Good evening, ladies and gentlemen. Welcome to the FY 2023 results briefing of CapitaLand Ascendas REIT, or CLAR for short. We thank you for joining us in person and online today. Before we begin, let me just give you a few housekeeping notes. This briefing consists of a presentation by management as well as a Q&A session. If you are attending this briefing online, you may submit your question via the Q&A feature on Zoom anytime during this briefing. For those in the audience, you may raise your hand during the Q&A session, and a microphone will be brought to you. Before we begin the session proper, let me just introduce the management on the panel. First, we have Mr. William Tay, CEO of CapitaLand Ascendas REIT. Second, we have Ms. Koo Lee Sze, CFO of CapitaLand Ascendas REIT. Next, we have Ms. Yeow Kit Peng, Head of Capital Markets and Investor Relations. Finally, we have Mr. James Goh, Head of Portfolio Management. With that, I will now hand the time over to Ms. Yeow Kit Peng, who will begin with the presentation. Thank you. Hi. Good evening, everyone. Thank you for attending this briefing. Some highlights first, before we dive into the details. Portfolio occupancy remained high at 94.2%, and we achieved a high rental reversion of 13.4% for leases that were renewed in FY 2023. Gearing is healthy at 37.9%, and we continue to have a high level of natural hedge of 81%. Distributable income declined 1.4% to SGD 654 million, and DPU declined by 4% to SGD 0.1516. Investment properties grew 3% to SGD 16.9 billion. On a same store basis, property valuation declined about 1.8% to SGD 16 billion. Financial performance. Full year FY 2023 versus the previous FY 2022. Gross revenue increased 9.4%, driven mainly by full year contributions from new acquisitions in FY 2023, i.e., the data center in Watford, U.K., 1 Buroh Lane, Toa Payoh, Lorong 1, and the Stuttgart in Singapore. Full year contribution from properties acquired in FY 2022, that is the 7 logistics properties in Chicago also contributed, as well as better performance from existing properties. NPI rose 5.6% to SGD 1 billion, despite some cost pressures. Total amount available for distribution declined 1.4% to SGD 654 million due to higher interest expense resulting from the high interest rate environment and higher borrowings as we acquire more properties. DPU declined 4% to SGD 0.1516 because of lower distribution and a larger unit base. When we compare second half versus first half performance, gross revenue increased 6.1% to SGD 761.7 million, and this is boosted mainly by the newly acquired data center in Watford, U.K., as well as full period contribution from newly acquired properties in the first half of the financial year, i.e., the Stuttgart, 1 Buroh Lane, and 622 Toa Payoh Lorong 1. At the Net Property Income, it was flat due to higher operating costs and property tax. Distribution income is stable at SGD 326.9 million. DPU declined 3.6% to SGD 0.07441 due to a larger unit base. Second half 2023 versus second half 2022. The growth in the gross revenue is largely driven by the new acquisitions in 2023. The four properties that we mentioned earlier, as well as better performance of existing properties. Net Property Income increased 4.6% to SGD 514.3 million, despite higher operating expenses. Distribution declined 1.9% to SGD 326.9 million due to higher interest rates and borrowings as we acquire more properties. In the second half, DPU declined 6.1% to SGD 0.07441. Some distribution details. We adopt a semi-annual distribution frequency. For the second half of the year, a distribution of SGD 0.07441 will be made. You will be receiving your dividends on the 6th of March. Investment highlights. Despite the challenging market, we were able to expand the business. This table shows a series of acquisitions and development during the year. Three acquisitions in Singapore were made, as well as one in London, The Chess Building, which is the data center in Watford, U.K. Development in Australia, MQX4 was also completed. Altogether, the total value is SGD 885.3 million. We continue to ensure that we acquire only quality properties with strong tenant base and have promising long-term potential. The NPI yields for these acquisitions range from about 6 odd percent to as high as 9.4%. We also continue to optimize the returns from our existing properties by repositioning and upgrading them. Take, for example, 6055 Lusk Boulevard, which we have completed. We converted the property to a life science property. Not only the rents are higher, the valuation of that property also increased. Divestment. During the financial year, we divested KA Place, which is an industrial property in Singapore, at a 55% premium to the market value of the property. You have seen these two slides already. More recently, in December, we've continued to streamline our portfolio. We announced the divestment of these three logistics property in Brisbane for a total of SGD 64.2 million at 6.2% above valuation. We received a good offer for them. The exit cap rate is about 3%. It is attractive. These three properties, if you remember, they were part of a portfolio that we acquired in 2015. After stabilizing the portfolio, it is opportune time for us to sell them as their returns are not expected to improve much further. Capital management. Total debt, you can see it has increased to SGD 6.7 billion as we continue to acquire new properties. However, with the equity fundraising in May last year, we raised SGD 