Good morning, ladies and gentlemen, friends from the media, analysts, bankers, investors, and fellow CDL colleagues. My name is Belinda, and I am the Head of Investor Relations and Corporate Communications at CDL. On behalf of CDL management and my fellow colleagues, a very warm welcome to CDL's briefing on its unaudited financial results for the full year ended 31st December 2023. This is a hybrid briefing format with both in-person here at the M Hotel Singapore, and also those joining us locally and internationally, virtually, on the live webcast. Thank you everyone for being here this morning. For today's briefing, in line with CDL's commitment to environmental sustainability, we will not be providing any printed materials. Instead, we encourage you to scan the QR code on the screen to download the documents that has been uploaded on our CDL website, and also on SGXNet this morning.
They would include a copy of the detailed financial statement, a copy of the press release summarizing some of the key highlights, a presentation deck that the management team will be partially going through this morning. For our guests that are joining us virtually, you will also similarly be able to download the documents which are available on the CDL website. I would like to introduce you to the CDL management team there on my far left. In the center, we have Mr. Kwek Leng Beng, our Executive Chairman, Mr. Sherman Kwek, our Group CEO, Mr. Kwek Eik Sheng, our Group COO, Mr. Chia Ngiang Hong, our Group GM, and Ms. Yiong Yim Ming, our Group CFO. The format of today's briefing will be in two parts.
We will kick off with a presentation of some of the key highlights of our performance, then followed by a Q&A opportunity. Without further ado, I would like to invite Mr. Sherman Kwek, our Group CEO, to kick start the presentation. Sherman, please.
Okay. As Belinda is sorting out the technical issues, just wanted to say good morning to everyone. Hard to believe a year has gone by and now we are into 2024. Thank you, everyone. I know all of you have had a very busy morning. There are three briefings going on, so appreciate the effort made to rush over to attend ours.
I have to say, I am still a little bit jarred by the fact that Belinda was playing the video that we recorded for our 60th anniversary, and it is always weird to see yourself up on screen and speaking, so thanks for that surprise, as I should call it. It has really thrown me off hook, right? So I almost took this up as the mic, although this is a light. So, yeah. So if I do not present well today, it is because she messed up my rhythm.
See the presentation was so scared of your presentation this morning, so it froze in the-
It froze.
-it froze with your.
Yeah. Are we ready to commence? Okay. I can also use this, right? I can't use this. What if I wanted to go back? I can't. That's even better. So Belinda has given me new challenges. I can only move forward. I can't go backwards, so yeah. I better make full use of each slide. Not to worry. I think today we'll keep it brief, and we want to leave more time for Q&A.
As per the last briefing, I think we decided that in order to keep the presentation short, it would just be myself presenting the overview and strategic initiatives. As well as after me will be Yim Ming presenting the financial highlights. The ops review is just for your pleasure reading, and we're not presenting it. This is actually from our Haus on Handy project. It's the conservation house at the top of the hill. Very pretty. We can organize for you to see it if you would like to.
Key milestones for last year, I think we had achieved the highest revenue since inception in 1963. This was primarily driven by our EC project, Piermont Grand in Punggol. As all of you know, under prevailing accounting rules, when the EC project completes, you recognize the revenue and profit in entirety. We also divested this land site in Japan, in Shirokane, a very prime location. We had five projects that completed last year, over 2,400 units. Put a lot of strain on us. Not sure you all realize how much effort goes into doing a handover to our buyers, and so really our property development team had a very hectic and busy year handing over these five projects, all of which are fully sold out except for Boulevard 88, which is about 91% sold.
On the living sector side, we continue to expand. We acquired 31 PRS assets and developments. In the U.K., we did two PRS developments in Manchester and in London. In Japan, we did 29 new acquisitions, 25 in Tokyo. We finally filled in our missing link in Tokyo, and then four more in Osaka. So brings our total portfolio up to 38, with 35 in operation and three still under development, but physically completing this year. Of course, we still have our PBSA that we had acquired the year before. We acquired six then. So that gives us our current portfolio of about 4,800 units across U.K., Japan, U.S., one project in the U.S., Sunnyvale, and Australia, as well as six student accommodation assets with 2,400 beds in the U.K. Lastly, on the hospitality side, we also continue to expand our footprint.
Acquired three hotels, one in South Korea in prime Myeongdong location, one in the heart of Brisbane on top of Central Station, and the other is a hotel in Osaka, also in a very prime location next to the luxury fashion district, as well as the walking district. Of course, we had three new hotels that opened up. One is M Social Suzhou, one is M Social Phuket, and one is The Singapore EDITION Hotel on Cuscaden Road. Key financial highlights are while we had record revenue, but obviously, if you look at the far right of our profit after tax and minority interests, we didn't quite measure up to the year before. The year before was SGD 1.3 billion, but I think all of you already know why. We had very substantial divestments in the year. Therefore, it kind of skewed the numbers quite a bit.
If you exclude divestment gains and impairment losses, you will see that actually, our operations across all segments have actually shown strong improvement and resiliency. Our NAV has grown quite a bit, and that's mainly because we were very acquisitive last year. For this year, we are doing a full year dividend of SGD 0.12 per share, so we hope shareholders will be happy. We have committed since 2018 that we will try to maintain at least a one-third payout ratio every year. So I think we have exceeded that with 36%. Of course, share price performance leaves quite a bit to be desired. But I will detail how we intend to close up the gap with our NAV. Won't dive too much into this slide. Property development side, we sold 730 units last year with a sales value of SGD 1.5 billion.
Quite a bit less than the years before, but we are still glad, I think, for this tally. We had two launch projects last year, Tembusu Grand in Katong, as well as The Myst in Upper Bukit Timah. Both have sold well to date. The overall Singapore resi market obviously has gotten a lot tougher. Costs are still very inflated compared to pre-pandemic levels. According to the URA official stats, we have also seen the overall new home transactions have come down. For 2023, it was around 6,400, down from, I guess, recent year's peak was 2021. It hit 13,000 units transacted. This excluding ECs. 2022 was about 7,100. Last year in 2023, the volume did drop lower, but prices still held up well. In fact, notched an increase, according to URA Residential Price Index. Last year, private home prices rose about 6.8%.
