Thank you for standing by, and welcome to the Abacus Property Group HY 2022 results presentation. All participants are in a listen-only mode. There will be a presentation followed by a question- and- answer session. If you wish to ask a question via the phones, you will need to press the star key followed by the number 1 on your telephone keypad. If you wish to ask a question via the webcast, please type your question into the ask a question box and hit Submit. I would now like to hand the conference over to Steven Sewell. Please go ahead.
Thank you very much, and good morning, ladies and gentlemen. Thanks for joining us here. We gather here in person, thankfully, in Sydney on the land of the Gadigal people of the Eora Nation, and I pay my respects to their elders past, present, and emerging. It gives me great pleasure to welcome you to the first half result presentation for financial year 2022, and I'm joined here today with Rob Baulderstone, our CFO, Evan Goodridge in our finance team, and Cynthia Rouse, our head of Corporate Comms and Investor Relations. What a half year of achievement for the group and solid operating results on which to move forward. Looking at the portfolio operating metrics, they're a great summation of where the group sits.
With a strong asset backing of quality income producing assets in our two key selected sectors, and a statutory profit for the year that reflects not only strong operating results, but a solid uplift in valuations of our asset base, led predominantly by our storage business. Pleasingly, the balance sheet is now almost fully deployed in our two key sectors, and even in light of the COVID disruptions, which have played havoc with so many aspects of everyday life to varying degrees across Australia and New Zealand, the self-storage business has risen to operating standards and performance never before seen. Pleasingly for investors, the distribution for the half year of AUD 0.0875 per share reflects a conservative 89% payout ratio for the half.
We believe it appropriate as the business transitions for full year 2023 to be the first full year of recurring income sources as we complete the closeout of our legacy mortgage positions. As I mentioned, in spite of the COVID difficulties experienced in the half, particularly in Melbourne, Sydney, and New Zealand, our operating results and transactional activity at Abacus has continued at a very pleasing rate. Investing over AUD 1 billion in the period from first of July to today in quality assets and all the while delivering the strongest ever trading results in the storage business we've ever seen and picking up good momentum in commercial with leasing demand being experienced now.
The new investments that we've made were neatly spread across both commercial and the storage sectors, including adding to existing assets, rebuilding and renovating some of those assets, as well as adding to the pipeline of some future development opportunities in the self-storage space. A diverse blend of income and value-enhancing assets from day one, plus many opportunities that we believe, as market conditions permit, will underpin strong asset backing and income growth for the business over the medium to longer term. In storage in particular, our investment thesis of investing and building contemporary modern properties in the best suburban and inner urban locations is continuing to deliver very strong occupancy and rental growth outcomes, and we believe will do this for years to come. Similarly, our portfolio of well-located CBD, near-fringe or suburban commercial investments has proven resilient.
With many locations, the subject of refurbishment and upgrade presently or in recent times, resulting in strong customer attraction and tenant retention. As I said, the balance sheet now sees almost exactly 50/50 split between the two key sectors. With our non-core legacy investments virtually nil following the exchanging of contracts to exit the last of our loans and mortgages exposure, as we released earlier. The group's investment focus is now centered on medium to long-term returns for each and every investment that we have either made or will make, to ensure that every dollar of capital we have invested is invested for the maximum long-term potential. This is a strict discipline internal, supported by the capability and experience of the team here at Abacus.
In storage, in particular, we've had a dramatic uplift in the trading locations acquired over the last 3-4 years, and our operating team at Storage King, which I'll touch on soon, we continually monitor and plan for these investments to maximize the returns. We pride ourselves on our differentiated market position of being an owner, operator, and manager of assets, either wholly owned by Abacus or with a set of strategically selected joint venture owners. Looking at the capital deployment slide, you see in front of you what a difference four years makes. A vast array of transactions, disposals and acquisitions, almost doubling our commercial property portfolio exposure and almost quadrupling our self-storage sector exposure.
In particular, the game changer decisions to fully internalize the operating platform of Storage King at the end of 2020, we believe will deliver in spades for the groups for years to come. Considering the challenging macro conditions that have existed in both calendar year 2020 and 2021, it's a testament to the capability and diligence of the entire management team at Abacus, well supported by the board and our major investor. As we'll touch on shortly, the operating conditions across the portfolio, in particular storage, are very pleasing and underpin our confidence to continue to invest and develop this asset base and key sector focus of the group. I'll now turn over to our CFO, Rob Baulderstone, to take us through the key financial metrics.
