Morning, and welcome to Frasers Centrepoint Trust's results announcement for the second half and the financial year 2024, ended 30th September 2024. We have put up the results announcement this morning on the SGXNet, and we hope you have a chance to go through them. We are very pleased today to have the management team, led by Richard, the CEO, Annie, the CFO, and our Head of Asset & Investment Management, Pauline Lim, and the IR on hand here to give you the run through of today's results. Without further ado, let me hand this over to Richard to kick off the presentation. Richard, please.
Yeah. Thanks, Fung-Leng, and good morning, everybody. Thanks for joining us this morning. As what Fung-Leng mentioned just now, the deck has already been uploaded. Hopefully you guys had some time to go through and digest the deck so that we could have some discussion at the end of this presentation. I'm just gonna go dive right in to share some of the key highlights. Firstly, on the financial front, if you look at this slide, it seems to suggest that both our revenue and NPI has dropped slightly over 4%. But, if you want to compare like with like, and we exclude Changi City Point, which was sold in October last year, and also the impact of Tampines 1, we actually did better, more than 3% higher in terms of revenue and also NPI.
Some of the details, Annie will share a little bit later. Next slide, please. Yeah. Okay, so in terms of DPU, second half, it's managed to achieve the same level as last year, SGD 0.0602. This brings our total DPU to SGD 0.12042, marginally lower than last year. But we are still being able to achieve a DPU of above SGD 0.12. I think we have been doing so, with the exception of the 2020 pandemic period. We continue to be able to deliver a strong set of our financial results. Okay, this is where we look into more details from the operational perspective. What I'd like to say is, firstly, our occupancy rate remains very, very healthy at over 99%, 99.7%. We've been achieving 99.9%, 99.8%. Again, this is a testament of the demand that we are seeing from the market, right?
The demand across our portfolio has been very strong. Continue to see very close to full occupancy, and in some instances, some of the malls are actually at full occupancy. That actually flows down to the sales performance as well. For the full year 2024, we managed to achieve 1.2% growth in our sales. Probably you would have seen from the market there's been some softening in sales overall. But from our portfolio, we are still able to achieve a 1.2% increase in sales, not forgetting that we actually had a pretty high base on the last couple of years. If we take this set of numbers, you compare it back to 2019, we actually achieved a sales growth of about 20%. We have been able to continue to have a very positive trajectory from the sales perspective.
In terms of shopper traffic, continuing to inch up 4.2% year-on-year. We are probably about slightly about 10% of the pre-pandemic period. Again, as more people return to work, different arrangements are put in place, but we are continuing to see this inching up, 4.2%. Rental reversion, again, something very strong for this year. We have achieved about 4.2% in 2022. Last year we did 4.7%, and this year, we achieved 7.7%. Over and above that, Pauline is going to share a little bit later on, is that we are still at the occupancy cost of about 16%. So very healthy occupancy cost, very strong demand at a strong occupancy rate. Sales are still holding up, traffic returning and reversion very strong. All the operating metrics, the performance is very robust for our portfolio. Leverage, not much have changed.
We are currently ends at 38.5% gearing level, and our cost of debt has been flattish at 4.1%. The height of what we have seen so far is first Q 2024, that is at 4.3%. But I think probably since then, rates have come down and so on. We are now at 4.1%. This is kind of a snapshot of what we have done this year. Again, we have done a lot of work around investment, around divestment and also in the ESG front. We kick off the year in October with the completion of our sale in Changi City Point, and then we follow up by the announcement of our acquisition of the remaining 34.5% stake in NEX in January, which was completed in March. Our AUM has since grown to SGD 7.1 billion.
At the same time, we also joined the Straits Times Index in March. Again, that gave us a wider perspective, a wider audience from the investor front. That has helped also in terms of our volume of trading for FCT. We also announced the completion of our AEI in Tampines 1, and later on, Pauline will go into a little bit of detail. We are very happy with the outcome of the AEI works and the tenants that we've been able to bring in, and also the response from the shoppers in the Tampines area. We have been getting very good positive response, and also from the tenants themselves. Separately, at the ESG front, again, we have done quite extensive work around that area. In January, we roll out the first of its kind food waste valorization at five of our malls.
Again, this is something that not only help us in terms of our ESG journey, but there are also cost savings components to that. What we have also done is in April, we announced the launch or the marking on the works to provide solar panels across six of our malls, FCT portfolio. A lot of things have happened. We continue to work on growing our portfolio, reconstitute our portfolio, and also not forgetting our journey in the ESG front. Overall market perspective. You guys are probably aware of all these numbers. Not going to go into much detail, but safe to say that Singapore economy continues to grow between 2%-3%. That's the latest that we have. But also importantly, looking at the inflation numbers, it seems to have stabilized and the projection is between 2.5%-3.5%.
That is on the back of also the fact that our GST is now at 9%. If you strip that out, the overall CPI would come in between 1.5%-2.5%. That kind of would help, whether from the cost perspective for us, cost perspective for the retailers as well. From retail sales, the wider market, you see some softening as I mentioned just now. On bullet point 2, what we have put together, if you look at from January to August for the retail sales index, because they are typically only announce the result one month after, so the latest number we have is up to August. From January to August 2024, overall, there has been a drop of 0.6% year-on-year. What we did is we also map out the same period for our FCT sales numbers.