This sector is still quite stable. Obviously, it has suffered, again, from what I mentioned, cost increases. Last year's imposition of the 60% ABSD against foreigners was also quite tough to swallow because it really meant that most of our foreign buyers have more or less evaporated from the market. China, we do not have much to talk for now because our existing residential inventory is almost fully sold. Same with Brisbane. We have two projects there in Brisbane. Same in Australia, sorry. We have two projects there in Brisbane that are also over 80% sold. On the hotel operations side, I think this has been a theme that we had expected. There was very strong recovery last year, and we hope that it will continue forward into 2024 and beyond, notwithstanding all the global macroeconomic uncertainties and geopolitical conflicts.
Average room rate was up over 10%. Occupancy was up more than close to 9 percentage points. That gave a 25% increase in RevPAR, revenue per available room, so a really great year for hotels. Investment properties wise, we still continue to be very resilient. On Singapore especially, our occupancy are very high for our office and retail portfolio. For the U.K., actually, our office and retail portfolio is still strong. The only problem is that you would have seen we took some impairments for our office portfolio in the U.K., and that is really because of cap rate expansion. Properties around us were all trading at much higher cap rates than normal, so therefore, we had to put in some impairments as well based on valuations. But actually, the underlying office properties are actually still doing well.
On the living sector side, we achieved a full completion of The Junction, which is in Leeds, the fourth largest city in the U.K. We did it over two phases. The phase one is almost completely filled up, and phase two, finally we achieved the completion for that. So now we are ramping up the leasing. But it has been very well received. 665 units, so it is a very big project. A good amount of commercial space as well.
Of course, you can see for our student accommodation portfolio, 97% occupancy and still doing extremely well. On the fund management side, I will have more details to share later. This typical slide we always put up. Asset size sits at SGD 24 billion. Of course, we fair value all of our IPs and revalue our hotels, it will go up to over SGD 30 billion. This shows how geographically it is split up.
Not too much change. Singapore is still about 52%, while the rest of our other assets are split across other geographies like the U.K., China, U.S., and Japan and others. GET strategy, all of you are very familiar with. Growth, again, just means building our development pipeline and recurring income streams to really strengthen our financials. Enhancement, enhancing what we currently own and driving operational efficiency in the processes that our teams undertake. Transformation, transforming through new platforms. Starting off with growth first, with G. This was what I alluded to in the first slide last year. We were very acquisitive. We invested SGD 2.4 billion, and this is just our share in all these acquisitions because some of them were joint ventures. I think we are very proud of the acquisitions we made. We capitalized on some of the price dislocations that arose.
We took a fairly contrarian approach last year when our pricing was under pressure. There were some distressed sales. Sellers really wanted to clear some assets, and so we acquired. Obviously, one of the big ones was St Katharine Docks, that office and retail complex in the U.K., next to Tower Bridge and Tower Hill. We have four funding projects for 1NQ , which is in Manchester, and Morden Wharf, which is in Greenwich, London. As mentioned earlier, we acquired a hotel in Korea. In China, we went back into Suzhou, which we are very familiar with, and acquired a land site there. That will have six residential towers and then one sky high tower with an office and a small hotel at the top.
In Singapore, we acquired Champions Way in Woodlands, a very well-located site, as well as, of course, a prime site in Toa Payoh, Lorong 1 , along with our JV partners, Frasers and Sekisui House. In Japan, the hotel in Osaka, I mentioned the PRS projects across Osaka and Tokyo, and then in Australia, finally, the hotel. I won't dive into this much. Again, just shows you our global living sector portfolio. We've really grown it. I would say the GDV now is about SGD 2.6 billion, 4,800 PRS, which is multifamily units, and 2,400 PBSA units. Overall occupancy for the entire portfolio is above 90% for those in operation. There are few in the pipeline that are being built. Launch pipeline for Singapore for next year, about 1,800 units. We have this formerly called Central Mall and Central Square.
You may remember we acquired Central Square, which was next door to our Central Mall development from Far East Hospitality Trust, and then we amalgamated it together and, of course, went for a Strategic Development Incentive Scheme, received a 67% GFA uplift. I named it after one of my favorite spots in New York, where I used to work and live for many years, Union Square. We will be launching the residential probably in the second half of this year. Champions Way in Woodlands, that will be second half of this year as well. Toa Payoh, probably right at the beginning of next year. Of course, Newport Residences, which is our former Fuji Xerox Towers, which is a component of the former Fuji Xerox Towers, that we are still monitoring the market conditions to see when it will be appropriate time to launch that.
We have no ABSD pressure there. These are the projects I mentioned earlier that we completed last year. Really, kudos to our team for diligently handing over more than 2,400 units. On to E, enhancement. We have been doing asset enhancements in our portfolio. I think we have to continue to maintain our competitive position for our priced assets. One is Jungceylon, our very sizable mall in Phuket. As I mentioned in earlier briefings, the mall actually has done really well for us pre-COVID. Every year was an increase in net property income and revenue. It has really done well. We decided it is time to invest in it. It is very worn down. We did a very big AEI, and finally, now we have completed, and we have already achieved community occupancy of 90%.
Thailand, as you know, has also, especially Phuket, relies heavily on tourism, has suffered quite a bit during the pandemic, and they were quite late to open up as well. Having said that, we are very encouraged by this Lunar New Year that we had just experienced, where shopper traffic was nearly triple that of the same period last year. That was nice. Then, of course, our flagship mall. We do not have many malls in Singapore, but our flagship mall is City Square Mall. It also has done well for us, and we have decided that we are going to do a big AEI. We have already commenced on phase one, and that is actually completing within the next couple of months. Phase one is more for the basement levels, including the food courts and all that.
Then phase two, which will be the rest of the mall, will be completing first half of next year. You will see that actually, in doing the AEI, we also took the chance to see how we could decant our M&E facilities so that we can increase the NLA, which we did. We increased the NLA by 26,000 sq ft. That will translate into strong value for the mall as well. Already, for the space under phase one, over 95% has been leased. These are the redevelopments I mentioned earlier. Union Square, technically it is three properties, Central Square, Central Mall, office tower and the Central Mall conservation block. All this will be redeveloped into residential and office, and a few other exciting concepts. We will share more when we are ready to share the details. So far, looking really good.