Thank you, Steven, and good morning. As Steven mentioned in his overview, the group has delivered a funds from operations profit of AUD 81.1 million. That was an increase of 33.7%. Some of the highlights in these results were commercial property FFO increased by 13.5% to AUD 47.1 million. Self-storage FFO increased by 67.2% to AUD 53 million, which was mainly driven by acquisitions and the internalization of Storage King, which Steven spoke about. The distribution for the half was 8.75% per security. Turning to the balance sheet. At the period end, net tangible assets per security was AUD 3.73, an increase of 8.7%. At the period end, our gearing was 29.4%. Our average cost of debt was 2%.
We expect the average cost of debt to increase to around 2.25% for the full year. Moving to the valuations. The valuation uplift for the period was AUD 175.2 million. The gain in self-storage was AUD 140.8 million, or 7.5%, while commercial property was up by AUD 34.4 million, or 1.8%. The property portfolio is now valued at AUD 4.6 billion, with an even weighting between our core sectors of commercial and self-storage. I will now hand back to Steven.
Turning to the operating performance related to those two key sectors of self-storage and commercial. As I mentioned before, and there's a lot of information on this slide, our operating results in self-storage are at all-time highs. It is apparent, as it has been for the last year or two, that a number of tailwinds are well supporting the uptake and increased utilization of self-storage, with the greatest impact seen in suburban and inner urban locations, where work from home, people wanting to declutter their houses, elevated transaction levels in the housing market, along with business users, small and medium-sized enterprises looking to store e-commerce and home businesses needing to store their inventory.
We also don't think it's a coincidence that contemporary developed stores which have a far higher quality fit-out, look, and feel, have seen a higher level of customer acceptance and attractiveness, and that has lifted materially across the period. This has translated in the last two years to exceptionally fast lease-up and across the entire portfolio, and that's in new projects that we've expanded or improved rental yields and occupancy right across the board. The COVID restrictions and lockdowns have variously impacted stores across the country and in New Zealand. Even so, most stores now are trading in positive rent roll growth territory year-on-year, even in spite of that. Our largest positive contributors presently are in Western Australia, Queensland, and the ACT. While the slowest recovering areas, albeit still single-digit positive on a like-for-like rental yield perspective, are in New Zealand and down in Victoria.
On the next slide, we've provided a lot of granular detail of the various categories of our portfolio, given the material changes of composition we have seen in the last 3-4 years. What a wonderful set of charts this is, showing you on a like-for-like portfolio, which is now 63 of our entire 105 trading locations, where we see positive rental rate growth right across the board. As I said, the confluence of strong occupancy and customer demand and acceptance is resulting in rental yield uplift in almost every market. We do expect this trend to continue for some time, and the trajectory as we see it is the strongest we've ever seen with so many tailwinds supporting. Something not many predicted as we entered into the COVID impacts in early to mid-2020.
Looking at the operational performance, we have a fully motivated and energized workforce across our Storage King operations. Their local market knowledge and passion for winning the consumer are to be applauded. As luck would have it, in early to mid-2020, we saw a dramatic increase and uplift in our online presence, upgraded systems, and our user interface. This has resulted in many pleasing results. Website traffic in the last six months up over 4%. Our online sales of storage up 49% on the previous six months, which is as a result directly of those website enhancements and improved user experience. Online merchandise sales up over 184% on the previous six months, with a combination of expansion of the product range and introduction of free delivery to our consumers.
We've launched several new TV commercials, the most recent one you can see there on the screen, and allied with a national brand campaign in January, which all builds on Storage King's market-leading brand awareness. At the individual store level, at our mature locations, as well as our new development and expanded stores, we are going through a brand refresh program and retail merchandise upgrade. Looking at the portfolio, there has been a very dramatic lift in number of locations negotiated, sourced, contracted, and settled. With an increased focus in the last year or two on development sites that are available to us as conditions permit, that will deliver these new contemporary large-scale locations to underpin our whole portfolio's income and capital growth prospects. These developments available to us, whether it be greenfield or brownfield locations of our choosing rather than accepting compromised locations buying on market.
