Morning to everyone. Welcome to Frasers Centrepoint Trust results presentation for the First Half Financial Year 2024, ended 31st of March 2024. We have uploaded the press release, the results deck as well as the financial statements on the SGXnet this morning. We are happy that you are attending our briefing.
Let me invite Richard, the CEO, to give us a run through of the presentation. Richard, please.
Yeah. Hi. Thanks Fung-Leng, and good morning to all of you. Thanks for joining us again for this quarter's update. I am going to dive straight into the summary of the result deck. I am very happy to actually share a set of healthy performance that we have for this quarter. If you look at the financial aspect of it, revenue is at SGD 172 million, NPI SGD 124 million. Later on when we go into the various slides that shows the charts and so on, you will also see two charts. I think we want to distinguish it a little bit.
Because if we were to exclude CCP, which is Changi City Point, which was divested at the end of last calendar year, but the first- Q for our financial year and also the effect of AEI T 1, our gross revenue actually rose 2.9% and NPI actually was higher at 2.1%. DPU are relatively stable at over SGD 0.06 . In terms of capital management, aggregate leverage is currently at about 38.5%, which is pretty healthy. Average borrowing cost, slight improvement from 4.3% in first- Q down to 4.2%. ICR over 3x . Currently for FY 2024 all our financing needs has been settled. Coming to the business operation side of things is we have seen a very robust set of numbers. Committed occupancy at close to 100%. Rental reversion at 7.5%.
Triple traffic has gone up 8.1% year-on-year, and tenant sales has continued its trajectory of improvement, and we saw an increase of 4.3% year-on-year. If you just take a step back, if we compare to pre-COVID, same period, we actually grew by over 20%. We also have some updates on AEI, which Pauline will share with you later on, and as well as some highlights on our ESG activities for the quarter, which Fung-Leng will share with you. Next slide, please. Just a quick recap of what we have done for this quarter. If you look at what we have started off the calendar year, which is our Q2. First off the block, we made an announcement, 25th January, on the acquisition of the additional 24.5% stake in NEX.
We also launched our equity fundraising, which we did raise SGD 200 million, 2.5x covered. Also some other notable things that happened during this quarter, including the FCT's inclusion into the Straits Times Index on 18th of March. We did an EGM on 25th of March and also completed our transaction for the 24.5% stake in NEX on the 26th of March. So today we own 50% stake in NEX as a whole. Quick update on the market. I'm not going to spend time on the wider macro perspective because you guys know as much as we do. Maybe a little bit on the sales. If you look at retail sales index, it's a 3% year-on-year growth. If you exclude motor vehicles compared to ours, it's actually stronger.
F&B sales continue to be one of the key driver at 4% year-on-year. From the rental perspective, similar trend. Suburban more, you've seen a 2.7% year-on-year growth as compared to ours, about 7.5% growth. But of course, the constituent of their numbers are very different from ours. Updating on the supply side of things, again, we are seeing a pretty muted supply that's coming on stream all the way to 2027. We have also included some of the projects. This is actually extracted from the research report from CBRE. Some of the names that you could see are some of the smaller malls. In fact, most of them are smaller malls that's going to be completed between now to 2027.
So very limited supply and that underpins the strong demand that we continue to see from retailers, especially to our stronger malls. This is also the other reason why we are seeing such a robust rental reversion as well. Okay. For financial highlights, I'll pass on to Audrey to share about what has happened during the second quarter.
Audrey, over to you.
Yeah. Thanks, Richard. So good morning to everyone. I'll run through the financial highlights for the first half. So first half we have registered higher gross revenue and also higher NPI. If you were to exclude the Changi City Point, which was divested on 31st of October, and if you exclude Tampines 1, which undergoes asset enhancement work. The gross revenue was up 2.9% due to higher occupancy, staggered rents and higher passing rents for the portfolio. NPI was also up by 2.1% with higher gross rent offset by increase in property expenses. We have a good NPI growth of 2.1%. Next slide. So distributions to unitholders is at SGD 104.9 million. This is due to the higher NPI registered by the portfolio, and also higher contributions from the investments, offset by the higher financing costs.
DPU at SGD 0.06022 for the first half of 2024. For this slide, I would like to bring attention to the distributions from investments. It has grown 22.8%. This is mainly due to the higher contributions from GRPL, which is the entities that hold NEX. We acquired the 25.5% stake on February 6 last year. As a result, this year is a full six months contributions from the investments. Secondly, we also increased our stake in SST, which hold Waterway Point, from 40%- 50% last year on February 8. That also contribute to the increase. However, this is offset by the absence of distributions in Hektar, which we have divested in December. The adjusted NAV is stable at SGD 2.25.