On the office side, we have an interested tenant that is looking to lease the bulk of the office. I think if we can get that in, that will really give us a great return on this project. Same for Fuji Xerox Towers. We are redeveloping it as Newport Plaza, and that will have the various components as listed there. The residential, the service apartments, and the commercial. We obtained a 25% GFA uplift under the CBD Incentive Scheme. New hotels opening last year, M Social Suzhou, which was the final component opened under our Suzhou HLCC, Hong Leong City Center. Reason being the construction of the hotel was delayed, and the fitting out was delayed during COVID. Maybe it was a good thing it did not open before then. Now it is opened, and slowly we are ramping up the operational performance.
M Social Phuket is a revamp of the hotel that abuts our Jungceylon mall I presented earlier. We have two wings that abut it. These two wings, 400 odd rooms, are now being refreshed and rebranded as M Social Phuket. The Singapore EDITION, which I had mentioned earlier, first edition in Southeast Asia. We also took the chance to revamp our Grand Copthorne Waterfront hotel in Singapore, not only the guest rooms, but also the conference center, which it's been very famous for. M Social, a brand expansion. This has been the brainchild of our Chairman, who came up with this brand, and really positioned as more of a lifestyle brand, catered for people who want to see and be seen. Right now we have six operational hotels and three more in the pipeline.
The one in London is a conversion of an existing Millennium. The one in New York is also a conversion of an existing Millennium. The one in Sunnyvale, California is a new build. All these are the exciting ones that will be coming online. Sustainability. As always, you know that CDL has embodied sustainability as part of our ethos for close to 30 years. It's important we do our part for the planet, to ensure that our future generations have a decent place to live in. I'm glad that we continue to notch up all the many accolades in many of the rankings around the world. We have made our net zero carbon commitment, split into two phases, 2030 and 2050. We continue to work towards it. On the governance and transparency side, we have also been ranked fifth.
Now on to transformation. The part that I think is very, very key, that has always been the lever that will push CDL to the next level. Yes, as we have mentioned, I think 2023, last year was absent of very significant divestment gains. It's not like we didn't do any capital recycling. We still sold quite a lot of stuff. Total sales proceeds over SGD 600 million. Also the good profits. I mean, our total gain was over SGD 250 million for this bunch of properties. The truth is, it can't compare to the year before, right? In 2022. 2022, the one hotel itself, the Millennium Hilton Seoul, the sales proceed was already over SGD 1 billion, right?
When you add on the gain on the deconsolidation of CDL Hospitality Trusts, you add on the proceeds from the two collective sales that occurred, Tanglin Shopping Centre, as well as Golden Mile Complex. That year was a huge year, right? That's why we had a SGD 1.3 billion PATMI. Obviously, we understand that we need to continue to accelerate our capital recycling in order to bring our gearing down. As we buy new, we have to make way for it by selling old, right? Many of our existing assets sit on our books at a low carrying cost. I think we have a lot of ways to unlock value and monetize.
My team is going to cringe when I say this statement, but I think the target I have set for myself and the team, and I hope we get there, is I hope to achieve at least SGD 1 billion of divestments this year in 2024. Big target I have thrown out. I think let's all work towards it. So portfolio harmonization and optimization. We continue, I think, to look at how we can optimize our hospitality portfolio, which we had privatized in November 2019. So you will see that we have done some divestments over the years. Millennium Hilton Seoul in 2022, and then last year, Millennium Harvest House in Boulder, in the U.S., Colorado. And of course, we deconsolidated our REIT, which brought a lot of benefits to us and to our shareholders.
We also recently did an off-market buyback of preference shares, which I think is good for shareholders and for us too. And of course, we continue to drive operational efficiency. We take innovation very seriously in CDL. We have a dedicated innovation committee, and we continue to see how we can improve our operational efficiency as well as deliver better and more innovative products and services to our customers. My last slide before I hand to Yim Ming, fund management. Very important to us as well. Yes, our AUM hasn't quite grown at the pace that we would like. We are currently at $3 billion U.S. And just for clarity, we only consider AUM if they are third party investments in it, and we don't take into account assets that are fully held on our balance sheet. So we are very strict on how we count AUM.
We had intended last year to reach $5 billion U.S., and we would have reached there if we had listed. As you all remember, we were trying to list our two U.K. properties back then, together with another partner who was going to list their property. So we are going to list that REIT in Singapore with the three U.K. commercial properties. That would have added at least $2 billion U.S., if not much more than that. That didn't materialize, so our AUM kind of lagged a little bit. As all of you know, capital markets have not been particularly receptive or favorable over the last two years. Nonetheless, I think we are going to push forward now. We certainly want to do more strategic partnerships.
I have one in mind that I am sure I am going to get questions on today, that we recently did, for a development that we had initially developed in Singapore, on an island. Of course, we also want to grow existing platforms. We have our CDL Hospitality Trust. We have IREIT, which we are the 50% manager, along with Tikehau from France. Of course, we have H Three City , which is our office fund that we are also part of. So we want to keep growing existing platforms. I think most importantly, we have been very acquisitive. Last year, as I mentioned, we made SGD 2.4 billion of acquisition. So we now have a lot of assets on our balance sheet that we can suitably package into public or private formats.
Whether REITs or private equity funds, we have a lot of room now to play with because we have already warehoused many of these assets. Whether it is a new multifamily private equity fund in Japan, or it is a sustainability fund, office fund or something, we have a lot of levers we can pull. I intend to kick that into high gear as well, starting from this year. I think this is how we intend to really accelerate our capital recycling, bring down our gearing, and ensure that CDL is well-poised with stronger recurring income streams moving into the future. Thank you, everyone. Now I will pass it over to Yim Ming.
I was told you can only go forward, right? Okay. Thank you, Sherman. Morning, ladies and gentlemen. Allow me to go through the financial highlights quickly. This slide looks at PBT of each of the segment. On property development, I think Sherman has mentioned, our star performer as usual. Two projects that contributed greatly was our EC project, Piermont Grand, and of course, our Shirokane land site. These two projects contributed SGD 1.5 billion to revenue and SGD 276 million to profits.
Notably, we also made allowance for foreseeable losses for our development projects. This is largely for our project in Shenzhen. Our Shenzhen project, I think what is really left for sale is largely office, which we developed for sale. I think office market is fairly weak in China at the moment, particularly in Shenzhen. On grounds of prudence, we have made a provision for that.
