Good morning, and thank you for joining us for Vicinity Centres' results call for the six months ended 31 December 2021. Before we begin, I'd like to acknowledge the traditional custodians of the lands on which we meet today and pay my respects to their elders past, present, and emerging. I extend that respect to Aboriginal and Torres Strait Islander peoples on the call today. Joining me on today's call are Peter Huddle, Vicinity's Chief Operating Officer, and Adrian Chye, our Chief Financial Officer. I will start today on slide four. The first half of FY 2022 has been a period of significant progress at Vicinity, despite another period of disruption for our industry. It was also a period that marked the beginning of a sustained recovery for our business and the retail sector more generally. In summary, we continued with our strategy of delivering growth while, of course, managing the ongoing challenges of the pandemic. We achieved significantly improved financial results with FFO up 8% to AUD 288 million and statutory net profit up by more than AUD 1 billion - AUD 650 million. Contributing to that result was a significant improvement in cash collections as retail sales increased and an uplift in asset valuations as we emerged from the pandemic. Our first half distribution per security is AUD 0.047, up 38% on the prior year and represents 84% of AFFO. Net tangible assets per security increased by AUD 0.15 - AUD 2.28. Adjusting for the AUD 0.047 per security distribution payment, NTA increased AUD 0.10 - AUD 2.23. This improved performance was driven mainly by a recovery in retail trading. Shoppers were quick to return to retail centers with confidence and capacity to spend once COVID restrictions eased, and this has been accompanied by a faster and more pronounced rebound in retailer confidence. The improvement in leasing spreads and cash collection rates reflect this. That being said, the emergence of the Omicron variant in late December presented a temporary setback to our recovery. We note, however, that with the respective East Coast state governments announcing the spread of Omicron has peaked, we are now starting to see visitation levels once again trend upwards. During the period, we also strengthened our portfolio by acquiring Harbour Town Premium Outlets, bolstering our position as a leader in the attractive and growing outlet sector. We also announced the divestment of Runaway Bay for an 18% premium to book value. Additionally, we progressed the retail and mixed-use development pipeline, advancing a number of projects which Peter will discuss later. Importantly, we maintained a strong balance sheet with gearing at 26.3% and with AUD 1.8 billion of liquidity. Overall, we are optimistic about future retail trading conditions and confident in the outlook for the second half of this year. Consequently, we are pleased to provide earnings guidance for FY 2022. Absent any material changes to current COVID conditions, we expect to deliver FFO per security in the range of AUD 0.118-AUD 0.126 for FY 2022, and AFFO is expected to be in the range of AUD 0.095-AUD 0.103. Turning now to slide five, adding to our growing optimism is the improved macroeconomic environment. Consumer confidence softened recently, but remains in line with pre-pandemic levels, which considering the extent of the recent disruption and dislocation, is remarkable. Consumers are currently enjoying a wealth effect created by persistent growth in housing prices, as well as an extraordinarily tight labor market where job ads have risen by a factor of 2.2% since January last year. At the same time, unemployment has reduced by 3.2%. Supporting this, the federal government recently indicated that unemployment is likely to dip below 4% by year's end. Of particular note, the household savings rate is once again more than double the five-year average and almost three times pre-pandemic levels. Our experience is that households start spending as COVID restrictions ease. Absent any major changes to current COVID-related conditions, we therefore expect our centers to once again benefit from the redeployment of household savings into consumption. We are, of course, maintaining a watching brief on inflationary pressures and note recent government and RBA commentary on monetary policy and the potential for interest rate rises in the future. I'll now hand you over to Peter, who will provide you with an overview of our operating performance for the half year. Thanks, Grant. Good morning, everyone. I will start on slide seven with a review of our key market trends and our portfolio performance. Our first half of 2022 was really a tale of two quarters. For nearly half of the performance period, our two largest states, Victoria and New South Wales, were in lockdown. Pleasingly, however, states less affected by the pandemic, Queensland, Western Australia, South Australia, and Tasmania, continued to deliver strong growth, with retail sales 8.9% up on pre-COVID levels. At a total portfolio level, retail sales in the December quarter were weighed by the New South Wales and Victoria impact in October. However, in November and December, our critical trading months in stemming, particularly midweek, higher levels of visitations on weekends have been very encouraging, driven by consumers seeking experiences only available in major cities. While foot traffic remains below pre-pandemic levels, more purposeful shopping is underpinning persistently strong spend per visit as shoppers visit less frequently but spend significantly more. In November and December, spend per visit was nearly 30% higher than pre-pandemic levels. Strong spend per visit has really supported our retailers, which in turn supported our 98.2% occupancy and improved leasing spreads, which I'll discuss in more detail shortly. Consumer habits have generally been driven by convenience and/or experience. While online retail continued to grow through the pandemic, almost by necessity, its convenience has been challenged by more recent supply chain