Good evening, esteemed analysts, investors, and members of the public. Warm welcome to MPACT's analyst briefing and live webcast for our results for the second quarter and first half of financial year 2023/2024. I have the distinct pleasure of hosting today's results briefing, allow me to introduce our speakers for today. They are Ms. Sharon Lim, Chief Executive Officer of MPACT, Ms. Janica Tan, Chief Financial Officer, and Mr. Koh Wee Leong, our Head of Investment and Asset Management. They'll be presenting our financial results, providing key business developments, and sharing market insights. Following the presentation, we'll open the floor for Q&A. We'll invite you to ask questions or seek further clarification on our results. Without further ado, I will hand the floor over to our CFO, Janica. Good evening. I hope everybody can- This meeting is being recorded. This meeting is being transcribed. This quarter's results underscore the resilience of MPACT's Singapore portfolio amid diverging Singapore- overseas currents. The strategic divestment of Mapletree Anson, coupled with steady performance of Singapore assets, provided some cushion against the effect of diverse conditions in the overseas market. Second quarter FY 2024/2025 gross revenue SGD 225.6 million and NPI SGD 167.7 million were lower by 6.10% and 8.5% year-on-year respectively. This largely reflects reduced contribution from Mapletree Anson following its divestment on 31st July 2024, and lower contributions from the overseas asset, which was further impacted by the strengthening of SGD. Excluding Mapletree Anson, the Singapore properties recorded a revenue growth of SGD 1 million year-on-year, led by continued robust performance of VivoCity, despite the ongoing AEI at B2. The property operating expenses were higher by 1.7% at SGD 57.9 million, mainly due to a SGD 2.8 million one-off property tax rebate refund, and this is relating to VivoCity, recorded in last year and not this year. Moving on to net finance expenses for the quarter. Net finance expenses were 2.6% lower at SGD 56 million as compared to second quarter last year. This was mainly due to the repayment of borrowing using the net proceeds from the divestment of Mapletree Anson, and partly or partially offset by higher interest rates, as the lower fixed rate legacy interest rates were progressively lower. Amount available for distribution, SGD 104 million, 11.9% lower. DPU, SGD 1.98, down 11.6% year-on-year. If we were to exclude the one-off property tax refund received last year, the DPU would be at 9.6% year-on-year. Okay. This slide shows the contribution by different markets. Excluding the results of Mapletree Anson and the one-off property tax refund received in last, I think through last year, both gross revenue and NPI of Singapore properties were higher year-on-year. The two core assets accounted for more than 50% of the portfolio's gross revenue and NPI. The lower contributions from the overseas properties were mainly due to weaker performance because of lower occupancy, negative rental reversion, and unfavorable FX impact from depreciating JPY and CNY against SGD. Moving on to first half. Gross revenue and NPI decreased by 3.3% and 4% year-over-year to SGD 462.3 million and SGD 347.1 million respectively. This was similarly driven by the reduced contributions due to divestment of Mapletree Anson, and with the overseas contributions further dampened by adverse foreign exchange effects. Net finance expense for first half was SGD 115.5 million, up 3.4%, mainly due to higher interest rates on Singapore dollar, Hong Kong dollar, and Japanese yen borrowing, as legacy low fixed rate RRF progressively taper off. This was cushioned by the reduced borrowing after divestment of Mapletree Anson. Amount available for distribution for first half was SGD 214.7 million, down 7.8%. DPU SGD 0.0407, down 7.9% year-over-year. Excluding Mapletree Anson, gross revenue contribution by Singapore properties would be at SGD 5.1 million higher year-on-year. Excluding Mapletree Anson and one-off property tax rebate refund, Singapore properties NPI would be at SGD 3.2 million higher year-on-year. On balance sheet. In view of the non-renewal noticed by FGM's master tenant and the localized market softness in the Makuhari sub-market of Chiba, interim revaluation was carried out on the three Makuhari properties, namely MBP, MBT, which Seiko Building, and FGM. This resulted in a 17% drop in fair value as compared to their respective valuation conducted in March 2024. Wee Leong will go into more detail on these revaluation later. As a result of this revaluation and plus the adverse FX impact, NAV per unit was at SGD 1.71 as at 30th September, lower than that of 31st March 2024. Moving on to capital management. Utilizing proceeds from the Mapletree Anson divestment to reduce borrowing rate debt, the total gross debt was lowered from SGD 6.8 billion as at June to SGD 6.1 billion as at September. However, the interim valuation of the Makuhari properties partially offset the positive impact of this debt reduction on the leverage ratio. Consequently, the aggregate leverage ratio improved from 40.5% last quarter to 38.4%. At 38.4%, the debt headroom was SGD 3.6 billion to 50%. Assuming total borrowing remain unchanged, it will take about SGD 3.6 billion drop in NPI for gearing to reach 50%. That is about cap rate expansion across the whole portfolio of more than 100 basis points. Okay. The weighted average all-in cost of debt for first half was 3.56% per annum, and adjusted ICR remained the same as last quarter, 2.8 x on a 12-month trailing basis. Okay. By the close of the financial period, MPACT has a financial flex of about SGD 1 billion in cash and undrawn facilities, ensuring sufficient liquidity. The debt maturity profile remain well spread, with no more than 24% of debt expiring in any financial year. Okay. On the next slide, the fixed rate debt portion was raised from 78.9% to 83.6% during the quarter, and this was mainly due to the pair of floating rate borrowings with Mapletree Anson's proceeds. With 83.6% of debt on fixed rate, every 50 basis points change in benchmark rate is estimated to impact the DPU by SGD 0.08 per annum. At the close of the quarter, approximately 90% of MPACT's expected distribution in distributable income on a rolling four- quarter basis was derived from a hedged SGD. Last but not least, on the distribution detail, DCD is on 4th November, and payout date is on 6th December. I will hand over to Wee Leong. Okay. Good evening, everyone. Maybe I start