Hotel operations saw top line increase of 9%. Global RevPAR increase is 25%. However, the much lower profits for this segment, I think Sherman has mentioned, is the outsized divestment gains in 2022, which I will not repeat. Notably, I think for this year, in this segment, we also have divested one hotel, which is the Millennium Harvest Boulder, for a gain of SGD 80 million. Notably, the sale price for this hotel was SGD 94 million. This again demonstrates that many of our hotels are carried at low book costs and can generate good profits on divestment. Additionally, with the rebound in the hospitality industry, we also wrote back impairment losses of SGD 54 million, largely for the U.S. properties. These reversals are supported all by external valuations for the hotels.
In terms of investment property, top line increased 32% with basically acquisitions from secondary stock, PBSA portfolio and PRS portfolio. However, this segment recognized a loss in 2023 vis-à-vis a profit in 2022. Again, 2022 has outsized divestment gains, whereas in 2023, I think the divest is also impacted with two things. I think number one was the impairment losses that Sherman had mentioned. This is largely for our properties in U.K. as well as, again, Shenzhen. And of course, number two, the higher financing cost, which hit this segment fairly heavily, particularly for our U.K. properties. Excluding divestment gains and impairment losses, EBITDA has actually improved 27% in line with revenue. Other segment relates to mark-to-market losses on our financial investments. If you noticed, a higher loss in FY 2022, it relates to the full write-off of our exposure to Sincere previously.
Okay, this looks at RevPAR by region. The bar chart speaks for itself. It is clear that all regions improved versus 2022. The strongest outperformer being rest of Asia, as China, Hong Kong, as well as Taipei hotels all did very well and fully opened up. The same for New Zealand hotels as well, although they have not reached pre-2019 pre-COVID levels. Overall RevPAR, I mentioned, is 25% against 2022 on a constant currency basis. We elaborate further on hotel segment. Star performer as well. It did well both in occupancy and ADR. Particularly, room rates have exceeded 2019 levels significantly by 22%. I am sure we all feel the pinch when we go for book our hotels today, right? With this increase in ADR, GOP margins has also improved, so with the flow through.
The GOP margin increase is largely led by the Asia markets. The Union buyouts in New York also improved the GOP margins as well. Next, let us move on to revenue by segment. Repeatedly, we have said we have achieved record revenue of SGD 4.9 billion. Last highest was SGD 4.2 billion in 2018. All three core segments saw increases in revenue. Property development is the biggest contributors at 57%. All three segments has also improved in revenue. Next, we will move on to EBITDA by target. The group always target a SGD 1 billion EBITDA for healthy cash generation. This bar chart at the bottom has removed divestment gains and impairment losses to better reflect the operating performance of each segment. You can again see that all three core segments actually saw an increase in EBITDA.
This is one metric that the group looks very closely at. Now we go on to PBT by segment. PBT is impacted by financing cost and depreciation. Financing cost has gone up by about, on average, about SGD 200 million for the group. Sounds like broken record as well. We depreciate our assets vis-a-vis the fair value model. With the two big cost component, which is financing cost and depreciation, reported PBT dropped by 75%. That is of course coupled by the outsized divestment gains in the previous year. Actually, if I were to exclude the divestment gains and impairment losses, the group's PBT actually increased by 90% in FY 2023. If you can see this chart across all the three segments, again, property development is our star performer.
Hotel operations increased 71%, but if you are wondering why is the bar so short, it is really because the financing cost that we have taken on the privatization of M&C back in 2019 has eroded the profits of this segment. Of course for IP, it is reported a loss, because of financing costs as well as impairment losses.
I will move on to balance sheet. I mean, the group is cognizant that operating resilience is the most important in today's market, so having a strong balance sheet is vital. Gearing has gone up to 61% versus 51% last year. This is really because of the huge acquisitions that we have made in FY 2023. I am very thankful to the lenders in this room that is always supported CDL. Total cash stands strong at SGD 2.2 billion, and available facilities is also very healthy at SGD 3.6 billion.
Average borrowing costs went up 2.4% in 2022 to 4.3% in 2023. This is in line of our projections, and we do look forward to more favorable rate cuts. I guess the question is when. Notably, in January 2023, we did a SGD 285 million MTN program, with two local banks at 3.712%. You look at the five-year MTN at 3.712% vis-à-vis our average cost of 4.3%, I think we are hopeful that this rate will obviously have hit its peak, hopefully. In terms of fixed rate, we are at 45%, including loans denominated in yen and renminbi. Remaining loan portfolio that's really floating to us is about 50%. I think this is a level that we are very comfortable with as well.
Lastly, in terms of debt maturity, 2024 comprises 33% of the debt maturity profile, of which 9% are short-term loans and bank overdrafts on cash pool arrangements. What happens is the group has hotels that's geographically dispersed, so we have a cash pool arrangement with financial institutions that extend overdraft facilities to subsidiaries backed by deposits with other subsidiaries within the cash pool arrangement. This is really for efficient cash utilization. For the loans in the first half of 2024, I think refinancing and repayments have been arranged accordingly. For the second half of 2024, we will be working with the lenders. My last slide. On foreign exchange, we adopt a natural hedging policy. We do not take speculative positions. Since with the recent overseas acquisitions, we have always taken bank loans to kind of hedge the foreign exchange exposure.
You can see that in the key geographical markets that the group operates in, we have a fairly effective hedge, about 72% natural hedge. With this, I hand over back to Belinda. Thank you.
Thank you, Sherman and Yim Ming, for the presentation. We would now like to move to the second part of today's briefing, which is the Q&A. Please feel free to ask your questions. My colleagues are standing around the room with microphones. If you have any queries, please raise your hands, and they will come to you. For those who are on the webcast, you may also pose your questions by clicking on the question tab. Before asking any questions, may we please ask you to introduce yourself and also the organization that you represent. I already see a hand right in front, so I'm just going to dive straight in. Mervin, would you like to pose the first question, please?
Thanks, Belinda. I'm Mervin from JP Morgan. My first question in regards to that asset recycling, that SGD 1 billion target. What is that mainly composed of? Is it just the U.K. offices? Which means that SGD 1 billion seems not very ambitious at all. Your thoughts on, because I noticed there are two new subsidiaries in U.K., REIT subsidiaries. Are you also considering selling some of the rental housing PBSA? What are your thoughts in terms of Stag Brewery site, whether you are looking to dispose of that? Maybe a question for Yim Ming. I remember the chairman said the interest rates cannot go up forever, probably last year. Any guidance in terms of where you think the borrowing cost could drop down to, based on the spot rates that you can see and the upcoming refinancing for this year? Thanks.