500 million. Gearing is maintained at a healthy 37.9%. Our emphasis in this very uncertain business environment is to ensure that our gearing levels are healthy. Debt maturity. In financial year 2023, we term out almost SGD 1 billion worth of debt with fresh tenor of five, seven years. The debt maturity profile you can see is quite spread out, with less than maybe 15% of the debt due for renewal in the next three, four years. Despite the high interest rates globally, the gearing is 37.9% and a high proportion of the fixed rate debt is 79%, so that helped to moderate our interest expense. The weighted average all-in debt cost is 3.5%. The strong balance sheet standing also provides us for buffer against uncertainties, ensuring resilience of our financial ratios and compliance with bank governance. The A3 credit rating by Moody's is maintained, and this is very important. It will provide us with financial flexibility and strong access to capital. We have here some interest sensitivity tables. On the left is sensitivity table based on the proportion of borrowings on fixed rate debt. On the right is a sensitivity table for the refinancing in FY 2024. In this coming year, we have about SGD 900 million of borrowings that will be due for refinancing. If they are, say, refinanced at 50 basis points higher, then the impact on distribution will be 0.7%, all things being equal. Natural hedge continue to be high at 81%. For our SGD 6 odd billion worth of investment overseas. Valuation. At 31st December 2023, we owned 227 properties, and the value is SGD 16.9 billion. Now on a same-store basis, the valuation is SGD 16 billion. When we compare with the year before, the value was SGD 16.3 billion. The difference is a 1.8% decline, and this is mainly due to lower valuations in the U.S. and in Australia. However, the decrease in these two countries were offset by higher valuations in Singapore and in the U.K. and Europe. By segment, the decline in the same-store property valuation was mainly due to lower valuation for business space, but partially offset by higher valuations for industrial and data centers and logistics. Although the valuations of the business space properties in the U.S. and Australia declined, these properties only account for about 14% of our total asset value of SGD 16 billion same-store basis. Moving on to our occupancy. On the extreme right, you can see that the portfolio occupancy is stable and high at 94.2%. On the left, you will see that Singapore, Australia, and the U.K., Europe portfolio, they are all stable at above 90%. Occupancy in the U.S. is lower at 90.4%. Some details follows. In Singapore, very stable at 92.7%, and this is higher than JTC island-wide occupancy rate of 89%. Also very pleased to highlight some notable improvement in the Singapore portfolio, particularly in some industrial properties such as UBIX. It is now 96.5% occupied. 10 Toh Guan, 92.1% occupied, and Tampines Business Hub, 98.1% occupied. These three properties we saw a sizable take-up, and the signings are for five-year lease term. Pretty good tenant. In the U.S., there is a decline to about 90.4%, and this is due to lower occupancy rates in Portland, and largely attributable to the downsizing by Nike. Nike reduced their space by about 10,000 sq m, but it remains a tenant in some of our other properties in Portland. We will continue to source for new tenants, and in the meantime, we are improving the amenities in the area to retain and to attract new tenants. Australia portfolio occupancy remains very high at 98.7%. U.K., Europe, similarly, 99.4%. Moving on to where demand came from during the financial year. In the fourth quarter in Singapore, it is tenants in the engineering, electronics industries. For the overseas market, tenants from the biomedical and government agencies. On a full year basis, for both Singapore and overseas properties, the tenants are mainly from logistics, engineering, and biomedical industries. Rental reversions. The portfolio achieved a 13.4% positive rental reversion for FY 2023. That beats our guidance for the year. You can see that we achieved positive rental reversion for all the markets and also all the segments. Perhaps for data centers, you see a -5.1% for the FY 2023. This refers to the fourth quarter that is 6.6% decline. That is mainly due to a data center in U.K. whereby it was overrented. It had a very long lease, and during that long lease period, there was 3% escalation throughout. Now it is renewed at a slightly lower level. Also want to highlight that the retention rate in FY 2023 is higher than that in FY 2022. WALE steady at 3.9 years. In terms of expiry on a whole portfolio basis, we will have to work on about 15% of our gross rental revenue this year. In Singapore it is also about 14.5% due for renewal. In the U.S., also about 14% or 15%. Australia, 21%. U.K., Europe is about 10%. There are a total of five ongoing developments or redevelopment AEIs worth SGD 551 million. They are scheduled to complete between 2025 and early 2026. In the fourth quarter, we have kickstarted some AEIs at two industrial properties, Pacific Tech Centre and 18 Pandan Road. We will continue to add to this list. In fact, in the first quarter this year, we will be decommissioning a data center in the U.K., Welwyn Garden City. It will be redeveloped into a 60 MW powered shell data center and targeting hyperscalers. Most of our business space tenants are on this work from home policy of two or less days. To support