The new development locations, as I mentioned, are experiencing far quicker and quicker lease-up demand from customers. Once close to full, are seeing increased rental yields well accepted. With this demand for well-operated, marketed, and equipped infill suburban locations outstripping supply, we see it as a structural change in the market for sure. For Abacus, this has been the main achievement of the last few years. With our material increase in dollar exposure invested in this sector at a time when operational performance has been sustained at the highest levels, plus an increased investment demand for the asset class, seeing cap rates compressing materially. We believe mostly the locations we're adding provide a strong path to income growth, which will underpin value through all market cycles and conditions. Turning to the commercial portfolio, which is a blend of office and retail.
Our commercial office portfolio is continuing to deliver solid growth, and we fully believe it's a testament to the quality of the locations in which we're invested and the caliber of our small to medium-sized tenant business partners. Mostly, over the last two years, we've seen that tenant base, small to medium-sized enterprises, proving very resilient and sticky to their individual locations. As well, with an active and refreshed asset management focus here at Abacus, including enhanced close tenant relationship management, that has delivered us well for the business. As the markets open up variously across the country, we're seeing a strong resurgence of tenants reengaging. Either in place tenants looking to expand and renew and extend their agreements, or new tenants seeking to establish in the locations, for example, where we are either building new or renovating and remixing space.
Incentives remain in line with the previous period, somewhat abating here in Sydney, and with a clear focus on amenity, tenant facilities, public transport connections by consumers. We're cautious on the Brisbane and Melbourne markets with elevated supply levels and backfill spaces, where we have a clear skew towards the Sydney market in the right locations with the right rental structures in place. Turning to retail. Of all the sectors, it's clear that retail has been impacted by far the most variously across the markets as the COVID lockdowns and retailer adjustments have rolled through. Our properties, being predominantly food-anchored and nondiscretionary, have fared okay. With only 200 tenants in total across the portfolio, we believe that certainly helps.
The biggest question being asked constantly and yet to be determined in some cases is what demand is there for the location? What are the viabilities of the businesses in that location? That is something that we see is certainly not homogenous across the market, nor easily established anytime soon. Looking at capital transactions and developments. We've been busy across a handful of projects and also completed a number of acquisitions of assets in several exciting quality long-term locations. Including our exchange, soon to be settled, acquisition of the office complex at 77 Castlereagh Street, right here in the center of the CBD of Sydney. Currently, we have only two small development projects approved yet to complete, being our new build in Church Street down in Richmond, which will result in about 19,000 sq m of NLA on completion, owned in partnership.
Owned outright, our building at Abbotsford in Johnston Street at Abbotsford, which will result in about 14,500 sq m of net lettable area. Both of these projects with under AUD 20 million yet to spend. In our various partnerships, we've discussions and plans afoot to upgrade and expand buildings such as 201 Elizabeth Street in Sydney, and most recently with The Walker Corporation, the options for refurbishment of the Goods Shed and also development above 710 Collins Street, down at the entrance to the Docklands. With more details and information to come in future reporting periods. Sustainability. With every acquisition project we undertake, and in keeping with the asset plans for each investment we have, our platform is integrating sustainable practices and strategies, be they energy use, waste, water and consumables, our greenhouse gas emissions.
We've enhanced our governance structures across the business and will continue to focus more and more on sustainability with a refreshed and redrafted board committee charter and attracting some new talent into this area into our teams. Turning to the summary and the outlook for the business. The group is extremely well-positioned. As I said, with a market differentiated strategy to be an owner and operator manager of two key sectors and asset classes that through this cycle of volatility, are delivering good income growth today and projected into the medium to long term. As an investor and owner, we will continue to be nimble, active and networked into the market to assess and crystallize opportunities as we see fit.
We will continue to be disciplined and judicious as to where we're invested, the assets in those locations, whether we should increase or decrease our exposure and manage our balance sheet conservatively, we believe entirely appropriate for the volatile macro conditions that exist. It's pleasing for us to be able to provide our investors the guidance that barring unforeseen market dislocations, and especially not further protracted pandemic lockdowns, et cetera, we're confident of being able to deliver a distribution for investors for the full year 2022 of at least AUD 0.18 per share, with a previously advised payout ratio of 85%-95%. We will continue to reassess our business operations for the outlook into the next financial year and provide guidance on that year at our full year results briefing in August 2022.
That concludes the presentation of the results, and we will now turn it over and take any questions that you may have. Thank you.
Thank you. For the phone participants, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two. For those on the webcast, to ask a question, please type your question into the Ask a Question box and click Submit. The first phone question comes from Callum Bramah from Macquarie. Please go ahead.