Morning, Mervin. Thanks for your question. The target I kind of set there for us that I hope we will exceed of at least SGD 1 billion. That actually does not factor in any U.K. office, because I still think that probably the best format for our U.K. office portfolio, which has now reached institutional level of GBP 1 billion sterling, is probably a REIT at some stage. I do not think the capital markets are going to be that favorable this year for REIT, at least not from what I can see. My target has not included that inside. There is a variety of stuff that I have included inside, some of which you have mentioned. It could be PBSA, in the U.K., it could be PRS in Japan.
There are a variety of things I have inside, of course, and then there are various assets that we are looking at throughout our portfolio that we feel are non-core, and those we will look at towards achieving our target. Of course, as I mentioned earlier on the fund management, there are strategic partnerships as well. We may also consider selling core assets. Not 100% stake, but maybe a partial stake in it into a fund-like structure that we will then manage. All kinds of things we are looking at. We do have a firm list, I just do not want to share it for now. Hopefully, as the months go by, you will see things materialize. Hopefully it will not be weighted to the back end of the year. I want to see this constantly evolve throughout the year. Thanks.
On the TISE listing, we have listed two companies on the stock exchange. I think they are really more for tax structuring purposes. You noticed the Royal Assent was handed down on 22nd of February, so we have kind of made it just in time. I think it is for two things, of course, number one, for tax structuring purposes, for tax efficiency. As we know for REIT taxes, it is slightly lower than a normal corporate tax in U.K., which is at 25%. Seriously, who knows after the elections what it will be. Of course, the second part is, we wanted to demonstrate that we are structure ready. Really, whichever fund management platform, private or public, that Sherman is willing to take, I think that at least we are structure ready. That is on the front of that.
You remember the chairman says that interest rates cannot go up forever. I hear this every month, but yes. At 4.3% right now. When we recently issue our MTN at about 3.7%, I think we are hopeful that 4.3% is hopefully the peak of where we are. We do hope that it will close in this year towards the low end of 4%. As for the rate cuts, I think like many of you, we are probably not expecting any in March. Hopefully towards the June meeting.
Okay. Can I have the next show hand? Okay, maybe I will go to Vijay first, and then I will come to Felicia maybe. Vijay, why don't you take the second question?
Hi. Vijay from RHB. I have three questions. Maybe I will take it one by one. Firstly, in terms of acquisition, do you have acquisition target for this year? You mentioned divestment target. Last year was a bit heavy on acquisitions. Maybe do you have an acquisition target for this year? How do you look at net gearing perspective? Your gearing has been going up and your interest cost is eating up a lot of your revenue growth. What is your target gearing for 2024? That is my first question.
Okay, Vijay. I will tackle the first question. We do not usually share acquisition or divestment targets. Although I have just thrown out the divestment target for 2024. I think going forward, we may consider in future, potentially. We do have internal targets, but we do not usually disclose them. But I may consider disclosing to you, I think how we look at the acquisition and divestment pace.
Obviously last year, as you have mentioned, based on what I said, it was a very acquisitive year, SGD 2.4 billion of acquisitions. Mainly because we just saw a lot of great price dislocations where we could really capitalize on things when market conditions were not favorable. I think this year, certainly there will be a greater focus on the divestment side. We will still acquire when we see good deals to be done, and obviously we still will participate in land tenders. For instance, in Singapore.
The emphasis is certainly going to be on capital recycling for the year. In terms of gearing, yes, we moved up 10 percentage points. We are at 51%, now we are at 61%. It is not the highest we have been to, and certainly not the highest for property developers in Singapore. I think you have some developers that are 90-over percent, 100%. Rest assured, we are not going there. I do not think we ever want to cross, for instance, 70%. But that is not to say that we are going to get there as well. I think it just depends on how fast we get our capital recycling in. But I am hopeful of that. We stay within this 60%-65% for the time being. You are absolutely right, Vijay. Our net financing costs have really eaten up our profits.
Our net financing cost was about SGD 200 million in 2022, and for last year it was SGD 400 million. So it lopped off an additional SGD 200 million off my PATMI, right? It is really a heavy burden on us. And most of our acquisitions are debt-funded, so that further compounds the problem. But having said that, I think last year was a good year for us to make the acquisitions that we have made, just because I think we got really good metrics for it, like as I shared earlier on St Katharine Docks. We got it at over 7% yield. So, at least that is not even a negative carry there.
The key, I think for us, going forward, is to ensure that we manage the capital recycling, and accelerate it, as well as obviously up to our dear CFO, Yim Ming, to ensure that we start to refinance as well at lower rates. I think the expectation is that rates should start to come down the second half this year. It is something I think the global economy really needs. Anyone who owns a mortgage in this room also knows how painful it is to suffer from high rates. But the expectation is that things should improve this year across the board.
Okay. Thank you. My second and third question, I will just ask it together, maybe. CDL seems to be a bit contrarian in the U.K. market. I think you have been aggressive, a bit aggressive in the last two years when others have been selling. Maybe can you share your strategy in terms of what are your thoughts in U.K. market? Would you still be considering this as a pivotal market in the next two, three years?
My third question is in terms of Singapore. Can you share a bit more color in terms of your land banking strategy? The outlook seems to have softened a bit. Would you still be buying a site, especially in high-end segment, where you have a project? Can you also share a bit of color in terms of the margin assumptions which you are making, especially with rising construction cost environment. Thank you.
Insofar as U.K. is concerned, my belief is that we should be present there, more active. Firstly, in the States, they have endless problems. In E.U., they have also problems. So what do people do? They come to U.K. U.K., I believe it is not difficult to do business there because it has a lot of potential, especially you deal with the British. They are always all right, Jack. So I am very confident in the U.K. In Singapore, I think we are going through a period of helping the not so rich. This is good for Singapore. But in the longer term, the world is upside down. My preference will be in the United Kingdom because E.U., whatever they do, they still have to go to U.K. U.S., whatever they do, they still go to U.K.
Singapore, we all like to go to U.K. because we think there are opportunities. I go in when nobody dares to go in. I come out when everybody wants to go in. That is my philosophy.