From the same period, January to August 2024, we actually saw a 1.9% increase. So we are outperforming the wider market. The figure that I shared earlier on at 1.2, that is for our full year financial period from 1st October to 30th September. So it is a different period. In terms of rent, you can see in the second bullet point there from the suburban prime retail rents, again, continue a positive trajectory, 2.1% year-on-year and 0.5% quarter-on-quarter. So it is a different measurement. This they only look at prime retail space. We have a basket of transactions that happen. From our perspective, we look at our reversion. As mentioned just now, we are able to achieve a 7.7% reversion across our portfolio. Supply continued to be muted.
If you look at for the rest of 2024 all the way out to 2027, you are probably looking at slightly over 1 million sq ft of NLA, about 1.1 million. This is spread out all across the island. There are a lot of smaller ones, part of a development without much of a significant size with the exception of Punggol Digital District. Even then, that is not really as what you would say a mall per se. It is pretty well spread out. It is more a linear type of shopping place in the Punggol Digital District. But overall, remain to be muted, slightly over 1 million sq ft of NLA. Okay, next we are going to look at the financial highlights. I will pass on to Annie to share with you the numbers. Annie, please.
Thank you, Richard. Good morning, everyone. Let me take you through the financial highlights. For the second half results, gross revenue is 2.5% lower as compared to corresponding period last year. This was due to the absence of revenue contribution from Changi City Point, which was divested on 31st of October 2023. Excluding Changi City Point and Tampines 1, which underwent AEI during the year, gross revenue is 4.1% higher mainly due to the higher physical occupancy and higher rents across most malls. For property expenses, it is 6.9% lower due to the divestment of CCP. Excluding the effect of the Changi City Point and T1, it is about 2.1% higher due to the higher utilities, higher property tax, which is offset by the lower maintenance expenses. This translate to a lower NPI of 0.6%.
Distribution from investments relate to the distributions from joint venture, which holds Waterway Point as well as NEX. It is 34.5% higher due to the six months contribution from the additional 24.5% interest in NEX, which was completed in March 2024 this year. For DPU, for this second half, it remained unchanged at SGD 0.0602. Next slide, please. On a full year basis, gross revenue is lower by 4.9%, mainly due to the divestment of Changi City Point and Tampines 1, which underwent AEI. Excluding the effect of both factors, gross revenue is 3.5% higher, mainly due to the higher rental income from new and renewed leases, as well as the higher turnover rents. As for the property expenses, it is lower by 5.6% due to the divestment.
Excluding the Changi City Point and Tampines 1, it is higher by 3.8%, mainly due to the higher utilities costs, as well as the higher property tax arising from the higher annual value. NPI is 4.6% lower than last year, but it is 3.4% higher if you exclude the effect of both Changi City Point as well as Tampines 1. We recorded higher distribution from investment in 2024 by 29.3%, which actually mitigated the impact from the divestment of Changi City Point during the year. With the full half DPU of SGD 0.0602, this brings us to a total DPU of SGD 0.12042 during the financial year. Next slide, please. The net asset value has decreased by SGD 0.03 to SGD 2.29 as at 30th September 2024. Next slide. We continue to report healthy financial position with a stable average cost of debt.
As at 30th September, the aggregate leverage is at 38.5%, which is 0.6 percentage point lower than last quarter. The ICR is healthy at 3.41x , which has improved compared to last quarter. This is mainly due to the Q1 contribution with the completion of the AEI, as well as a decrease in the borrowing cost from a lower loan quantum during this period. Cost of debt remained low at 4.1%, and 71.4% of our debt has been hedged to fixed rate. Total undrawn facilities as at year-end is about SGD 786 million, and our credit rating remains unchanged at BBB Stable and Baa2 Stable for S&P and Moody's respectively. Next slide, please. We have a well spread debt maturity profile as can be seen from the chart.
I am pleased to inform that we have no refinancing risk this year, as we have already secured all the facilities that are needed to refinance all debts due in 2025, moving the debt and maturity profile further to FY 2030. Next slide, please. We have a stable appraised portfolio value as compared to last financial year. The aggregate appraised value of total portfolio, including 50% of NEX and Waterway Point, increased by about 1.2%. This is mainly due to the higher appraised value from the completion of Tampines 1 AEI and improved rents in NEX. The capitalization rates adopted by the valuers remain unchanged as compared to last year. Next slide. For DPU, SGD 0.0602 for the second half, it will be paid on the 29th of November 2024. I will now hand over to Pauline, who will take you through the portfolio highlights in the next section. Thank you.
Thank you. Thank you, Annie. Hi, everyone. It is great to connect with everyone again this quarter, and like what Richard had alluded to in his earlier presentation, we do have a good set of results to share. On this slide, you see the committed occupancy still remaining very robust at 99.7%. In terms of the high occupancy that has been achieved, it actually is across the portfolio. Each of the respective malls have contributed to this very, very good level of committed occupancy. I wanted to also highlight for Tampines 1, we have ended the AEI or concluded the AEI on a very good note with 100% committed occupancy level. Next slide, please, Fung-Leng. Revenue and NPI.
