Thanks very much, welcome to the first half FY23 Financial Results for Region Group. My name's Anthony Mellowes and I'm the Chief Executive Officer. Presenting these results with me today is Evan Walsh, our Chief Financial Officer, and Mark Fleming, our Chief Operating Officer. Also in the room with me is Campbell Aitken, our Chief Investment Officer, and Erica Rees, our Company Secretary and General Counsel. I'm pleased with this set of results as it reaffirms that we continue to remain true to our core strategy of investing in and managing convenience-based shopping centers weighted to the nondiscretionary retail sector. Firstly, let me take you to slide four, which sets out our first half highlights. Our statutory net loss after tax of AUD 95 million. Our FFO per unit of AUD 0.0835, down slightly over the same period last year. Distribution of AUD 0.075 per unit is up 4% on the same period last year. Our gearing was 31.7% as at December 31, 2022. Our NTA decreased to AUD 2.65 per unit, down by 5.7% against June 30, 2022. Our portfolio weighted average cap rate is now 5.67%. Our weighted average cost of debt is 3.2%, and our portfolio occupancy is 98% with our specialty vacancy sitting on 4.9%. We acquired AUD 180 million of assets and divested AUD 23.5 million of non-core assets during the first six months to December 2022. Moving to Slide five. We've got solid leasing and sales results is driving the performance of our core business. With respect to optimizing the core business, our comp NOI growth was 4.2%. We had good leasing spreads of 4.4% for the period with an 86% retention rate. Our specialty vacancy rate improved to 4.9%. We maintained that portfolio occupancy at 98%. Our tenant sales increased by 3.6% with non-discretionary sales growth of 6.4%. We're progressing well towards our net zero by FY30. All of our shopping centers have LED lighting and smart digital energy meters installed. Currently there are 12 solar sites that have been installed with eight sites under construction and a further 12 sites in design. With respect to growth opportunities. Our assets under management has grown from AUD 1.3 billion since listing in 2012 and now exceeds AUD 5 billion. As I mentioned earlier, we did acquire five convenience-based shopping centers for AUD 180 million in July of 2022. With respect to funds management, our Metro Fund did acquire Beecroft Place in July 2022 for AUD 65 million. With respect to divestments, we divested Carrara Shopping Centre, which was contracted for sale in November 2022 for AUD 23.5 million, a 2% premium above our June book value. We also, during January 2023, sold our remaining securities in CQR, realizing net proceeds of nearly AUD 27 million. With respect to capital management, our balance sheet is in a strong and robust position. At December, we had cash and undrawn facilities of AUD 278 million. We had hedged and fixed debt of 76.5%. Our gearing was 31.7%, which is at the lower end of our range. We have no debt expiries until June 2024. However, post the sale of CQR units, the Carrara Shopping Centre, and the proceeds of the January 2023 DRP, our pro forma metrics change to we're having cash and undrawn facilities of approximately AUD 370 million, hedged in debt and fixed debt increases to approximately 82%, and our gearing decreases to under 30%. I'd now like to hand over to Evan to present the financial results. Thanks, Anthony, and good morning, everyone. I'll start on slide seven, which shows our financial results for the half. Our statutory net loss after tax is AUD 95.1 million, which is down 122%. This has largely been driven by a AUD 148 million decrease in the valuation of our investment properties. Now, backing out the non-cash and non-operating items, the underlying performance of our business remains resilient, with funds from operations down just 0.2% to AUD 94.1 million. Our adjusted funds from operations, where we deduct the spend on maintenance, capital, and leasing incentives, has grown by 5.9% to AUD 85.7 million. Our AFFO per security has increased by 3.4% to AUD 0.076, with the distribution being AUD 0.075 per security, being AUD 0.003 higher than the first half of FY22. The distribution represents a payout ratio of 99%, which is in line with our target. Increased market interest rates has seen our net interest expense increase by approximately AUD 6 million, with our cost of debt increasing from 2.4% to 3.2%. The increase in these interest rates is partially mitigated through 76% of our debt being hedged or fixed. Excluding the impact of this increased interest expense, our FFO has actually seen a robust increase of 5.3%, with AFFO increasing by over 11%. Net property income has increased by a solid 4.2% for the half, with comparable NOI increasing by 4.2% or AUD 4.4 million. This has been driven by strong leasing outcomes, increasing turnover rent, and a reduction in our specialty vacancy rates. We received a total of AUD 11 million of insurance proceeds, primarily related to the flood damage at Lismore Central. AUD 1.8 million of this has been allocated as income, which relates to lost rent and additional operating expenses incurred through supporting the redevelopment. The Metro Fund acquisition of Beecroft Place has increased assets under management by AUD 160 million, driving a 25% increase in funds management income. Corporate expenses remain controlled, with costs slightly lower than previous period, we expect that maintenance and leasing expenditure to be weighted to the second half of FY23. Turning to the next slide, which shows our summary balance sheet. As Anthony Mellowes mentioned, our assets under management have increased to over AUD 5 billion, which is a 1.7% increase over 30 June, with AUD 245 million of acquisitions over the half, including the Metro