Allison Chen: Hi. Good morning. Thank you for joining us today. I'm Allison. Happy to host you for CICT's for your results briefing. So apologies about the minor delay. We are very excited to have you with us today, whether you are with us in person or tuning in from your desk. So as per usual, today, we will start off with a presentation by our CEO, Choon Siang, who will walk us through his key highlights. After that, we'll move on to the Q&A where the management team will join us on to the stage to address your questions. So if there some good ones, please save them for later. We'll try to get to as many as we can. And with that, I would like to invite Choon Siang on to the stage.
Choon-Siang Tan: Hey. Hi. Good morning, everyone. Thank you for joining us today. So we just announced our results this morning. Quite happy with the overall outcome of how last year went. A lot of things to go through today. So bear with us. I will spend just maybe about 10, 15 minutes just walking through the highlights, and then we can move on to Q&A, as Allison has mentioned. Okay. So first on the numbers. I think CICT delivered a very strong performance for the year FY 2025. Full year NPI, we grew by about 3.1% year-on-year to $1,189.7 million. Second half NPI grew at a faster pace at 6.8% year-on-year to about $610 million. The strong growth was due to strong quite a few factors across the board, strong asset performance across the portfolio and the step-up acquisition of the 100% interest in CapitaSpring, which was completed on 26th August last year. Full year distributable income rose 14.4% year-on-year, while second half distributable income expanded 16.4%. Unitholders will be pleased to know that CICT's full year DPU increased 6.4% year-on-year to $0.1158 despite an enlarged unit base from a private placement in August last year. This was supported by a very strong second half, which provided uplift with a 9.4% year-on-year growth in DPU to $0.0596. On the capital management front, we have been proactive putting CICT in a very favorable position in terms of cost of funding. At the end of 2025, our aggregate leverage has improved to 38.6%, down 0.6 percentage points from 30th September, giving us greater financial flexibility. Our average cost of debt has declined to 3.2% from 3.3% 3 months ago versus the end of 2024, we are down by about 0.4 percentage points from 3.6%. This was supported by the easing interest rate environment and our refinancing efforts. Our current portfolio property value is at $27.4 billion, an increase of 5.2%. Operationally, our portfolio remains strong. Overall occupancy 96.9%, WALE 3.0 years. Rent reversions for both retail and office, 6.6%. Tenant sales per square foot, up by 14.9% year-on-year, largely due to the inclusion of ION. Shopper traffic up 20.5% year-on-year. Excluding ION, tenant sales per square foot would have grown by about 1.2% year-on-year while shopper traffic will be up 4.6%. The momentum was stronger in the second half with tenant sales rising 1.9% year-on-year excluding ION Orchard. In 2025 and year-to-date January 2026, we continue to execute our value creation strategy across acquisitions, divestments, AEIs and even development. These have strengthened the quality of our portfolio, enhance income resilience and position CICT for sustainable long-term growth. I will cover more on the newly announced initiatives in the next few slides. In January 2026, we announced the divestment of Bukit Panjang Plaza for $428 million. The price is a 10% premium to the latest valuation and 165% uplift over our purchase price in 2007. The exit yield was around mid-4% level if we were to complete the divestment in end 2026, gearing would have fallen 1% to 37.6%. We expect to complete this divestment by the first quarter of this year. We'll be embarking on the development project this year. We won the Hougang Central Site through a joint bid, which includes CapitaLand development. This is the first major GLS site in the precinct since 2019. We will own and develop the commercial component. The site is in a prime location served by the existing Northeast line and upcoming Cross Island line and will be seamlessly integrated with a new bus interchange. Surrounding the site, there are established amenities, including schools, sports center, community club and parks. We see this as a compelling opportunity to address the underserved demand in the precinct and to curate a retail environment that meets the needs of both residents and commuters. The total development cost for this project is about $1.1 billion, which translates to approximately $3,600 per square foot and an expected yield on cost of over 5%. This compares very well with the recent retail transactions at a low to mid-4% level. And this will be a brand-new mall built to our specifications. Taking into account inflation, the sites prime location and the integration with the 2 MRT lines and the bus interchange, we believe the total development cost is reasonable for a high-quality brand-new mall. For reference, the capital value for our Bedok Mall is about 3,700 psf, while some of the recent market transactions were done at 4,000 psf. We will be financing the development through both internal funds and external borrowings. Target completion is expected to be in 4 to 5 years. The development is strategically important for a few reasons. Firstly, it increases our exposure to Singapore, which remains our core market and a key source of stable long-term income. Secondly, the site is in a prime location in the heart of Hougang with excellent connectivity as I have articulated earlier and a large residential catchment. Thirdly, this is a rare opportunity as well located suburban malls at transport nodes in Singapore are tightly held and rarely available. Through this development, we can establish a strategic foothold in the Northeast region and expand our retail footprint in Singapore. The development sits within a strong population catchment, one of the top highest in Singapore. There is also likely spillover demand from neighboring towns like Kovan, Punggol, Sengkang and Serangoon. Our JV partners will further expand this catchment by introducing 830 residential units to the mixed-use development. Hougang has only 2.8 square foot of private retail space per capita, far below the national average of 11.4. This presents an untapped potential, supporting the development's long-term prospects. Next, moving on to AEI. This year, we'll be starting a new AEI at Capital Tower. Essentially, this is to -- what we are doing is basically reposition our Level 9, which is this floor. Some of the amenity space into a community space and create a higher-yielding F&B space at the ground floor of the Urban Plaza. On Level 1, we'll be introducing a 2-story multi-tenanted pavilion with F&B offerings. On Level 9, the space will be reconfigured to become the first workplace mental wellness center in the CBD. The AEI works will be from third quarter 2026 to the fourth quarter 2027. An update on our ongoing AEIs, Gallileo have completed -- has completed a progressive handover of Phase 1, the office tower to ECB. The target handover of Phase 2 is expected by this quarter. AEIs at Tampines Mall and Lot One and Raffles City are progressing well. On valuations, the key assumptions remain largely unchanged and cap rates remain fairly stable. Our portfolio property value grew 5.2% to $27.4 billion, largely driven by the step-up acquisition of CapitaSpring and the strength of our Singapore portfolio. Germany's valuation went up after factoring in Gallileo's AEI. I'll conclude my presentation here. Happy to take your questions after this. Thank you.
Allison Chen: Thank you, Choon Siang. Can we invite the management team to the stage? Okay. Now we have come to the Q&A segment. Before we dive into it, let me introduce the management team. So on Choon Siang's right, we have Wong Mei Lian, our CFO. And to his left, we have Jacqueline Lee, Head of Investment. And to Jacqueline's left, we have Lee Yi Zhuan, Head of Portfolio Management. Okay. A few housekeeping rules before we start. We'll take questions one person at a time. We kindly ask that you keep your questions to 2 per turn. If you have more questions, we'll come back to you as we know, some of you always do. [Operator Instructions] If you have questions, please raise your hands, and we'll bring the mic to you. So I see, Mervin. Go ahead.