For the financial metrics, the aggregate leverage actually went up from 37.2% to 38.5%, due to the loans that was drawn down in March to finance the acquisitions of 25.5% stake in NEX, and also to fund the asset enhancement work at Tampines 1. ICR at healthy level at 3.26x , and our cost on debt for this first half is at 4.2%. For the first quarter, it is at 4.3%, and the second quarter is at 4.1%. So you see a dip in terms of the cost of financing. About 68.5% of our debt are actually hedged to fixed rate interest, increased from the last quarter of 63.4%.
In total, we have undrawn facilities about SGD 587.5 million for the vehicle. This shows you the debt maturity profile is well spread. There is no refinancing risk in FY 2024. What is due next year in FY 2025 is about SGD 320 million. We have already started engaging the banks for the refinancing in next year.
With this, I will hand over to Pauline. We will run through the portfolio highlights.
Thank you, Audrey. Hi, good morning, everyone. I am very happy to actually share with all of you a good report card. I think it is a good report card with all around positive, robust and resilient performance. Richard has spoken about some of the good news that we are sharing for this quarter. We see very positive trends in terms of occupancy, in terms of sales, footfall, as well as reversions. I will go into a little bit of details on these KPIs in my subsequent slide. What you see here is the committed occupancy. The portfolio's committed occupancy has remained at a very strong level of 99.9%. This has been sustained over the past two to three quarters. On a year-on-year basis, we also see an improvement in the occupancy.
I would say that some of the active management in terms of repositioning, in terms of curating the retail offering at our malls is actually bearing fruit. This is also underpinned by the fact that we do see, I think we shared earlier what some of the sales, the occupancy in the Singapore retail market. The trending is also generally in line with the positive performance that we are seeing in the overall market. Next slide, please, Fung-Leng. For this slide, again, I think Richard shared earlier that for revenue and NPI on a year-on-year basis, our portfolio has actually delivered a growth. This is notwithstanding the headwinds that we are seeing in terms of cost inflation and so forth. Our focus remains on driving the top line.
You will see that across our assets on a year-on-year basis, the top line has actually been growing on a year-on-year basis. I would attribute it to our three pillars of growth. Driving organic growth, so really driving the rental growth. You will see that in the rental reversions for our portfolio that I will share later. It is also through value creation via AEI, as well as repositioning. The likes of Century Square, for example, you see that the revenue has actually picked up quite strongly compared to last year. Also lastly, strategic acquisitions. The focus on rebalancing our portfolio, going into quality assets. All that is bearing fruit in terms of the numbers that we are showing.
Next slide, please, Fung-Leng. Footfall. Happy to share also that in terms of footfall, we are actually on an overall portfolio basis. We are actually recovering very close to pre-COVID level, about 1%-2% below pre-COVID level for the second quarter of this financial year. I think this is again attributed to some of the seasonalities, in fact, the timing of CNY, the timing of Hari Raya this year versus last year, and also due to some of the active management that I spoke earlier in terms of changing out some of the tenants and also getting our existing tenants that are doing well to upgrade themselves. That is coming through in terms of the footfall and also the marketing initiatives that are being undertaken to enhance the stickiness of our shoppers. That flows through in terms of the sales trend.
I think Richard mentioned earlier, compared to pre-COVID, that has actually grown by 20% on a quarter-to-quarter basis. We continue to see the growth being sustained. Next slide, please, Fung-Leng. So reversions. So where does that lead us? In terms of reversions, very happy to share. Very strong reversions for the first half of this year. I think over the course of the past few months, we have met various investors and this was an area of key focus. We did indicate that we are positive about the reversions that we are seeing in the portfolio. So this has actually panned out in the number. We have achieved a rental reversion of 7.5% on an average-to-average basis for the first half of this year. We are seeing good traction in terms of leasing.
You do not see next year, but the reversion from NEX has actually also contributed to the 7.5%. For confidentiality reasons, I cannot share the exact number, but it has actually come out quite positive for NEX. Next slide, please. This is just some of the new tenancies that we have brought to our portfolio for the second quarter of this financial year. I think in terms of focus on refreshing our retail mix, that continues to be something that we are very, very cognizant of because that will then future-proof our portfolio for sustained good performance. The sensing is also in terms of the Singapore retail sector that continues to be active. We do see good traction from various trades, including F&B, fashion, as well as beauty and services.
Next slide, please. The focus on activating our malls, entrenching our malls as a part of the community. We have not lost sight of this. So through promotions, events, keeping up to date with some of the social trends that we are seeing. This activating our malls continues to be a key focus, and I think this is also one of the reasons why the footfall has actually recovered. It is back to basics, getting the shoppers back to the malls, providing them with the retail offering that is needed and driving the sales.