our tenants, we try to improve their experience and the work environment with us. In Singapore, we organize community engagement such as Oktoberfest, health talks, wellness talks, and treats for tenants. In Australia, we upgraded tenants, the amenities such as terraces, pool, tennis courts, barbecue area. In the U.S. we are constructing an amenity center in Portland. To conclude, the uncertain inflation trend, geopolitical tensions, and weaker than expected recovery in China continue to pose some challenges to tenants' businesses and CLAS operating costs. We cannot stand still. We will proactively reshape CLAS financial and portfolio management, to adapt to the changing market and tenant requirements. With that, thank you very much. On behalf of the management, I wish you good health and a successful year ahead. Thank you. Thank you, Kit Peng. Now we'll head into the Q&A session. Let's start off the Q&A by getting some questions from the audience. We have the first, Mervin from JPM. Hi, William team. Congrats on the very strong rental reversions. Two questions. Maybe can you start off with Singapore business parks? I know it's been an investor concern given the increased supply, can you talk about your outlook for occupancies for the coming year? I mean, we've seen job losses within the tech sector, unfortunately our finance industry is not doing so well at this point in time. Maybe touch on that. U.S. probably a victim of your James' success in the past. We saw some slippages. Are we expecting further slippages ahead? In terms of borrowing costs, it's peaked to about 3.5. Are we expecting further increases for this year? Any guidance on that? In terms of refinancing, can you give us some details in terms of split between the different currency be that SGD, USD, EUR, GBP? Thanks. Thanks, Mervin. First, I'd like to thank you for taking time to attend this briefing in person. We have quite a number of people who actually dialed in for the webcast. Thanks for joining us. The questions about Singapore business park. I think there's no surprise, as you have rightly pointed out. It's not here in Singapore alone. It's almost everywhere that we see there's no tech demand. Any tech demand that comes in, comes in very small quantity or if you like, very small space. Very, I would say, specialized tech. They are not your big tech companies. The big tech are also looking out for shadow space to be leased up. In Singapore, looking forward, I think the occupancy will likely to be similar to what we see today. While there is new supply coming up, no doubt we are a contributor. We actually a big contributor as a group. A big contributor to the supply that's coming up in the next two, three years. As I mentioned previously, our Geneo development, about 1 million sq ft, we do have some inquiries and interests, even before we started work. It continued to be there. We are progressing well towards pre-commitment. I can't disclose it right now. We are progressing well. It also helps that the new development that comes on stream that was completed last year, they were well occupied for the biomedical. Some innovation company, mainly for the biomedical industries. If you ask about that, these are the replacement coming from biomedical engineering company. We also saw some success to helping tenants to find replacement tenants. If they want to give up space, pre-terminate, we do see some new tenants that came in from industrial engineering companies, who took up, replaced the pre-termination. In fact, higher rent than previous, as well as longer lease. We are likely to see some musical chair, no doubt, but that will probably be what we will see here in Singapore. Your borrowing cost, maybe I'll let Kit Peng. Sure. Okay. This year's refi, will be in SGD and USD. A lot of it will actually be in the second half of the year. Based on today's benchmark rates, just today's rates, it is expected to gradually increase, possibly 4% or lower. I think what is important is that we do have a healthy gearing, and a lot of it is fixed 81%. I think that is very important to help to moderate that interest expense increase. The U.S. outlook? James? Okay. Before I go to U.S., perhaps I can also provide a bit more context for the Singapore BSP occupancy outlook. If we rewind back about 12 months ago, and we look at what was the lease expiries for 2023, you have seen that in Singapore, about 55% of our gross rental income was due for expiry. Or at least 55% of the leases that are expiring would have come from the BSP sector. You'll see that we held our occupancy relatively well. In fact, we clocked in rental reversions of about 13% for the full year. I think this is a very commendable result from the asset management team. We've done pretty well. If I were to look forward into 2024, many of the leases actually comes from the One-North and Science Park clusters. I would be less concerned this year, in fact, compared to last year, because last year we did have quite a sizable leases that were coming due from Changi Business Park. In certain cases, International Business Park as well. Moving on to U.S., I would say that we continue to face headwinds. This is a very market-wide macro trend that we continue to face the same challenges as our competitors. We are not standing still. We are quite proactive. This is something that I mentioned before. We invest tactically, right? We are not putting in flashy, big bang, kind of AEIs, SGD 15 million in one go. We put in very