Mervin Song: I'm Mervin from JPMorgan. Congrats Choon Siang, very strong results. Glad to see you keep doing Tony's very strong legacy. I would say this is probably the best results amongst the S-REIT season. If I annualize the second half DPU, it looks like you're hitting the pre-COVID 2019 level already. I know you're not supposed to annualize it given the second half is very stronger -- is much stronger. But why you're excited about this year in terms of growth drivers, maybe you can share that with us? And second question is divestments. I think previously you mentioned about asset rejuvenation, is Germany something you want to be in.
Choon-Siang Tan: Thanks, Mervin. Okay. So yes, this year, well, on your DPU question, yes, so we don't typically provide forecast. And typically, second half is stronger than first half, seasonally speaking. So while we hope to improve on our results for this year, but let's see. I think the -- maybe we will just break it out into what are the potential growth drivers in terms of our DPU, right? I think underlying performance for the organic portfolio still remains healthy. I mean we're still reporting positive rental reversions and the positive rental reversions from last year will also continue to contribute to the organic growth because as you know, we calculate rental reversions based on average to average. So in fact, the last 2 years, rental reversions will also still be figuring into next year's -- this year's growth drivers. So that's one for organic -- on the organic side. Second thing on the AEI. This year, we have Gallileo completing. So Gallileo will fully contribute for this year. Last year, it started contributing towards the end of the year, probably not significantly. So that would definitely be one of the cost drivers as well and one of the growth drivers as well. Third, of course, there are some of the other AEIs, like Lot One and Tampines Mall that will progressively contribute as they -- but those are likely to happen closer to second half of the year. So the contribution for this year will probably be slightly smaller. Third thing on the AEI front is that last year, we also completed I mean IMM towards the middle of the year. So there will be a full year contribution. But last year, they started contributing probably from the middle of last year. So those are some of the incremental growth drivers from AEIs. On the third growth driver, I would say, while we had the benefit of a full year ION already. So that's -- so the base has already included 12 months of ION income. So whatever we get from ION going forward will be the incremental organic growth. But last year, we acquired CapitaSpring in August, and that's a fairly accretive transaction. So that contributed about 4 months last year and this year will fully contribute for 12 months. So some of the improvement in the second half was actually attributable to CapitaSpring as so we're likely to see this flow through to this year. And of course, last but not least, very importantly, interest cost savings. We know that there's a big swing factor when for REITs. Every time interest rates come down, we will see a significant benefit. But of course, I think I mean, nobody knows what the direction is going to be this year. It looks like SORA has kind of found a footing. But of course, a lot of our rates are -- a lot of our loans are still fixed at higher rates. On average, it's 3.2%. Marginal rate is probably closer to the mid-2 handle. So there is still some room but it all depends on -- we don't have a lot of loans for refinancing this year, to be honest. I think we did a lot of refinancing last year. But of course, we still have a large proportion of loans in floating. So that will benefit from the drop in floating rates. And it also means that it will help with our ability to continue to grow and acquire going forward. So I think those are the growth drivers. So hopefully, that should -- if the economy remains nice and chugging along nicely, that should help us. I spent a lot of time on answering your first question. I forgot your second question.
Allison Chen: Divestments.
Choon-Siang Tan: Divestments. Okay. So we just announced one divestment. Take it easy, man. Give us some breathing room. We haven't actually closed the Bukit Panjang. So I think we'll as be focused on closing Bukit Panjang first, and then we will think about the next step in terms of divestment. But we do have -- I mean there are a few possibilities. As you rightly pointed out, we will start looking -- reviewing some of our assets outside of Singapore as well. But of course, those will always depend on the market conditions in the respective markets. But I think -- I mean you brought out Germany, which I'm sure is something that's on quite a few people's mind. But I think Germany is it's -- the way I see it, it's slightly de-risked now because we have Gallileo that has already been handed over to the tenant. So from this year onwards, you will start contributing income. So there's not as much urgency. So we can actually benefit from the uplift in NPI from the asset in any case, whether we divest or not. But of course, if you divest, then you probably have to worry less in a sense. But actually, the asset itself has a long-term tenure lease. So it's pretty much de-risked. But we have another asset in Germany that is not of the same tenancy structure, of course, so there will be some -- so we potentially can look at that as well.
Allison Chen: Rachel, please?
Lih Rui Tan: Congrats on the very strong results. My first question is probably, if you could -- I think you spoke a little bit on interest cost. You have done very well in 2025. Could you guide us a little bit on the 2026 interest cost? And my second question is on -- since Mervin have asked divestments. I will ask acquisitions. Are you still keen on Singapore retail, like, say, your sponsor pipeline Jewel? Or are you keen to buy the office assets that's out in the market?
Choon-Siang Tan: I'll take the second question and then maybe Mei Lian can take the first question later. In terms of acquisitions, no, I think we continue to look at our portfolio reconstitution. I think the current environment in terms of our cost of funding, actually, is very conducive for us. Interest cost is low. Our cost of equity is fairly reasonable, but I think we have always been quite selective about what we look at in terms of acquisitions. There are not that many opportunities in the market. I mean, on the retail, you talked about retail and office. So let's maybe look at retail. Retail, I think there aren't that many opportunities in the market. You mentioned Jewel, which is our sponsor pipeline. I think that potential -- I mean that has been there for a while. I think it needs to -- it needs -- it might take some time because I think the financials need to match our pricing expectation as well before there can be a transaction. So we'll have to see how that goes. And also, the vendor needs to be willing to sell at some point first. We don't know what's the thinking there. On the office front, there are a few assets that has been out in the market. The challenge, I guess, is the pricing expectation and the yield expectations for some of those assets, whether they can make it work. I think safe to say we are unlikely to acquire an asset that is -- doesn't contribute financially or doesn't really help unitholders. If it's not accretive, it will be quite challenging. So if you're talking about those chunky assets, if it needs equity funding, it's even more challenging. I don't know. I think it depends on -- probably not answering your question, but taking a long time to not answer your question. But I think it's quite difficult for some of those assets that are trading at fairly low use. Yes.
Mei Lian Wong: On interest rate, like what Choon Siang mentioned earlier, the amount of loans that is due for refinancing is not that big. So given where current interest rate levels are. In terms of interest rate guidance, I think we could be in the range of 3% to 3.1% level. Yes.
Allison Chen: Geraldine?
Geraldine Wong: Congrats on the very strong set of results. My first question will be on valuation. I think foreseeing the lower bound of the value cap rates, seems to have tightened a little bit, are you able to share what has changed? Is it because of the market transactions? And second question is on really if we are looking forward, the picture looks very rosy. I was just thinking a lot what are the kind of concerns that you have in mind for 2026? And anything further that you like to de-risk in 2026?
Choon-Siang Tan: Okay. Maybe I'll take the second question first. First question, I will refer to Yi Zhuan. But our cap rate lower bound move, I don't recall it moved.
Geraldine Wong: Retail. I think 4.35.
Choon-Siang Tan: Last year it was 4.35 also, right?
