of Top Ryde as well as MBFC Tower 3 in the fourth quarter of '25. This was partially offset by the lower interest rate during the period. Driven by stronger portfolio performance and contribution from acquisition, distributable income from operation increased by 25.2% year-on-year to about $119.6 million. Excluding contribution from Top Ryde and MBFC Tower 3 acquisition, DI from operations increased approximately 3.7% year-on-year, and this reflects the quality and resilience of the portfolio, which continued to deliver organic growth through active asset management and leasing initiatives. Including the anniversary distribution, distributable income for the period was $129.6 million, while this reflects a solid first half performance, the period include contribution from nonrecurring items mainly due to lease pretermination payments as well as a stronger Australian dollar. DPU for the first half of 2026 is $0.0261 compared with the $0.0272 in the prior year period. With underlying earnings growth, partially offsetting the impact from dilution from the enlarged unit base during the distribution period. On Slide 11, again, this shows the distribution timetable. So distribution we paid to unitholders on 15th September. Next, for balance sheet. Total borrowings and total liabilities decreased 14.8% and 21.1%, respectively, from the 31st December '25. The equity bridge loans, which were obtained to temporarily fund acquisition of our additional 1/3 interest in MBFC Tower 3 were fully repaid in full on 20th January 2026. Adjusted NAV per unit as at 30th June is $1.22. Next, Slide 13 outlines our key capital management metrics. Weighted average cost of debt was 3.27% per annum for the first half of 2026 and this is in line with our guidance for weighted average cost of debt for 2026 would to be in the range of 3% to 3.3%. Note that compared to the first half, it went up, and that's mainly because of our first quarter, sorry, not it went up from the 3.16% reported in the first quarter, and that's mainly due to first quarter having the equity bridge loan in there. So I believe we disclosed during the first quarter as well that excluding the equity bridge loans is about 3.7% as well -- 3.27%. We remain focused on proactive capital management, and we'll continue to evaluate opportunities to achieve favorable outcomes as we manage our refinancing requirements. Aggregate leverage was 40%, fixed rate borrowings and sustainability focused funding accounts for 62% and 80% of our total portfolio debt, respectively. Interest coverage ratio was 2.7x as at 30th of June '26. Next, in terms of our debt maturity profile, we have completed the majority of our 2026 refinancing requirements and are in advanced discussions for the remaining portion. Consistent with our proactive approach to debt management, we typically engage lenders 6 to 9 months prior to the debt maturity and expect to commence discussion relating to our 2027 requirements in due course. Following the acquisition of MBFC Tower 3 in December '25, we have made good progress on the planned conversion, including the necessary tax and legal work streams. A required submission to IRAs are largely completed. We are working through the remaining processes and we'll provide further updates as appropriate. With that, I will now hand the time to Jason, who will walk you through our portfolio review.