Thank you, Chairman. You can see he's a big believer in the U.K., having also spent many years there. To be more sector specific, I think we are still very optimistic about the U.K.'s future. Even after Brexit, we all know that the U.K. plays a very significant role and cannot be totally, so-called, segregated aside or left out. Office sector obviously is going through some rumblings as well as will be the case right now with the high interest rate, high inflationary environment. As our chairman had alluded to, if you look at the office sector, it's nowhere near the U.S. office sector, which itself is going through a shakeout that all of us are thankful not to be part of. I think U.K. office demand will start to stabilize and will strengthen over time as well.
On other asset sectors, the asset classes that we're in, such as PBSA, which is Purpose-Built Student Accommodation, still you've seen the numbers for yourself. Still very strong. Rents are strong. Occupancies are very high. I'm sure you know many friends that still continue to send their kids to the U.K. for education just because the economy is not great or there's some political changes in the U.K. Parents still don't stop sending kids over there. The U.K. still offers very good quality education. Likewise, I think for the PRS, or as we call it, or multifamily, as some of you call it. Same thing. I think that's a global theme. We expect that the multifamily segment will continue to strengthen and grow, not just in the U.K., but in Australia, in other countries. In Japan, it's growing strongly.
I think as housing prices remain high and labor mobility is also very high. People now are very mobile. They can move and live anywhere in other cities or countries. I mean, a lot of people are turning to renting, to avoid paying a hefty mortgage, taking on a hefty mortgage or down payment. So I see this as a continuing trend. U.K. definitely has a strong, favorable business environment, with a sizable population that is, again, mobile, moving between cities, right? Whether it's London, Leeds, Birmingham. So I continue to be quite bullish on the U.K. outlook. Having said that, this year, obviously, as I said, I think the focus, the emphasis, will be more on capital recycling.
Land banking in Singapore. Yes, as mentioned earlier when I presented, things aren't as smooth as they used to be. In fact, every year the difficulty keeps increasing. We have new cooling measures and of course, costs have gone up. Land prices still remain high and most tenders for good sites are usually very ferociously combated. So it's not easy. I think we will continue to replenish our land bank. We try to keep our margins high. Really, at the end of the day, your cost is going to be fairly fixed as costs stabilize now. So it's a question of what are your projections for the ASP, right? For the average selling price. But we still try to be disciplined and keep to certain margins, when we bid, so that we don't continue to see a margin erosion.
This year we will certainly still participate in some selective land tenders. We are going to be very selective. Obviously there are some very big ones coming up. We will see how things go.
Okay. Thanks, Sherman. I am going to pass the time over to some of the media folks. Felicia first, and then later I will take Dexter. Felicia.
Hi. A while ago we saw that Facebook was giving up space in South Beach, which you guys have a stake in. I wanted to know what is the impact and whether you have found a replacement tenant. My second question is, are you able to reveal how much CDL has invested in the U.K. collectively? What is the current valuation versus the purchase price?
Okay. South Beach, I think, came out in the paper, said that Facebook may not be renewing the lease, but they still have a long way to go. In fact, I think as my manager mentioned in the press earlier, two of the floors already more or less committed and a few more are already looking at taking up the space. We are quite confident with the location, and the reasonable rent that we are asking. We should be able to fill it up quite soon. Thank you.
Felicia, just to check, you are asking about our total investment in the U.K., and what time period is this over, just 2023 or?
Since 2012 or 2013. Basically, like a sort of 10, 12 year period, is it? We will tabulate it for you in a second because we have a lot of stuff over the last. We will come back to you at some point. Thank you.
Felicia, just very quickly, in terms of total assets we have in the group is about SGD 24 billion. U.K. market right now is about 19%. That is about SGD 4.5 billion. This comprises a few parts. Number one, of course, the hotels that we have had a historical cost. Those were acquired many, many years ago. Number two, will be the U.K. commercial portfolio that we acquired from 2018 onwards. In 2018, we acquired two, plus SKD. That is in the range of about GBP 1 billion, thereabouts. Then of course, we have the living sector, which is the PRS, as well as the PBSA that we are progressively building. That is close to about another GBP 1 million. So valuations are inching slightly above for the PBSA portfolio as well as the PRS portfolio.
For the U.K. properties, I think we have taken some impairments, largely for the two that we acquired in 2018. That is really for Oban Street as well as Aldgate. St Katharine Docks, I think we acquired this year in March 2023 at a very good cap rate. So I think that is fine.
Okay. Maybe I move on to Dexter. Dexter, would you like to ask your questions?
Hi. Morning. Dexter from Bloomberg News. Two questions. One on the Singapore property market. Obviously you guys were early proponent of this kind of luxury apartments, things like the sale, for example. With 60% ABSD, especially using foreign demand, do you see this model, especially appealing to luxury apartments, appealing to foreign buyers, sustainable going forward? Is that something you guys would eventually pivot away from? The second question on property development, specifically. Obviously, you guys mentioned a bit about fund management just now. Quite a lot of developers obviously struggling with the margins. Are you guys looking to kind of pivot away from developing towards more fund management kind of activities in future going forward? Thanks.
Thanks very much. What was your name? Sorry.
Collin.
Dexter.
Collin, is it?
Dexter.
Oh, Dexter.
From Bloomberg.
From Bloomberg.
Yeah.
Okay. Hi, Dexter. You are right. We have certainly undergone a fairly rough time, and as I mentioned when I presented last year, imposition of the 60% ABSD on foreigners was not too helpful, especially for luxury developments. I mean, for non-luxury developments, either in RCR or OCR, usually you will see less than 10% of foreigners. A very small percentage, usually. But for centrally located projects, in downtown or Orchard Road, kind of a Cairnhill location, you are looking at a fairly sizable amount of foreigners to support it. So it is not that we will stray away from these projects. I think if the right project comes up, and the metrics are good, we could potentially either tender for the land or do a private acquisition or collective sale of it. But the numbers just have to work out.
Again, it's not to say that luxury projects was definitely underperform at the moment. If the luxury project is done well enough, I think there will be a fair amount of buyers for it as well. An example is Boulevard 88, right? There was still a very healthy amount of a very large proportion of Singaporeans that bought too. It wasn't just fully dependent on foreigners. But, as mentioned earlier, foreigners do make up a sizable proportion of the buying base when it's a luxury project. So just got to be cautious, but doesn't mean we won't ever do it again. Same with land tenders. I think we will continue to participate in land tenders. I think we will bid in a disciplined manner with our margins and our estimates in mind.