Geraldine Wong: Last year, I believe it's 4.5. No. Yes. I think 4.35 is the first time I'm seeing such a tight cap rate. And for office, also was 3.15. Last year, I'm not sure. I think it's closer to 3.25, a very slight movement.
Choon-Siang Tan: I believe it's the same. Yes. I think it's the same as last year. Okay. Maybe, Yi Zhuan, you can double check, and then we can get back later. What's the second question?
Allison Chen: Our concerns for 2026.
Choon-Siang Tan: Risk. Yes. Yes. Okay. To me, the biggest risk is actually interest rates because we have come down quite a bit over the last 1 to 2 years. And there is always this fear that we might start reversing the trend. Australia just high rates last week. So there's always this pressure. But I think Singapore is in a fairly stable environment. So hopefully, we will be -- I think and also from most people's perspective, SORA has come down to low 1%. How much lower can it go, right? So -- but I think there's a lot of liquidity still in the system. There's still a lot in flow. So hopefully, SORA remains at the current levels. And it doesn't look like -- I don't -- I think the risk to SORA going out is if the U.S. rate starts going up. It doesn't look like that's happening anytime soon. But it's always the risk at the back of my mind. Secondly, obviously, it will be the economy, general economy. Last year, we have a lot of good things going for us. I mean at the start of the year, we were forecasting a recession in Singapore. And we ended the year at, what, 4.8% GDP growth. So there's a big swing from beginning of the year to the end of the year. Whether we are able to repeat last year's performance in the general economy, I don't know. So that could be a big risk. I think last year, there was also a lot of pump priming, right? I mean, CDC vouchers and all that. So that could be -- we'll see what the budget brings next week. So there could be some effect there. Third, I don't think it's a big risk, but people in The Street will always put it as a risk, of course, is the completion of RTS this year, whether that will have an impact. I think we have talked about this at length many times with many of you. Different people have different opinions. So we'll see what happens. So -- but we can't rule it out as a risk yes. Maybe we'll go back to the first question on cap rates. Yi Zhuan.
Lee Yi Zhuan: Yes. The range compared to last year, year-end is the same range for both the office and the retail at least for the lower bound.
Allison Chen: Okay. Can we go to Joy, please?
Qianqiao Wang: Joy from HSBC. congrats. Two questions from me. First on development on Hougang. So if I look at the lower end of your cap rate is 4.35%, do you think roughly about 70 to 100 basis points of spread is sufficient to compensate for development risk? And with Hougang, can we assume you won't look at redevelopment of your existing assets in the near term? So that's one. Second question is on NPI margin. So I think historically, Q4, your retail NPI margin usually is lower. If I look at the quarterly trend, this quarter, you actually bucked the trend. Your NPI margin is very strong. Can I understand what has -- is there -- what's the swing factor? And can I take this as the base for next year?
Choon-Siang Tan: Okay. So I think on the development premium front, I mean there's always a judgment, right? And when we say it's at least 5%, we didn't say it's 5%. So that's one. But if you look at 70, 80 bps, it sounds small, but it's 20% of the value. When you move when you have a compression of 80 bps is at 4% is 20% of the value. So I don't know, is that enough for a development premium? When developers do residential development, I think the pricing typically a 10% to 15% margin for -- so but let's just think of it, if we don't do this and somebody is developing and we had to buy from them 5 years later at 4.3%, would investors have preferred that? I don't know. I mean it's a tough call. I think there's no right answer. It also depends on how we manage the cost. I think if we are able to manage the cost well. Of course, when we plan -- it's all about execution on the development and how it turns out in 5 years. Nobody knows what the market is going to be like in 5 years. I mean even if you assume the inflation of a certain rate, rent should theoretically go up by then. So if you're able to get entry of 5-plus percent, then $3,600 per square foot, to us, that's reasonable. Yes. So it's a bit of a judgment call. But the reality is there's -- I think it's hard to find an asset at the kind of yield in this market as we have found out in the last few months. But of course, we also go the safe -- go down the safe path and buy a core asset at maybe 4.2%, 4.3%. Yes. So -- but we think that this, but I think for the calculation for this is also a bit different. It's not just simply comparing an asset to another asset. I think we like the location. I think the location in this -- but this precinct is very underserved. in terms of retail demand. I mean I don't know for those who stay around the area, you know that there is not that much in the neighborhood. I think neighborhood is tough of a retail mall, a big retail mall, which is -- which there's been quite a lot of new neighborhoods in the area. That's a very new from Hougang all the way to Sengkang, Punggol. There's a lot of new flats that have come up. And I don't think the growth of the retail space have been commensurate with the growth of population there. Okay. I think second question on NPI. I believe the NPI margin is partly because we have also added CapitaSpring, which obviously is a higher NPI margin. So it may not be a like-for-like when you compare year-on-year, a specific retail. I think for retail, we did have some cost savings, I think. Utilities costs have come down. I think we have entered into better contracts last year. So there were some utilities cost savings. So that has improved our margins. Yi Zhuan, anything else to add in terms of margin?
Lee Yi Zhuan: Largely in part your utilities savings is one. And then there's a bit of rebates on electrical front. For 2026, probably, you can see a little bit of that continuing. But I will say that this is slightly a slightly improved NPI margin that we can expect for 2026 also. Redevelopment.
Choon-Siang Tan: I think AEIs to us is BAU. So whether we did Hougang or not, we will continue to go ahead with AEIs. That's the -- I mean, yes, so it's not. And I think Hougang actually -- doesn't really see the rationale of spreading out AEIs is that it tends to create a drag on our cash flows. Because when you do AEI, you have to sacrifice some NPI because you have to shut down some of the spaces to rejuvenate. The difference with Hougang is that you don't give up any NPI because you're not carrying out anything. There is definitely balance sheet consumption, but interest cost is capitalized during construction. So there is no drag on DPU as well. So the only cost to this, I guess, is gearing. So gearing will go up, but I think we are quite comfortable with the divestment of Bukit Panjang, we are gearing at 37.6%. So that gives us a very comfortable position. So in a way, we are not sacrificing any DPU to go into Hougang. So it shouldn't affect our other BAU initiatives. So if a redevelopment comes along and it makes sense, it shouldn't matter whether we have done Hougang a lot. But of course, the only thing is if we whether we had the balance sheet to do the redevelopment, but we -- I think we are fairly comfortable at 37.6%, gives us a lot of debt headroom. Every 1% for us is about how much $27.200 billion. Yes. So we are about maybe just under $1 billion from debt headroom.
Unknown Analyst: Just one quick question on the Hougang site. Does $1.1 billion include capitalized interest costs? And secondly, on Bukit Panjang Plaza divestment proceeds, would you set that aside for development? Or is there a chance that you could actually redeploy during the next 1 to 2 years?