Fund's acquisition of Beecroft Place. As Anthony Mellowes also mentioned earlier, Carrara Shopping Centre was contracted for sale in November 2022, and that's held as an investment property for sale at AUD 23.5 million, and we sold our remaining our holding in Charter Hall Retail REIT. No COVID-related rental assistance was provided to tenants in the half, we've had a strong cash collection rate. We have seen a reduction in our expected credit loss by AUD 1 million. Our securities on issues have increased by 1.5%, mainly due to the underwriting of 50% of the June 2022 distribution. On slide nine, which highlights our property valuations. Our total property portfolio value has increased by AUD 26 million to AUD 4.487 billion. During the half, all centers were internally valued with, in addition to 20 centers being selected to be independently valued. This has resulted in a like-for-like decrease of AUD 131 million. We have seen a 23 basis point softening of market capitalization rates to 5.67%, with our Neighborhood portfolio at 5.5% and our Sub-regionals at 6.12%. The reduced valuations were offset by the acquisition of the AUD 180 million portfolio in July and approximately AUD 11 million of capital expenditure spend and the impact of accounting adjustments. The decrease in property values saw our net tangible assets reduced by 5.7% to AUD 2.65 per security. Moving to the next slide. We maintain a prudent approach to our debt and capital management given the uncertain market conditions, with our available cash and undrawn facilities being around AUD 277 million at 31 December. Gearing was sitting at the lower end of our target range of 30%-40% at 31.7%. Post-period end, we have collected a total of AUD 69 million from the sale of our CQR holding and the underwriting of 50% of our December distribution. With the expected proceeds from the settlement of Carrara Shopping Centre, our pro forma available cash and undrawn facilities increases by approximately AUD 93 million to AUD 370 million, with our pro forma gearing reducing to under 30%, which is below our target range. At 31 December, our fixed and hedged debt increased to 76.5% with an amendment to an existing interest rate swap, increasing our hedging by AUD 100 million. On a pro forma basis, our hedged debt increases to over 80% of our total net debt. The forecasted FY23 weighted average cost of debt is 3.4%, which is up 0.9% versus FY22 and follows a forecast 2.9% increase in market interest rates over the same period. Although the reduction in property values and the increase in interest rates impact our gearing and interest cover ratios, we remain well within our debt covenant requirements. We have stress tested these metrics with every 25 basis points movements in capitalization rates. This would see a change in property valuations, resulting in a 1.5% movement in gearing. For every 25% movement in market interest rates, interest expense would change by approximately AUD 400,000. Moving to slide 11, we show some key charts highlighting the strength of our debt and capital management position. We continue to take a balanced approach to debt and capital management with our strategy aimed at minimizing risk, targeting attractive rates for our debt facilities, whilst providing flexibility for future growth opportunities. We have a diversified debt book of AUD 1.5 billion with approximate equal split across bank-provided debt, medium-term notes, and US private placements. 82% of this debt is expected to be hedged at the end of FY23. In FY24, we remain well protected against adverse increases in interest rates with 71% of debt expected to be hedged. We have no debt expiries until June 2024, with negotiations being well progressed for the extension of our bank debt expiring in both FY24 and FY25. The AUD 225 million medium-term note expiring in FY24 is covered by available cash and undrawn debt facilities. I will now hand over to Mark, who will take you through our operational performance. Thanks, Evan. We'll start on slide 13 that gives an overview of our portfolio. As at 31 December, we had 13 convenience-based sub-regional assets and 82 neighborhood assets. Our assets have gross lettable area of approximately 798,000 square meters, and we own over 2.5 million square meters of land. 46% of our gross rent comes from our anchor tenants, including Woolworths, Coles, and Wesfarmers. Of the other 54%, there is a heavy weighting towards our core non-discretionary categories being food and liquor, retail services, and pharmacy and healthcare. As you can see, our geographic diversification is well-balanced across all states in Australia. Slide 14 shows our portfolio occupancy. Our occupancy level is stable at around 98%. The long-term stability of our portfolio occupancy illustrates the resilience of the portfolio. Specialty vacancy decreased slightly to 4.9%, which is still towards the top end of our target range of 3%-5%. Specialty tenants on monthly holdover reduced slightly to 3.9%. Turning now to slide 15. Tenant sales growth has been robust, with moving annual turnover growth of 3.6%. Specialty tenant sales growth of 5.8% was particularly pleasing as they continue to recover from the COVID period. Our tenant sales are now approximately 12% above pre-COVID levels. Our turnover rent is also increasing due to continuing growth in supermarket sales. 