Morning, Steven and team. Thank you for your time. My first question is just on guidance. You consciously provided an expected cost of debt for the year. Are you able to provide any additional color on components, particularly with respect to underlying growth in the subsectors, any potential earnings that would be recognized from property development, and any expectations around COVID-related impacts, please?
In the second half, we're not expecting further COVID impacts. We obviously still have arrears in each of commercial and retail to collect from the first half. We don't expect, even though there is obviously COVID mandates in place in two bigger states, until I think it's March, middle of March, we're not forecasting further COVID impacts. In respect of debt costs, I think, you know, we're cautious of the environment. We're clearly facing underlying interest rate lifts, and I think that's something that, you know, we continue to monitor and take advice on where those forward curves are sitting. We're just factoring in some conservatism there. As far as the growth on the individual segments, we're not providing that growth at this stage.
I think, you know, your comment about the development income, I think FY 2022 will be the last of that development income as part of a segment. That comes with the extinguishment of those loans and mortgages, which we're expecting subject to all the CPs being completed over the course of the next month or two. That will see that segment go to zero and not be in existence in the next financial years.
Sure. We should expect some earnings out of that non-core portfolio in the second half, albeit lower than the first half, given that wind down.
Yeah.
Sure. If I take the AUD 0.18 per share or at least AUD 0.18 per share dividend guidance, and apply the payout ratio range at a spread of about 11% or 12% on an implied FFO guidance basis, what sort of variables should we be thinking about in regards to, I guess, the spread between the high and low end of that range?
I think, you know, we've got a wide payout ratio, and I think, you know, looking at where we've got capital uses with projects either that we're committed to in a small number of instances or projects that we might initiate, we'll see us bring the payout ratio down. I think, you know, whether the average payout ratio continues at the lower level, our preference is being, given we're quite conservatively geared to run at a higher payout ratio. I think we're just giving ourselves some flex in the balance sheet as we now have, you know, basically the entire balance sheet, invested in those income-producing assets. It is really just giving ourselves that flexibility.
Yep, sure. The second question, just around the tax expense in the first half. Looks like it picked up quite significantly to about AUD 6.8 million, despite the wind down in the property development segment. Could you just provide some color around what's driving this and okay, we should think about it once that segment winds down this half?
Yeah, I think the major impact there is the impact of the Storage King ownership of the operating platform.
Yeah
of Storage King. We can perhaps provide you some color on that, more detail on that.
That's fine. Final question from me, just around funding. Pro forma gearing now at about 33%. You've stated that internal maximum of 35%. How should we be thinking about funding growth from here? Would Abacus look to potentially recycle some assets, or are there other sources of funding you might look to consider from here?
Yeah. We do have some initiatives underway. The recycling of assets is real. As we basically look at what assets are on the balance sheet and what do we want to be on the balance sheet in the medium to long term. Initiatives such as the Virginia Park Business Park down in Melbourne in partnership is one that you'll see come to market shortly. Yeah, we're constantly going to the top of the portfolio down to the bottom and cycling back again. That's something that we will continue to do, as I said, to basically continue to confirm where it is we're invested and how is that capital working for us in the medium to longer term.
We do have some, also some commercial assets that we've been actively improving and releasing over the last few years, which we believe may have peaked in their operating conditions and tenant attractiveness, which we may look to shift as we see better opportunities in more strategic locations. That is an active work by the team, the asset management team in commercial.
It sounds like the preference then is to, I guess, refine the existing portfolio rather than to grow it in dollar million terms. Is that a fair conclusion?
I think we have identified in both sectors that product creation through investment in, whether it be development or enhancement and renovation, delivers the far best returns for us and is the best use of our capital. You're seeing us build in a pipeline of opportunities in storage, for example, you know, projects that we can pull off the shelf for years to come in locations that we have identified. And similarly in office, particularly retail to a lesser degree, Ashfield really being the only property that we've got works planned. Although, you know, up at Oasis on the Gold Coast, conversion of some of the upper-level retail space to commercial is an active consideration. You know, certainly investment into the assets we've got is our best use of capital.
That's clear. Thanks very much for your time this morning.
Thanks, Callum.
Thank you. The next question comes from Alex Prineas from Morningstar. Please go ahead.
Good morning. Thanks for the presentation. We've had some other sort of interesting commentary in the market this week from some other office REITs. One of them was saying that about 25% of the big corporate tenants that renewed were cutting about 25% of the floor plate. Another REIT asset, they didn't experience that and that most tenants were keeping the same space or increasing. I was wondering what you're seeing in that regard in terms of renewal. They, you know, what level of floor plate are they hanging on to?