with the committed occupancy. You'll see that MBC's maintained its committed occupancy at about 92.5%. There are a number of vacant spaces that came in in this financial year, namely the two floors on that Google had given up, as well as Bank Julius Baer space that both of which were given up in the first quarter. We are still in the progress of leasing out some of these spaces. We hope there's some better news for everyone over the next half year or so. VivoCity occupancy came down just a little bit, and that's largely due to the asset enhancement activities that we are doing in Basement 2. For the other SG properties, occupancies remain strong. Of course, for this quarter, the other SG properties are only mTower and ERC because of the divestment. Sorry, mTower, ERC and Bank of America HarbourFront, because of the divestment of Mapletree Anson with effect from 30th of July. For Festival Walk, occupancies are now at 96.4. The 3.6% vacancy there is largely due to vacancies at the office component of Festival Walk. We are in the process of signing up a number of leases. We hope to get this number, this occupancy up a little bit more over the course of the next two quarters. China occupancies, the 87% number is for the, for, is for the two assets. For Gateway and Beijing, that the performance is better than this is at the committed occupancy is now at 91.2%. Whereas for Sandhill Plaza, that's hovering at about 80% and has been for the last two quarters or so. For Japan, the biggest change is actually in the Japan portfolio. You will see that this set of numbers, the performance at Japan has dragged down the portfolio occupancy quite a bit, largely due to the fact that, even though the Japan portfolio is about 8% of our portfolio valuation, it's about 20-ish% of our portfolio net lettable area. It has quite a big impact on the valuations. If you look at the, the change in occupancy for Japan assets, that's largely due to the non-renewal of the master, of the, of the master lease at Seiko Building. That's the tenant has largely left the building. Only about 26% of the net lettable area is currently leased out to subsidiaries of Seiko, who have remained within the building. That's caused a drop in occupancy for the Japan portfolio. The Pinnacle Gangnam, now about 92.7%. There was an unexpected non-renewal of this tenant, as well as a bit of softness in the retail part of the asset. Moving on to rental reversions. The Singapore portfolio rental reversions remain very healthy. MBC at 2.5%, VivoCity at 17.3%, and the other SG properties at 8.8%. Festival Walk rental reversions have widened slightly. However, if we look at the leases that were signed prior to the social disturbances in 2018, the rental reversion for the remaining assets are still slightly positive. China properties, rental reversion has widened very slightly. It was -1.3 in the previous quarter. Now it's about 2.9. Rental market in both Shanghai and Beijing still remain soft. There is increasing pressure on rentals as well as occupancies. Japan, that's largely due to the Seiko non-renewal and the underlying leases coming in. For The Pinnacle Gangnam, this is actually due to just two retail leases at the building, both in Basement 1 and Basement 2, totaling only about 3,400 sq ft. The remaining performance of the office is still fairly healthy. But the fact is that we are seeing a little bit the rate. Sorry. The office rentals are fairly toppish. We unlikely to see significant increase in rentals from this point onwards. But our current rentals are still a little bit below where the market is. Likely that we can still see a bit of positive reversion for office side going forward. Moving on to WALE. Office WALE is now 2.5, while retail remains at 2.2. In terms of performance, maybe we can move straight away to the valuation. Like Janica mentioned, we have conducted a revaluation of the three assets we have in the Makuhari area of Japan. This was triggered by the non-renewal notice, which we had received from Fujitsu for their space at Makuhari, Fujitsu Makuhari Building. Because of the change in the structure of the lease, it was previously a master lease, double net basis. When this change occurred, we had to now value the building as a multi-tenanted building. The main change is, the main changes are actually twofold. First and foremost, of course, there will be additional operating expenses being incurred in the building. The second thing, of course, is that there will now be vacancy that will accrue to the building because of the non-renewal. Unlike in Seiko, where a portion of the tenant had remained at the building, this will not be the case at Fujitsu, where the building will be vacant after the expiry of the master lease. For the other two assets, what has also happened is that at the point of this valuation, the valuers have taken a look at the market rentals in the Makuhari area. Compared against the March 24 valuations, they have brought down the market rentals very slightly, about JPY 500 per tsubo. The valuation impacts that you will see are largely due to the reduction in market rentals for MBP as well as for MBT. Whereas for Fujitsu, it's largely due to the conversion from a single tenanted master lease to a multi-tenancy basis. Okay. We will continue to actively assess strategic options for these three buildings. We have been looking at potential change of users. We have also been intensifying our marketing efforts to try and relax new tenants. If at all possible, we will be pursuing them as more opportunities as well. Maybe moving on to VivoCity. VivoCity, shopper traffic is well down 2% on a half year versus half year basis. If you compare just the second quarter against last year, it's up about 1%. On the quarter versus preceding quarter basis, it's actually up about 5.6%. I think that reflects first thing that there probably is some shift in the shopper traffic and tourism traffic coming back to Singapore, especially in the second quarter, as well as potentially people traveling a little bit less in the second quarter of our FY. Tenant sales, on a half year versus half year basis is down about 4.1%. On the second quarter versus last year basis, it's down about 4.8%. On a quarter on quarter, second quarter versus first quarter basis, that's up about 1.6%. A little bit of this is actually affected by downtime. Comparing this year, this quarter, second quarter against last year second quarter, aside from the fact that we have the asset enhancement activities going on in Basement 2, we also have more tenants