51 anchor tenants are now paying turnover rent, which represents 39% of total anchor tenants, and another 15 anchors are within 10% of their turnover thresholds. Two anchor tenant turnover rents were captured in a base rent review during the year. Moving now to slide 16, supermarket online sales. We continue to support the online offering of our supermarket tenants. Online sales are included in 96% of our supermarket turnover rent calculations. We benefit from increased turnover rent as online sales grow. Our research indicates that having a convenient online supermarket offer also increases foot traffic and in-store sales for our specialty tenants. Our centers are ideally located for last mile logistics. We believe that the store-based fulfillment model will remain the predominant model for online grocery fulfillment. Turning now to slide 17, specialty key metrics. We had a strong leasing performance during the half year with 198 deals completed at an average positive leasing spread of 4.4%. Ongoing sales growth and relatively low rents positions us well for future rental growth. The sales productivity of our specialty tenants has increased to over AUD 10,000 per square meter, while our average rent per square meter remains at around AUD 800 per square meter. As a result, despite the strong positive leasing spreads during the half, our specialty occupancy cost remains relatively low at 8.7%. Our specialty leases are generally five-year leases, and most of them have annual fixed rent reviews of around 4% per annum. Slide 18 provides a sustainability strategy update. Most pleasingly, we're on track to achieve our net zero target by 2030 or before. We've completed our LED rollout and have now installed nine megawatts of solar panels on our roofs. Well on the way to our target of 25 megawatts by FY26. We're also gradually replacing R22 gas at our centers, installing building management systems, and exploring opportunities for on-site battery storage. Other sustainability targets are also progressing as planned. We're in the process of completing climate risk assessments at six of our centers during FY23 on top of the six we completed in FY22. We continue to focus on improving our engagement with our local communities, including via our partnership with The Smith Family and the development and implementation of local community engagement plans. Thank you, and I'll now hand back to Anthony. Thanks, Mark. Okay, on to slide 20, which is about our acquisitions and divestments. As you can see there, we acquired five centers, predominantly in Dernancourt and Fairview Green in Adelaide, Delacombe, Brassall, Port Village, and Cairns Square, a couple in Queensland, one in WA. We also contracted to sell Carrara in Queensland, which I mentioned before, above our June book value, and recently we just sold our remaining investment in CQR. We'll continue to remain disciplined with respect to acquisitions while we're always being opportunistic with respect to asset sales. With respect to the market, the convenience-based shopping center market did definitely slow in the six months to December 2022. We believe that we're really well-placed with our gearing below 30% to continue to source some acquisitions that will be earnings accretive and also add value to our portfolio. Turning to slide 22, Funds Management. Our joint venture with GIC really does offer us a good platform for growth. It did commence in FY22 with seven seed assets, and we did acquire Beecroft in July for AUD 65 million. It is a fund that is all about metropolitan neighborhood centers, and it has an initial target fund size of AUD 750 million. The ownership is 80% GIC and 20% Region Group. This really does position us well to access those metropolitan neighborhoods in partnership with a high-quality, globally recognized partner, while also growing some more asset-light management fee income. On slide 23 outlines our indicative development pipeline. We have in excess of AUD 250 million of investment over the next five years, predominantly in two areas, being the traditional developments of the shopping centers, but also our sustainability initiatives that Mark was talking about, predominantly in the larger solar areas. I'd like to talk about our key priorities and outlook on slide 25. Our core strategy remains unchanged. We will continue to seek and deliver defensive, resilient cash flows to support secure and growing long-term distributions to our security holders. We will continue to focus on convenience-based retail centers with that strong weighting to the nondiscretionary retail segment. We'll be seeking those long-term leases to quality anchor tenants such as Woolworths, Coles, Aldi and the Wesfarmers Group, which was again demonstrated by our latest acquisition. We'll continue, as I said before, to explore core business growth opportunities but remain disciplined with respect to acquisition and disposal opportunities that meet our investment criteria. Evan, do you just wanna run through slide 26, our longer-term AFFO growth target? Thanks, Anthony. Slide 26 has been a pretty consistent slide for us over the past few periods. This highlights our longer-term target to grow our adjusted funds from operation by 2%-4%. We target comparable NOI growth of 1%-3%, which is supported through an expected sales growth for anchors of 2%-4% per annum. This, we should see this increase the number of anchor tenants paying turnover rent. 55% of rent is derived from our specialty tenants, where around 90% of our tenants are consistently paying average fixed growth rates of 3.9%. For tenants that expire, we expect rents to grow by at least 2% over the prior rent. Growth opportunities are indicated to add at least 1% to our target growth, with a focus on investing in value-added extensions and refurbishments, selective acquisitions, and through growing our funds management business. Corporate expenses are targeted to increase by no more than the NOI growth rate. The impact of interest expense is to remain neutral to our longer-term growth targets. However, we expect there to be a short-term impact from current market pricing. Capital expenditure is expected to remain as a constant% of our property values. Back to