Choon-Siang Tan: Okay. I think the short answer to the first question is, yes, it includes the capitalized financing costs. I mean it includes all of our construction costs and all the contingencies that we have provided as part of our normal planning purposes as well. Bukit Panjang proceeds, I mean money is fungible. You can see as whether we had -- I mean, last year, we made some acquisitions. You can see it stopping up the balance sheet. We can also use it to fund future acquisitions, you're right? In a way, selling at mid-4% is no different from -- in fact, slightly cheaper than raising equity at -- currently, we are -- our cost of equity probably 4.8%, 4.9%. So yes, so we do -- we can use it to redeploy into future acquisitions, definitely.
Unknown Analyst: Next is on forward guidance. Maybe just a comment REITs P&L is probably one of the easiest to forecast. As Jack has said that forward guidance is encouraged. So maybe next time we meet you, you can be the first brief.
Choon-Siang Tan: Noted.
Allison Chen: Thanks, Shen. Derek, do you a have question.
Derek Tan: Maybe just a follow-up on Hougang. Don't mean to flog this, but how did this come about? I mean I don't think we generally don't participate in GLS sites even as a joint venture partner. So how did this come about? Do you volunteer or...
Choon-Siang Tan: Yes. Okay. So yes, that's an interesting one. So if you had asked us a year ago, we -- whether we will do a pure development project, probably the answer might be closer to no than yes, probabilistically speaking. How did this come about? So I think one is I mean we have always been quite focused on growing over the last -- and we have looked at many opportunities along the way. And we have also found that it's quite difficult to do acquisitions in Singapore, as you might appreciate. And a lot of assets that are available for sale have been sold at very aggressive pricing. I mean I wouldn't say aggressive, maybe it's fair pricing. Five years later, we could go back and think that, wow, that's cheap. So okay -- so then this Hougang site came about and it was -- it has a fairly large commercial component. I think if it was a small commercial component, we probably won't look at it. So then we think -- and I think if it's not a big project, we also are less likely to look at it. The reason why we wanted to do Hougang, I think one is very sizable enough, right, billion, $1.1 billion of deployment. Secondly, competition. I think because not many people out there can do a residential come commercial project. I mean we have seen from, say, for example, the Clementi Mall bid, the competition was quite tough. When you have 10, 15 people bidding for the same project, the value gets competed away. We know that there probably won't be that many people who can bid for such a huge project. I mean if you add in the residential and the commercial component, the total development value is north of $2 billion. I mean there aren't that many parties in Singapore that can do that. And in a way, true to that, it's -- there were only 3 parties that bid it. Of course, we know there are likely 2 or 3 parties that are likely to bid. I mean -- so actually, we look at it for a while since the site was announced. But of course, we didn't really want to invite competition, so we didn't really put it out there, obviously. The alternative was for -- I mean the other consortium which are CLD and UL consortium to bid. I mean the earlier conversation was that they will bid, win it or not. But if they win it, we can potentially just buy over from them, which is our normal process. But if they were to do that, then they have to then we will have to buy at a different price, which is fine because it's de-risked. Not that a higher price -- higher price doesn't always mean worse, obviously, because it's a de-risked product. But the difference this time is that if they were to do that, then they can bid as high as well because they have the price in the margin, right? So they can only bid -- maybe -- because when they sell it to us, they also have to they have to hold it for 5 years and then sell it to us. They probably have to bid in a certain margin. So then we thought that, okay, if you come in directly, then we can get rid of that, that safety net for them and then we will be able to bid a little better than if they would do it themselves. So I mean we debated that maybe that's the better outcome for everyone. It also means that we have a higher probability of securing a win. If we are able to -- if the REIT is able to come in directly. And we know that very few other REITs can do that because $1 billion because there's a limit to how much development headroom you can do. So for us, our total AUM is $27 billion. 10% of that is $2.7 billion. So it gives us a very comfortable headroom and still able to do other projects. For some of the other REITs, probably we know that they are more limited by that. So we know that -- so that is our thinking. And that was a strategy that we went in with. And fortunately, for us, that worked up relatively well. And despite that, we only won by a relative margin. So we really needed that competitive pricing. But even though you won by a small margin, but I think that pricing is generally -- I mean, we are quite happy with the outcome. We think that buying at that price is fairly reasonable. It's probably no worse off than buying a brand-new retail mall that is de-risked at mid- to low 4%, say, for example.
Derek Tan: But some of the malls are like
Choon-Siang Tan: Sorry?
Derek Tan: Some of these malls, low 4% are better locations also, strong catchments.
Choon-Siang Tan: Depending on how we -- yes, it depends -- location -- more central doesn't mean a better location, I guess. I think location to us means it depends on the catchment and the scarcity in the area as well. Yes. So.
Derek Tan: Okay. And just one last question on reversion outlook, especially for retail. How does that look like and how does it stack up against your occupancy costs?
Choon-Siang Tan: I think last year, we have about a 6.6% reversion. This year, I think we'll probably -- I would say that we'll probably stay at moderate to about that level, mid-single digits for retail reversions. Yes, I think that's the guidance we will give. Yi Zhuan, anything to add?
Lee Yi Zhuan: For office retail, probably looking at now, I mean, 12 months later, a lot of things can change, but I think we are pretty much looking at our mid-singles kind of reversion. How it's backed up against for the retail out cost? I think if you look at the year-end occupancy cost, it's relatively okay, 17%, right? And downtown, if I look at the suburban is actually on the 16-ish kind of percent. So I would say our cost perspective, we are still quite healthy. Of course, along the broader market, you see on and off, there's pockets of the retailers having some of these challenges. On a like-for-like basis, we probably have to tackle some of the localized kind of specific issues across the different trades, right? Like, for example, we talk about cinemas, whether or not there's an immediate replacement to cinemas or we are taking a short-term kind of extension to some of them. So that will play out a little bit, in fact, in terms of rent reversion, but I would say, by and large, we should be okay in terms of the our cost and reversion.
Allison Chen: Can we pass the mic to Gola, please?
Unknown Analyst: [ Gola ] here from the edge. Okay. I've got a couple of questions on the office front because your occupancy fell. And in terms of the expiring rents, which is on this slide -- slide 34 because they're a bit high for -- next year, they're a bit high. So I'm just wondering for this year and as well as this year. So I'm just wondering whether you said mid-single-digit reversions for this year, but I'm just wondering what you think is the outlook? And why did your occupancy fall for that's the office front? And then for the retail, there's another retail question. I just wondered, what is the F&B percentage of the just the retail portion? Because I think you put it as 17 -- 16% or 17% for the whole portfolio. But I noticed that your peers that only do retail very, very high retail portions by GRI and by NLA.
Lee Yi Zhuan: Okay. Yes. I'll take the office one first. So okay, if we look at the expiring rents, right, it's true that if you look at this to 2025 and 2024, actually, the expiring rent versus the market rent, right, we are kind of closing up, right? So actually it's a much tighter now. So how do we then actually explain the kind of outlook? I said a lot of things can change in the next 12 months. And we are looking at some of the leases that were in discussion for the office side. If we look at the consultants, actually, they are a lot more bullish than us in terms of rental growth in '26 as well as '27 given that there's actually a little bit of tightness in supply, especially for good quality assets in centralized location. So they do expect the market rents to actually go up quite substantially. And then if you look at the expiring rents, naturally, we are -- the growth in expiring rent is not going to grow as fast as how the outlook of consultants market rent growth. So that kind of supports a little bit of hope that some of these things that we set out. Because if I give a very low guidance in terms of reversions, you all will think that I'm being conservative about it. So I think it's just realistically how we are looking at this. And the next thing I would look at is actually the expiry profile for our assets, right? So if you look at how our expiry profile is like for office in the '26, '27, '28, the kinds of the '27, '28 kind of is in the window where there's actually tightness in terms of supply again. So hopefully, we can take advantage of the tightness in supply that supports a higher rent, right, to again negotiate for better outcomes for office portfolio.