in the mall undergoing fit-out and downtime in this current quarter against last year. Overall, that's resulted in the 4.8% drop on the second quarter versus last year basis. Like I mentioned, there is asset enhancement activities undergoing in the mall currently. The first phase is to upgrade the Basement 2 food kiosk area. We have done some of these. A number of the shops have actually opened. A number of the kiosks have actually reopened in the middle of October. You'll see some of the new to mall brands, as well as some of the returning brands on the slide here. We have continued to refresh the concept and the tenancies within the mall. These are just some of the new tenants that are coming to the mall, as well as some of the tenants that have refreshed or relocated within the mall. We continue to drive shopper traffic through two events and activities within the mall. For this past quarter, we collaborated with Disney on Donald Duck's 90th birthday. That was done in conjunction with our Mid-Autumn Festival celebration. Moving on to Festival Walk. Here the shopper traffic numbers are a little bit more positive. Whether on the 1st half or 2nd quarter as well, or 2nd quarter versus 1st quarter basis, those are all up, reflecting increase in shopper, in tourism arrivals into Hong Kong, especially for mainland China. However, shopper tenant sales remain weak. That's largely attributed to the changing shopping habit of Hongkongers, driven by the fact that their currency remains very strong. There is still a significant number of homeowners who travel out of the country over the vacation periods, and that's contributed a little bit to the drop in shopper in tenant sales. Okay. Looking at Festival Walk's tenancy mix, we have looked to increase experiential as well as lifestyle concepts. Now the mall has a gym. We're looking at a number of other changes in the mall as well. Activities in terms of advertising and promotion remains very strong at Festival Walk. These are some of the activities that we have done over the last quarter. The team there is very good at attracting staff to come and host events within the mall. Last but not least, I think we mentioned this a bit earlier, the divestment of Mapletree Anson was completed on 30th of July. That's improved the aggregate leverage ratio of the REIT. It's also improved ICR as well as our debt headroom. Okay. Okay. I think we can perhaps we can go on to Q&A. Thank you, Janica and Wee Leong. We're now ready to take questions. We kindly request that all analysts please state their name and firm before asking your questions. For our online participants, please submit your questions through the Text-to-Speech platform. First, we have Terence from J.P. Morgan. Hi. Hi. Yeah. Hi. Thank you so much. This is Terence from J.P. Morgan. Now, for my first question, I'd actually like to understand a little bit more about Japan. You know, how long should we expect the downtime to last for these three properties? I can see that Japan, the NPI margins have dropped quite substantially. Is this sort of like a stabilized NPI number going forward, notwithstanding the Fujitsu lease and? Hi. Maybe I'll take that question. Fujitsu lease is all the way to 2026. Right now we are still enjoying the master lease income. They have given us the notice that they will not renew. That would depend on how fast we can lease it up. If you ask me a very pointed question of how low can it go, like I mentioned as a ballpark, yeah, on an extreme case basis, it means that we are talking about in the next three-to-five years. The worst case, we are talking about Japan was contributing, let's say about SGD 60 million. Worst case, it will drop all the way down to SGD 30 million, half, because it's about half the asset. If you put it at zilch, it will be around 30. That is now all the way to Fujitsu, we still have income. MBT is already multi-tenanted and is still continuing. That is as a general guide in, let's say to four to five years on a worst case basis, that will be the general drop. I want to put it into perspective here. You may see the drop. Let's look at in relation to the other leases. Maybe I'd like to touch a bit on its contribution and where the outlook for Japan would be for our Makuhari assets. I think I've already given you the worst case of the Makuhari assets. It's not gonna be immediate impact. It will be beyond three years and longer. To if we even get there, to that level, okay? That is the worst case. The valuation, I think a lot of people may wanna ask, why do we do a reval? Okay. I think it was triggered because of the notice that was given by Fujitsu. Out of prudence, we decided that we should reval. SGD 120 million is less than 1% of our entire portfolio, okay? Just to give you a perspective, if you look at the occupancy, you may see that, hey, you know, the occupancy is locked, but the value per square foot of rental that is contributing is actually very low. If you are talking about below SGD 2 a sq ft, just for a matter of perspective, and you convert the tsubo into per sq ft in SGD. That's when if you look at Seiko. A whole building is equivalent to a Hong Kong supermarket. Fujitsu, whole building is equivalent to one lease in MBC. That is to give you a sense of the relativity of what we are facing. I'm not belittling the fact that there is softness in there, okay? I think we have been guiding that there's some softness in the Makuhari asset, and now we have reval because of the notice of the Fujitsu. I'd like to put it in context on the impact of it. Worst case, 60 down to 30, okay, for Japan. That is on a longer- term basis, not one year, not two years, not three years. I'm talking of beyond that, okay? On a worst case basis. Yeah. Okay, maybe just to follow on from that. With the retail, your gearing or let's say your debt to- Is the gearing has been taken? The gearing has been taken in consideration at 38. We are still comfortable at the LTV level and the coverage in all. The gearing impact itself, I think we are still in a safe zone, way below the 40 as of now at 38. I think we are comfortable at this level. Even at over 40, we have always said that we are comfortable. Right now we are 30. Even taking into consideration the 120, we are at 38.4? 38.4. Let's put it in another perspective of what is 120. 