small amounts. For example, the outdoor amenity in Raleigh, that cost us about SGD 0.9 million. We held a broker event. It helps to create a marketing buzz. Separately, I also mentioned before, we do white boxing. In Raleigh, we did white boxing. We spent about SGD 750,000. Again, to explain what white boxing means. Typically, in the U.S., a tenant wouldn't need to reinstate their premise when they vacate. Usually, it's marketed on an as-is basis. We took the decision that we'll tear down all of the cubicles. We replace the carpet tiles, we refresh the paints, maybe do a bit of upgrades to the lobby entrance, et cetera. We were very happy that that particular space that we did the white boxing, we actually secured a tenant. It's a very substantial one. It's about 41,000 sq ft. It's a biotech company. If you were to pull up the statistics for Raleigh, for the whole of 2023, that ranks as a top five largest lease that was signed in Raleigh. That lease hasn't commenced. It will likely commence between 2Q to 3Q 2024, so it hasn't showed up in our occupancy. This is just a demonstration of the kind of things that we are doing to try and improve our occupancy. I think lastly, the last point that I'd like to add, I don't want to belabor the point on U.S., we continue to clock in very healthy rental reversions as well. I think this year we clock in about 10%, again, in a tough market. If you look at our leases, which are expiring in 2024, they continue to be under the market, and we expect to still get close to double-digit kind of reversions. While it might be difficult to protect occupancy, at the NPI level, there will be some sort of moderations because we'll be either signing new leases at higher rents than the preexisting leases, or we are renewing leases at higher rents. Thanks for that. Yeah. The operational performance are very strong. Right. Thanks. Okay. We'll move on to the next person. Yes, I saw your hand earlier, Derek. Derek from DBS. Evening, William and team. I think a commendable effort last year, you did close to a billion-dollar worth of deals, right? When the market was so tough. My question is on acquisitions. I think, William, your thoughts on whether you think it's time to get more active again this year. Is yields expanded to a point where you think you should be a bit more aggressive, and maybe which part of the year and which jurisdiction? That's my first question. My second question is on leasing spreads. I think James did give a good sense that U.S., we have a 10% kind of a catch-up. How about in Australia, in your suburban office and logistics? Is that still that gap that you can capture? Just these two questions. Thanks. Thanks, Derek. Acquisition this year, we did about SGD 700 more million. We did that including a development, SGD 885 million. Compared to 2022, we did only about SGD 200 million. We are still not back to the level that probably where you know us. When we first started going overseas, we only want to make sure that we enter well and scale up fast. At one point in time, we were buying about SGD 2 over billion in a year. Having said that, we have evaluated many deals. In fact, in 2023, the investment team has evaluated over SGD 6.5 billion of deals. We are selective, looking at deals that make sure that it's accretive to us. Good quality tenant, good location. Because over time we want to make sure that the portfolio is strengthened. You know our strategy. We want to diversify across mature markets and focus on the asset classes that supports the driver in that economy. We have been doing well, as is shown in our valuation. While there's a lot of stress over valuation, our numbers do hold up. Operational metrics are strong. Occupancies are good. We continue to deliver rental reversion. What I mentioned is high single digit, we achieve double digit. In regards to where you look at where we have done in 2023, Europe, Singapore. We completed a development in Australia, but that was because it started two years ago. I would say it would be the countries that we are in, specifically except Australia. Given the fact Australia, you talk about yield spread. It hasn't come to a level that is accretive for us, even if we were to do development. We are prepared to look at development right now in Europe, in U.S. That actually give us an opportunity to gain into certain cities or certain locations that we feel that there's growth potential. As you heard from Kit Peng, we are now evaluating a redevelopment in U.K. to convert one of the data center from currently we have about 25 MW. We have put in applications and in principle, we have about 60 MW on hand. We are depending on the final letter of award, if you like, before we start work. That will actually give us opportunity to further increase our revenue in those countries. In terms of catch-up rental, you have seen that our guidance towards rent reversion is mid-single digit. As of now, obviously, I've seen some leases that's been renewed right now. You look at expiry trend, we have some leases that's renewed. That give us some confidence that we are still able to catch up to the market. I've mentioned before, we have very strong rental reversion all thanks to the team. It also started because of lower base. Two, three years ago when leases were signed. Now with a higher rental, higher inflation, naturally the gap is huge. To the extent that the team actually surprised me with a huge rental reversion in logistics in the fourth quarter. We