Again, we see that broad-based performance improvement across our portfolio, and this strengthened financial performance is driven by both top-line growth as well as savings optimization of OpEx. This is very much through a lot of discipline and focus on ensuring that our OpEx is at a manageable level despite the inflationary headwinds that we are all facing. Next slide, please, Fung-Leng. I shan't go into a lot of details. I think Richard spoke at length on the footfall, as well as the sales growth. He mentioned earlier that in terms of the sales, we have actually outperformed the broader market. That is largely attributed to the fact that our positioning is very much in the everyday lifestyle, convenience and so forth. That has accorded us with resilience in terms of our sales performance.
Also the other reason for the strong performance, I would attribute it to our focus on refreshing our offering. This is to ensure that how we are performing is sustainable. We continue to meet the needs of the shoppers. Also we continue to drive the footfall to our malls, and also through targeted marketing that I will speak about in my subsequent slide. Reversion, 7.7%. On a year-on-year basis, our rental reversion has stepped up by 3 percentage points, which is a commendable outcome. That is across 31% of our portfolio NLA. Next slide, please, Fung-Leng. Effective occupancy cost at 16%, very healthy and sustainable level.
It gives us the headroom for further organic growth as the leases come up. This strong trading performance of our malls, as well as the high space productivity as seen in this very strong occupancy cost of 16%, it actually enables us to then in turn bring popular concepts and brands to excite our shoppers. Next slide, please. Our focus on refreshing our trade mix remains. Over the course of FY 2024, we have brought in 114 new to portfolio tenancies. I think in a way this is testament to the fact that the Singapore retail scene still remains very vibrant. We have both local as well as overseas retailers coming into the Singapore market. The fact that our malls are suburban prime spaces, we are able to actually bring in these new concepts for our shoppers.
And also wanted to note that this is actually a good mix of not just F&B, but also non-F&B trades including Beauty and Healthcare, as well as Fashion. The other interesting observation that we have is that there are also brands that are coming across the borders from Malaysia, and this is testament to these retailers' confidence in the Singapore market. Next slide, please. All right. Our belief is that our malls are actually the community landmarks for their respective catchment. So placemaking, engagement of shoppers is an important focus for us as we continue our focus to drive shoppers back to the malls and to cultivate shopper loyalty. So this engagement with our shoppers enables us to understand what their retail needs are, and then in turn sharpen our offering to cater to the needs. All right.
And we are positioning our malls as an essential part of the heartland live and play. Next slide, please. All right. Just some illustration. We do have signature events for various malls across our portfolio, and this is some differences to cater or to tailor to the slightly different demographics of each catchment. Next slide, please. All right. For Tampines 1 AEI, I think I mentioned earlier that we have ended on a good note, on a high note with that 100% committed occupancy. We have achieved both the retail as well as the financial objectives that we set ourselves out when we embarked on this AEI 16 months ago. So in terms of valuation gains over the course of the two years, we have actually more than delivered the cost that was invested in this AEI.
The ROI target, when we first embarked on it, we set ourselves a target of 7-ish percent, and we have outperformed this target. On the retail positioning front, this AEI has enabled us to sharpen the positioning of Tampines 1 within the Tampines Hub cluster. So it's differentiated. It has a refresh offering, and it's also unique. So we brought 68 new to mall concepts, of which 46 are actually new to our portfolio. Next slide, please, Fung-Leng. All right. This was the relaunch celebration that we had on the 12th of October. It was well-attended. It was a celebration that we had with our retailers, as well as the Tampines shoppers. Next slide, please. All right. So with this, I'll hand over to Fung-Leng to take us through the next segment of the presentation. Thank you.
Right. Thank you, Pauline. I'll cover the next few slides on the ESG update of the three projects that we have completed. First of all, as Richard has mentioned, we announced the rollout of the solarization project for six of our malls early this year in April. We have since completed the installation of all the panels on the You can see the names of the six malls in the first bullet. So while this is not designed to replace the energy consumption, it's meant to supplement some of the powering of the equipment of the malls, such as car parks and corridor lights. So we can see we have some savings in terms of the energy cost as well as the reduction of the carbon emission on a yearly basis.
What you can see there are some of the pictures of the solar panels on the roof of the malls that we have mentioned on this one. The other great news is for GRESB, this is a benchmark for all the Group Real Estate in terms of the ESG journey, and we are pleased to announce that we have achieved yet another five-star rating for the fourth consecutive years. Since we have participated in 2020, we have grown from strength to strength, and this is the fourth year of achieving the highest rating from GRESB assessment. We have also achieved very good score on the overall GRESB score. You can see it's 91 over 100, and with a full score on management score as well as for performance score highlighted in the box.
Besides the decarbonizations as well as the sustainability journey, we are also going quite intensive on the, a s part of the ESG, which is a social and doing the community engagement to promote inclusivity and for the experience of our members of the community with different needs. You can see that some of the things that we have implemented in our malls include the dementia go-to points. This is to help some of our shoppers with the needs, as a safe harbor in case they get lost, so their family members can find them designated dementia go-to points within our malls. Also, the other part of it is the Paint It Forward.