120 is less than 1%. Last year just a Forex move, Forex move on the valuation, just the currency itself when we just translate it was over close to SGD 300 million. Okay? With the AEI works coming up that we have done, the worth of it is definitely more than SGD 150 million. If we were to delay it to our yearly val, I think Vivo itself can more than cover. Just matching, Japanese yen debt to Japanese yen assets, is there a risk of over-leverage, given that you have taken such a big bet in the Japanese yen assets? I think we are still comfortable. Nobody's making any noise about it. I think we are fine with where we, what we are, where we are. Okay We do have a very small overhedge position, but once our CCS roll off, we will be in a better position. We'll be within a 100% position. Yeah. It's very small. Yeah. Okay, thanks. Final question from me. Would MPACT consider top- ups, given that there could be some DPU declines ahead? No. Top up. Oh, excuse me. Top -up using debt? I think top -up. No. No. Top -up, yeah. If you're talking about borrowing money to top it up, we don't see the need to do so. I think it's not sustainable, and we would like to DPU typically has to be from operations, as opposed to borrow from the bank and give it to you. It doesn't make sense from my perspective. Okay. Okay. Thank you, Sharon. Yeah. Thanks, Sharon. Next, can we have Geraldine from DBS? Geraldine. Hi. Hi, Sharon and team. Yeah. Maybe just a follow-up on Makuhari building. If you were to multi-let, have you taken a look at the rents as compared to what you were getting from the anchor tenant previously? Not sure if it's too early to ask. The valuations have really taken it into account, the differences in rentals between the multi-let and the single tenant. For The difference actually is a little bit The differences are varied. Each building is slightly different. ranges from between only about JPY 500 per tsubo to about JPY 2,000-3,000 per tsubo difference. Not sure if that answers your question. Oh, okay. The JPY 500 is the anchor rent, and the JPY 2,000 plus per tsubo. No, what I meant is that the difference between the anchor rentals and the multi-tenant rentals. The anchor rentals are typically a little bit higher. That difference between the anchor rental and the multi-let rental usually about is about JPY 500 to about JPY 2,000. Just back to Singapore MBC, there were seven leases signed this half. Can you share a bit more about the tenants signed with you this half and any more prospective tenants that is potentially in the picture? The seven tenants is a mixture of office and retail tenants. The number predominantly comes from the office tenants. The retail tenants are quite small. These are renewals as well as a small number of one or two new leases. Generally, the tenant mix hasn't changed. It's still a mixture of technology companies as well as FIs. We are in negotiations with a number of tenants for the vacant spaces within the building. You know, when we are able to have those signed off, then we'll report them. Okay. Thank you. Thank you, Geraldine. Next we have Rachel from Macquarie. Rachel. Hey. Hi, good evening, Sharon and team. Thanks for the call. Maybe just back to the Japan properties. I think in your slides you mentioned that there could be potential change of use or potential divestment. How realistic are those options are? You still have to try that because I think there is some restrictions in terms of land use and Japan itself conversion will take a bit of time. I mean, if you talk about conversion into DC, or selling it as a DC, you need to have the power, and that will need time to talk to TEPCO and all. How realistic? I would say that you've got to put a longer term horizon on it, as opposed to immediate. Okay. If you do go on that route to change of use, would you look to develop it or you would look to sell back to sponsor and develop? I don't think I'm looking at the sponsor. I think we will have to look at what is the best use and whether we are capable of doing it. I mean, if it's a different sector, obviously we are not going to it. Let's say, for example, if it's conversion into student housing or ability to, assuming it can, that's not my core expertise. We'll have to be able to sell it. If you ask me, I would rather sell it as opposed to do it because it's not within our mandate nor our core capabilities. Okay, got it. Maybe just on Festival Walk, could you give us some updates in terms of how many more leases that has yet to be marked to market? What are your expectation on reversions moving forward? You know, I mean, softness in terms of the tenant sales have been slow in recovering. What do you see in the next few quarters? Okay. I think what are the positives that we see out of Festival Walk, yeah. Footfalls are better. Q-on-Q and so on so forth, they are better. Okay. Footfall. Tenant sales, although is down comparing, we are still better than the retail sales in the market. Okay. I would say I cannot say that it's doing fantastically, but I would say that it's doing better than the market in terms of tenant sales. I'm seeing positive in terms of the footfall. Hong Kong is still, there is still a little bit of softness in there. When we look at the rental reversion, okay, when they analyze the leases, Most of it that has already been renewed 1 time after the COVID, the reversion was not down. Okay. The down in reversion was due to leases, a lease that was done prior to COVID. That has to come down. Yeah. Because this was, you know, they signed prior to COVID, then this is the first renewal after the COVID. I think we are still cautiously optimistic. I mean, if I look at the footfalls, I look at the sales, doing better than others, but it's still on a negative region. I would say that my team has done better than the market. Yeah. It's still not good enough compared to the old previous high. Yeah. We'll continue to do what we can, and try to strip out a little bit more efficiency on the ground in terms of OpEx, and so on and so forth. Yeah. Okay. I remember last time the remaining leases was about 10%, right? Or less. Is that still about? Around about same figure? It's still there. Yeah. Okay. One of the big one This is, this quarter took in one of the big ones. Yeah, the supermarket. Okay is a big one. Yeah. Oh. It's a big one. Oh, okay. Yeah. Okay. Took in into that. Okay. If not, the rest of the leases didn't look that bad. It's one lease. Yeah. Okay. Yeah. I think the vacancy is in the office side of Festival Walk. Yeah still soft, and will that impact as well? Okay. I think the office is rougher than the retail. Yeah. The office has been rougher than the retail. Yeah. In Hong Kong. In Hong Kong. Yeah. This lease actually, it was tracked to us that they were not renewing a good 9 months - 10 months ago. 9 months - 10 months ago. We have been working to try and lease out the space. Only about half the space has been let out. That's why the committed occupancy is still short on 3.8% to full occupancy. We are discussing. We have a number of other tenants, but we've had to cut up the space quite a bit. Used to be 1 tenant only. Now we have cut it into about five or six tenants. Unfortunately rentals really have come down. In that location we used to be able to do over HKD 30 per square foot. Now we are in the low HKD 20 range. Yeah. Hong Right. Office is rough. It's a very small component. I think we just have to deal with it and to make sure that our key anchor tenant, which is Arup, continues to stay. I think that lease is good until 2034. That is a very, very huge tenant for us in terms of the office space. That's already been done. Till 2034. At least there's a very I would say that the stability is there for the office component. We just have to deal with the current vacancy. We have to adapt. We have to chop it up, make smaller units as opposed to bigger units. Okay, thanks. Maybe if I squeeze in just one quick one. Now the interest rate cuts have started, what else can you do with MPACT? You've sold Mapletree Anson. What do you think, what else you can do with MPACT? What do you mean? What do you mean? You mean like in terms of- No, I think the gearing, your gearing. Yeah. Your gearing is okay. Oh. interest rate cuts Yeah You know, what else would you do? Okay. You're talking about acquisition. Yeah isn't it? Yeah. Acquisitions or divestment. I think we just have to be still a little bit more careful because I think asset values are at certain level. Yeah. I think We are still in a market to look out, okay, as long as there is a good fit or an improvement to the quality in depth of our portfolio. So where I'm coming from is this, it's not that we have the gearing, we have the capacity, let's chunk and just do everything that we can. I think there is still The spread is still may not be attractive enough. There's only a few sectors and specific markets that has a spread. The rest does not seem to have a reasonable spread yet. Okay. All right. Thanks, Sharon. I'll circle back. I'll let others ask questions. Thank you. Thank you. Thank you very much, Rachel. Can we have Brandon from Citi next? Brandon? Yeah. Hi. Can you hear me? Yes, we can. You can hear me, right? Yeah. I just wanna go back to the Festival Walk, right? I think last quarter, Sharon, you were saying that you're working on some AEI, right? Do you have any updates on that front? Sorry, just repeat the question. You're talking about AEI for which one? Festival Walk. Festival Walk or Vivo? Festival Walk, yeah. Festival Walk, I mean, we are in process. We are in process. The submission process and the regulation is heavier than Singapore anytime. We are already in progress. Consultancy is going on, and now we need to apply to certain regulators. The process is a little more long drawn as compared to Singapore. It's in progress. For Singapore, it's well under its way. We're ready. We talked about entire basement going for conversion. We have started the phase I, and part of the phase I has already started. As you see that, you know, if some of the numbers are down, it's Vivo down though. There were a lot more downtime. We actually stopped work and removed kiosks for upgrade. A portion of it has already started, and that will progressively continue over the entire year. Okay? I would say different speed, and I'll be thankful that Singapore is very efficient. Okay. Very fast in the go process. Yeah. Yeah. My second question, right, I think with the recent China stimulus and also the lower rates, right, do you think that we have a high chance of selling some of your Hong Kong, China assets today? Okay. I think in terms of the China stimulus, everything is positive for sentiment. Okay. What we want to see is more on the demand side moving up. Yeah. A lot of stimulus is more on consumption and more on the finance and debt and side. If you look at it, the key for real estate is always demand. Okay. Hopefully there will be more better outlook in terms of demand situation. The supply situation on the ground is huge, but it's not that the supply is huge, it's just the demand is lesser than previous. Okay. Any good news is good on the sentiment, but it will still take a bit of time for us to see that the demand starts coming back. Okay. We have been prodding along quite well, especially for Gateway. Okay? Gateway is in one of the key CBDs within the Beijing side. Yeah. If you look at all our occupancies and stuff, we definitely have stacked up. Occupancies and rent, we definitely have stacked up better than most of our compare our peers. Okay? We are thankful to a few of our anchor tenants that we did a year or two ago. Okay? That has given us a lot of stability. In back to the stimulus, okay, I think for the real estate sector to benefit, there will be, but we need to see it more from the demand angle. Okay? Which the stimulus are more tilted towards borrowing and, you know, stock market as opposed to the demand yet. I think that will be the second part. If when sentiment come back, people have more optimistic in terms of the general outlook, yeah, then they will start expanding. Yeah. Okay. Thanks so much. Before we go to the next question or move on from Festival Walk, I just want to clarify that the key office tenant at Festival Walk lease is actually good till 2030. Oh, not three four. Yeah. Sorry. Aging, you know? Sign of aging. Thank you, Brandon. We have again, Derek from DBS. Derek Edison, to put your question. Hi, good morning. Good evening. Can you hear me? Where are you? Aging. A sign of aging, Derek. Yes, yes, aging. Just a few questions, right? If I go back to Japan, Sharon, just curious whether, given the options that you have, right, should we assume that the divestment option will be an accelerated option in your view, or you still wanna try to work this out? I think if I can divest, I would. I will tell you so. Okay. It's a locational issue. Makuhari is a locational issue, so it will be a bit more trying to do so. I'll be very upfront with you. Yeah. Yep. Yep. Even at the latest write-down price, is this something you think can clear the market or if it's put up the market or you think it still need to take it down? It has to be single user type. Okay. People who want to own their own building, single user, as opposed to somebody buying out to hold it as for multi-tenanted. You will be a