believe that that will continue to be a trend. We still will be in the catching up, and hopefully, that actually will translate to real results that we won't disappoint you. Thanks, Derek. Australia, if you look at our numbers for FY 2023, which is about 19.4%. That is actually the highest that we have ever recorded since we acquired the portfolio. This stellar results, I'm not sure if we can repeat this in 2024, but I am definitely confident that we'll continue to get a positive rental reversion. Similarly, I'll just digress slightly to Singapore. Singapore, we locked in about 13.8% rental reversion for the full year 2023. This is the highest on record since March 2014. I would say that in 2023, we put ourselves on a very strong footing operationally. If you look at our occupancy and our rental reversions, we are firing on all cylinders. We are very well poised to take on the challenges in 2024. Hopefully, the economic conditions continue to remain benign. There's no downturn or negative sentiments, so that we can continue to carry forward this strong positive momentum into 2024. Maybe I'll just add one more point. Our retention ratio came in very strong compared to 2022. That also shows that the quality of assets that we hold, as well as our ability to retain our tenants by way of whether is it through community development, engagement. We also realize that over time, as occupancy creeps up to a level that we are comfortable and we're happy with it, that also means that what is left as vacancy are quite stubborn. It gets tougher to lease out. That will actually, in this market today, while we still see good demand, especially in industrial and logistics that we've seen that our occupancy is very strong. We still see good demand, you will get increasingly challenging to close that final gap of that 1%-2%. Over time, with our ability to look at Because we got big portfolio, if we can, there's untapped plot ratio, redevelopment opportunities, AEIs. We hope to be able to continue on a better trend to retain the tenants first, and then of course, to increase occupancy. Okay. With that, we'll move on to Yew Kiang from CLSA. Hi, William and team. When I look at your responses, you are still guiding for mid-single digit rental reversions for this year. You are also going to benefit from all the acquisitions you have done last year. In terms of cost pressures, these are also stabilizing. Utility costs are stabilizing. Refinancing rates are also peaking. Can we expect performance fees for this year, for FY 2024? That is the first question. Second question is on acquisitions. You mentioned you wanted to do more. Given that your gearing is also trended slightly higher, you are still trading well above NAV. Some of your peers are also tapping the market. What are your thoughts in terms of funding preference, whether it is debt or equity? Thanks, Yu Keng. The rental reversion guidance of mid-single digit. I suppose you acknowledge that is possible to achieve. Perhaps you think that it is very easy to achieve. I think we still feel that the market allows us to be able to increase, over time, our gross revenue, with higher rental reversion. What we are facing right now is also increase in cost. While we say that cost is stabilized, it is still on an uptrend. If you look at our margin in 2023, the primary reason is because of higher inflation for our maintenance costs, which is dragging down in terms of our margin. The other point that is probably not very well-known, as we move towards better occupancy and rental reversion, our property tax went up. That actually drags down whatever that we can on the NPI side. Obviously, under the line is interest cost. Still going up. As Kiping mentioned, we hope to close the year below four, based on today's rates. That will continue to drag in terms of numbers. Definitely I hope to be able to do performance fee. If you know our numbers, it has to be 2.5% and above in terms of DPU growth, before we can get performance fee. I will bear your comment in mind. We will work towards that. With regards to fundraising acquisition. To hit 40% right now, we are about SGD 600 million. If you want to push forward to beyond 40%, which we do hear noises that it becomes a norm right now that you can live with 40-ish. Our guiding principle is that we still want to maintain below 40%. Depending on the acquisition target, ability to get it accretive, and how accretive, or the pace of acquisition, I think we will leave our options open. Whether it is debt or equity funded. We definitely have a need for more CapEx, of course, for AEI, for redevelopment. We continue to look at opportunities here in Singapore. That would actually take up whatever some of this debt headroom that we have. We will leave our doors options opened, and make sure that we are able to continue to deliver the results that investors expect from us. Okay. May I invite more questions from the floor before we head on to the questions online? We have Joy from. Thank you. Thanks, William and team. Question following up on your comment on development in U.S. and U.K. Would you be doing these on a speculative basis, or you will source tenants first? What sort of return are you looking at for the respective markets? If you can just also elaborate a little bit more on the development CapEx you will be looking at for 2024. Thanks, Joy. Development CapEx as in AEI. Typically we do about SGD 50 million-SGD 100 million. I think we can push for more, given the fact