Choon-Siang Tan: I think there's a second question on retail. I didn't really quite understand your question. When you say are you talking about retail portion of office?
Unknown Analyst: I'm talking about retail portion, F&B. What is the percentage of F&B in your retail malls because there's so much F&B will all grow fat the next few years because and because they have a lot higher rents than your cinema or your supermarket?
Choon-Siang Tan: You don't necessarily have...
Unknown Analyst: And they keep on opening and closing. I mean the -- these food places keep on opening and closing. Yes. I'm just wondering. And is it a risk for you?
Choon-Siang Tan: We have a slight right on the percentage of our F&B. I think it's about 30-odd percent. Okay. It's say 17.8% here, but this is overall our entire portfolio. But overall, our retail space is typically around depending on which mall probably about 30-odd percent. Your question is whether how are they doing?
Unknown Analyst: Whether there's too much F&B especially when the RTS comes and everybody goes up to Malaysia. So that's the point.
Choon-Siang Tan: But I think actually, people who go to Malaysia are less likely to be consuming -- I mean, they will continue F&B, but I don't think that's the trade that will get affected most because everyone can only eat 1 lunch a day. So if you go to Malaysia, you can only eat 1 lunch. But you go there and buy groceries, you can buy like 10 detergents. So actually, F&B is probably the least at risk to the RTS opening although there will be some leakage, but it will be very small. So we're not so worried about that. Actually -- so in a way, having more F&B is likely to be more defensive. Yes. So I mean, I think, F&B opening and closing has actually been part of retail trade for the longest time. I think it's -- I mean it's been a bit more on the news lately, but I think a lot of the closures are also not really in our malls. A lot of this opening closings, you tend to find them in shop houses because the rent variance tends to be a bit higher because some of these shop houses can be very low rent for a long time. And then suddenly, when the owner wakes up one day or a new owner comes in and then you can have a rent adjustment. Whereas in malls, you are less likely to see that, right? I mean our contract, most of our rent escalations are 2%, 3%. We're seeing like average rental reversion of 6.6%. We never ever see it 40% in our rental reversion. So you don't really see that. So -- and 6% rental reversion actually means 2% per annum, which is not significant. So most of the F&B that are in our malls, it tends to be able to survive as long as the business model is sensible and is sustainable. So those that are not able to survive typically means that they are not able to survive even if the rents don't increase because 2% is not idly to make a difference to your business model and your sustainability, right?
Unknown Analyst: So can I just ask a question on Clarke Quay as well because I think when you mentioned opening and closing, I mean, Haidilao is closed. Have you decided what's going to come in its place and how you're going to -- because Clarke Quay, we've been to it, and my colleagues have been to it, not me so much. But there's not much I mean it's not as buzzy as other some places?
Choon-Siang Tan: Yes. Haidilao closure does draw headlines but I wouldn't say it's one of those that open and close. Actually, Haidilao has been there from day 1, and it's one of the first stores that opened. But while we have rented out the space, maybe Yi Zhuan can elaborate.
Lee Yi Zhuan: Firstly, I mean, thanks for coming to Clarke Quay. Please do come more. It's -- I will say that actually it's a little bit -- I can understand why people are saying now Clarke Quay less busy, but I think there's also a change in the type of crowd that we are seeing in Clarke Quay where previously a very -- to almost some like extend route part of certain our kind of crowd, right now, you kind of disperse the crowd across the day rather than just concentrated at night and then you have a lot of tourists because a lot of them tons by to the other [indiscernible] and stuff like that. So for the [indiscernible] we already have a replacement. And of course, I would say that it's not a finished product yet because a lot of things is also when -- if I say that actually, I have exactly what Clarke Quay has to be for the market today, it's probably not true, right? It's a product that is evolving as we try to also find where is the threshold of the market's preference when it comes to your day and night trade mix. And then, of course, the other part that will be important for us is when eventually Canning Hill is completed, then we will see when the whole precinct kind of be a bit enlightened where there's residential, hotel, tourism and all these things, we can again fine tune that trade mix a little bit. So that's an evolving process. And in fact, actually, as I shared previously, there's also an element of experiment that we are trying to take with Clarke Quay. So some of the tenants are deliberately CapEx short-term or temporary, right? Because we didn't want to sign on a tenant, not sure whether that concept -- they can promise you a lot of things, right? But eventually, you want to see the execution. We don't see the market acceptance towards it. And that's why we will try out some of these concepts and see how all these things pan out. So it's a work in progress. I would say that there's a few good things that's happening. I mean, [ Zum ] is going to do a renovation. And like all brands for a long time, when everything is doing stabilized, nobody really go. When you say it's going to do close down for renovation, everybody starts to go [ hooters ] -- nobody went to hooters for probably a while, but there's some day everybody is asking what is going to happen to this. So I think that it's very inherent that all these things catch like the headlines. But at the end of the day, when we see it's really that when you look at occupancy costs of all the retailers. We know some that works. We know some that don't. And that's why we will talk to tenants, either we help them to grow their sales. If not, then we will have to look at replacements. So I think if you see across some of the closures across, I think recently, there's another one about some of the closures in malls, right? Oftentimes, it's not just about the rents. It's really about manpower constraints. So some of the retailers that we spoke to previously, they did share that they have overexpanded and they're looking at how to rightsize because they don't -- simply the manpower constraint, manpower cost, all these makes a lot of the operating costs not sustainable. And then that's why, naturally, then we will feel the pressure because at the end of the day, they want to protect their margins, right, and something else goes up, they will try to find to cut from other place. So I think there's all these things that's ongoing. But I'll say F&B, it's one that we do see a shift in the consumer patterns, right, where now actually they go to something that's not overly pricey, but they like something innovative, experiential and everything. So when it opens, right, the first month is very good. So she done very good. And the challenge is that when we bring all these new to market in, right, we are not here to do a tenant for 1 or 2 months. We want to make sure that, that kind of product that they do is actually something that can sustain their sales going forward. And that's why I think there are a lot of challenges for some of the F&B operators. It's not difficult to open F&B. But when they start to open F&B, that is offering something that pretty much everybody is offering without something that's differentiating and still without the scale of operation efficiency -- operational efficiency, that's where they are under pressure in terms of their survivability.
Unknown Analyst: We passed my 2 questions. Just one more, Australia. What are your views on your Australian assets given that the [ RBA ] moved cash rates up 25 basis points. Yes, the third of the...