But we want to accelerate our fund management, but doesn't mean that's going to be at the expense of our development side. Our development side is still very important. Of course, aside from Singapore, as you've seen on the chart I put up, we are also undertaking development in China, in Australia, in the U.K. So we've also gone overseas to accelerate our development pipeline. There, margins are still very healthy.
Okay. I have one question in front. Maybe I'll take the question from Rachel.
Hi, good morning. Thanks for the presentation. A few questions from me. Maybe just start off with PRS and living sector. I think it's been growing very strongly for your portfolio size. Just wondering, is it big enough for you to look at the portfolio, and big enough for you to eventually lease it out in the future? Second question is really on share buyback. What are your thoughts looking at the share price now? Can you execute the share buyback soon? My last question is, what are your thoughts on Jurong Lake District? Is it something that you would consider to JV, take a small stake with some other developers to develop that? Yeah.
Rachel, good to see you again. Thank you for the good questions. I think the first one was on our PRS or PBSA sizes, all that. I think yes, certain parts of it, I think we have grown it to a good enough scale. For instance, with our Japan PRS portfolio, which now we have 38 properties, that amounts to something around JPY 70 billion. I would say sizable enough. If I want to do a private equity fund, and you add in some leverage, definitely sizable enough to do. Of course, we can also package things across asset classes or whatever we needed to. It depends on investor appetite and, of course, the geography as well, whether it's a country specific fund or whether it's a regional fund. So there are various things that we can do. These are not just talking motherhood statements.
We're already in talks with people and there's been a fair amount of investor interest. So that gives me quite a bit of confidence and optimism. Share buyback. Really, we think that our share price is at a ridiculously low level, and we have considered starting the buyback many times, and each time we hold off.
Again, if we do the share buyback, it's not because we are trying to so-called improve or strengthen the share price. The main rationale for doing it is because investing in your own shares, which are deeply undervalued, is as good an investment as any other, right? So, it's something we've looked at many times, and we're really at levels that we can already start the share buyback, and we have already earmarked a fairly sizable quantum to do the share buyback. But I think we have just held off for the time being.
It's a good question. I do not know when we'll put it into play. Obviously, the share price has gone through quite a bit of a tumble, so it's definitely making the value proposition even more attractive now. So it's something we are still considering. But I can't say with certainty when or if we will do it. Lastly, for JLD, for Jurong Lake District, certainly we're very interested. I can't share too many details, but we are very interested.
We've been looking at it over the past year. Singapore is trying to position JLD as the second CBD in Singapore. The government has invested a lot of money into really enhancing the district, building out the infrastructure, beautifying it, and of course giving it new connectivity. So I think JLD is going to be a very promising precinct that's going to be full of future potential. So we are interested. Yeah.
Sorry, just to jump in. On the first one about the REIT, I think you also need to bear in mind we do have a CDL Hospitality Trusts already, and they also do acquire PRS and potentially PBSA as well. I think that's another option that we do have. Also on the share buyback, it's always a trade-off, right? About whether you want to use the cash to buy shares or do other acquisitions. I think last year we have been very acquisitive, and I think we also need to take into account our gearing as well. I think these factors all play a part in deciding whether we want to start the share buyback. Yeah.
Okay. Is there any more questions on the. Okay, Mervin, any more hands? All right. I'll pass it to Yew Kiang first, and then after that, Mervin, you can close up with the last sets of questions.
Hi. Yew Kiang from CLSA. Just on data points like your PRS, what's the asset yields that are for Japan and say, the U.K. currently, and then also on the U.K. commercial portfolio that you have. What's the NPI yield currently? Yeah.
For U.K. PRS, we only have one that's completed, but you're probably looking at about 5%, slightly over 5%. Okay? On so-called Australia, you're looking at probably about the Australia, we have two PRS projects, but they're under development, one in Melbourne, one in Brisbane. When it's completed, we expect the yield to be probably about 5% or so low, around 5%. Japan is lower, obviously, because it's still a very attractive market, and a lot of investment has been pouring into Japan for these recurring income assets. Japan, for Tokyo, you're looking at probably about 3% or thereabout. Obviously, there's some aggressive investors that have gone below three, even in the twos. We haven't. But you're looking probably about 3% or slightly above 3%.
In Yokohama, which is a suburb of Tokyo and a strong feeder in Tokyo, Yokohama, you are looking at probably high 3s, and then high 3s to around low 4s. In Osaka, you are looking at probably low 4s to high 4s, depending on when you had acquired the asset. I would say, blended together, we are probably looking at about 4% for Japan. But I am borrowing below 1%, right? I am having a great spread there.
The second question on divestments, the SGD 1 billion that you have. Will it be fair to say that given that the hospitality segment has picked up, this is probably a good time to capture some of the gains and divest some of these? Is this an asset class that you will be considering more focused on?
I will turn it to our hospitality expert, both Chairman and Eik Sheng. Are we going to further deepen our hospitality exposure and footprint with acquisitions and stuff?
Obviously, we will do so whenever there is opportunity, because from day one, I have learned a lot about hospitality business, and it is in my blood. I will try to target it with a zoom, and all of us will be happy.
I'm not sure. Is your question more about are we going to sell hotels?
Yeah.
Well, let me answer this. All our hotels were bought at cost. If we were to sell one, we can make fantastic profit. But it's not in my nature to sell good asset. We have about, I think, 200 odd hotels. They're all at cost. So one day you'll be very happy with me when I sell everything. I say goodbye.
To add on to that, we are looking at selective hotel divestments. But at the end of day, you have to remember that Millennium & Copthorne is a chain of hotels, right? It's a brand that our chairman has painstakingly built. So it's not likely that we're going to sell the entire portfolio or even some of the core, the key assets in key gateway cities. But there are a lot of non-core, non-gateway assets that we are looking at as well. So it's something we are It's certainly on our radar. Eik Sheng, you want to add on to that?
Yeah. Let me just share a bit more about the Boulder sale. Actually, we operated it as a hotel, but when we sold it was actually on a basis that it would be converted to student accommodation, and they did take some time to get planning. So I think we have said this before, we do review the portfolio and see whether some of these sites are highest and best use may not be hotel anymore. There may be other users, and that kind of process takes quite a bit of time. So there are other sites we are exploring. This will take some time as we go through the planning. But in the meantime, I think what chairman shared is that, we are very committed to operating these hotels, especially in the key gateway cities. We definitely want to be there.