and logistics pressures. Overall, we have seen the rate of growth in online sales steadily falling from its peak in September 2020. The strong rebound in retail sales when restrictions eased has been a consistent theme throughout the pandemic, which highlights the ongoing relevance and importance of physical retail to consumers. Resilient trading conditions is a very welcome tailwind, driving Vicinity's recovery and return to growth. While Omicron represented a temporary setback, I'm pleased to advise that as of the end of January, shoppers were confidently returning to our centers with total portfolio visitation at 76% and in COVID unimpacted states, visitation reached 87% compared to 2020. Turning to slide eight. Since the start of the pandemic, we saw cash collections decline in periods of lockdown and then recover when restrictions eased and as retail confidence strengthens. Following the recent lockdowns in New South Wales and Victoria, the rate of recovery was significantly faster than prior periods, underpinning a pronounced rebound in rent receipts in respect to current and prior months' billings. As of 31 January, collection of gross rental billings in respect to the first half of 2022 averaged 80%, and this compared favorably to cash collections rate reported at our first quarter update of 74%. Net of estimated waivers in respect to the first half 2022 gross billings, our cash collections rate averaged approximately 92% for the period. As I said, the underlying resilience of the retail sector is supporting our rent collection efforts, and pleasingly, these efforts have resulted in AUD 51.8 million reinstatements of prior period net rent property income, which Adrian will talk to shortly. We expect cash collections to improve progressively once the commercial codes in New South Wales and Victoria expire in March, which will in turn enable us to finalize rent relief agreements. We are working towards completing all rent relief negotiations by the end of the financial year. We were certainly disappointed to see the New South Wales and Victorian government extend their SME codes to March, despite lockdowns in those states ending in October last year. With governments confirming that lockdowns are a thing of the past, we look forward to the end of the codes, which have proven to be highly complicated and bureaucratic instruments for both retailers and landlords. For retailers not eligible for assistance under the SME codes, our support has taken into consideration the benefits from strong rebounds in traffic and sales following previous waves of the pandemic and subsequent retailer profits, which for some have been at record levels. As a result, our assistance is substantially more targeted towards retailers generally impacted by lockdowns. Importantly, though, assistance provided to retailers who are not covered by the SME codes has been focused on generating mutual value outcomes in the form of longer term leases and/or new stores. In summary, we believe lockdowns are a thing of the past, and as a result, we are anticipating that materially less rent relief will be required going forward. Turning to slide nine. Despite the disruptions, the team delivered strong leasing outcomes in the first half of 2022, delivering 643 deals, which represented 101 more deals than the first half of 2021 and 60 more deals than the first half of 2020. Much of this outperformance was in Victoria, where deal activity was double the same period last year. The volume of leasing deals this half further reiterates that sophisticated retailers have realized the finite nature of lockdowns and see the medium- to long-term necessity of physical retail. Our leasing spreads improved significantly, largely driven by the states less impacted by COVID, where retail sales growth has remained in high single digits versus pre-pandemic levels. We maintained our customary lease terms with more than 70% of new leases having fixed 5% annual increases, and cumulatively over 90% of all new deals were negotiated with fixed annual increases of at least 4%. Our average new lease tenure extended from 4.3 - 4.8 years over the period, further reflecting retailer confidence in retail trading conditions and importantly, their long-term confidence in physical retail. Once again, retailer administrations remained at very low levels, with just 13 stores entering administration during the period. Our portfolio vacancy remains broadly in line with prior periods as the team successfully leased more than 200 vacant stores in the period, highlighting the strong demand across the country, particularly in Victoria. With strong leasing momentum and very few administrations, our portfolio occupancy was maintained at a high of 98.2%. We anticipate demand will grow as we begin to experience a prolonged stabilization of trading conditions. Turning now to slide 10. Our development pipeline is gaining momentum. The new car park at Chadstone is complete, providing the foundation for growth of this asset. We commenced the expansion of the entertainment and lifestyle precincts with the development due for completion prior to Christmas. Pleasingly, this new precinct has attracted retailer pre-commitments covering 75% of forecast income. At Bankstown, we have commenced works for a new Coles supermarket and upgraded fresh food precincts. We are also consolidating retail space and relocating the bus interchange to facilitate our larger scale mixed-use projects, which are either DA approved for certain commercial towers or are in advanced planning for the total master plan. At Box Hill, the retail consolidation in the south precinct is due for completion mid-year and will include a new Coles supermarket and refreshed services and food offerings. This project establishes a contemporary retail offer in Box Hill South, which will in turn allow Box Hill North to be unencumbered for the commencement of large-scale phased mixed-use projects for this site. In the last six months, we have had significant success attracting top-tier