Choon-Siang Tan: Thanks for the question on Australia. Actually, Australia is generally doing quite well. If you look at -- if you -- the market consensus on Australia is that things have bottomed up probably last year. And rents are actually going up in at least in the core CBD. Core CBD actual occupancy is quite strong. There's been quite -- unlike some of the other cities in Australia, Sydney is holding up quite well and there's a bit of a flight to quality, right? So supply is getting tighter. Rents are going up. Vacancies are coming off and the incentives in Australia are also coming off. So actually, it's -- which is the reason why if you look at Australia, today, they are actually quite a bit of capital market transactions going on. So people are actually getting a bit more optimistic in terms of what's happening in Australia. If you look at our occupancy in Australia, it's also picked up slightly across our properties.
Allison Chen: Perhaps now we'll turn to the online audience. Thank you for being with us virtually. We have four questions. First one is actually from Andy, DBS -- sorry, OCBC. Can you provide the debt breakdown schedule for the Hougang development project?
Choon-Siang Tan: What do you mean by that?
Allison Chen: The drawdown.
Choon-Siang Tan: As in how much money is debt. Is it maybe [indiscernible]?
Mei Lian Wong: Well, I don't have the exact amount, but a large part of it will be in this FY, given that we will be paying for the land acquisition.
Choon-Siang Tan: Yes. I don't know what's the -- I'm guessing the question actually is not about debt. It's about the how much is needed per year. The deployment schedule -- the cash deployment schedule for the next few years, whether it's debt or otherwise.
Jacqueline Lee: Mei Lian said, of course, the land cost that will be paid this year. So I mean, we will be paying within 90 days, I think the 100% of the land cost and then, of course, there's stamp duty as well. But for construction costs and the rest of it, right, it will be progressive because construction will probably begin only in 2027 after the planning period, which I think probably it's going to be like about 1.5 years. So construction will really in 2027. And then that construction cost will be drawn down progressively.
Allison Chen: Another question we have from Helen CBRE. Will CICT's consider another development project before Hougang completion as we are still debt headroom available?
Choon-Siang Tan: I think I mean, it's a hard question because it depends on what's the opportunity, right? But I think quite -- less slightly, but I mean, like I mentioned earlier, AEIs continue to go on. So depending on how you view what's development. To us, AEIs is BAU. Whether we will -- if the question is whether we will bid for another development project, which I think is what the question is driving at, probably less slightly. I mean we try to not manage too many projects on an ongoing basis. Let's do this really well first and build a track record of doing executing development projects well before we look at subsequent projects. But of course, never say never, is something that's very attractive, that comes up, who knows. But I think the current thinking now is quite unlikely.
Allison Chen: Okay. The next question we have from Derek UBS and Mr. Yap. What is the status of the ION tax transparency?
Choon-Siang Tan: I think no new updates on that. So as I mentioned in the last earnings update -- so this is unlikely to come anytime soon. Yes.
Allison Chen: Okay. And then last question from Frasier. We have -- he is congratulating us on the strong results. The like-for-like revenue growth seems low versus the strong reversion. What is the cost? Is It due to AEI?
Choon-Siang Tan: What's the like-for-like growth? I think it was about...
Allison Chen: 1.4%.
Choon-Siang Tan: 1.4%. Okay. So I think 1.4%, I guess a little bit of that -- I mean if you look at our reversions, it's about, call it, 6%, average 2%. So should we be tracking closer to 2%? It could possibly -- some of it could be possibly due to the AEI, but maybe we can break down the details and then get back to you, Frasier.
Allison Chen: Yes, Frasier, we'll get back to you. Thank you for the question. Okay. Now we turn our attention back to the physical audience. Jovi?
Unknown Analyst: Jovi also from Singapore. Just one small question here also about retail. Combining a few threats mentioned here with the new Hougang with the line from the slide is about establishing a strategic foothold in the Northeast region. And reading that along with your comments on the lack of retail offering for debt catchment, also your comments on RTS, just broadly, what is your thinking about the entire North of Singapore right now? Would there be a catchment of interest to CICT, perhaps somewhere near like the [ Turf Club Crunchy ] area away from the more crowded established areas now?
Choon-Siang Tan: I don't think we have a specific view in terms of -- I mean we went into -- in Singapore is always and in real estate in general, it's always very localized. I mean to talk about North in general, it's very hard. You can have 2 more things with each other and the performance will be quite different. So it always depends on the actual location, right? I think generally, we are Singapore-centric. We like Singapore in general. If there's an opportunity in Singapore, we will definitely look at it. And when we look at it, we will evaluate, obviously, holistically in terms of whether that particular location makes sense for us. But definitely, we did mention that one of the reasons why we went to Hougang was because we don't have anything in the North-East, because it always helps us to expand our customer base. I mean, we have a loyalty reward program. The more malls we have across, it gives our customer base a wider selection and offering as well, right? Because then we can then access the database and customer base in the Northeast, because people naturally always shops somewhere near their residence. Yes. So I think we are not -- we are fairly agnostic in terms of whether it's North-East. Obviously, I think there is market talk about how the northern part of Singapore is going to be more affected by RTS. I guess, partly true, but you will also benefit from the inflow. So there will be a certain vibrancy at the entrance too. So maybe more leakage than less, but I don't know. I mean for us, fortunately, we don't have that much exposure in that area. Whether we see that as a -- I don't -- I think I said, we will look at it specifically on each individual location on its own merits.
Allison Chen: Okay. Pass the mic to Vijay.
Vijay Natarajan: Congrats on a good set of results. I think most of my questions are asked. Just two questions from me. In terms of office, Singapore office occupancy drop during -- seen during this quarter, maybe can I know the reason why? And specifically, with office rents hitting multi-year high, do you think -- do you see pushback from tenants in terms of increasing it higher, some tenants moving to out of CBD areas? That's my first question. Second question is in terms of retail sales, I think if I look at your tenant sales, overall tenant sales looks a bit soft. I think it's in line with broadly with market while I expect you to outperform. Any specific reasons? And with this level of sales, do you still see pushing up rents possibility in the next few years?
Choon-Siang Tan: Okay. Maybe I will take the second question and then Yi Zhuan can take the first question. I think tenant sales -- we are up about maybe -- yes, I think it's on the [ Board ] now, call it, just slightly over 1% for the year. But I think we also have to be mindful that the first half of the year was a slightly more cautious environment. So if you strip out the effects of the first half, if you look at it on the second half alone, which was -- I think I mentioned it earlier in my presentation as well, we are up close to 2% year-on-year, which I guess is -- I mean, sales growing at inflationary rates, I guess, it's business as usual, whether we should be outperforming that. I think it's okay. I think we are quite happy we have 2% growth on a year-on-year basis. if anything else -- if nothing else, it's in line with our rental reversions of about 6% per annum, which then allows us to maintain the same occupancy cost. But as we have also mentioned a couple of times, our occupancy cost is actually not super demanding at the moment. We are at 17-odd percent. Pre-COVID, we are about 19%. And our sales have gone up quite significantly, probably much faster compared to our rentals over the last few years. Sales always lead rents, right? I mean your sales have to go up before your rents can go up. So we have already had the benefit of sales going up quite strongly the last few years. So we do have rooms, I think, for rents to grow up to catch up with the occupancy cost. But if nothing else, at least if you continue to grow at 2%, 3% sales per annum, at least you are able to maintain the same occupancy cost as this year. So I wouldn't call it weak growth rates. Maybe the first question on drop in office occupancy.