you, Anthony. Thanks, Evan. Finally, really, onto slide 27. We will continue to drive that strong and sustainable NOI growth while maintaining our gearing at the lower end of our target range. With respect to that core business, we're going to generate that compare sustainable NOI growth by driving increased rental income from our specialty and mini- major tenants, partnering with our anchor tenants to drive turnover rent, and leveraging our scale to maintain controllable property expenses as a% of property income over time. We'll be continuing on our path towards net zero by FY30, sorry. With respect to growth opportunities, as I said, we're going to remain disciplined with earnings-accretive acquisitions and divestment opportunities, targeted spend on the development pipeline and sustainability investments, and continuing to expand our funds management platform through the Metro Fund. With respect to capital management, we're gonna maintain that appropriate capital management strategy, which includes gearing at the lower end of our range of 30%-40%. At the moment, we are below that. Our interest rate hedging to remain at the higher end of our target range of 50%-100%. We're actively managing our upcoming debt expiries and maintaining sufficient capacity to fund any identified growth opportunities, and we expect the DRP to remain in place. Our FY23 AFFO per unit guidance is upgraded to achieve at least AUD 0.152 per unit, that assumes no further acquisitions or disposals and that the three-month BBSW for the second half of FY23 is 3.6%. I'd now like to invite any questions. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask a question. Your first question comes from Caleb Wheatley with Macquarie Group. Please go ahead. Good morning, Anthony and team. Thanks for your time. First question is just around guidance. Slight upgrades there on AFFO to AUD 0.152 per share. We've got some divestments, albeit small, coming through in the second half. Just wondering what drove the upgrades to expectations to go through second half of 2023. There's two main reasons for the upgrade. One is the impact, the full year impact of the acquisitions we did back in July. The second one is the underlying performance of the comparable NOI growth, with some of the leasing outcomes driving the first half flowing through to the second half. A bit about performance from the like for like NPI. I would have thought the impact of the acquisitions was largely known when guidance was provided in August. Has there been some outperformance or some additional accretion that's come out of that than what was originally anticipated? No, not particularly. It was slightly better, but not dramatically better. The major area was out, as Evan Walsh said, was just we had bits and pieces across the area, across all the areas, some turnover rent, specialty rent, et cetera, did slightly better. That was also offset by sort of slightly higher interest as well. A slight better forecast on where we're heading with capital for leasing and maintenance capital this year. Drivers for the upgrade. Have there been any change compared to where we were in August? Apologies on that maintenance CapEx AUD 0.10 a spend. I know you flagged a second half skew, how should we think about that going into the second half? Sorry, it just cut out. Was it the CapEx in the second half? Yeah, just exactly how that skew is going to play out. Apologies. Yeah. Evan? Look, I think, I think based on current, I think the last couple of halves have sort of been a bit lumpy up and down. We are expecting the spend to be slightly higher the second half, and fits within our guidance of the 15.2. Thank you. Second one is just around the FFO guidance. You provided, I think it was expecting AUD 0.170 per share in August. Doesn't look like there's been any additional update there? Provide some color as to maybe what you're expecting FFO and if there's no additional color, just the rationale behind that. The FFO guidance remains in line with six months ago at AUD 0.17. It is really driven by the increased interest expense, and that is offset by the NOI performance. Great. Thank you very much for that. Second one from me is just on the GIC joint venture. It looks like the growth assets are in the fund has increased since the FY22 update. Just wondering if you could provide some additional color on, you know, what you're seeing in terms of opportunities for those more metropolitan located assets, and how your partners potentially thinking about, or how we should think about growing that fund moving forward? Yeah. No, that's a good question. Look, the whole acquisition market has slowed considerably in the last six months as interest rates rose. There was a big gap, as I spoke about in our August results, emerging between vendors' expectations and purchasers' expectations, and hence not a lot of deals were done. Us as a purchaser, and I'll put our partner GIC in that, with interest rates increasing, cost of capital increasing, you needed to get a better return out of that particular asset that, or out of any asset that you're looking at, and that's where this vendor expectation on price and the purchaser's expectation on price were different. That gap has closed, and we have seen a couple of acquisitions this year already that were being negotiated in the last part of last year. I think there's still a bit of a gap there. Our joint venture partners have a similar view that until the market reaches or that gap is closed, we'll probably be remaining very disciplined because it's got to be accretive to buy. If you can't buy an accretive amount, you've got to make sure there's going to be very strong growth in that asset. That's where we're sitting at the moment. I think our joint venture partner with their particular