tenants to our office assets. Notably, Officeworks will be relocating its headquarters to Chadstone in 2023, and a 4,000 sq m office will be built at Box Hill South for the leading coworking provider, Hub Australia. At a portfolio level, we are in the market seeking tenant pre-commitments for more than 130,000 sq m of office towers across six centers in our portfolio. In addition to the larger scale mixed-use pipeline, we are also working on a number of smaller scale modernization projects. We are reinvesting in our centers to enhance the aesthetics, transform the tenant mix, and replace dated major retail stores in order to significantly raise the customer offering. We have projects under construction at Mornington, Broadmeadows, Lake Haven, Northgate, and Cranbourne, and have recently completed important enhancements at Northland, Runaway Bay, and Altona Gate. Turning to slide 11, you can see some of our major near-term mixed-use projects. With all available space at Chadstone fully leased, we're now securing the first tenants for One Middle Road, an important new office development at the center. Leasing interest is strong, and we expect to announce the first tenants and commence the construction of this project this year. At Bankstown, we have recently gained DA approval for 30,000 sq m of office towers, and like Chadstone, we're in market securing pre-commitments. After considerable government consultation, we lodged our DA for Victoria Gardens in May 2021. This project will further transform the site by adding 800 residential apartments across a number of towers. You can see this in the image at the top right of the slide. We plan to deliver the project in stages, and it will augment the retail revitalization works we have undertaken over the past two years. The image on the bottom left shows part of our master plan vision to completely transform Buranda Village in Brisbane. We've recently submitted the DA outlining our plans to develop an 8,000 sq m retail and dining precinct with up to 600 residential dwellings and 50,000 sq m of office space. The center image at the bottom shows the location of Officeworks's new headquarters at Chadstone. We are completely refurbishing the existing office and delivering a Net Zero Carbon Certification and state-of-the-art amenities in that building. Finally, at Bayside, we have an approved DA to build a 14,000 sq m eight-story tower adjacent to our major regional shopping center located in the heart of Frankston CBD. Frankston is an important location in Melbourne's growing southeastern corridor, and we anticipate interest to come from government tenants and allied space users. In summary, our key assets are master planned with an understanding of highest and best use outcomes. Larger and smaller tactical developments are strategically phased and can be flexed to take advantage of market conditions. Importantly, we have now substantially transitioned from planning to execution of our mixed-use developments, and you will see further project completions in FY 2023. I will now hand over to Adrian to provide an overview of our financial results. Thanks, Peter, and good morning, everyone. I will start on slide 13. Despite the continued impact of the pandemic, Vicinity has delivered a strong financial result for the six months ended 31 December 2021. Statutory profit for the first half was AUD 650.2 million, an uplift of approximately AUD 1 billion compared to the six-month period ended 31 December 2020. The FFO was up approximately AUD 21 million or 7.7% compared to the first half FY 2021. The key driver of this increase was a AUD 37 million uplift in net property income. As Peter mentioned, post the lockdowns, we saw a strong rebound in retailer confidence. This positive rebound, combined with our persistent focus on collecting prior period billings, enabled us to reverse AUD 51.8 million of prior waivers and provisions during the half. Net interest expense increased by AUD 20 million due to the unwind of the interest rate swap restructure in the prior period. Due to the high volume of leasing activity and a more normalized level of maintenance CapEx, FY 2021 AFFO capital increased by AUD 15 million. The FY 2022 interim distribution per security of AUD 0.047 is a 38% increase on the FY 2021 interim distribution of AUD 0.034 and reflects an AFFO payout ratio of approximately 84%. Moving now to slide 14, where I'll provide more detail on our waivers and provisions. As shown in the gross rental billings chart at the top of the slide, first half 2022 estimated waivers and provisions of AUD 96 million represents a AUD 51 million reduction relative to the estimated position at first half 2021. On a re-estimated basis, which includes prior period reversals, total waivers and provisions for this half have reduced by AUD 4 million. We collected 79% of gross billings for this half, 9% more than the same time last year. Pleasingly, these outcomes were achieved despite a high proportion of the portfolio being subject to lockdown this half, which demonstrates the underlying resilience in our retail portfolio, as well as our targeted approach to providing COVID-19 assistance. Going forward, we expect a continued reduction in waivers and provisions as retail remains consistently open, and we will, of course, continue with our targeted approach to COVID-19 assistance. Now to slide 15 and valuation outcomes. For the six months to 31 December 2021, the portfolio recorded a net valuation increase of AUD 320 million or 2.3%. This compares to a net valuation decline of 1.3% in the six months to 30 June 2021. Positive growth was achieved across all center types and states, with the weighted average cap rate reducing 14 basis points to 5.35%. Our subregional and neighborhood portfolios recorded the strongest growth, highlighting the continued resilience of non-discretionary based retail and active purchaser demand. Similarly, the DFO portfolio again saw strong valuation gains, benefiting from both income growth and cap rate