Lee Yi Zhuan: Yes. Okay. So for fourth quarter, actually the main reason for the drop in occupancy actually some transitional vacancies that we see in the Singapore office portfolio. So of course, we have one -- I think previously, I mentioned that one of the City tenants actually left. So that one on its own is quite a big void. And Six Battery Road, we have a few of the kind of smaller kind of tenancies that expire. So these are kind of things that we are aware of ahead of time. And so actually, there are already some of the space has actually backfilled. So for example, the one in Capital we got what, 20-plus percent backfilled. And then it's fortunately had a positive rent reversion and the ones at Six Battery Road, we have also backfilled some of the spaces. Some of the spaces in these in part this drop in occupancy. So we have to set aside for some of the things like, for example, fire compliance for Six Battery Road before we can put it back out under the market yes. So it's largely that -- I would say that if -- so we are aware that -- I will even say that going forward in the next quarter so we probably will see a little bit of volatility in a little bit of these occupancies because some of these movements in the market is quite natural, especially at a point in time where we see movements in the market as there's flight to quality, there's people consolidating expansion, and then there will be natural downtime to some of these things. I think there's a second part of that question where you talk about where the tenants push back on rents. I would say actually, not really at this point. Of course, naturally, everybody is a bit cautious in terms of with all these go by uncertainty, market uncertainty, then, of course, they try it a bit more prudent when it comes to rent negotiations, right? But by and large, I'd say the broader themes that is still happening, right, flight to quality because ultimately is about talent attraction, talent retention. So centrality is actually a key theme, not just in Singapore and Australia as well. As we see the core CBD markets are the one that always recover and grows faster. So there's actually companies are prepared to pay for the right space given that in the view of the broader business, actually, real estate cost is just one function of the other parts that they are concerned about. In fact, actually, right now, the challenge for a lot of them is not so much the ongoing rent in a monthly payment perspective, but it's actually more the initial CapEx that is involved in moves. So that's the reason why you can see in many cases, right, some of the landlords are starting to do fitted out offices to help companies bring down the initial setup costs and all these things then becomes rentalized into the rents. So that's gaining a little bit of popularity across quite a few buildings in CBD. But by and large, I think that the companies are aware that ultimately, there's only so much space that's available and they had to make a choice on whether all these ESG central location fits their business banner or cost efficient. And the delta between a decentralized and CBD is still not wide enough for them to then say that actually a decentralized location is a better way to go for just pure cost reasons.
Allison Chen: Do we have any more questions?
Unknown Analyst: [indiscernible]. Can I ask -- I know to hop back on this point. On the RTS, do you have actually done any modeling to kind of talk about leakage or modeling in terms of how much leakage you would see on that front? And also on the retail side, again -- sorry to hop on this point, but what kind of demand are you seeing now in terms of tenants for your retail malls? Is it still largely coming from overseas, the usual suspects? And on the office side, obviously, there has -- capital market seems to be improving like how you can pointed to. Is there any -- if you guys approach to sales over assets, will you be considering that?
Choon-Siang Tan: Okay. If we have -- your question is if we approached to sell some of our assets, will we contemplate the...
Unknown Analyst: On the office side. Yes.
Choon-Siang Tan: Yes, on the office side. I mean we have sold off [indiscernible]. So we are not adverse to selling assets. We sold off 21 Collyer Quay, which is an office asset. So we are not adverse to selling office asset. So I think between office or retail, I wouldn't say we have a preference over either, right? Because I think the cycle always changes. So for us, it always depends on what is the proposition in hand. If someone offers us -- I mean, never say never. If someone offers us a price that is very attractive, I think we will always take a look. We are not -- I mean, if it's attractive enough, we will definitely always take a look, is I would say. Yes. So that's on the office and retail front. I think the first part of your question is on RTS leakage, whether we have done some modeling. I think we did before. I think there are 2 parts to this, right? Question is the existing leakage, which has already happened and the incremental leakage as a result of RTS. I think existing leakage -- I think when people talk about leakage, there's some confusion about the truth because actually, existing leakage doesn't affect the numbers anymore. They have already leaked. So it forms a new base. So whatever delta from a year-on-year basis does not make a difference. So what we should concern about is the incremental leakage from the RTS which I think is a bit hard to model, I think. If you look at it from a pure -- I mean, if you look at it from -- today, the people who drive are likely to remain drivers into JV because you cannot substitute that away. You drive because you want to be able to move around from point to point because you spend a whole day there and you want to be able to -- if you have the ability to drive most likely, you drive. So I don't think that will substitute a way to RTS. So RTS is likely to create the additional demand from people who used to take the Causeway bus. I think there is an existing Causeway bus, which I have taken to test it out and see how convenient it is. It is already very convenient because just from one side of the Causeway to the other side, it only takes like 10, 15 minutes. But of course, there's that additional time that you have to take from your house to the -- each of the Causeway. But just crossing the Causeway itself actually is already quite convenient. But of course, with the RTS, it makes it even more convenient. Maybe 15 minutes can cut down to 5 minutes. So likely, you will take away the demand from the -- those who are currently taking bus and move it over to RTS, but that's not incremental leakage. The incremental leakage is the people who are currently not going to Johor and then suddenly decide to go to Johor. So if you are currently not going to Johor, why is that? And why would RTS make you go to Johor? -- must be because of the added convenience and a slightly shorter time line. But actually, it doesn't take that much of a long time today anyway. So if you are the type that will go to Johor to shop for cheap goods, you're probably already doing it today. So I think the incremental effect to me is not as big, but I could be wrong. But to me, people who have the propensity to shop for cheaper products in Johor are probably already doing it. But what RTS will also do is that it allows Malaysians to then more easily come into Singapore. And this facilitates cross-border labor flow, right, which then allows us to tap into incremental demand in terms of labor flow both ways. And you also -- and RTS also -- I mean, the whole Johor is booming, right? And there will likely to be greater population growth in Johor, either organic or -- I mean, you can't have economic activity without people, right? So you are likely to attract people from other parts of Malaysia coming out to Johor. So there are a lot of things that Johor doesn't have that Singapore has. Some of these people will likely want to come to Singapore, over weekends, et cetera. And then you have expats and all that moving to Johor because of all the development of industrial activity. So there's also the incremental benefit. And previously, these people probably may or may not drive into Singapore. And then RTS now creates an avenue for them to come to Singapore. So I don't think it's all bad. It's not all doom and gloom. So there could be some incremental leakage as what I mentioned earlier. But I think it's probably not as big as it is because it's -- because all the leakage that started to happen has really probably happened, but it also facilitates flow back to Singapore. So that's how I would think about it, but it remains to be seen. So let's see how that goes. Was there another question on the RTS? I think that's about...