different subset of buyers, potential buyers. Yep. Okay. Got it. Got it. Okay, no problem. Okay then, my next question is your interest cost, right? I mean, Janica, give us a guide. Could you give us an update on how you see it trending the next year, maybe the next financial year? Do you have any low hedges that would expire, that would spring a negative surprise in the coming financial year? Actually, if I look at my Interest Rate Swap or IRS profile, my Interest Rate Swap with low fixed rate, which is fixed rate lower than the current prevailing swap rate, there's quite a fair bit more to go, and it will last until FY 2025, 2026. Whether this will impact my borrowing cost, that depends on where the market is at the moment. Currently, those are still below the current swap rate. Having said that, I would think, I would think looking at the number that I have in front of me, the cost of that should be stable because we have paid off quite a fair bit of loans using the directional proceeds. Interest cost should come down, and cost of debt should thereabout be stable at around the rates now or around the mid-threes. Okay. The mid-threes. Okay. Got it. Got it. Thanks. Sorry, last one for me. I look at Vivo, right? It's your star performer. You know, tenant sales has been a little bit soft recently. I'm just wondering whether the reversions that we are seeing, is it okay, still can maintain? Okay. You see, we shut down quite a number of kiosks for AEI. We had higher number of fit-out period compared to previous period. That's one component. The tenant sales, you see that is actually, there is better for preceding quarter. Means like second Q is better than first Q. There's no festive, no nothing. First Q was the one that was a drag, which is March, April, May. Sorry, April, May, June. I would like to associate that more to traveling during the June holiday. If I take the Q2, which is July, August, September, it's better than Q1. I think I'm not so concerned. Okay. Okay. Sounds good. You know what I'm saying, right? You know what I'm saying, right? The numbers are down because of majority of Q1. Yeah. Yeah. I mean, people are still spending. Yeah. Plus AEI. You see my whole Basement 1, the first half and next to the escalator, the whole stretch of the kiosks was all down. Yeah. We tore it all down, and now it's back. Yeah. Basement 2. The Basement 2 AEI. Basement 2 AEI. When we do AEI, we still consider it. Our sales calculation for the mall, we do not remove any of them because of downtime or AEI. We take the very simple approach of this is the entire mall sales. Definitely during AEI period, definitely the sales will go down if nothing else goes up. Okay, can. Sounds good. Thanks. Thank you. That's all for me. Thanks, Derek. Tan Hsien, it's your turn now. Please unmute yourself and pose your question. Tan Hsien? Good evening. Sharon, on your overseas markets that are currently pretty weak, right, like Japan, I guess you've mentioned you expect weakness to persist. China and Hong Kong, do you expect them to turn around in the next 12 to 24 months in terms of reversion? I think, in terms of reversion. I think it will, it will potentially narrow. You know, these two, these two, it's, if you talk about Hong Kong itself, I want to see, whether if the FX has moved against CNY to It means Hong Kong is less expensive, then I think You will see better tenant sales. You will see potentially better tenant sales and, there will be less, better reversion. Right now, I think there is some leakage to Shenzhen in terms of consumption or overseas. Because their dollar is strong. Hopping on a plane to ABC next to themselves, which is be it Taiwan or Japan, is a very common thing. Even on a short weekend, it's a Consumption is potentially still happening, but maybe not consuming in Hong Kong. When there's a potential change in the currency, then I think the outlook will be better for retail. Right now, Hong Kong dollar is very, very strong. Okay. Tenants actually educate me that they are still spending, but they're spending outside. Okay. They can draw the conclusion in terms of the Forex having an impact on having, being a driver to that. If you talk about when are we rental reversion, I have to look at what, where All the old leases that you signed before is about less than 10%. It's less than 10%. Those will go down. Okay. What I'm seeing now is the second round of those that has renewed one round after the COVID, this quarter, it still looks like it's holding up in terms of it's not breaking another round. Okay? The rental reversion that you're seeing negative is predominantly due to one lease, which is the supermarket that was done way before COVID now. Yeah. What about China? For two reasons, we don't expect China to reverse the re-rental reversion profile anytime soon. First and foremost, the economy still remains fairly weak. In terms of demand for spaces, we're not seeing significant improvements. Not just on the demand side, on the supply side there is quite a lot of issues in Shanghai in particular. There is a lot of supply both in the office as well as the BP space in Shanghai. If you go and check some of the statistics over the next this year + 2 more years, the amount of supply in the Shanghai market- Yeah. will be more than 20% of stock, right? There's a lot of space being built up. Some of that is due to the fact that a lot of these spaces were delayed from COVID period. All that's coming into the market at the current moment. The supply plus the weakening demand has actually caused rentals to fall quite a lot. We have been hearing of 30%, 40% reductions in rentals in the Shanghai BP market. That, that will definitely flow through to our numbers. Luckily some of our leases were still on a slightly lower base, so the rental reversions aren't so negative. As time progresses and we come through to the leases that were signed at higher rentals, the rental reversion is likely to widen rather than narrow. Okay. China, I think the focus is on preserving occupancy. Okay. It's the supply on the ground is still there. Okay? Protecting occupancy is key as opposed to having a very, very long downtime and to find new tenants. Okay? It makes more dollar and cents. Last time I always mentioned the rental reversion is always a good signal. Okay? If you were to say, "Sharon, are you going to keep this space vacant for six months and go for a 2% rental reversion?" No way. I would rather take the 2%-5% cut as opposed to a six to nine months downtime. One month, one out of 36 is about eight, three tot four. If you take one quarter down, it's about- 10%. 