that construction cost has gone up quite substantially. The two new AEI are small by quantum. I think this is a start in 2024. We hope to be able to do more. SGD 100 million is probably what we will work towards. Each year we probably look at six, seven projects to do. In regards to development, perhaps I would say, okay, I will not touch on the DC yet first, data center. For development, for example, if we were to be able to, we want to make sure that first priority, of course, is tenant. As I mentioned, we are prepared to do some development right now because we want to get into certain cities that we feel that there is a growth potential. Some cities that has presented themselves to have almost no new build in the past three, four years, and yet demand has escalated to a level that there is shortage in the market in those cities. We can take some risk if you want to, in terms of speculative development. Actually, it actually comes with very high level of conviction that it may be pre-let even before completion. As for the data center in Europe, as we now mention it up front right now, even before we start, we have not even seen a decommission of their site. We obviously hope to get the word out, and then we get ourself a call up for potential inquiries. If anybody who is hearing this are interested in the hyperscale data center in U.K., do give us a call. Thanks. It's too early to tell. When I get the numbers in, as we make a formal announcement, I will share with you the returns that we expect. If you look at our track record right now in today's context, we also look at it as has to be accretive. Has to be, at least in the context of what we have seen in Singapore, 78%. We probably look at that probably more given that there's higher costs in overseas. Okay. If there are any more questions from the floor. I'll have Xuan Tan from Goldman Sachs. Hi, William. Can you talk a bit more about assets that's sitting under CLI? Do you think those will be potential acquisitions this year? Then second question is, can you share more colors on the U.S. valuations? Which specific assets and what kind of cap rate changes? Last question is on fundraising. In 2023, we saw forward fundraising, and that actually did drag down DPU before acquisition came in. Is that something that you think could potentially happen again this year, or will you think about it differently? Thank you. Thanks, Xuan Tan. CLI has interesting and attractive assets. Yes, I'm in Science Park Data Center. If you look at their assets, unfortunately for us to make it accretive, given the land tenure that they have, it's probably still not accretive for us. Easily 50 years and above. It's probably a stretch for us to be able to acquire from them. I would say that if there's opportunities, third party will probably be where we be looking out for in terms of our hunting ground. Looking at other assets that is owned by other owners will probably give us. There's a range of very good assets around in the market that we can look at. U.S. valuation. Maybe Hi, Xuan Tan. Regarding U.S. valuations, it's largely a function of increased cap rates, slightly tempered by higher assumptions for market rents and a slight decline in occupancy depending on the assets. The biggest declines, as you expect, came from the office assets. On average, we saw about 120 basis points expansion in cap rates for U.S. offices. In terms of the actual number, it moved from like a 600 to a 700, mid-700 kind of handle for U.S. offices. For U.S. logistics, there was a slight expansion of less than 100 basis points. It moved from about five-ish to six-ish kind of cap rates. Again, the valuers also increased the assumption for market rents as well. I think we'll move on to one question online first. One more question. Sorry. I suppose you are referring to our last EFR, that we upsized, and we raised about SGD 100 million ahead. It came from a point that it was primary reason because we actually lay up all our projects up front. We believe that that's also a good thing for us to communicate the action plans, our business plan forward. We are happy that we are able to get it through to investors, and they understand what we are trying to do. Redevelopment opportunities here in Singapore in terms of logistics. We obviously want to be able to strengthen our balance sheet, so that we can remain nimble when there's opportunity that arises. Will we do that again? Will we look at how we fund our future acquisitions? I think it's still a little bit early to tell. At a point in time, if we do have an acquisition, we definitely look at our options to see whether there's opportunity to raise equity or what other ways that we can do to fund those acquisitions. Thanks, Xuan Tay. Okay. We'll move on to one question online. It's asking about which data center in EU or U.K. has a cap rate of 10.21%. Any particular reason for the high cap rate? It's the Watford data center that we just acquired. While we can't speak on behalf of the valuer, this cap rate is not too far from the entry NPI yield that we have mentioned as well. That's roughly in line with our own internal valuations as well. Maybe just to add, we mentioned the NPI is about 9.4% post-transaction. The implied cap at the acquisition is about close to 10. This is not far from where we have acquired. The valuer this time around has applied a 10.2. It is very close to the implied cap that we had during our acquisition. Okay. There are a couple of questions online