I think it's really more about enhancing the assets, which is why we've shared quite a few plans about them, especially in New York and London. These are the key assets that we do have, and we want to make sure we generate the proper returns from them. Yeah.
Yeah. For those analysts that remember from many several briefings ago, I shared that when we privatized M&C, shortly after that, we started embarking on the exercise. Of course, slightly curtailed by COVID, but we have placed the hotels into four buckets. For hotels that we want to divest, as Eik Sheng has mentioned, sometimes the highest and best use is not necessarily hospitality anymore. It could be a student accommodation, it could be a PRS. Then we will look at whether we have the expertise to do that in that market, and whether we have a competitive edge versus other developers. If we don't, we'd rather sell it and pocket the gain. So Boulder is one of those. Yes, we want to run PBSA, but right now my portfolio is in the U.K. I don't know anything about the student accommodation market in the U.S.
We thought we'll sell it. We made a gain of SGD 80 million from selling Boulder. So it was something that worked out really well for us. As Eik Sheng mentioned, this takes time because the guy who wants to buy it, the buyer also needs time to go and figure out whether he can get the planning for student accommodation, all that. When he was satisfied, then the deal transacted. So sometimes these may not occur as fast. Again, that's why I'm saying we will pace out our capital recycling. So there are some low-hanging fruits and of course, there are some things that require more gestation. But over time, I think you should see more action from us.
Okay. Thanks, Yew Kiang. I'm going to give the last set of questions to Mervin so that you can ask the last question. Ready?
Thanks, Belinda. Lucky last. I just want to follow up on these asset divestments. Hopefully, you can exceed that SGD 1 billion. Is the priority to reduce gearing, or will you be giving us investors a special divvy by year-end to reward their patience? The other question I have in terms of your follow-up, in terms of your comments about strategic partnerships and your comments about selling core assets, is that working with other funds management groups, and maybe even selling stakes in Republic Plaza, for example, if that is considered core. Then the final question in the hotel side of things. Second half RevPAR for Singapore and U.K. seem to have growth has moderated. Are we expecting a similar type of growth for 2024 for those markets? Or you think the growth can actually accelerate with the return of Chinese tourists? Thanks.
Thanks, Mervin. You had to end this session with a bang. First question on divestments and special dividend. Yes. We always try, I think, to reward our shareholders for steadfastly supporting us. If you look on the year that we sold Millennium Hilton. We did make I think we did share the spoils of the war with our shareholders as well. Of course, when we deconsolidated the REIT, we did a distribution in specie to our shareholders. So we do try, I think, to share the upside. Of course, at the end of the day, what is more pressing is the company's needs. So we do need to obviously reduce our gearing. That is a key priority for our capital recycling. Resultantly, reduce our very heavy net financing cost.
At the same time, we want to leave, although we have a nice cash halt, thanks to also Yim Ming, who really guards over it, and safeguards it well. We also obviously want to leave enough dry powder for future acquisitions. So variety of, I think, uses that we have from our divestment proceeds. But certainly, we do keep our shareholders in mind and do want to reward them with special dividends, as and when appropriate. On the fund management side.
The partnerships for safety.
Oh, partnerships.
Yeah.
When I mentioned core building, I was thinking, oh, no, some of them are going to think Republic Plaza or something. Republic Plaza, probably not, because we are really proud. The asset's our flagship. It's where the entire CDL staff, management team and staff, are all located. But we have other buildings in Singapore, whether office or resi or whatever. There are other things that we can look at. And yes, you're right. Some of the strategic partnerships we're referring to could be that we inject it into a fund where we also continue to take a stake in it, whether minority or majority, and we have third-party investors. So making it more like a true external fund. Things like that will all be considered, and they are already in the pipeline. And I'm already in discussions with investors.
Again, I hope, throughout this year, we will be able to unveil more things.
Thank you.
Maybe just to quickly talk about the hotel side. Those two markets you talked about, I think you are right. The pace of growth, I think back to recovery, was very fast, and I think 2023 was also outperformance year. I think for this year, it really depend on the type of events, and I think Singapore, of course, has been a shining example. With Taylor Swift and everyone coming down to Singapore. We had the air show as well in February. So I think if the pace of events continues, I think we, of course, do expect quite optimistic growth in Singapore's market. U.K., I think pretty stable. I think once we come back to second quarter onwards, we have the whole Middle East boosting the numbers as well. I think the big question mark is whether China will start to return to both these markets.
I think nobody has the answer to that. I do not think we are very optimistic they will start to return so soon. But in the meantime, we have actually found other source markets to kind of boost those numbers. I guess when that market does open up, it will be icing on the cake as well.
Okay. Thank you. We have almost come to the end of our briefing, but I want to give the opportunity to the panelists, and in particular, the chairman, if he would like to just close off with some closing remarks.
My task here is to find opportunities. I have been to Phuket. I know the in and out of Phuket. I know the Russian are there. I can create things for the Russian. My property there is first class, very good. You should go there and enjoy. I do enjoy myself. My task is to build relationship. Like the owner of Tanglin Shopping Centre, Tanoto. His name is Tanoto. I met him. I met him actually a long time ago. We just recall, we met each other some time ago. But he has already forged a good relationship with me. We are going to do things together.
Y ou see the board, Tanglin Shopping, tomorrow, that is him. He is in the paper business, but he does not know much about U.K. I am going to bring him to U.K. He will love U.K. I bring him to Hard Days Night. You know, just like many of you love the Hard Days Night. It is not so hard for me, but hard for other people.
I also want to say to you that I am building good relationship with a lot of people. I think we can do deals together. Nobody will be the loser. Everyone participating will be the winner. I would like to say that my task is to build good relationship with people who are very influential. They will bring deals to me, I will bring deals to them, so we can be in joint venture. That is my task. I would love to do all this to the advantage of everyone. Thank you very much.
Thank you.
Thank you, Chairman. On that note, on opportunities, partnerships, it actually comes to the end of our briefing. On behalf of the CDL team, thank you for attending. Thanks to all our webcast audience for joining us. Refreshments are served outside, so do stay back and join us for a cup of coffee. We hope to see all of you very soon. Thank you very much. Have a good afternoon.