10%. Okay? What is the likelihood of a 10% down, a one-month vacant? Very high. In office you do not match the expiry to the start that beautifully. What you are seeing, if you wanna have a gauge of where revenues will go, two components. What you are seeing is a rental reversion. The other component is downtime. When we manage, we always see what is the potential downtime that we need to hold it vacant. If I'm just after a positive rental reversion and to wait out for nine months or six months, it doesn't make sense on a cash flow basis and a return basis now. I think just a matter of putting that into perspective now. Thanks. On Japan, right, can you share, mBay Point and Makuhari Bay Tower, what's the committed rent? Also what's the actual occupancy, in terms of rent that's paying for the quarter? For Makuhari Bay Point rentals, they are generally signing in the JPY 10,000-JPY 12,000 per tsubo range. Occupancy at the building now is about 80%. Makuhari Bay Tower, the former Sumitomo, former Seiko Makuhari Building, that building has rentals slightly lower. They are running at about JPY 8,000-JPY 9,005 sort of range. The occupancy is only about 26.5%, because that's the space which Seiko retained at the building after the termination of their master lease. Thanks. Just one last question on capital recycling, right? Does it sound like your priority is AEI at Festival Walk, then divestment, and lastly acquisitions? Yeah. I think it all have to come together and see whatever that is available in the market. Okay. If I put the current market out there and evaluate, say, will I be actively looking at acquisitions today, I think, like I mentioned, we have to be cognizant about the spread versus the borrowing cost to be material enough for it to make sense to the portfolio. Yeah. Which is presented by a few sectors, not all the markets. That's one. The capital recycling, like I said, is part and parcel of our job to make sure that if the two key properties of ours, which is synonymous to us, is VivoCity and MBC. The rest, if it makes sense to recycle, we would. Okay. It's not that we are accelerating or decelerating. It will go through every year, we'll consider. Okay? Like I mentioned, we are not gonna be pushed to do any recycling due to any form of gearing issue, which we don't see that we are in any dire straits that we need to do anything about it. If you are saying that are we gonna be doing any more divestment due to our certain capital structure, I don't think we need to. We are healthy enough. Okay? We are healthy enough. Our capital structure is relatively strong. Okay? Expansion have to be careful, in short. Divestment, when it comes, we'll evaluate. Okay? The two cores, that is VivoCity and MBC, is not in our books to consider. It's not in our books, to consider. Okay, got it. Thank you. Thank you, Tan Hsien. Next on the line we have, Derek from Morgan Stanley. Derek? Hi, E-Fen. Can you hear me? Yes. Loud and clear. Hi. Perfect. Hi, Sharon. I just want to follow up on your comments earlier on Festival Walk. I think you mentioned that you've outperformed the Hong Kong retail market- Retail sales. in terms of tenant sales. Thank you. Yeah. Just looking at some of the numbers that came through. I think Hong Kong, year-on-year, Retail sales are down maybe about 10% so far, last couple of months. Just looks like Festival may have underperformed a slight bit. Just wondering what's the gap over there? Hi, Derek. According to our own internal estimates, right, I think for the month of July and August, average daily basis, compare that to the quarter before, the Hong Kong retail sales is actually -3%. Whereas for Festival Walk, if you look at it, 3Q versus 2Q, we are up 3% for tenant sales. Oh, wait. Hang on. Sorry, 3 Q? We are talking about 3 Q versus 2 Q? Like for like. Oh, no. I meant. No. like year-on-year. Wait. Year-on-year. Oh, year on year. I said it's down. Well, it's underperformed. No. In January we are in line with Hong Kong retail sales performance. I think if you look at it from the 3Q versus 2Q perspective, we are actually outperforming Hong Kong retail sales numbers. That's all, yeah. Oh, okay. I see. Understood. Yeah, I just think that, the year-on-year performance seem to be a bit weaker compared to the overall market. Yeah. I was trying to get a sense of- Okay. If you just talk about, that means that is, what is dragged down is previous quarters as opposed to the current immediate quarters. The current immediate quarters are doing better than the retail sales index, which is a better sign for me, as opposed to previously I do better and now I'm worse. You know what I'm saying? Mm-hmm. Mm-hmm. Yeah. Okay. In that case, Are you able to share, I guess, the occupancy cost for Festival Walk and Vivo? 20. how it compares to COVID. 20. 20-ish. They're all in the 20-ish, yeah. Both 20, is it? Low 20s? Low 20s. Okay. How does that compare pre-COVID? It's also the same? Pre-COVID was slightly shy of 20%. Yeah. Slightly shy of 20%. About 20%. They've always been about 20%. Okay. They are already above pre-COVID? Yeah. Okay. Got it. Just lastly, I guess, you know, you mean your stand's clear on pop-ups, but what about buyback since, especially since you already have that mandate? Buyback? back in July. Buyback. The question is on share buyback. Yeah. Your question being, what about the share buyback? No. Question is, what are you. How we- Doing share, actually carrying out share buyback, especially since you have that mandate back in July. I think our mandate is still there. Not in our plan but can be activated. Yeah. Okay. Got it. All right. Thank you so much. Just to clarify, I think what Sharon meant to say is that the share buyback mandate is still in place, but currently we do not have plans to actually use it. Yew Kiang from CLSA, it's your turn. Yew Kiang. Hi, can you hear me? Yes, we can. Yeah. Just on the Japan properties, talking about divestments, is there any recent transactions and what are the kind of cap rates that's done in the Makuhari area? Second question is on tenant sales. When can we expect improvement in tenant sales in the positive region for Vivo and Festival Walk? Okay. Yeah. For Makuhari, we are aware of one transaction, but the transaction details were not disclosed, so we don't know what the cap rates and what the transaction pricing is. Mm-hmm. Okay. Just maybe a follow-up on that, right? Should we also expect further downward revaluation for your remaining Japan properties? Out of Makuhari, no. I