tightening. Regional assets delivered a net valuation increase of 1.5%, and our CBD portfolio saw a modest valuation increase of 0.6%, reflecting the continued impacts of COVID-19 in the short term. Turning to slide 16 and the balance sheet. Gearing of 26.3% is at the low end of our target range, and we maintain AUD 1.8 billion of available liquidity. Our strong balance sheet position enables us to navigate periods of uncertainty and provides capacity to fund our development pipeline and selectively pursue growth opportunities, such as the recent Harbour Town acquisition. Our debt portfolio remains well-diversified, and we have minimal debt maturing until FY 2024. Our weighted average cost of debt for the first half was 4.1%, and we expect a similar outcome for the full year given our relatively high hedging levels. We retained our strong investment-grade credit ratings of A and A2 with Standard & Poor's and Moody's respectively, both with a stable outlook. I'll now pass to Grant to wrap up. Thanks, Adrian. Turning now to slide 18. Vicinity continues to be recognized for its sustainability programs. During the period, we were recognized as the Oceania sector leader and number three globally in the listed retail shopping center category by GRESB. We now rank number five on the Dow Jones Sustainability Index, up from 7th last year, and have an A- rating for climate disclosure by CDP. We continue our work on modern slavery, assessing and addressing modern slavery risks in our operations and supply chain. We also established and convened a modern slavery working group during the period, which is chaired by Peter Huddle. In November, we concluded our second Reconciliation Action Plan, the Innovate RAP, having rolled out a number of important initiatives across the business. Our community engagement agenda is also being recognized with Vicinity recently listed in the Giving Large top 50. Of course, we are also well progressed towards our 2030 net zero carbon target. The emphasis we place on managing climate-related risks and opportunities was also highlighted by our formal support of TCFD. Turning to slide 19, as mentioned earlier, we are pleased to provide earnings guidance for the remainder of the year. Our expectation is that FFO per security for FY 2022 will be in the range of AUD 0.118-AUD 0.126, and that AFFO per security will be in the range of AUD 0.095-AUD 0.103. We are targeting a full year distribution that is within our target payout range of 95%-100% of AFFO. While we expect the ongoing impact of COVID-19 on our business to continue over the coming months, and although Omicron had a material impact on visitation in January, particularly at centers located on the East Coast of Australia, we have seen some upward trend in visitation in recent weeks. Importantly, our guidance assumes no material change to current COVID-related market conditions in the second half, and assumes also that the SME codes in New South Wales and Victoria will expire as planned in mid-March. Turning now to slide 20. In summary, today's result demonstrates that Vicinity is recovering from the pandemic. Operationally, the team focused on cash collection and leasing outcomes while managing the disruption caused by lockdowns in New South Wales and Victoria. We took advantage of the strengthening transaction market to enhance our portfolio and drive earnings accretion. We continued to deploy our development spend across a number of projects aimed at upgrading our centers to deliver value. Our balance sheet and credit metrics remain solid and position us well for growth. We are fortunate to be returning to a supportive macroeconomic environment where retailer and shopper confidence are growing. Vicinity will continue to build on the outcomes delivered in the first half and capitalize also on the momentum which we have in our business once again and of course, the continued recovery in retail. Before I hand the call back to the operator, I would like to take this opportunity to acknowledge and thank Vicinity's board, my executive leadership team, and indeed all of my colleagues at Vicinity for their hard work during the first half of FY 2022. Thank you. With that, we are happy to take any questions. The first question will come from Stuart McLean with Macquarie. Please go ahead. Good morning. Thanks for your time. First question is on FFO guidance. Just taking the midpoint of that guidance, looks like 2H FFO down about AUD 20 million versus 1H. Can that just be explained via increase in net rental reletting, given the write-backs that occurred in the first half? Or are there some other drivers at play there? Thanks, Stuart. It's Grant here. I'll ask Adrian to pick that up. Thanks, Stuart. Thanks for your question. Yeah, look, the AUD 20 million is what you get, I guess, if you go to that midpoint. Really, it's driven by a couple of things. Firstly, as you point out that the waivers and provisions, the reversal and, you know, a potential waiver and provision estimate into the second half. The other two components are probably overheads. We are assuming that we'll get to about AUD 90 million of overheads for the full year. So there's probably an extra AUD 10 million of overheads in there as well. For the outgoings, we expect outgoings to probably increase by about AUD 15 million. Those outgoings? Sorry. Yeah. Outgoings are AUD 15 million. At the property level? That's correct. Great. Thank you. My second question is in regards to NPI. I was just looking at 2H 2021 at those earnings bridges you provide at the back in the appendix. It looked like 2H 2021 was down AUD 8 million, implying like a AUD 4 million-AUD 8 million recovery this half. Can you just describe what's happening with that NPI line item to go from negative to positive there, given occupancy is broadly flat? Yeah. I think if you look at the bridge on page, I think it's 32 of the slide deck, you can see that there was various movements throughout the year. Obviously, that elevated surrender payment in AUD 16 million was impacting