Unknown Analyst: So can I -- would you have a number on that point? Because you seem like a net negative in the sense from a Johor plan. And on the retail side, again, can I also ask, right, in terms of the just adding right, in terms of softness, I think which popped up about just now, are you seeing change in consumer habits in terms of, obviously, the footfall seems to be increasing, but spending seems to be coming down. Have you seen that in your malls as well?
Lee Yi Zhuan: Sorry. You are asking if we have a number for the sales leakage.
Unknown Analyst: Yes.
Lee Yi Zhuan: Okay. So, have we done the modeling? Yes, we have done the modeling. We won't be [indiscernible]. So whether it's there a number I can share with you I only can say that it's not a number that I worry and lose sleep over there. Then if anything, I will refer you to the DBS report, probably that was a good reference point. I hope that I address that question.
Unknown Analyst: And on the previous occupants.
Lee Yi Zhuan: So on the retail consumer pattern, I would say that generally, I think, for example, some of the -- it's very hard to just use a single line to kind of capture the whole market shift. But of course, what we see is a little bit of at risk of generalization, we do see that people are moving away from very, very big ticket items. So you'll start to see people are trying to spend on experiential dining, experiential entertainment lifestyle elements. Of course, there's a little bit of a shift towards mall like sports and healthy kind of living things. But the shift in trend also does not always reflect in the kind of sales that you see because, for example, we talk about year-on-year, if you compare it, for example, sports equipment and then you I mean, just using Brompton by example, right? You see it coming down. It doesn't mean that less people are cycling compared to 3, 5 years ago. It's just that on a year-on-year basis, because it grew a lot in the prior year and the base is high and then it came off subsequent. But by and large, that trend and inherently directionally is still going a certain way. We also see that actually, for example, IP is doing -- IP collectibles are doing very, very well. Like everybody, I'm not sure -- we used to ask who are buying blind boxes. Now as we have not bought one before. right? And I don't know if any of you have not bought one. But even if you don't really believe in it, people will still try and buy. And in fact, we do also see like some of the traditional like operators that sell toys to kids are now also trying to pivot a little bit into this adult kind of thing. So toys, games, all these things no longer become something that used to be for kids. And nowadays actually the one that's spending a lot of all these things. Fortunately, for us -- I won't say unfortunately, but it's actually the end up. So that's the kind of shift that we do see in some of these consumer patterns. And that's also the kind of things that we always say that the retail products are evolving. Then we talk about all these closures and whatnot, are we seeing a lot of brands from overseas, right? In the past, right, the comment has always been that malls are cookie-cutter malls. So then, of course, when we start to bring in overseas brands, we start to say, there's too many overseas brands, new-to-market brands. And then what does it mean for local, it's finding the right balance. I don't think in any of our malls, I can't say for the rest, but I don't think in any of our malls, you can see that our malls are predominantly tenants from one particular location. It's not a local versus foreign thing. It's really getting the right mix, right, that when somebody goes to our mall, they can buy things that is from local fashion, they can buy a local F&B. They can also -- if they choose to do something else, even Chinese food is very, very good. Today, you have options. And I think that's important when people come to the mall, because especially the mall nearest to you, right, it's all one style, one pattern, one product line, right? I don't think you want to go back there even though it's the nearest mall to you all the time. So overseas exposure, we do see continued interest from Chinese brands, of course. But that aside, we also see a lot from the Western part, right? So like, for example, again, I bring back Chick-fil-A, I bring back like new concepts from -- we see like permutations, right. For example, certain things that tend to be high-cost items, now they try to make it more mess pricing. So people can still experience the same thing for a much cheaper price. So we see some of these things evolving along the way.
Allison Chen: Yes. I'm just mindful of time. Maybe we'll take one last question from John. Can we pass the mic to John, please?
Unknown Analyst: Congrats on the very strong DPU growth. My question relates on growth and how that changed your view on country allocation. So for example, would you be open to expand into retail in Hong Kong? Would you be open to expand into office in Japan? So right now, locally, asset prices are quite high. And given that you're already the largest REIT in Asia Pac, would you be a bit underrepresented overseas? And would this be the right time to expand more overseas?
Choon-Siang Tan: Interesting. Thank you. Thank you. No. So I think question is whether if one day -- I guess I mean you prefer your question because of the new growth mindset, whether we will look at overseas. I guess the assumption is that if we want to continue to grow, but we run our opportunities in Singapore because at the end of the day, if we have to -- if you are able to find something in Singapore, we'd rather spend the money in Singapore and continue to grow in Singapore. The question is, have we run out opportunities because you're asking if this year is the right time to look at overseas. No, I think we have shown in our track record that we are still able to find opportunities and decent sizable opportunities that continue to be accretive financially makes sense for us and puts our portfolio in a good position. I mean we did -- this outcome is also another way that we deploy capital in Singapore as well. And that also is another reason why we also look at it because it offers us another way to grow in Singapore. I don't think we have run our opportunities. I mean there are still so many assets in Singapore that we can look at without going into details and names. So I think the short answer is if we are able to deploy the next dollar in Singapore, we'd rather do that than going overseas. Do we like Hong Kong and Japan exposure? I think Hong Kong is probably going through quite a bit of challenges as we can see in some of the other -- our sister REITs that have assets there. Rental reversions are still on a negative trend. I don't think it's something that we will keen to look at, if you ask me. And as I mentioned, I think it's -- I mean as -- most of our investors, I think, prefer us to still be predominantly Singapore. I think we have also addressed some of these questions in previous. I think, in fact, if we have a choice, I guess, we may even look at reconstitute things out of our overseas portfolio, if possible, before we look at growing if possible. Japan wasn't on my mind, so I guess I forgot about that. I guess that was indirectly answering your question.
Allison Chen: Okay. I think that's all the time we have. Before we conclude, Choon-Siang, would you like to share some closing remarks.
Choon-Siang Tan: No -- I think this is a very good set of results, and I think I really want to thank all of you for continuing to support us. We know that this sets the bar even higher for us, makes it 2026 bigger hurdle to climb over, but we will continue to work hard, push for results and stay disciplined in terms of what we do. I think our team is -- we have a very strong team. I think credit to everyone sitting here and everyone sitting there. That's the reason why we are able to deliver on so many fronts. I think it's not just the acquisition front, although that's the things that people -- a lot of people are focused on, but actually, organically. The organic assets still make up 98% -- 95% of our portfolio. And if we are able to deliver performance from organic assets, that will make our job a lot easier actually looking -- in terms of looking for growth. So hopefully, we continue to deliver, but we know it gets much harder and harder each time. Okay. Thank you. I think we have some tea right outside, right?
Allison Chen: Yes. If you have further questions, please feel free to reach out to us. Otherwise, have a great day, and those in person and join the refreshments outside. Thank you.
Choon-Siang Tan: Thank you.
Lee Yi Zhuan: Thank you.