This is our annual art jamming event that promotes family bonding, and we also use the event to raise some funds that goes to the benefit of Community Chest in Singapore in support of different programs for persons with disabilities. I'll hand this back to Richard to take us through what's coming ahead for FCT. Richard, please.
Yeah. Okay. First and foremost, we are happy to announce that we are embarking on another AEI. This time around is at Hougang, where we are looking to spend about SGD 51 million and expecting a ROI of about 7% return on this investment. For those of you who are familiar with Hougang Mall, this mall has been there, has been around for about 25 years. We haven't done any significant AEI for the longest time, so it's very timely. We have seen that the catchment market has grown. There is also kind of a different profile of shoppers that's coming around this area. So it's very timely. What we're going to do, a couple of things, we're going to expand the CSFS space to about 27,000 square feet.
We're going to be also able to, in a way, free up some higher value areas so that we can convert them into our retail space. We're going to also expand our ground floor space to provide for not only an increased proportion of F&B, but also looking at potentially longer trading hours and so on. In terms of some of the key highlights that we are looking at for this mall is besides the physical attributes, we are also going to increase the proportion of F&B from current 26% to 32%, because the demand for similarly, like what we're experiencing in our other malls, demand for F&B trade is very strong, both from a shopper perspective and also from the retail perspective.
We are expecting to commence this AEI sometime in the second quarter calendar year, not our financial year, calendar year 2025, and to complete sometime in the third quarter calendar year, again, in 2026. Right. Again, we are very excited to embark on this because we have seen the results coming from what we have done at Tampines 1. Sometimes, when we look at it from AEI perspective, it seems to may not be that significant. But if you look at it in total, this is SGD 51 million. We've just spent SGD 38 million. It's almost SGD 90 million, right? If you are investing SGD 90 million and you're getting the return between 7%-8%, actually that is a very good return compared to what you would have gotten acquiring another asset. Do not discount AEI.
It may not be as big, as large, as significant as what you imagine for a real estate. But once you put all this together, not only are you getting very good return, actually, and also it's an enhancement to the value of our assets. Overall, I think we are very excited. That's why we shared before that we have plans to roll out our AEI. When we complete one, we will then embark on another one. Hopefully, we look forward to this getting the same result, same traction as what we are getting at Tampines 1. For those of you who have not seen it, I would suggest maybe you can make a trip down to Tampines 1 to look at the new spaces, the new brands, and the vibrancy that has been created for that mall.
Okay, another area of focus for us when we are looking forward is I'd also like to share next slide, please, Fung-Leng. It's about all the developments that we are expecting to come in the northern part of Singapore. A lot of conversations, discussion, highlights have been surrounding the development or the completion, the upcoming RTS. But what I would like to say is RTS is but one development that's happening in the north region. There are so many developments that's coming on stream and not forgetting that Woodlands is the third regional center in Singapore.
If you take the cue from what you have seen over time, Tampines being the first regional center, how successful it has been, what kind of development that came up, what kind of vibrancy and support structure that is provided, infrastructure support, development of housing and so on, t he results that you could see, that is the reason why if you look at our performance of our malls there, like Tampines 1, it is doing very well. Similarly, Jurong Lake District was the second regional center.
Again, massive development. Housing there are being snapped up. The price of housing has kept going up. Over there in Jurong East area, you have currently three significant malls that is close to about 1.4 million sq ft of space. But the demand continues to be very strong and a lot of development is coming up. Likewise, for the north region, I think beyond just looking at RTS as one development, there are so many things that is happening.
We thought maybe it is timely for us to also share because we are actually quite excited with all these developments because there are actually a lot of opportunities for our mall in the northern region. If you look at some of this information we have put together. Firstly, I want to focus on the growth in the catchment market. In Woodlands perspective, firstly, there is going to be another 10,000 new homes over the next five years. Of course, recently, the private condo, Norwood Grand, that was launched, it was overwhelming, right? Firstly, the demand was strong, the pricing was very good.
Again, we will expect if more development coming up or more private development comes up, we will have a similar kind of interest because, for those who are familiar or know what is going to happen in the region, they will probably be able to preempt and expect what they do see in the Tampines area, in the Jurong Lakeside area, and that is the same thing that is going to happen in the northern side of Singapore as well. 10,000 in the short term, over the next five years. As we were preparing this deck of information, again, the government announced two days ago, further expansion of development in the northern region, in Woodlands North Coast, and also Sembawang North. Another 14,000 new homes that is going to come on stream.
Of course, maybe this is a slightly middle to longer-term period, but if you put this 14,000, 10,000 homes together, 24,000 new homes, i f you take an average of three person per household, we are expecting quite a significant growth in the population over time in the northern region. Today it is about 255,000 catchment market. This 24,000 new homes is going to provide an additional close to 30% growth in the total catchment market. Today in that area, there is only one Causeway Point that is 400 over 1,000 sq ft. We do not have 1.4 million sq ft. Again, look at perspective, right? RTS is but one development, but there is so much that is going to happen around this area.
From the catchment market perspective, and then also what is going to happen around the areas, 400 hectares of land will be developed into commercial hub, industrial developments, R&D facilities and so on. This is going to be the largest economic hub in the northern part of Singapore. Coupled with that, the focus on the ecotourism, right? You know that Jurong Bird Park has shifted, so all our ecotourism are concentrated again on the northern part of Singapore. The last point that I have here is, recently, again, another major development that comes in that location, Woodlands Health Campus, a 1,000-bedded community hospital with another 400 beds for long-term care, plus all the specialist clinics as well. Again, another very major development.