the first half, so that's unwinding into the second half. There's underlying growth of about a AUD 6 million coming through that NPI line, which is about, you know, just over 1%. It was that plus AUD 6 million was minus AUD 8 million last in the prior half sequentially. What is the- Yeah. Have you seen a rebound in ancillary income coming through the portfolio? Like, what's causing the positive movement there in NPI? Yeah, Stuart, I think you've got it right. Ancillary income has increased half on half. That's the majority of that increase. How far below is ancillary income versus pre-COVID levels as we sit today? Still around 30%. Largely that's car parking, which has continued to be impacted in some of our CBD centers, particularly [New South Wales]. We expect that to come back over time. Great. Thank you. Maybe a final one from myself, just in regards to the reduction in footfall to 84% New South Wales, Victoria, ex-CBD. What does that mean for tenants that rely on increased dwell times? For example, the cafes and the restaurants, et cetera. What's the outlook there for that portion of the portfolio, please? It's Peter, Stuart. I'll pick that up. From our strategy and our approach, the tenants that rely on that dwell time, whether it's leisure or food and beverage and some of those in the CBDs is where we're focusing our assistance moving forward into the future. You'll see that in some of the provisioning that we've done is really has always been focused on those tenants relying on that footfall and dwell time, and less on those tenants that have actually traded quite well through this pandemic period. We will continue to support those tenants, particularly the ones that might be in the CBDs or large scale food and beverage and leisure tenants, as we go through calendar year 2022. Do you see any medium to longer term implications there on the outlook for that as a tenant category? Or is your view that footfall return to pre-pandemic levels, so they'll all be fine in the medium term? Sure. That is our view, that particularly once, for example, CBDs, commercial occupancy increases, international borders open up, and we learn to live with the pandemic, we anticipate normal foot traffic returning in the short to medium term. We'll support up until that period of time. Thanks very much, Peter. Thanks, Stuart. The next question will come from Lou Pirenc with Jarden. Please go ahead. Yes, good morning. Can I just follow up on this, the AUD 61 million of reversal of prior waivers from prior periods? Does your guidance for the full year assume any more reversals or does it not? Lou, it's Adrian here. No, it doesn't. Can you just talk? I mean, you talk a lot about your development pipeline. What is the total CapEx that you've committed to for the next few years, and what return do you expect to get on it? Lou, it's Adrian here again. I think what we've guided to is about AUD 150 million worth of spend for FY 2022. We probably expect a similar amount to FY 2023. We expect the pipeline then to ramp up with the onset of mixed-use opportunities and probably Chadstone from 2024 onwards. That'll return, you know, probably closer to the historic levels of AUD 300 million per annum. In terms of return, you know, on a stabilized basis, we're looking at returns of 5%-6%, probably a little bit higher for some of the commercial opportunities, where we don't necessarily have to fund the land given that it's already on our site. In terms of IRRs, we're looking at 10%+, but for risk-adjusted projects, depending on the specifics of the project. Great. Final one from me. Just what do you expect to happen with maintenance CapEx and tenant incentives for the rest of the year? Yeah. I think what we previously guided on maintenance and tenant incentives is around 110-120. We're looking at that coming down a little bit, probably closer to 100-110 for 2022. The key driver of that is a higher retention rate from leasing transactions. We're actually seeing very positive momentum in leasing, which is reducing the churn. That's reduced our leasing incentives forecast. The other one was just our maintenance CapEx. We've actually just dialed that back a little bit by about AUD 5 million. Great. Thank you. Thank you, Lou. The next question will come from Sholto Maconochie with Jefferies. Please go ahead. Oh, hi, everyone. Just a couple follow-ons from before. Just on the guidance, the write back at AUD 52 million reversal, but looks like in the Appendix 4D, the rent waivers were AUD 91 million this period. It's up about AUD 40 million from the June number. Was it mainly the reversal that drove that? Because if you look at that bridge in the appendix, the 51 was the biggest impact. Then second half, you've got higher costs, and you've also got the benefit of Harbour Town in there. Is your guidance to pretty much assume no more, very minimal waivers in this period? Or could you give us an indication what you're assuming in COVID assistance for second half? Yeah, Sholto, I think a good guide is probably to think about the second half 2021. I'm sorry, we're showing that on slide fourteen. You know, I think we expect probably similar levels, maybe a little bit under those levels for the second half. 1H 2021. Just on the ancillary income, how much was that in the period versus the PCP, the dollar value? I think it's around 30 s. 35. AUD 30 million, AUD 35 million or AUD 37 million. Yep. The PCP, how much was it? Was that a lot lower, I guess? Yeah, it would have been a lot lower by about, I think it's about AUD 3 million lower. Okay. Thank you. Going forward, what was your holdovers? Did you disclose that? What were they in December, June versus December? Sholto, it's Peter here. The holdovers came in slightly above 700, which was down on the June quarter. It's about 7% of leases. What was the old one? Was it six? We're down about 20-odd in terms of holdovers from the June reporting period. Okay. The 7% of leases are in holdover versus how many in June again? Eight. Eight. Okay. Thank you. Then