Thank you, Andy. Slide 16 shows Keppel REIT's portfolio breakdown as at 30th of June 2026 by geography. Singapore remains Keppel REIT's largest market at 78.7%, while Australia, South Korea and Japan are at 18.4%, 2.2% and 0.7%, respectively. We maintained a high portfolio committed occupancy of 96% for the quarter, mainly driven by a higher committed occupancy within our Singapore portfolio. This was offset by a lower occupancy at some of our Australian properties due to anticipated downsizing. Committed occupancy at top right declined slightly quarter-on-quarter, and this is expected as we continue to work with our partner to refresh and optimize the tenant mix. The leases we have signed recently have been secured at improved rental rates, which are above underwriting, reflecting healthy leasing demand at the asset. At 8 Exhibition Street, we continue to actively engage prospective tenants and pursue opportunities to backfill available space. While leasing activity remains encouraging. Market conditions in the Melbourne office market remain competitive and may result in some near-term occupancy pressure. Slide 17 provides a breakdown of our performance by geography. Attributable NPI for our Singapore portfolio increased 23.5% due to the additional 1/3 interest in MBFC Tower 3 and higher rentals. At our Australia portfolio, NPI increased by 21.2%, mainly due to Top Ryde, increased contribution from recently commenced leases at Pinnacle Office Park and a stronger Australian dollar. The decrease in the attributable NPI for our North Asia portfolio was due to a lower occupancy and a stronger Singapore dollar. Slide 18 gives an overview of our leasing performance. 80% of our leases committed during the first half of the year were at our Singapore properties. New leasing demand and expansions were primarily driven by tenants from the banking, insurance and financial services sector. We continue to maintain a well-spread lease expiry profile. The weighted average signing rent for our Singapore CBD office leases was $13.14 per square foot per month in the second quarter. In comparison, the average rent for the remaining leases expiring in 2026 stands at $12.54, which is below both our signing rent and CBRE second quarter 2026 average core CBD Grade A office rent of $12.50 per square foot per month. We have 6.4% of leases by attributable gross rent due to expire in the second half of 2026, which are largely concentrated in Singapore CBD assets. Leasing demand remains healthy, and we continue to actively engage with tenants ahead of upcoming lease expiries. This slide highlights the strength of our tenant base with a diversified mix of reputable blue-chip corporations and government agencies contributing to portfolio stability. In April this year, we completed the lobby upgrading works at Pinnacle Office Park, including a new business launch and refreshed common areas, enhancing the tenant experience and fostering greater workplace collaboration. These upgrades are expected to support tenant retention and leasing efforts by further improving the property's competitiveness within its submarket. During the quarter, ESG initiatives included children's kitchen workshops at top right, conducted in partnership with retail tenants to promote community engagement and hence on learning as well as a food donation drive at 255 George Street in collaboration with OzHarvest, Australia's leading food rescue organization. In Singapore, Gourmet Park was launched at Ocean Financial Centre to foster community interaction and enhance the workplace experience for tenants and visitors through curated food and lifestyle offers. In June, we obtained the BCA Green Mark, Platinum Super Low Energy certification at MBFC Tower 1 and 2, Marina Bay Link Mall and One Raffles Quay. With this milestone, all of Keppel REIT's Singapore properties have attained this certification, reinforcing our leadership in sustainable real estate and low-carbon building operations. These efforts also help to optimize the energy consumption, supporting cost efficiencies and enhancing the long-term resilience of our portfolio. 2 Blue Street also achieved the highest 6-star Energy NABERS rating, highlighting its excellence in energy efficiency and sustainability. I will now hand the time to Xuan Lin, who will go through the market review.

Thank you, Jason. The next few slides provide a snapshot of market conditions across Keppel REIT's key operating markets. In Singapore, average core CBD Grade A office rents rose a further 0.8% quarter-on-quarter to $12.50 per square foot per month in the second quarter of this year, representing the sixth consecutive quarter of growth. Occupancy remained high at 96.7%, reflecting continued landlord favorable market conditions. The tightening market conditions extended beyond the core CBD with vacancy in decentralized locations declining sharply from 5.6% in the first quarter to 3.6% in the second quarter, partly due to the withdrawal of Harbourfront Center from the market. The Shaw Tower redevelopment was completed in July this year with no further supply expected for the rest of the year with limited upcoming supply and no significant completion projected to 2027. Market dynamics are expected to be positive for landlords. Key real estate agencies are largely in consensus with Singapore Grade B office rents in the CBD forecasted to grow at up to 5% year-on-year in 2026. In Australia, JLL reported that Prime Grade office occupancies improved in the Perth CBD and remained broadly stable in Sydney CBD and North Sydney. While occupancies in the Melbourne CBD and Macquarie Park moderated quarter-on-quarter. Prime Gross Effective Rents continue to trend upwards, reflecting ongoing demand for quality office space. In the Sydney CBD, Prime Gross Effective rents increased by 8.3% year-on-year from $1,048 per square meter per year to $1,135 in the second quarter, highlighting the resilient demand for quality office space. In Australia's retail market, the household spending increased 1.3% in May, supported by growth in all 9 spending categories. Spending on discretionary categories as well as clothing and footwear remained robust during the quarter. On the supply side, new supply of regional and sub-regional retail in Sydney remains below historical levels. With future supply largely driven by upgrades and expansion of existing shopping malls. In Seoul, rents continue to trend upwards with Net Effective Rents for CBD Grade A offices, rising 2.8% quarter-on-quarter in the second quarter of this year. Occupancy remained healthy at 87.7%. The Tokyo market continued to perform exceptionally well with Net Effective rents for Grade A and Grade B offices increasing 6.9% and 4.8% quarter-on-quarter, respectively, reflecting sustained demand for office space. Occupancies remained high and approximately 99% across both segments. That concludes our presentation. Thank you.

Thank you, Xuan Lin. We will now take questions. [Operator Instructions] We can start with the first question from Terence from JPMorgan.

Good morning, Terence.