Yeah, I suppose, it's a little bit, you know, it's bespoke for our portfolio. As I said, our portfolio predominantly is occupied by small to medium-sized tenants. We have very few multi-floor tenancies across the entire portfolio. We've seen quite strong and positive initiatives by in-place tenants to extend their term in place. We've seen that across the spectrum from smaller to more mid-sized tenants. One of the notable reductions in space, and it was one that we actually encouraged and are happy for, is Computershare down in Melbourne, which has literally halved its office space. It had a vast tract of office down there, 16,000 sq m, some of which was not utilized. We've compressed them now to just under 8,000 sq m, and we're re-tenanting and reconfiguring the space, the balance of the space.
We proactively drove that, and actually, it was two or three years ahead of expiry on that lease. As far as that corporate reduction in footprint, we do not have a tenant, basically, that has the sort of footprint and locations that refers to. That doesn't refer to our portfolio or impact our portfolio.
Thanks for that. One of the other trends that was observed elsewhere was smaller tenants moving from, you know, fringe locations into CBD prime grade buildings. Is that something that you're seeing?
I think that's certainly a trend, where there is a disparity in the rent levels fringe to CBD, and that most dramatically is in the Sydney market. I think in the case of Brisbane and Melbourne, we've not seen that trend so much, and we do own fringe buildings in all three markets as well as CBD buildings. I think, you know, for us it is building specific, but we're aware of that commentary and we think it gets back to tenants assessing and, you know, judiciously selecting locations for their buildings and for their tenancies. That really is, you know, looking at the amenity of the building, the precinct, the public transport connections, and even, you know, the wellness security, you know, ventilation of the building.
That is certainly coming up more and more in tenant discussions and tenant representative discussions.
Okay. Thank you.
Thank you. The next question comes from Richard Jones from J.P. Morgan. Please go ahead.
Oh, good morning, Steven. I have a few questions, if you don't mind.
Sure.
Just firstly, on slide 5, just interested in the AUD 247 million increase in other self-storage investments. Is that your NSR spend, or are there other things in that?
Valuation movements.
It's valuation movements, right?
Valuation movements. Yeah. Not NSR.
No. Do you mark-to-market that position?
Yes.
You do. Okay. Second question. Thanks for splitting out the breakdown of the storage portfolio between stabilized acquisition and established. Just interested similarly in office, your operating stats are all based on non-development assets, I think is how you classify. Just what proportion of the office portfolio is considered development assets?
It's pretty small. We'll get to the proportion. Yeah. It's the same as last half, Richard. It's, I think, only two or three properties. And we'll get you the percentage if you like. It's 464, 201, and that might be it. Maybe Abbotsford.
Just on those two developments you called out, Richmond and Abbotsford, can you just give us a leasing update and remind us on practical completion of those two projects?
Yeah. Richmond is about 70% pre-leased. It will have practical completion March, April. There was actually a variation, an extension of time claim because of the lockdown and the prohibitions on the proportion of trades that could be on site in Melbourne in the latter part of 2021. We're about 70% leased. The building's in great shape. We've got discussions over the balance of the space. We're extremely happy with the outcome down there. The tenant mix, the look and feel, and the construction quality is superb on that building. You know, valuation very much supported by the acquisition by another REIT of the building over the road, which added nicely to our development profit and end valuation on the building. Very happy with that, Church Street Richmond.
Similarly, Abbotsford, if you drive past Abbotsford today, there's a lot of work happening. We've commenced Computershare and fitting out their new space at one end of the building. We have early stage works to create the tenancies in the balance of the building, and that's to be leased. We've got about 7,000 m or 8,000 m of space to lease in the balance. And we've got early interest on some of that space. But our key tenant being Computershare is locked away for a new 10-year period, and the building looks sensational compared to what it was historically. Well, they're the only two projects, Richard.
Sorry, I was on mute. Sorry. Just the thoughts on Riverlands and Camellia that you converted from a, you know, a loan to an equity holding. Can you just-
Yeah.
Update us on your thoughts on those two landholdings?