views of this investment has similar views. Great. Just waiting for that pricing to come through and being a bit more prudent with capital, that sounds like we should expect that to recover. Thank you very much. Appreciate your time this morning. Very much. Your next question comes from Sholto Macpherson with Jefferies. Please go ahead. Hi. Thanks for your time. Just following from Caleb's guidance question. The FFO is the same, but I looked at your 22 preso. The assumed cost of debt was 3.4 for the full year, and it's still 3.4. Was it just the weighting that was a bit higher rate in the first half versus second half? That's been a bit more weakness in the first half than you expected on the higher cost of debt? Yes, correct. If you look at the NOI, the comp NOI is pretty strong. It's up, you know, 4.2% for 3.3%. If you take out the ad back leasing and amortization straight lining was up about 47%, so that added about AUD 3 million. If you take that out, there wasn't a huge increase in the investment, even on the NOI line. Is it just a function of the leasing volume that are done that you've got that higher ad back of the amortization in the FFO property line? On the earnings slide, that doesn't include any accounting adjustments. That's pure, underlying op-performance of our NOI. The 4.2% is based on essentially, yeah, cash. Okay. That's great. Thank you. Just to follow up, the anchors in turnover, you've had some acquisitions here, so it might not be like for like, but you've obviously specialty rents increased a lot and you've bought more. I think it said, your specialties increased from 55% to 53% of rental income. Was that just from acquisitions that the higher specialty or growth in specialty income exceeding the anchors? Yeah. Hi, it's Mark here. two things. One is acquisitions, because obviously the assets we divested were smaller neighborhoods with a higher% of anchor income, and the ones we acquired had a slightly higher% of specialty income. There's a little bit of a mix change. Also over time, because the specialty rent grows more quickly than the anchor rent, over time, we will gradually, as we have done, gradually see specialty rent become a higher% than anchor rent, just naturally through the growth of those two lines over time. Yeah. That, that's good. Just last period, you had 41 out of 92 supermarket turnover of 45%. What was the percentage at 44 out of, not sure how many supermarkets you have now? I may have missed that in the presentation. What's the percentage? Slide which sets that out. It is slide. Which is slide 30, 34. You can do the calculations on slide 34. We set out the number of supermarkets in each period. Thanks. Thanks. The DRPs remaining on, there was a 50% deal you had with MA this period. Is that just a one-off for that, for having that underwrite? You know, is the DRP going to go back to sort of normal DRP this period? We sort of have kept that underwrite on for a number of years now. There's nothing to it. It's a 1% discount to our price at the time. We think it's a good effective way of topping up to effectively pay for our development spend, is how we really look at it. We do have a lot of retail investors. The take up is about half, 25%, we underwrite to 50%, that's been pretty consistent over the last few years. Yep. Just on the corporate costs, I think you said they went down or slightly up. The cash flow statement had AUD 13.6 million versus AUD 9 million. I think there was a restatement of AUD 1.4 million, which was below the line before. What sort of was going on with that restatement and the sort of AUD 1.4 million that was below the line before? I'll have to come back to you on that one. Come back. All right. Finally, just on the revals, it seems most of the weakness came through in the sub-regionals. If your cap rate's up only about 3 basis points higher than the neighborhood increase. Was the cash flows impacted more on the sub-regional assets than the neighborhood assets to get to those negative revals this period? Mark, do you wanna? Yeah. look, I don't think there was that skew. Overall, we had slight NOI growth in the vals of around 1% for the period. The real impact on the vals is the cap rate expansion, not the NOI movements. It was pretty consistent with that. Between neighborhoods. We didn't- Yeah. discern them that much. In fact, you know, we are starting to see the NOI growth of the sub-regionals, come back, you know, relatively strongly over the last six months. Not so much about income, more about cap rates. As we've said before, the sub-regional sector is one of the most widely defined. Ours tend to be at the very smaller end of the sub-regional sector, and there are some that are much, much larger centers. It's a wide range. Ours are the smaller ones, and there wasn't that much difference between either. Yes. Thank you. Just finally on the leasing majors, CapEx of AUD 8.4 million this half. What's the sort of increase, what is expecting second half on the run rate for that? That's maintenance and leasing CapEx, Shelto? Yeah. If you look back over the last couple of years, we've generally spent around AUD 23 million per annum on leasing and maintenance. It can be lumpy, as Evan said. In particular periods, depending on how many deals we've done in the previous six months, and just the timing of maintenance, CapEx. I'd sort of think about through the cycle around that AUD 23 million-AUD 24 million for the current portfolio. Not using that as a forecast for the second half, but there will be a slight increase in the second half versus the first half. That's all captured within the guidance. Yep. All right. That's great. That's everything for me. Thanks very much for your time. Thank you. The next question comes from [inaudible] with Jarden. Please go ahead. Yeah. Thank