Whenever an area is identified as the regional center, you expect a lot of investment in infrastructures, a lot of developments in terms of homes, and also the business hub and so on. Massive opportunities as far as we are concerned. Next slide, please, Fung-Leng. This is where we spoke about the Agri-Tech and Food Corridor. Again, this is something that would also benefit the northern region, stretching from Lim Chu Kang all the way to Senoko, right? The middle chart that is actually showing the business park, the industrial development that we spoke about, and also the 4,000 new homes in the North Coast area, that is one stop away from our Causeway Point. Massive developments.
Similarly, in the last map that you could see is in terms of the ecotourism that I spoke about, t he whole Mandai area has been redeveloped significantly with the inclusion of the Bird Paradise and so on, and also an ecotourism hotel development there. I have also not included, actually, the numbers about the development that is going to happen around Singapore the club area. Like what I said, a lot of very exciting development that is going to continue to increase the overall catchment markets in the northern region for our malls like Causeway Point and also Northpoint City. Incidentally, if you go to and focus now on the Yishun area over the next slide, please, Fung-Leng. You see a similar kind of development that is going to happen there, maybe on a slightly smaller scale, not as extensive as what you are seeing in the Woodlands area.
But nonetheless, it is also very significant because firstly, we are expecting another 8,000 plus new homes in the near future, between 2024 to 2029. Also a slightly longer-term period, the development of the area, what is termed as Chencharu area. That is going to create about 10,000 new homes by 2040. Again, this is one stop away from Northpoint City. Northpoint City as a whole is over 500,000 sq ft. A significant retail mall that is going to benefit from this increase in catchment market. Of course, it is not complete if we do not talk about the RTS. The RTS development is going to expect to complete in 2026. This is a map of where RTS station is going to be vis-à-vis where our malls are going to be.
Another point of interest that may have been overlooked when we talk about this development is the fact that Causeway Point, the MRT station that is directly connected to Causeway Point, the Woodlands MRT station is an interchange station between the North-South Line as well as the TEL Line. We can expect that this station is going to be very busy because people coming from the North-South Line, if they want to change to the, they are going to transit at Woodlands MRT station. Vice versa.
Again, we expect to get additional transient customers that may not be residing in Woodlands area to come to this area, whether they want to take RTS, whether they need to change the train, or whether they are coming here for the new medical campus, all the new developments that is going to happen in terms of the business, the working people, working population, and so on. We do see this as a key driver, in fact, a positive driver for our malls in this area. That also allows us then to look at how can we enhance our retail offerings, whether it be F&B, whether it be specialty retails, given the fact that the profile of the catchment market is going to not only increase but also potentially could change because there are other components that is coming on.
This is where we feel that there is a lot of opportunity for us then to review our trade mix and ride on and leverage on all these future developments that is going to happen in that area. As Pauline mentioned, that it is also something very interesting that we have been observing, is the fact that we are getting actually more and more retailers from Malaysia coming to Singapore to set up shops in Singapore. In her pictures just now, she showed Beauty, that is the Bhavati concept is from Malaysia. Tǎoyàn, another concept from Malaysia. Oriental Kopi is going to be opening up shops in Singapore. The question is then, if we think that it is going to be so much impact with the RTS, why would retailers from Malaysia want to come to Singapore and set up stores?
Fundamentally, it is because they believe that the market in Singapore will continue to thrive and do well. They want to have both represented both in Singapore and also in their home base in Malaysia. This is where we thought we wanted to share from the wider perspective, not to overlook at all the major developments that is going to come on stream. As I said, our team are very excited about working through some of these numbers and planning ourselves for all these future developments to come on stream. Okay. Maybe just a wrap up before we move to Q&A. Again, strong sets of results. We are delivering over 12 cents in terms of DPU. Completion of Tampines 1 AEI and also the completion of our transaction for the remaining 24.5% stake in NEX kind of would lay the foundation going forward.
This year, we did not benefit from the full contribution from these two, from the acquisition and also the AEI. Next year we should see the benefit in the contribution. Again, very excited to roll out our next AEI in Hougang Mall, and this is something that again, based on what we have seen in Tampines 1, we would like to also take the opportunity to revamp the mall, get the upside and also provide new features and enhance the retail experience for our shoppers in that area. We continue to work very hard from the asset management perspective, the property management perspective. We continue to look at our organic growth within our existing portfolio. At the same time, having a mindset in terms of our continuous journey in our ESG front as what we shared today.
Again, efforts will be put into place to continue this trajectory. The final point is we continue to be positive in our outlook on Singapore's prime suburban retail based on the metrics that we have shared. Very strong demand that gives us a very high occupancy rate. Our OpEx continue to be very stable, healthy at 16%. Our reversion was at 7.7%. All this points to the fact that Singapore prime suburban retail continue to do well. With that, I will end my presentation and thank you very much.
All right. Thank you, Richard. We now move into the Q&A, starting with Geraldine from DBS Group Research. Geraldine, please unmute yourself and go ahead with your question.