just last question. You again, you said, you don't expect any more COVID, you know, lockdown sort of mandated. Is that sort of expected after the mid-March that that's pretty much done and just it's all sort of broadly back to normal with shadow lockdowns if people don't want to go out? Yeah. Sholto, it's Grant here. That's certainly our assumption. Certainly, it's our strong objective. Just perhaps I can take the opportunity to go into a little bit of detail on that. You know, we've transferred AUD 300 million of our shareholders' essentially earnings across to essentially rent relief since the pandemic began. If you include our JV partners, that number is half a billion. Obviously, we feel we've done our part, and we would also note that that relief was targeted at providing relief during periods of lockdown. Of course, now we're in periods where we are living with COVID to quote government policy, which means, of course, no lockdowns. We're open for business in all of our centers. We don't see, you know, candidly the need to extend the code beyond where it was at the end of last year. We obviously have had an extension through to the middle of March this year. We're certainly advocating to government very strongly that given there are no lockdowns under the current policy, the need for that rental relief program to be legislated goes away. We'll of course work as a good landlord with all of our tenants to work through their requirements as individual businesses, but that does not need to be regulated. Yep. Okay. This last one for me on the capital side of things. If you take the share price today and the current trading, about 20% discount to NTA, you've got the big pipeline. Would it be assumed to say you'd prefer to invest capital towards the developments as opposed to a buyback? Yeah. I mean, obviously our board, you know, will always assess the best use of capital at any point in time. Therefore, it continues to assess all forms of capital deployment. We do think that the most accretive use of capital at this point is reinvestment in the development pipeline. I think as Peter walked through earlier, we've gone through a really detailed program of master planning all of the major assets. You see the benefit of that today, where we can flex in to meet the market in, you know, areas that are actually highly sought after, such as suburban office. We certainly see those as being the most accretive use of capital at this point. Just to finalize on that, on the last bit on the capital side. In the pipeline, have you thought of putting the sort of suburban office into a spin-off fund? Or what's the sort of strategy on the mixed-use and commercial and/or potentially build-to-rent into a separate vehicle? Is there any color or advancement on that? Perhaps I'll ask Peter to talk about build to rent, and then I'll come back on the fund point that you started with. Pete, could you perhaps pick up the residential uses that you're anticipating? Yes, Grant. Sholto, look, from the mixed-use component, a lot of our forward-facing mixed-use developments are actually commercial in non-CBD centers. That really takes advantage of the current market conditions. We're still investigating build-to-rent as a particularly for Victoria Gardens with our joint venture partner there. It's still to be determined exactly the residential component to move forward with, whether build-to-sell or build-to-rent. Our preference is build-to-rent subject to financial returns on it. Grant can talk about the funds, but clearly, we have obviously engaged in a funds management approach. We've just appointed Director of Funds Management, which Grant will talk to, and how we execute some of the mixed-use developments will be considered in that strategy moving forward. Yeah, thanks, Pete. Just to come back to that point, Sholto, on funds management. We're investing in organizational capability, as Peter mentioned. David McNamara, who joined us from Lendlease, was frankly a massive recruit for us, 30-year veteran and well known to many who'll be on the call today. I'd just note a couple of things. Firstly, we'll have much more to say about this, I suspect, in the August earnings call. At this point, you know, we're obviously considering all options. What I would note, however, is that we have seen already a significant increase in wholesale capital being allocated to quality retail assets. It's one of the reasons those valuations from a transaction comp perspective were so attractive in this cycle. We'd note that and hence the decision to invest in the organization and specifically the recruitment of David. That would account for the higher overhead, that investment in that function area in the second half? Yeah, it's Adrian here. Yeah, there is some vacancies probably into the first half, and that'll unwind in the second half, so that's pushing up some overheads. There is additional investment across strategic initiatives, not just mixed use, but also some adjacencies as well that's coming to that second half. All right. Thanks for your time, guys. Cheers. Thanks, Sholto. The next question will come from Simon Chan with Morgan Stanley. Please go ahead. Hi. Good morning, guys. Hey, not to take away from the good result, but I just got a simple question on cash flow. Adrian, if I just keep it very simple, NOI increased by AUD 35 million-AUD 40 million versus prior corresponding period. If I look at the cash flow statement, operating cash flow before interest expense declined by AUD 35 million. Can you, I guess, talk to what that is, please? Sure, Simon. I think what's impacting the cash flow and NPI this year is the increase in trade debtors. That's the main shift, if you like. Because we've got that increase in trade debtors, there's a bit of a disconnect between what we're booking in FFO and also on cash flows. Right. Okay. Basically, your, the stuff that you've booked in, there's a larger portion of what you've booked in revenue that hasn't been collected as cash yet relative to previous