you. Good morning. quick question on the development pipeline. Apologies, Anthony, if I missed it, but what returns do you expect on those smaller developments and sustainability initiatives, or is it really, maintenance CapEx as well? I had to basically get on that slide, except for things like the shopping center rebuild, I'm talking slide 23 where we had Lismore, that was just the best place to show it. Basically, they've got to meet our IRR hurdles and everything on that slide meets it. The sustainability, we have some that do a lot better and some, such as some of the solar with the embedded networks does very well, some of the R22 gas replacements probably doesn't meet it. As a, as a whole in sustainability, they all meet our IRR hurdles. Great. Then just as a follow-up to Caleb's question earlier, which is more about the metro kind of bid-ask spread in terms of acquisition opportunities. Is it very different from the non-metro in terms of for your own balance sheet, or is it a similar kind of issue at the moment where the bid-ask spread is still too wide to really jump on opportunities? No difference. Great. I think they're getting slightly better, but vendors still think their centers are valued at the same price as this time last year, and purchasers aren't willing to pay as much as they were willing to pay this time last year because of funding costs. That gap has narrowed now. Makes sense. Thank you. Your next question comes from Simon Chan with Morgan Stanley. Please go ahead. Hey, good morning, Anthony, Mark, and Evan. Hey, I just want to pick up on that last point, Anthony, about that gap. Let's cut to the chase. How big is the gap in your view at the moment? How big? Oh, look, you were probably thinking were 5.5% last year. A purchaser was thinking 5.5%, they're probably thinking at least 6% now. I think there was probably a 50 basis point gap, and now that's probably not 50. Others are paying 5.4% for an asset went this week up in Brisbane. A couple of the smaller neighborhoods are still selling below 6%, but you've seen some movement with some larger regional/large sub-regionals where they're, you know, higher than sort of 7% plus 8%. In our sector, being the small sub-regional neighborhood, I think there was 50 basis points, and I'd probably say there's, I don't know, 25 basis points gap now, if I was to sit there. I mean, put it this way, Evan won't let me go and buy anything below a 6% because he says that's what it's costing us to fund it. That's a very good discipline by Evan. Well done, mate. Anthony, if I were to extrapolate your comments, are you implying that potentially, across your portfolio, if you market to market, there's another 25 basis points of cap rate expansion, in the near term there? I think in August when we did our results, we said there was probably coming down the pipe a 50 odd basis point movement. I think we moved nearly sort of halfway at December, and we'll see what happens in this next six months to June. Great. If I just go back to your slide 23 that you referred to on your CapEx forecasts. Those annual spend used to be AUD 50 million, AUD 60 million, AUD 70 million. If I go back to, you know, last half or even the half before, any reason why your annual CapEx spends, you know, down to AUD 40 million per year now? It's just a bit of more trimming up and, you know, these are, you know, pretty long-term forecasts. A couple have fallen out, but it's roughly gonna be 50/50 What I call traditional developments, à la expansions of the supermarket, adding a couple of shops, et cetera, and 50% of sustainability. It's gonna range between AUD 40 million and AUD 50 million a year. That's very clear. Got one question for Mark. On slide 17, I notice average incentive's gone up by one month, so that's probably, you know, incentive's gone up by 2%, assuming a four to five year deal. Is this just an anomaly or is this a trend, or was there a strategic decision to increase incentives but then you also get better leasing spreads? I know there's average uplift of leasing spreads and new leases that's also increased. Can you talk a bit about that? We get asked this pretty much every time because the range that we've had over time has probably been between 10 months and 15 months. What we always say is that the market is around 12 months, and it hasn't really changed in the whole 10 years we've been around. Sometimes might be a little bit more, sometimes a little bit less, but it's pretty much always around 12 months. It just depends on the deals that are done in that, you know, particular period. The fact that we were 10.4 in the previous year, I wouldn't read too much into that. I think the market is around that 12-month level. We're still very comfortable at 11.4. It will vary from six-month period to six-month period, just because of the mix of the deals that are done. I don't think there's any underlying change in the market, and I don't think there's any underlying change in our approach. We tend to think about 12 months as being roughly what the incentive is on a five-year deal. Yeah. Evan, insurance. Can you clarify your comment made in your prepared remarks? I think you said you guys got AUD 11 million or something, cash proceeds, and then you allocated AUD 1.8 million of that to income. Have I got those numbers right? Two, will you be allocating more money to income next half, or is this it? Like, how do I think about that? Yeah. The AUD 1.8 million is related to both the lost rent and additional operating expenses that we've incurred whilst the redevelopment is happening. The remainder is actually allocated to the redevelopment spend. It lines up with what was on the development pipeline page. Yeah. It's the capital replacement- Mm. effectively 'cause it was wiped out with the