Congrats on the good results and on the Tokyo divestment. Maybe just 2 questions from me first. Firstly, on the divestment. Can we ask on the use of proceeds? And are there other properties that would or could qualify for asset recycling? And secondly, on acquisitions, another REIT has actually said that they may be open to divesting their 1/3 stake in ORQ. I would like to understand if K-REIT could potentially exercise their right to acquire the property?

Okay. So on the divestment first. So this asset was 100% funded by debt. So the -- so what we are looking to do is to pay down debt. We're not looking to redeploy any of the proceeds for any future acquisitions. There is one other asset that I shared before, which is our asset in Korea, we could potentially look at divestment of this asset also given that the -- we bought in at quite a good price. If we sell it today, the price would actually be relatively attractive. So this is the only other asset that we could potentially sell. So that's on the divestment. Then in terms of investment, I'm not sure what Suntec is thinking about in terms of divestments. They have not spoken to me at all about potentially selling any of their assets. So at this point in time, we are not doing any work. I've also shared with you that this year, the focus is on divestments, not on investments for the time being. So yes, that's something that we can, of course, always look at if they approach us. But as of now, they have not spoken to us. We've not spoken to them too.

I guess, if they were to approach or if they were to exercise their sort of like -- if they were to actually say that they wanted to divest, would this be something that you could consider? And potentially if this acquisition, if you were to acquire that your equivalent stake of that 1/3 stake in ORQ, would that be accretive?

Based on -- of course, we are a 1/3 owner of this asset, right? Based on the information that we have on this asset, a price valuation, if you ask me, would not be very attractive at this point in time. But of course, you need to do a bit more work. But if you are just asking very high level, if there was an offer to sell this asset at the current valuation at the current yield, I don't think. That is something that will be very interested to look at.

Next, we have Andy.

Can I just check on the NPI margin, it compressed by more than 2 percentage points, right? So just wondering how much of this was mostly driven by Top Ryde or were there some other reasons given that we did see increases in utilities and repair and maintenance? And just a follow-up on that. For Top Ryde, 67% NPI margin. Is this -- can we consider this as a stabilized level? Or is there some room for improvement going forward?

So I think the NPI margin, I mean, it depends a bit like you also mentioned that things are repairs and maintenance. Some quarters is a bit higher, some quarters is a bit lower. So there will be some fluctuations and 2 percentage points is not really that large. In terms of the Top Ryde, this should more or less be -- so it's the same thing, right? So like what I mentioned earlier, there could be a bit of fluctuation between quarters, but you can sort of take this as relatively stable level that you can look at.

Okay. Then in terms of the rental reversions, do you mind just giving us the breakdown between Australia and Singapore for both second quarter and first half?

I thought I didn't -- I shared just now already in terms of rental reversion, one minute.

Sorry, I may have missed the earlier part. Was there a breakdown given between the 2 markets?

So for the quarter -- for second quarter, the rental reversion, this is for first half, rental reversion is 12.8% for the first half and then of which Singapore is around 10%.

Okay. For Australia?

The Australia is -- because Singapore is 10%. The rest of it basically comes from Australia, so Australia is a lot higher than that. I don't have the exact number, but it's quite a high number.

Okay. Last one from me. Maybe any updates on your cost of debt guidance?

I think it should still be between 3% to 3.3% in terms of the balance that we have previously given.

Next, Wong Geraldine.

Maybe just one question on Japan after the exit and Korea, you're also looking to divest. So will you not be deploying in a big way in these 2 markets in the next, say, 3 to 5 years and just double down on what you have in Australia and Singapore. Is that right to say?

Okay. So 3 to 5 years is a very long way away to sort of be so definitive in terms of acquisitions. What I can tell you is, today, it is a better time to be selling in Japan and Korea. The cap rates have compressed. We are in an environment where the interest rates are actually going up. So the returns from Japan and Korean assets are actually quite low. So in fact, in Japan, I also shared just now the cost of borrowing is higher than the yield of the asset. So if you buy today, you actually out of the pocket immediately. There's is no returns, it's negative returns. So if the cap rates remain at these current levels, it doesn't make sense for us to invest in Japan, nor Korea. So if we do sell our Korean asset, the chances of us buying back into these 2 markets today is actually quite low. I wouldn't say that we are going to double down in Singapore and Australia. I don't think we are looking to like redeploy all the proceeds into new acquisitions, only if we see something that we like, we feel that the returns are attractive, then we'll look at it.