periods. That's what you're saying. Absolutely. That's right. Okay, cool. Just one more from me. I think in the past you've said about 30% of your income come from SMEs. Just wondering, with this code of conduct extension, which is, I guess, a lot tighter now in terms of qualification, what percentage actually qualifies? Simon, you're right. It was previously broadly 30% of SMEs. There is a tighter qualification down to 5 million and 10 million as threshold, but it probably reduces the qualification down to the low- to mid-20s%. We still have a number of SMEs in that that qualify as part of the extension of the commercial code of conduct, even with the lower thresholds. Okay, cool. Okay. Can I just clarify an answer Adrian gave earlier? You said the waivers that you factored into your guidance for the second half would probably be similar to what second half FY 2021 was. Is that correct? Yeah, that's correct. Okay, cool. Thanks, guys. Thanks, Simon. The next question will come from Adrian Dark with Citi. Please go ahead. Good morning, Grant and team. Around six months ago, Vicinity announced a strategic refinement, I note your comments about a stronger transaction market, but also being mindful of the potential for higher interest rates. Could you talk about how any shift in the backdrop could influence how you implement the new strategy and anything we should watch out for there? Yeah, sure, Simon. Just on the overarching question, which is the six-month reset last year. I think what's hiding in plain view here, and the reason there wasn't a separate section calling out, you know, quote-unquote, strategy is that we've embedded strategy at every element of the organization, including how we think about the business and how we present it to shareholders. I'd note, and consistent with six months ago, you know, the two Gold Coast transactions, which were directly targeted at a capital recycling. In fact, they're about 20 km from each other, but marked a channeling of capital out of essentially a regional asset play and into a DFO play. Elevated leasing activity where spreads are improving, which obviously speaks to our core business. Most importantly, given, I think what we've advocated for several years now, the very strong progress on mixed-use. On the innovation side, there's also been a number of developments that we didn't call out specifically in the deck, but which I would highlight for you. Probably the most interesting has been the development of a logistics hub at DFO Homebush, where we've had 20,000 parcel movements in the final two months of calendar 2021, with potential for 15 more sites. The strategy is very much embedded into the business. We don't want to distract ourselves from our core mission, which is to generate shareholder return. Hence, there's no separate call-out of that today. On the second part of your question, which is interest rates. What I would note here is that retail, almost alone among real estate asset classes, is a principal beneficiary of inflationary effects. Inflation, of course, is the driver of potential interest rate rises. I did note a couple of the broker reports this morning speculating on that. What I would note is that what we are seeing in terms of the recovery, particularly of our sales data, is a direct consequence of that same inflationary pressure. I just urge everyone to understand that that's the flip side of the coin. Yes, there is inflation in the system, but it's net positive for retail sales. Thank you. Peter, perhaps a question for you on development. Can you talk about the level of pre-commitment that you're seeking to commence some of the office projects, and perhaps whether a slower return to CBD offices is a headwind or a tailwind in terms of those mixed-use project, leasing assets, please? Morning, Adrian. In terms of pre-commitment, it's typically between 30% and 50% is what we're seeking, and it really depends on the project. It'd be project-specific. We have some smaller towers. For example, the tower that we have at Bayside, the pre-commitment will be potentially for the entire tower 'cause it's a single office use in that particular tower. It depends on the project, but particularly, typically 30% - 50%. Thank you. Sorry, the second aspect was just whether a slow return to the CBD. Oh, sorry. Is stimulating efforts in those locations or perhaps is a headwind? No, no. It's probably again it's taken advantage of being able to flex a mixed-use pipeline. We are seeing significant interest in highly well-located non-CBD assets that are linked by major transport. We're seeing significant inquiry. From a commercial leasing point of view, we've enhanced our skill, our capability internally in Vicinity, but also obviously engaged with the broker market and we. That's what's driving the regional center commercial leasing activity as front-running our mixed-use pipeline as a result of that. Thank you. That's helpful. Thank you. The next question will come from James Druce with CLSA. Please go ahead. Good morning, Grant, Peter, and Adrian. Just one question from me. I was just thinking about the normalized sales for the whole portfolio. I think you said the COVID unimpacted portfolio is about 8.9% above pre-COVID levels. Where do you think the whole portfolio will get to? James, let me pick that up. It's a really tricky one. The one that we essentially look at with most interest is really specialty sales. It's obviously what drives the majority of the rental income. If you look at the total MAT specialty sales on what we call the COVID normal states, then that's about 10.2%. If you look at the COVID impacted states, it's substantially higher. The reason why it's substantially higher is because you're not really comparing apples with apples, because you're comparing off a lockdown period. That's why we've reported the November, December sales for New South Wales and Victoria over 2019 levels to give a sense of where productivity growth is at that 5.5% number. To answer specifically your question, we