Hi. Good morning and team. Yeah, excellent set of results and a very exciting development for Woodlands to come. Hopefully see some tourists. My first question on reversions. I think Causeway Point delivered quite a positive surprise at 9% reversion. Are you able to share if this is a good gauge for future quarters as well?
Yeah. Okay. I'll chip in first and then, Pauline, if you've got anything to add. I think, again, maybe just now we wanted to highlight this point as well, and thanks for bringing it up. Causeway Point 8.8% and then Northpoint City almost 7%. These are malls located on the northern part of Singapore. Occupancy very high, reversion very strong. I mean Are we missing something or the retailers are missing something? Because they know that they continue to thrive and do well in this mall, despite the fact that there's a lot of noise around RTS and so on.
Because probably they have seen all the development that's coming on stream. If you ask me, very strong set of results. Of course, year-on-year, it could be a different composition. Certain years we have different trades that is up for renewal, and sometimes certain trade gives us a better uplift. But I would rather look at it from an overall perspective that as a portfolio, I think the 7.7% growth was in fact pretty strong numbers that we have. We will continue to work very hard in our next cycle of renewals, and we hope to be able to then get the same level of reversion for next year. Pauline, anything you want to add?
Yeah. Fung-Leng, could you bring us back to slide 23, please?
Okay, give me a second. Let me look at it.
Geraldine, I wanted to emphasize the fact that your question is whether this strong reversion is sustainable. I think if we look back at what has been achieved for FY 2024, it's of a significant base, right? We're looking at 42% of the malls NLA, 88 leases, right, to contribute to this 8.8% rental reversion. And I think the number speaks for itself, right? The strong reversion is just not coming off a small base. It's across the mall. And we do see that it is from various trades, right? Not F&B, some of the retail trades as well. The other point to note is that for Causeway Point, there's a lot of focus and emphasis on refreshing the trade mix. Some of these are actually coming from new offerings.
That is again, the testament to the fact that there is very strong conviction in the Woodlands catchment area. All right. I hope I've provided a little bit more perspective on this.
Yeah, thanks, Pauline.
Thank you.
New offerings, are you more biased towards certain trade sectors, or you see more longevity in certain trade sectors from Causeway Point?
In terms of the positioning, I think we do take a very hard look at how we can differentiate ourselves, because Causeway Point is actually quite close to the border, right? At the end of the day, the focus is still catering to the immediate catchment, right? It is everyday convenience, the lifestyle needs of the heartlands and so forth. That is where we feel that in terms of moving the positioning of Causeway Point, that is where we should be working towards. Continue to be relevant to the immediate catchment, but then also have an eye on what are some of the new opportunities and new developments in the catchment. Right. That, I hope I have answered your question.
Okay. Thanks, Pauline. We need to be there ourselves to see Causeway Point.
Sure.
If I just ask you.
I agree with that. Yeah.
Okay. Yeah, that's very true.
Okay. Thank you. Thank you, Geraldine. Moving on to the next question. I understand some of you all will need to drop off at 10:30 A.M. for another call, so we'll try to move faster. Second question from Terence, J.P. Morgan. Please go ahead.
Hey, thanks, Fung-Leng, and congrats, Richard. Just two quick questions from me. Could I get an outlook on interest rates year to date? It's trending down, but the Q2 is still flattish at 4.1. So what's the outlook for next year? Second question I wanted to ask on both the fees in units and also the distribution from FCT Sigma. How much is left and what's our say for fees, units at FCT Sigma next year? That's all. Thanks.
Yeah, I'll take the question. Yeah. Hi. The cost of borrowing is likely to be in the low four based on the outlook now.
Sorry, is that slightly above or slightly below the 4.1 that was achieved in this?
It will be around the same region, in the four region, low four region. Yeah.
Okay. Around the same region.
Yeah.
Thanks.
The second question is on the ENP units, right?
Yes. Management fees in units and also FCT Sigma.
Okay. The ENP in units on a full year basis is about 70%. We have taken 70% in units. That is to take into account the loss of income from the T1 AEI.
Going forward, should we be expecting similar here, given that there's a Hougang AEI coming due?
Yeah. We will review the ENP in units in conjunction with the income loss from the Hougang Mall on an ongoing basis.
Okay. Thank you.
Yeah.
Actually, Terence, it may not be the same because, again, depending on the disruption, right? Usually the disruption is spread out, so it depends on at which point in time. So if there's a higher area of disruption that impacts the income, then we will use a higher proportion of ENPs to cover that. So effectively, what we are saying is that the impact from the AEI will be covered by ENPs. That's how we work in order to maintain the performance of the mall, so that the investors will not suffer as during the AEI that's been carried out. But at the same time, they benefit once the AEI is completed.
Yeah. Terence, just to add on to that, so when we actually carry out the AEI, we are very cognizant of the disruption and the continuity in the trading of the mall. So the AEI, like what was done for Tampines 1, is actually phased out. So that staging is something that we look at very closely. The timing of the works on which part of the mall is also another area that we look at in order to minimize the disruption.
Great. And FCT Sigma ?
Yeah. For Sigma, I think we are still in the process of liquidating the entities in the ARF portfolio, so the amount of the Sigma balance is still subject to change.