Very clear. Maybe just a quick one on 2027, expiries looks a little bit low $11.5. I'm wondering if I'm able to share a breakdown of what are those leases, which assets they are from? And are you able to rightfully uplift those to today's market rates?

We have already started working on that. So it is a fair bit of that is actually in Singapore in one of our -- I won't share that it's CBD asset. So it's -- we only have MBFC, ORG and OFC is one of those. It will definitely get to market levels. It's -- the expiring rent is at a very low level, and they will get to market. We have more or less already agreed on terms with them. So the reversion for this particular large tenant is going to be quite high, but I won't be able to share any further details at this point in time.

Next, can we have, Vijay?

Most of my questions are answered. Maybe just a couple of follow-ups. Firstly, on this JPY divestments. Just wanted to check, what is the yield -- exit yield and also that loan you are repaying, would it -- is it a Japanese loan? Or is it a Sing dollar loan? If so, have you -- do you have to repatriate it? And would that be a mark-to-market loss?

Okay. I will answer the first question. Andy will take the second question. The exit cap rate for this asset is low 2%. Okay. Andy, do you want to take the second question?

Yes. So in terms of the loans, all the loans are JPY loans, so there's a natural hedge to the proceeds. It's taken both onshore and offshore. So the onshore loan will be repaid upon completion. And then once we repatriate the money back, we will repay the offshore loan in Singapore as well.

Okay. Net debt, would it be a slight minor negative impact to DPU or what would be the impact of DPU assets?

It's very minimal impact on DPU, which is why I think we are not to do as a media release rather than an H1 announcement.

Got it. Got it. Yes. My second question is in terms of rent reversions, I noticed that the quarter-on-quarter, I mean, it has moved to some high single-digit kind of level. Is this because of the lease expiring? Is that a reversed -- revised guidance for the full year rent reversions, which we should look out for?

I don't think we are providing any guidance in terms of the rental reversion for the rest of the year. So I think that I did mention earlier this year and also last year, the expiring rentals for this year is of course, a fair bit higher than the expiring rentals for next year. So the rental reversions for next year, obviously, is going to be a lot higher. So as of now, the rental reversions, like what we have shared is around 12.8%. But I also wanted to point out that we have done most of our this leasing for the year. That's actually very little leasing rent for the remainder of this year. This should be reflective of the performance for the year.

Got it. Just one last question. In terms of future acquisitions, potentially after divestments, earlier, there was a discussion about adding retail to your portfolio. I mean if you're looking at a future acquisition, would it be more office or retail, how would you look at these 2 asset classes for future?

Okay. So okay, before I get there, I think what I've shared, I think, for completeness, we mentioned that we'll be looking at divestment of one or more assets. We have already done Japan, which has been announced. So -- but I think that some of the analysts did pick up that it's quite a small divestment. So I think logically, it is fair to assume that there could be potentially another one more divestment. We have shared, I think, consistently in the past 1 or 2 quarters, the aim is to pay down debt first and also to use part of the proceeds for share buyback. That is what we are looking to do. We are not looking actively at any investor at this point in time. So -- but if we were to look here to look at a deal, for example, hypothetically, based on your question, will it be retail, would it be office? I don't think there is a definitive answer. We do like both our commercial assets. It really depends on the opportunity that comes up. We will look at the returns to see what actually makes sense. But of course, today, if you look at purely use, retail yields are higher than offices.

Next, Yew Kiang Wong.

Just 2 quick questions from me. I think, firstly, in terms of the signing rents that you reported this quarter, right, $13.14, I noticed that it is lower than first Q. So just wondering, is it due to the types of leases you sign? Or is that indicative of rents coming off?

No, the rents are actually still going up, but I think this is reflective of -- we signed very, very large leases. So as you know, the very large tenants, the rental rates are actually a bit lower. Also depends on where they are in the stack, lower -- those, especially the lowest stack will take slightly lower rental. So it is not a reflection of the market starting to come off. In fact, the rentals are still going up. It's just the nature of these leases.

Okay. Okay. That's very clear. Okay. And next question is just wanted to also follow up on what you mentioned earlier, this year's focus will be on divestments. Outside of Korea, Japan, I don't know, is Singapore something you would consider? I mean, firstly, given that ORQ yields are really low. So it could be something attractive or if DBS would come to you and say they want to 50%, 50% partnership with you for MBFC Tower 3. It's something -- is this something you will consider?