Well, it's as per previous periods. We're in planning, particularly in case of Camellia, the government's called for submissions on the master plan. You know, we're fully expecting at some point that there'll be a decision made on Camellia. There's, I think, unanimous, all parties in agreement that something has to happen. You know, we're not settled yet on that acquisition, but as the 100% owner, it'll be our role to manage that process. Once rezoned, look at how that's subdivided and decontaminated, and that's that sort of work for the next 2, 3, 4 years as it falls out. In the case of Riverlands, our major activity there is waiting for our adjacent neighbor, who acquired almost 18 hectares, Mirvac.
They've got, you know, development submissions and rezoning on their block. We're hampered in some ways not to start on our side until such time as they get going on their side. We're not unhappy with that because we believe they will add materially to the value and amenity of the area. That's the two parcels. They're now part of the commercial team managed in-house.
Any expectation that you would do land sales on those two parcels at the right time? Is that the thought?
I think in the case of Camellia, there's a potential for development of either storage or commercial. In the case of Riverlands, you know, yet to be determined really. I think that needs to play out with the neighboring estate, just as to what the best use, highest and best use of that, you know, it's 50-60 hectares, a majority of which is actually a floodplain of the river. But we're excited at what Mirvac will do to the adjacent estate. But they're medium- to long-term holds, but they'll be actively managed along the way as to maximize their value for us.
Great. Thanks, Steven.
Thank you once again. To ask a question, please press star one on your phone. For the webcast viewers, you can type your question into the ask a question box and hit Submit. The next phone question comes from Edward Day from MA Financial. Please go ahead.
Good morning, Steve and team. Just a couple of quick ones from me. On your capital management, your hedging is relatively low compared to peers. Can you just firstly talk through whether you have a hedging target? Secondly, how we might expect this to sort of evolve over the next 6-12 months?
Ed, we sit at around 50% hedging today, and the band that we have, upper and lower band, is in sort of 40%-90%. We've given ourselves plenty of scope on that. We're comfortable where we are given where markets are, but it is something that, you know, we do take external advice on and manage quite closely.
Okay. Thanks. Just on your storage development, you mentioned you're seeing exceptionally fast lease-up of development sites. From memory, you know, you sort of work to about a two-year timeframe or two to three-year timeframe. Can you give some color, I guess, as to what you're experiencing on recent developments?
Yeah, I think it's been, you know, 2-3 years is exceptionally quick. That's sort of what we're experiencing at the likes of Brookvale in Sydney, Pymble in Sydney, as well as, you know, Robina on the Gold Coast and Rowville down in Melbourne. Historically, it was always anticipated 3-4 years was the typical lease-up for storage. But I think the important point as well is that even with the accelerated lease-up, it's being done at higher rent levels, and that, we think, is the structural change that, you know, the customer is better accepting of newer, shinier, you know, infill locations.
That has given us that, you know, real confidence to proceed and start to accumulate some land and, as I said, greenfield and brownfield opportunities to undertake those developments in years to come and create the product rather than, you know, buy existing product that might or might not be in the right location or in the right configuration.
Thanks. Finally, just you mentioned you were cautious on Brisbane and Melbourne office markets. I'm not sure what percentage of your leasing was done in those markets during the period, but can you just give us a bit more granular detail around the metrics on leasing deals you've achieved in those markets?
We haven't actually done a lot of leasing in. Mainly it's because of the asset profile we have in Melbourne, other than obviously the new builds, Church Street and Abbotsford. Melbourne is more when we see, you know, supply and new supply coming into the market, backfill space numbers as is being reported presently. That is concerning. It mostly impacts us and, you know, sort of jaundiced our view, if you like, on acquisition, due diligence and investigation of opportunities. Up in the Brisbane market, again, you know, we're seeing increased from elevated levels, we're seeing increased levels of supply and new buildings being proposed, approved, and commenced, almost on a weekly basis. You know, we have, as you know, disposed of some assets in Brisbane. 444 Queen Street, we sold.
You know, we've still got exposure in Brisbane, but we are extremely cautious. We've owned assets in that market for a long time and, you know, we don't have a big team on the ground, development or leasing, and we just remain cautious about, you know, not being the victim of people stealing tenants and, you know, looking to pre-commit or get pre-commitments for new builds at our expense. So that's really the basis of the caution.
Okay. Thanks. That's all.
Thank you. The next question comes from Suraj Nebhani from Citigroup. Please go ahead. Oh, Suraj has actually just removed his question. At this stage, we're showing no further questions. I'll hand the conference back to Mr. Sewell.
Thank you very much. Thanks, everybody for the questions, and I realize it's a busy day and appreciate you dialing in. Have a good day.