about 1 Science Park, we will just group them together. Basically, the questions are asking about the pre-commitment at 1 Science Park and achieve average rents, and if there is any guidance on ROI for this development. We have actually announced the ROI for development. It is about 6.1% where we did the investment. I cannot share more details in regards to the pre-commitment, and the achieved rent at this point in time. We have easily another 12 months to go before completion. We do not want to disturb all the negotiations and the finalizing of details with our customers. Bear with us. There are actually strong interest, even before we started the construction. I think we are now close to signing this as we go towards closer to the TOP. Thanks. We will just do one more question online. There was a question about the valuation decline for U.S. and Australia. What drove this? I think the one for U.S. has been answered, perhaps we will just answer the one related to Australia. Yep. Okay. To provide a bit more context and background, it was a mixed bag of results for logistics and business park/suburban offices. Logistics actually went up. That is notwithstanding the fact that cap rates did expand. It expanded about 90 basis points. It was about four handle previously, went up to about five plus. I think that is very in line with market transactions and the kind of trends that we see. Even though there was the expansion, like I mentioned, the valuers actually increased market rents by a lot, and they actually marked it to market. As a result, that was able to largely offset the effects of expansion in cap rates. For offices, in Australia, we saw a similar increase or expansion in cap rates. This time around, the valuers didn't move the market rents by much. Neither did they really adjusted the occupancy. As a result, you see that decline in overall office values. Okay. Let me just add, if you look at our slides and all the details, there is no surprise that cap rate expanded across the board. It all goes down back to your performance of the asset. The rent occupancy, obviously, to be able to push valuation up. As James mentioned about our Australia logistics, our valuations still went up, given the fact that, yes, since 2022, we've been looking at strong occupancy and rents were pushing, and we were looking at good rental reversions. That actually helps in terms of logistics. In fact, logistics, slight decline in the U.S. logistics, but throughout where we have, they're all on the uptrend. As the press release or even the announcement that we have made, business park was the one that actually drags us down, given coming from U.S. and Australia. As a bucket, as a segment, industrial logistics are all higher valuation. We take comfort that this construct and this diversified strategy works very well in our favor to make sure that overall and over time, we continue our resilience in our portfolio. The assets that we have acquired in the past or continue to do AEI are the right assets that we have picked, right locations that we have picked to be able to attract these leases. Occupancy, as James mentioned, they are all-time high, and in this environment, we do expect the occupancy to be very stable, and we hope to be able to push the rental reversion towards positive region again. Okay. We will head back to the floor. Can I have Xavier from Morningstar? Hi. Thanks, William and team. My question is on your 60-megawatt data center. You keep saying hyperscale tenant. I'm just wondering, why are you aiming for hyperscale? Why not AI? Is there a difference in the service standard that might be more challenging to fulfill? Yeah, that's my first question. No particular reason, actually. Given the fact that we probably use hyperscale too loosely. Given the fact that today we have about 25 megawatt, if we can push towards 60 megawatt, that from an enterprise company. The previous tenant was enterprise, financial institution. If we can push towards 60 megawatt, the market opens up for hyperscaler. To what we understand today, if the data center will be used for AI consumption, the power requirement is much more, which we don't have the ability, given the fact that what we have been talking about in terms of getting additional power is up to 60 megawatt. Bear this in mind. This is not a certainty. We have put in application. We have been able to get some confidence that we can get the 60 megawatt, but the authorities need to study this, how they will get the power to us. We still need time to be able to finalize the details. For AI, is 60 enough, or they need more? To what we understand, it's more than that. Okay. Thanks. For my second question is on the Singapore business park. Obviously, it's very challenging. Is there a reason why you are keeping these assets? Is it because they have redevelopment potential, or are you so confident that you can continue to lease it up and improve their performance? Thanks, Xavier. Very good question. Over time, we have realized that we are sitting on locations that are very valuable. For example, in International Business Park, we have torn down a building, iQuest, now under redevelopment. There'll be no surprise that we have plans for two more buildings that's next door, Acer and Creative. Why so is because when the new MRT comes in in 2027, it just opens up the opportunity. Would we let go of that where we have more than 30 years of lease right now? Unlikely. We definitely have to make sure that