think the rest of our non-Makuhari is relatively stable. Mm-hmm. Okay. Yeah. Tenant sales, Vivo and Festival Walk. There's no sales, you know, in office. Oh, you're talking about- Festival Walk tenant sales? Yeah. Okay. I think it boils down to consumption needs to come back, right? I think there's a lot of write-ups and a lot of people spending and consuming out of Hong Kong. Like I said, that the Forex will be a good trigger. When Forex moves, Hong Kong dollar not as strong compared to today, consumption will be definitely tilted more towards Hong Kong as opposed to out of Hong Kong. How about Vivo? Is it also a Forex issue? I think Vivo has, it was only one quarter. Okay. The previous quarter. Only previous one quarter due to, I think it's holidays more than anything else. This quarter, we shut down a lot of the kiosks, which is called zero sales. that will be recorded. We are doing all the works that continue. The worry is not warranted so much for Singapore. Hong Kong, I think there is still some consumption out of Hong Kong, especially to Shenzhen. Yeah. Okay. We also have another school holiday coming up soon. Yeah. But then how- Am I concerned? With that kind I mean, there's a few indicator when you run a retail. I mean, that you see a number, you say, "Oh, Sharon, your sales coming down." I will tell you a story, yeah. If you look at it, quarter-on-quarter is better. Okay. This quarter is better than preceding quarter. Second, I have shut down our AEI, okay, due to AEI, that's why it's not in the denominator at all. Now, am I really concerned with Singapore retail? Another indicator is the interest level for our unit. It's definitely way stronger compared to Hong Kong. Okay. I think we have the good sense of when we manage it. Okay. Am I anywhere worried about Vivo? I would say no. Okay. I think Singapore has done well in terms of opening its borders early, I think the tourism numbers has also come to a certain level. Yeah. Activities are no less. The drop in traffic could potentially be due to the transient. Okay? I look at my sales as already pre-crawl back way one, two years ahead, I meant one, two years ago, we have already surpassed pre-COVID. Okay? That means that the sales itself is not anywhere near lacking. Quarter-on-quarter, okay, this quarter is better than last quarter, definitely it's better news. Okay? The only quarter that was down was last quarter. Okay? I am not concerned on the performance of VivoCity. Okay? When we start continuing to do our enhancement work, you will see that we'll be creating more value through our entire Basement 2. If we are talking about spending about SGD 30 million, SGD 40 million, the vibrancy that we will be creating in the entire Basement 2 will be very, very different. We're talking about converting, about, using unutilized GFA and converting 60 cutout lots, increasing kiosks from 30 to 27, thereabout, plus additional space of about 10,000, just at Basement 2, which is our most prime floor. We are not stopping. I think that is a good indication of our confidence level in terms to widen, to lead ahead. If you see us stopping, slowing down, then you'll be concerned. We are not stopping. We still have a whole stack of things that we wanna do to VivoCity because there's no end into asset enhancement. Okay. After we finish this, there's other things that we also want to upgrade. For us to stop, continue plonking money, it means it's churning for us. Okay. From prospecting on outlook, the queue is still there. Okay. There's a lot more foreign brands, F&B especially, trying to come in. From our stance of throwing, injecting more, investing more into our asset, I think it's quite clear that our confidence level is very, very high. Okay. Okay. That's it from me. Thanks. Thank you, Yew Kiang. Just to take one question from Helen from online. She's asking for MBP, like currently the occupancy is 80%. Do you expect this to change? How is it going to change going forward? Thanks for the question. There is some risk that the occupancy could come down. I mean, prior to the expiry of the master lease at MBP, the master tenant as well as the sublessees took out about 50 odd percent of the building. When that master lease expired, more than 80% of the underlying leases continued with us. Now, whether those tenants will continue across after the expiry of their current leases, I think that one still remains to be seen. We do have one or two of the sublessees who have already informed us that they will be terminating their leases. There is a little bit of down in occupancy that will come across over the next six months or so. For the remaining sub-lessees, you know, when it comes to the expiry or comes to the point that they can terminate leases, they will inform us if they are leaving. Okay. I think we have two final questions from Rachel again. Rachel? Oh, hi. Thanks. Thanks. Just housekeeping. I think for MBC, could you give us an update, how many percent of backfilling have you done for, you know, the Google space, the Unilever space, and also the JB space? Lastly, just some color why The Pinnacle Gangnam tenants suddenly just left. One by one. For Google, we are still, the space is still being marketed. We are talking to currently about two tenants for, two or three tenants for potentially taking up part or all of the space. That's the same for the MBP spaces as well. For the Unilever spaces, we have filled about 70% of the space currently. We have about one floor and a little bit left, so we are still marketing. We are in discussions with a number of small tenants for the, for that top floor. For the larger, one floor space, one tenant in discussion at the current moment. Right. For, for TPG. How many square foot? No, she was asking about the drop in occupancy. Oh, okay. The drop in occupancy was largely due to one tenant giving up space at the building. The tenant had some legal problems, right? We actually pre-terminated the tenant out before they had the legal problems cause us more problems with the space. Okay. Yeah. Since got the rent, is it under rented or is it close to market rent? Oh, rented. That particular lease was signed a few years ago, so that one is still a little bit under market. Okay, great. Thanks for the color. Thank you. Thank you, everybody. We are very well aware of the timing. It's close to 8:00 A.M. Thank you again for your time and participation at this hour. If you have any further questions, feel free to reach out to the investor relations team. Thank you, and we wish you a great evening ahead. Goodbye.