flood. AUD 1.8 of it is income, and the balance is capital replacement. Straight insurance process. We insure for loss of profits and capital replacement. For the second half, will Lismore then be earning genuine NOI like rent, or will there still be more insurance income to flow through? There'll be a bit of insurance income, I'd say. Yeah. It gets smaller and smaller, but we've still got some shops that haven't opened, because you can't get tradies there. There's a whole range of issues. Okay. Okay. Fair enough. Thanks, guys. That's all I've got this morning. The next question comes from Ben Brayshaw with Barrenjoey. Please go ahead. Good morning, Anthony. I just have one question in relation to Rockingham Centre. If you could comment on whether you expect that will be used as valuation evidence for Kwinana and Warnbro going forward? Much, much bigger centre than ours. You are right. It's in that southern Perth centre. What I will say is, I mean, you're talking AUD hundreds of millions of dollars for Rockingham. I think Kwinana's AUD 150 million. Warnbro is AUD 80 million or AUD 90 million off the top of my head. You're at very different price points there. Yes, it probably will have a bit of an impact. Not at, I think, the levels, but it will have an impact. The market's the market. Right? That's why we get valuations done. Yeah. It seems to have transacted at around a cap rate of circa 7% at around 19% below its most recent independent valuation. How much of that is, you think, you know, due to illiquidity as a, as you point out, a larger, you know, a larger, I suppose, more complex asset to manage as well? Yeah. Well, I mean, look, that's went through a bit of a redevelopment, so I think it's had a few issues. Look, you need to talk to others about that, but certainly, it's a big-ticket item, and it's a very different investor base going after those types of assets than the smaller types of assets that we tend to have. Okay. Thanks, Anthony. The next question comes from Grant McCaske r with UBS. Please go ahead. Good morning. Just, are you able to just give an update or some anecdotes on sales trends? I guess two pieces to that. You know, just acknowledging inflation, the supermarkets, thinking about price growth versus volume and then also metro versus non-metro? Yeah, I'll take that one. It's Mark here, Grant. The sales growth was really robust, really through the whole of the last half. In December, you would've seen the ABS statistics as well, we did see a slight softening in some of the discretionary categories, if we just look at the December month versus the same period last year. That's really all we've got at this point. I would say based on what we know, there could be a slight softening in the discretionary categories. I'm talking apparel, for example. We're not seeing any real slowdown in the non-discretionary categories. Let's be clear that our apparel is also not high discretionary apparel. No. It's more everyday needs. Yeah. Sure. Then your comments, how does that relate then to supermarket sales? Supermarket sales, we'll obviously get the update from Coles and Woolworths later this month, which will be really interesting. I suspect what's happening there is that inflation is quite significant, but volumes are probably down, and there's definitely some trading down by customers as well to lower priced items. Even though we might have, you know, 6% or 7% inflation, we're not gonna see that level of sales growth from the supermarkets. It's still positive and we've reported, you know, we've reported our sales for the half, which were 2.9%. I think that's what you'll continue to see in the current half looking forward, is inflation running ahead of the sales growth in supermarkets. The other thing, we're getting into some much more normalized reporting with no COVID impacts with lockdowns, because that does skew a lot of things. Now we're getting non-COVID impact over non-COVID impact, so things will normalize. I expect it to go back to, you know, we've say in our long-term forecast, 2%-4%. We say 2%-4%, and if you look back. 30 years. ... 20, 30 years, that's pretty much where it's generally been, with some exceptions. I think you'll continue to see that. But there's, you know, definitely some evidence of trading down by consumers. As I said, we'll have a lot more information later this month when Coles and Woolworths report their sales for the last quarter. Sure. Yeah, just a question on the operating cash flows. If you strip out those insurance proceeds you alluded to, you're down nearly AUD 10 million on PCP. That's just a very different outcome to what you're guiding to on AFFO. Is there a second half skew or what are we missing there? We'll come back to you on that. I think you're talking about the cash flow statement. We'll come back to you this afternoon on that. Cash flow statement, yep. Just on the property expenses, that's essentially running at two times NPI growth. Is that just inflation or what should we be looking at there? Mark, I'll take that one. I think there's two things. One is definitely inflation, and it's not just wage inflation, it's increases in statutory expenses. I think in New South Wales, we've just been hit with a 20% increase in land tax, for example. It's insurance, very significant increases in insurance costs. Electricity, we all know what's happening with electricity. There is headwinds in expenses, and they are starting to impact us. That's probably the major driver. We have made some small investments in our team, both in terms of the new Knight Frank contract, which has strengthened national roles, and we've bolstered our leasing team a little bit. It's the combination of those things. Expenses is definitely gonna be a focus for us as we head into the FY24 budget for the