think if you normalized everything, we would still anticipate that specialty sales are in the mid- to high single-digit growth over the last 12 months across our portfolio. Okay. That's clear. Thank you. Thanks, James. The next question will come from Ben [Brayshaw] with Barrenjoey. Please go ahead. Good morning. I'll just keep this brief in the interest of time. I was wondering if you could put some more color around the composition of the holdovers. I think, Peter, you mentioned on the call there were 700, about 7% of the portfolio. I'd just appreciate any color or visibility around the categories, i.e., you know, catering, you know, apparel and services. Just to clear this, about 7%, 7.2% of holdovers is 7.2% of rent. It's about 10% of leases, about 7.2% of rents, compared to June, which was about 8% of rent. We're down about 40% in terms of holdovers. In terms of the holdovers themselves, about 60-odd% are in national retailers. The rest are in SMEs. A substantial portion of those, I've got to say, is holdovers on our existing. It's in some pre-development centers that we have, whether it be Myer Centre Brisbane, Chatswood, and Bankstown, which we're into at the moment. From a category point of view, approximately 50% of those are national retailers. Clearly, as part of our comment around mutual benefit associated with COVID negotiations, we're converting a lot of those retailer holdovers into longer term leases as a result of these negotiations at the moment. From a category point of view, it's probably split evenly across categories. I've got to be honest, there's no specific to food and beverage, which is something that we're really focused on, obviously. Maybe another point that's not necessarily called out in the pack. One of the really strong performances for this half has been the strong performance in leasing spreads and conversion of holdovers for apparel and footwear. That's typically a large GLA proportion of our portfolio. For context, it delivered about a 3% negative leasing spread and a large amount of deals. That's great. Thanks, Peter. Thank you. The next question will be from Grant McCasker with UBS. Please go ahead. Just a quick one. A big feature for the last couple of results has been the reversal of provisions. Can you just let us know what the level of under collected rent has been provisioned on the balance sheet at the moment? Yeah, thanks. Thanks, Grant. In relation to, I guess, unpaid rent, there's about AUD 50 million of uncollected or unpaid rent that we haven't provisioned for. AUD 30 million of that relates to the latter or the first half FY 2022, AUD 20 million relates to prior periods. Okay. That hasn't been provisioned, you're saying? That hasn't been provisioned. That's correct. There's a bucket that has been provisioned on top of that as well? If you look at our balance sheet, if you like, we've got trade debtors of about AUD 191 million, and we've provided about AUD 142 million in waivers and provisions against that 191. There's about AUD 50 million there. That's the unpaid. Perfect. Just following on from, I think, Peter's last comment about incentives. Can you make a comment just on incentives for new deals? Any trends worth noting? It's actually the incentives for the reported period is about 9.9 months for incentives, which was down from about 11.5 months in the June reporting period, which was also down on the December reporting period. We've got a trend going down on incentives, even though obviously construction prices have gone up. We've been managing that particularly well. Some of that's influenced by we have materially lower incentives in our DFO portfolio. Thank you. Thanks, Grant. The next question will be from Richard Jones with JP Morgan. Please go ahead. Good day. Just in terms of the AUD 15 million higher outgoings in the second half, can you just clarify what's driving that? Richard, I'll pick up the first bit, and I'm sure Adrian will pick up the second. Obviously with lockdown periods in New South Wales and Victoria, we substantially reduced the costs associated with things such as vertical transport, electricity, to a lesser degree, cleaning and security. As we move to more normalized operating environments in Victoria and New South Wales, they come back to normalized levels. That's a significant component of the AUD 15 million. Yeah. Nothing more to add there. I think that's a good explanation. Okay, fair enough. Just another one, perhaps for you, Peter. Just in terms of the valuers, can you just talk us through what they are assuming in terms of stabilized net property income, and where that compares to pre-COVID levels? Perhaps how it compares to your internal assumptions. Yeah. Look, I might have a first stab at that question. Look, I think it really depends on the type of asset we're talking about. I think the CBD assets in particular, that's where levels of NPI are gonna take a little bit longer to recover. We're not expecting those levels, and the valuers aren't expecting those levels to come back for another 24 months. In relation to the other segments, I think largely most of that recovery in NPI the valuers and ourselves are expecting that to occur into the FY 2023 period, but really FY 2024 for everything to wash out. Just some context, the valuers are still assuming AUD 100 million of COVID assistance or COVID relief in the valuations as at 31 December. That'll wash out over the next couple of periods, I think. That'll lead to hopefully an increase in those valuations. Thanks, Adrian. Thanks, Richard. Thank you. There aren't any further questions at this time. I'll now turn the call back to Mr. Kelley for closing remarks. Thank you very much. If I could just close by thanking everybody for dialing in today. To our shareholders and other stakeholders, we look forward to meeting with many of you in the next three weeks. Thank you once again, and have a good day. Thank you, sir. That does conclude our conference for today. Thank you for participating. You may now disconnect. Take care.