So the comment about, the ORQ being the lowest yield income for me. So one -- you have to go back to talk to the person who made the comment. As of now, there are no plans to -- for us to consider divesting any of our Singapore assets.

Next, can we have Terence Lee.

So far Singapore office, you mentioned that the property consultancies are expecting 5% growth in 2026. I'm not trying to split here, but as office rents reach new highs, what is more reasonable here? This 5% or perhaps something more in line with GDP growth like 3%?

Pricing is not -- pricing for office is really not tagged to GDP growth. It really depends on supply and demand. So I think that if you look at what has actually happened in the second quarter, we have seen a healthy lease-up of even at assets outside the CBD. So shortly just come online, they have reached fairly healthy occupancy levels. The other one is, of course, an asset that our sponsor has. They didn't tell me what the occupancy is, but I know that it has reached not nowhere full, but they also reach relatively healthy levels. So they'll be announcing results tomorrow, maybe if any of you are covering them, you can also ask them. So that is a reflection of the market. And within the CBD, if we're talking about [indiscernible] Marina Bay and Raffles place, the occupancies are very high. So that is the reason why the rental rates are going up. So rental rates are not tied to GDP. I wouldn't look -- wouldn't want to suggest that there's some correlation between these 2. And today's reversions really reflect what the tenants are prepared to pay for and like what I said in the opening remarks, we do see a flight-to-quality and people are prepared to pay a bit more for good office space, premium office space in very prime location. So that is a trend that we actually see.

So would it be at 5% next year, given that there's no new supply coming up. I don't think it's quite reasonable.

I think that they meant 5% this year in 2026, which implies $13.50 rents.

Correct, correct. But then, I think that if you look forward, of course, this is anyone's guess, right? So to make an assumption of 5% plus/minus on a yearly basis, I would say that, that is a fair assumption that one can take.

Okay. And maybe just help me understand how -- say it comes in at 5% for 2026, hypothetically. How would this -- I think it will naturally bring our asset valuations being that it's slightly ahead of what valuers have penciled in earlier?

So the value will hold on 5%, you have -- it's not just about what the market had seen, the values will take the rent roll, then they will look at how much is actually expiring in the next 1 to 2 years, they will make certain assumptions around the rental growth. Would they revise, for example, previously, they assume 2%, 3% and market actually shows 4%, 5%, would this actually be on the valuation? Technically, it could. You know the values will never mark exactly to the market, right? They will have their own house assumptions, but I think that if you are hypothetically, if the market has demonstrated say, for example 5%, would they up the forecast a little bit? Potentially, it could. But like I said, it also ties back to the expiry profile of the building.

Can we have [indiscernible].

Can I ask about the higher JV and associate contribution, how much of that is driven by one-offs? And also what is the cost of debt at the JV level?

Yes. One moment, let me check. In terms of the higher JV one-off, it's only about $1 million or so. So the rest are really the strong performance -- the underlying performance for the JVs. And of course, Australian dollar is stronger as well. So our Australian JV also contribute positively from the FX difference as well.

Okay. So maybe to break down a little bit also. So I think that you are talking about rental reversions, we've spent a fair bit of time talking about reversions. Reversions just now, if you're looking in the market, it is that up to 5% growth in rental on a year-on-year basis. But of course, some of these leases are up. They are only due like every 3 years. So that's why the rental reversions are a lot higher. That's how you get the average of 10% for Singapore. The rest of it is really interest savings.

Yes, interest savings. And then in terms of the question on what's the interest rate for the JVs. I don't think we disclosed that on a stand-alone basis, but they do form part of our 3.27%.

Is it higher or lower or similar?

I mean if you look at the Aussie rates now, right, Aussie rates is so much higher than Singapore rates, right? So by reference...

It will be lower.

Okay. Okay. I think earlier, you mentioned about share buybacks, right? Can you talk a bit more about that in terms of timing, quantum? What are you looking at?

No, we -- I think what I'd said is if we have sold, for example, if I have sold another asset, we would look to take out some portion to do share buyback. But I've only sold Ginza and Ginza is very small, so share buyback is not happening yet. So if I do sell one more asset and we look at that, then we will actually share once we have announced the divestment of the DPU, how much we intend to take out to do a share buyback. I think we will provide more details once we have crystallized and other divestment when that happens.

Okay. And then just one last question on Pinnacle office occupancy. How should we think about that further?