Okay, thanks. Sorry, if I could slip one more in. Reversions, will it come in the cash flow? Will it come in immediately, or does it flow through in about six months kind of thing?
The reversions for those will be leases that has already been committed. It depends on when these leases were committed. Some of them would have been done maybe early part of the year. Some is as close as maybe two months ago. It depends on when all this came into force. By and large, it is an average across the whole year and across all the leases that were renewed or new leases that were brought in.
Yeah.
Thank you. That is very helpful.
Actually on this thought, the stronger reversion actually builds the revenue base, because if you recall, most of our leases, we also have that step-up. That is also growing. It is growing off a higher base literally, in that sense.
Thank you.
All right, thank you. Moving on to the third question from Rachel Tan, Macquarie. Rachel, please unmute yourself and go ahead.
Hi. Good morning, Richard and team, and thanks for the call. A few questions from me. On your Hougang AEI, how much downtime do you expect during this AEI? I see some of the Hougang Mall has quite a large proportion of the lease expiring next year. If you could give us some color. Also, I think you probably already have some tenants being signed for the Hougang AEI space, like [inaudible] and all. What's the pre-commitment level at the moment now?
Okay. Again, I'll give you some perspective, and then Pauline can add on. Okay, so by and large, the impact to the mall, it's about 40-ish percent in terms of the overall NLA. But like what Pauline mentioned, it will be done in stages. The whole mall will continue to be in operation, and then we will embark on different phases to minimize the overall impact. But by and large, it's about 40% of the entire mall that will be affected. Back in Tampines 1, it's about 30%. It's very hard to say exactly at which point in time how much will be affected, but the assurance is that we will progressively do areas where it's minimal impact, and then before we move to another area. So the overall impact, not only just the financial impact, but we are also very mindful in terms of operation.
We want to make sure that our existing tenants continue to trade. Our shoppers can still continue to come to the mall and shop the necessities and also carry on with their requirement for F&B and so on. In terms of tenants, we are working very closely with several tenants. We can't reveal the names as of yet, because I think a lot of them are in very advanced negotiation. This will be shared in subsequent quarters as we start getting closer to the time when we start the AEI.
Yeah. So Rachel, I add on to address the question on the commitment levels. In terms of the staging of the AEI, we are looking at the first phase that is affected coming back towards the end of the year. The other thing that we are very careful on is, I think in terms of AEI, it's not just about physical changes, about physical upgrading. We are also very focused on the brands that we bring in, the kind of trade mix we want to calibrate after the AEI. Yeah, the engagement has started. I think to date, we have interest from more than 50% of the spaces that is affected by AEI. But before we actually lock in some of these leases, we want to actually ensure that the holistic outcome is achieved.
There is still quite a fair bit of time before that first phase comes in. To date, we have already achieved more than 50% interest.
Sounds good.
All right.
Thanks. The next question is just a quick one on debt. Can I assume that all your debt has already been repriced to current levels?
Yeah. For those that is still on floating, it will be based on floating, because we have 71% of the debt that is hedged. When we do the refinancing, we will monitor and progressively put in place the hedges as well.
What I mean is that currently all your debt and swaps are all already at-
Yes
the current market levels.
Yes.
There's no low rates to de-
Correct.
Yeah. Okay, good. And one last one. In terms of acquisitions, what are your thoughts? You have quite extensive footprint in the Singapore retail space. Do you still see room for you to expand in Singapore, or will you be looking at somewhere else aside from Singapore?
Sorry. Honestly, my own view is that there are still opportunities in Singapore, and we will continue to focus in the Singapore market, at least in the immediate future.
Okay, great. Thanks so much.
Thank you. Next question from Derek Chang, Morgan Stanley. Please go ahead.
Hi. Thanks, Leng. Just two quick questions. On the management fees and units, is it fair to say that we could see this as kind of a balancing figure to maintain the 12 cent DPU, especially in line with the disruption from Hougang AEI?
It's not so much as to maintain the 12 cents, but the whole idea of the AM fees is to cover the extent of the financial impact on the AEI. So whether at the end of the day, it still comes back to 12 cents or not, it's a separate matter. More importantly, if, let's say for example, hypothetically SGD 1 million on the NPI is disrupted because of the AEI, then we will hedge back that SGD 1 million. Whether it makes back to 12 cents, hopefully, but it may or may not be. The 12 cents depends on many other issues with regards to the performance of the other malls and so on.
Sure. But effectively, the downtime of the Hougang AEI is almost irrelevant in a sense, because you're going to use the management fees to offset that impact, so it doesn't really matter-
Yes
financially speaking.
That is right.
Right. Thanks. That is really clear. Second, last question is on the NEX transparency. Any update on that yet?
No update. I think that is the short answer, because as we mentioned before, this is something that requires unanimous decision by all parties in the joint venture. So, there is no further development from the last time that we met.
Okay. All right. Thank you.
All right. Thank you, Derek. Next question, [inaudible] from HSBC. Please go ahead.