reasons that I said. We'll be having a very close look at the growth outlook for expenses and developing strategies for each of those lines I spoke about. Obviously that'll be included in our guidance when we give that for FY24 in August. Okay, excellent. Thanks, Anthony, Mark, Evan. Okay. Your next question comes from Richard Jones with JPMorgan. Please go ahead. Hi. Sorry, there's been a lot of questions. I'm just trying to be quick. Just two quick clarifiers. The ACL allowance, is that the benefit of that, is that included in FFO and AFFO in the first half? The reduction in ACL, yes. Just in terms of Lismore, is the insurance covering all lost income through development? Will the income post-completion of the project kind of align with the return you were getting pre-flood? Yes. Can you hear me? The answer is yes. Yes. Okay. When it's all back rebuilt, all the tenants are there, is basically the same or slightly better after a couple of years. Yeah. Thanks, Anthony. Next question comes from Murray Connellan with Moelis Australia. Please go ahead. Good morning, Anthony and team. Just a quick follow-up, please, to the comments that you already made around balance sheet activity and I guess the direct market. Gains obviously quite a bit lower than the 35%, I guess, yeah, sort of soft target that you guys would have been moving towards about a year ago. Do you expect, is the strategy to move back in that direction once direct markets liquidity improves? Just within that, could you please unpack the strategic rationale for the disposal of the CQR stake now as opposed to later as a funding source? I'll do the first part and then maybe you have the CQR, Evan. Yes, we want our gearing to be at the lower end of our range. Our range is 30%-40%. We've actually, in the 10 years, been 30%-35%. I think we've been below 30% once or twice. We've been above 35% once in 10 years. I expect us to remain around that 30%-35%. Most of the assets that we do buy are smaller. There's not a lot of portfolio deals, we generally buy a couple, and then that's why we have the DRP on and other capital initiatives. We will go back up. At the moment, we feel it's the best time to have gearing at the very low end of our range. Because there could be some opportunities, there aren't at the moment, but there could be some opportunities coming up probably later in the year. As some people may find themselves in a bit of distress with higher funding costs. That's our view there. In terms of, Evan, do you wanna answer the why did we sell CQR? Yes. On the CQR side, this was seen as a non-core investment. It's very small amount compared to their total assets. We did actually get a positive return over the time that we owned it. There's no strategic rationale for keeping it. We had nearly 5% at one stage, and we sold down over the years, and this has been held as a current asset for the last year or two, and now is the time to have lower gearing with higher interest rates. That's clear. Thanks very much. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. The next question comes from Alex Prineas with Morningstar. Please go ahead. Thank you. Good morning. Just a question on the sustainability capital expenditure outlined on slide 23. Is it, you know, in the ballpark of AUD 20 million per annum outlined there through to FY28? Just interested in your thoughts on, you know, what happens after that because, you know, presumably you hit net zero by FY30 in line with your goal. Does that CapEx sort of continue as, you know, either new kind of sustainability initiatives come up the agenda or new regulations, or potentially maintenance, or, yeah, do you expect that to stay the same increase or decrease? Yeah. Thanks, Alex. I'll take that. Mark here again. We are getting a really good return on that investment, and that's the key. As I said before in my answer to an earlier question, electricity costs are increasing substantially. When we put solar on the roof, we get a really good return on that investment, particularly if we have what's called an embedded network, where we can retail to the tenants. We're getting returns on that investment well, well ahead of our return hurdles, as Anthony said. At the moment, we've only got solar panels on, I think, around 12 centers. We own in excess of 90 centers. We're not gonna stop when we get to net zero. We're gonna keep going because we are getting good returns on that investment, as well as doing the right thing, you know, by the climate and so on. Also, as I said, we're looking at other opportunities to further reduce electricity usage. That could include battery storage. We're looking at that. We haven't made any decisions on that as yet. It could be building management systems which regulate the amount of electricity we're using at the center. There's a whole range of investments we can make and get a really good return while also ticking our sustainability goals. There's no reason for us really to stop, it'll take us a while to get through the 90 or 100 centers, as I said. There's gonna be continued technology advances- Yeah ...on lots of different other things as well. certainly for the next five years- Yeah ...we don't intend to slow down, and obviously we'll reassess after that, but I expect it'll continue beyond that five-year period. Makes sense. Okay. Thanks for that. Thank you. There are no further questions at this time. I now hand back to Anthony Mellowes for closing remarks. All right. Thank you, everyone. Took up nearly the hour, which is good. Look forward to meeting you all over the next couple of weeks, please feel free to reach out to Evan and I and Mark to answer any other questions that you weren't able to ask today. We look forward to seeing you all over the next week. Thank you very much, and speak soon.