we continue to make meaningful leases because we intend to redevelop some of these opportunities. If you look at it in Science Park, over time, whether is it CLI or us, we do have plans to increase plot ratio, redevelop, which our Geneo project has shown. Right in front of MRT station, we managed to convince the authority to award to us more plot ratio. Originally, the site was 1.2 plot ratio, we managed to get 3.6. Now we are building 1 million sq ft. CLD has actually, over time, redeveloped the assets around there. I think these are all very valuable assets, like Ascendas, you probably know that they own that. There is also a new building that comes next door to our Geneo asset, Geneo redevelopment. We will look at all this as opportunity. Science Park, we are still sitting on 50 over years. Science Park is still in demand, given the ecosystem around life science near One-North. There will be new trend that comes along for us that we can redevelop to suit the new specs and the new development or new requirements of the clients today. That leave us some good opportunities, which is why I won't say that we are hanging on to them, they are really valuable assets and locations. You're just waiting to see if there will be an opportunity to redevelop. If not, you just hold on for a while longer, right? In our evaluation, there are opportunities. It's being able to phase out to time the development. Having said that, the occupancy is over 80% for business park. They are not terrible. If you give the context that even the JTC statistics is about 80%. We are doing very well. This is probably only a phase of time where there's no demand from tech tenants. It's replaced by other industries. They are still a good asset class that makes sense for the industry players, whether it is from engineering, whether it is from industrial R&D. These are still good assets to own. Thank you. We are very aware of the time. It is already 6 minutes past 6:30. Perhaps we will have one last question from the floor. I think, Derek, you raised your hand earlier, correct? Yes. Thanks. William team, just wanted to follow up on the data center project. What is the expected cost of a rough gauge? Because 60 MW sounds a bit pricey. I want to keep that as a suspense, Derek. I mean, for new builds, it could be north of SGD 500 million. Possible, but I don't think it will be at that kind of size. Depends on how we end up building it, whether you want to include the M&E or it is core and shell. These are still early stages. Okay. I didn't know that this announcement of potential brings so much attention. I hope you do feel that what we want to put in place is a lot of proactive asset management. We know ahead the expiry of the tenant. We know the potential. Just like Geneo, before we tear it down, we went to apply for higher plot ratio. In this case, same thing. It took us a while to put in application and to talk to the authorities for higher power. We have to plan ahead to give us time, I think we are very comfortable that at this point in time, seems to be that the plan that we have in place are positive. Right after we are able to get confirmation of the size of power that we can get, we should be looking towards further down the evaluation to look at construction costs and what we want to build for if there's a tenant or there's not a tenant. Thanks, Derek. Okay. We will move to the final question online. There is this question on will CLAR explore new geographical regions for acquisitions to grow the portfolio. For example, with Mr. Tay's strong background in South Korea, where the current fundamentals look strong, notwithstanding local funding costs, will there be opportunities? Thanks for mentioning South Korea. I think we've been asked a lot about Japan, Korea, given that they're also mature market. Yes, we do see that it's interesting. At this point in time, I think our focus will still be where we are right now in terms of U.S., Europe, Australia, and Singapore. While I say there's no investment opportunity in Australia, I think we are still sitting on very good product and asset class in Australia. Occupancy for office, despite all the negative news about vacancies in fringe of CBD. We are in several location. Our occupancy are strong. In fact, we have a few new builds. MQX Four is new. Mulgrave in Melbourne is new. We are attracting good tenancy and inquiries. Logistics, as we have mentioned, they continue to give us a lot of confidence to continue own and hold on to these assets. Selectively and strategically, we have done some divestment, which we have picked three logistics assets in Brisbane. Since we got a good offer. Based on the offer price, the NPI is looking at 3%. Even if we've rent growth, we believe that it probably can push towards four-ish. Since we get a 3% right now, I think it does make sense as a responsible manager to accept this kind of pricing, we look for better yielding assets to acquire, whether it's in other jurisdiction, to be able to supplement and build up a better portfolio. With that, we have come to the end of this briefing. Thank you, everyone, for joining us in person as well as online. Thank you for submitting your questions. We hope you enjoy the evening. Thank you. Thanks for coming. Before we sign off, maybe I just want to thank the team. It's not an easy year, we have done very well. The asset managers, portfolio managers, leasing team, property management. I just want to thank the team here. Thanks. Good job.