Hey. Hi, Richard and team. Thanks for the presentation. Maybe just two questions from me. Firstly, on White Sands. Just wanted to get an update because, Richard, I recall you said previously that the initial impact from the opening of Pasir Ris Mall was positive. So wanted to see if you are still seeing the trend being positive for now. Second question, for the rent reversions, they are very strong. But we do see the growth in the tenant sales slipping quite a bit. So how confident would you be in terms of maintaining the reversions going to the next FY? Thank you.
All right. Firstly, on White Sands. I think what we have seen so far, because Pasir Ris Mall opened in June period, right?
Yeah, June.
They have had a lot of, as usual, right? When new malls open, you have a lot of publicity, a lot of campaign, a lot of promotions to attract people. Again, being a new kid on the block, you expect a lot of people want to go there and experience and see and so on, right? We are happy to say that the impact on the traffic is actually pretty minimal, right? That goes to show that as what we spoke about before, that having another 250,000 sq ft or so of space actually makes this area more attractive so that people in Pasir Ris can then come to one area to shop, right? White Sands is only 150,000 sq ft, and then you have Downtown East, so it is spread out, right?
Today what we are seeing is more people would then come to the central area for shopping because you have over 400,000 sq ft of retail space and offerings that is available. In terms of sales, we are still monitoring because like what I said, I think it is not stabilized because there has been so much happening over the last three months or so. This is something that we will continue to watch. We continue to fine-tune our offerings and so on. Also our own campaign that we are going to roll out because there is no point in we are having a campaign, we also have our campaign. This is something that we continue to monitor and maybe we can give more details and sharing in subsequent quarters because now it is just too early.
Your second question is on tenant sales. Yes, the number does not look as interesting as what we have been sharing for the last year or so. Again, do not forget that we are coming off a very high base. Despite that, we are still growing at 1.2%. As we compared just now, if we take the similar timeframe of 1st January to August, we compare to the wider market, we are actually 1.9% up versus the wider market of 0.6% down. From our perspective, the sales is still holding up well. More importantly is also if you look at the occupancy cost, it is at 16%. Is that a healthy occupancy cost? The answer is yes. If you have a healthy occupancy cost, that also gives you opportunity to continue looking at positive reversion.
This is where we are very focused on, and our team will continue to work in driving sales, right? We want to at least maintain the sales trajectory that we are experiencing and enjoying.
Sounds good. Thank you, Richard.
All right. Thank you. We now have the last question from Tan Xuan, Goldman. Tan Xuan, sorry for keeping you waiting. Please go ahead.
No problem. Hi, Richard and team. Good morning. First question is on Tampines 1. I understand earlier you mentioned 30% of the NLA was affected by AEI, right? Over five quarters, and you stage it out. But if you were to think about the entire five quarter, how should we think about the average occupancy that were paying rent?
Hmm. Average occupancy. Would it be fair to say about 85%-90%, Pauline? I think each time, each quarter, maybe at the most about 10% space affected. Of course, I am talking about average, right?
Yeah.
There are certain periods may be slightly more. But over the last few quarters, I think no more than 10% on the average.
Okay.
I think that would be fair. Just a proxy.
Ballpark. Yeah.
Yeah.
Okay. Second question is to follow up on the tax transparency at NEX. I guess it has been a while. Can you share a bit about what are the key hurdles? Is it getting agreement from partners or is it regulatory bodies?
I think the first step is even before you go to regulatory bodies, is getting approval from all JV partners. As we shared before, I think this is something that benefits FCT. We are not aware of benefits that may be attributed to the other JV partners. That is what it is. We need to continue our engagement with our JV partners. Talk to them, and at an appropriate time, we hope that they will be convinced that they could come on board with this proposal to restructure the holding company.
What are the additional costs on the JV partners if you go through with tax transparency? Does it make sense for FCT to cover it in order to get that too?
Okay. Because the thing is, the restructuring cost itself is not significant. I think that is something that it is not going to affect much, right? It is not a significant cost. More importantly is any potential impact that could be if they were to restructure from their own perspective, from their own tax perspective. That is something that we are not privy to what are those potential impact that it might be. We hope, like what I say, we hope to continue to engage them. That at some point in time they are comfortable to share with us, then we can look at it collectively. But until such time, we remain hopeful, we continue our conversation. Again, the focus, like what I said, has always been about the asset. How can we continue to drive value from the asset? Reversion is strong. Occupancy is 100%.
How can we maximize the value? How can we look at some low-hanging fruits, spaces to work on and also focus our attention on AEI? The AEI, as mentioned in the last quarter, we already submitted to the regulators and now we are getting feedback from regulators. We are getting questions from regulators, and we continue to work on that. We want to focus on things that we think that is at least within our control, and we can work on those areas.
Okay. Just one last question on next year's reversion. I guess occupancy cost is still healthy, but it is higher year-on-year. Should we think about reversion as still positive but to moderate from current level, or do you think that's sustainable?
I think what we can say is that it's going to be a positive reversion. Whether we can achieve 7.7% or better or lower than that, I think that's where the team will continue to work hard on that. Coming back to the 16%. To me, 16% is still a very healthy occupancy cost. So that gives us a good perspective to start engagement with our retailers.
Okay, got it. Thank you.
Thank you.
All right. Thank you very much. We have come to the end of the analyst briefing this morning, and we would like to thank everyone for your attendance this morning, and we wish you all a good weekend ahead.
Thank you.
Thank you.