Next slide, please, Fung-Leng. Now I will share a little bit about our enhancement strategy. We have a live AEI project ongoing at Tampines 1. In terms of the progress, it has panned well, both on the project side as well as on the leasing side. To date, we have achieved close to 100% in terms of the pre-commitment for the leases that is in scope for the AEI. The project or the construction is also panning well, on track for overall completion by the end of this financial year. In fact, for the month of May, we are looking at about 86% or more than 80% of the spaces impacted by the AEI being handed over to tenants. Progressively, you do see some of these new tenancies coming on.
Kudos to the team on the ground. I think in terms of the brands, the new-to-mall brands that are coming into the Tampines 1 post-AEI, that will definitely strengthen the positioning of this mall. We do have quite a few good names that is coming to the mall. Next slide, please, Fung-Leng.
With this, I will hand over to Fung-Leng to talk about sustainability. Thank you.
Right. Thank you, Pauline. Happy to announce, or rather share with you the initiatives that we have on the ESG front. First of all is the launch of the inaugural online ESG data book. This is in line with the group's push to increase the disclosure on ESG data. If you go to our website, that link that is provided there, you will find that all the ESG data that is related in the last three years organized in different tabs for the user to look at all the related ESG data, including those with Scope 3 disclosures. This is a very comprehensive ESG data book, and we hope that this will provide the investors and stakeholders with an easy-to-use resource in their ESG study.
We have announced last month a larger solarization project for retail malls to date and across six of our retail malls. This installation will be completed by the end of this year. A total of 3,533 sq m of solar panels will be installed at our six malls, including Causeway Point and Northpoint City North Wing. The size is about nearly three Olympic-sized swimming pools. This will be installed on the rooftops. This latest initiative is in line with our group's goal to achieve net zero carbon by 2050. On the savings that is to be generated is roughly about 722,000 kW of electricity per year, and this works out to be just under SGD 180,000 in terms of energy costs, and a reduction of 293 tons of carbon emission annually.
While the electricity generator is not meant to replace the main source of energy, it is meant to complement. This amounts to about just under 2% of the energy consumption for the buildings.
I will hand this over back to Richard to sum up the presentation. Richard?
Yeah, thanks, Fung-Leng. Just a quick closing summary. As what Pauline has mentioned just now, I think our approach or strategy of having three pillars of growth that are bearing fruits in terms of organic growth, value enhancement, and also strategic acquisition. As you can see, the healthy first half results that we have shown in terms of financial results, in terms of the overall operating performance. If you look at what we have done at our AEI, we are close to completing our AEI and as we have indicated for the next FY, you will be able to enjoy the full year's contribution from this asset enhancement initiative. By and large, we are going to continue very much to focus on our asset and property management capabilities to drive both organic growth, value creation.
And at the same time, always look for opportunistic investment when it comes out. So, also, I think the other notable point to note is that the acquisition of 24.5% stake in NEX, again, this year, we only will have part of the results coming from that acquisition. But for the next FY, we will be able to enjoy again, the full contribution for the entire year. Like what we have done or what we have achieved for the initial acquisition of the stake in NEX.
So with that, we end our presentation and happy to take questions. Back to you, Fung-Leng.
Yes. Thank you, Richard. We are opening the floor for Q&A. So, let's take some time to queue the questions, and then I will open up to the first questions later. Okay. Okay, we have the first question from Jonathan Koh. You'll be keen. Jonathan, please unmute yourself and go ahead with your question.
Morning to our management team. Two question from me.
Jonathan, could you speak up a little bit louder?
Okay. Can you hear me now?
Yes.
Yes, much better.
That is good. Yeah, thanks.
Okay. Congrats on the good number. Two questions. Firstly, you mentioned improved physical occupancy for your suburban mall. Could you elaborate a little bit more because we tend to relate physical occupancy to office. For dynamics on the ground at suburban mall, is there negative impact from more people going back to work in the office? Would you attribute the better performance at suburban mall to less leakage to Singaporeans traveling out?
Secondly, is on cost of debt. There is a 20 basis point quarter-on-quarter improvement. I did notice that SORA is a little bit lower, but could not have caused that big a fluctuation. Could you share if you have benefited from better credit rating and therefore a narrower credit spread? Those are my two questions. Thank you.
Yeah. Thanks, Jonathan. I will approach the first question. Audrey, maybe you can take on the debt or interest rate question. I suppose you are referring to committed occupancy that we have indicated for this set of numbers. We have revealed that we achieved a committed occupancy of 99.9%. There is a slight improvement from where we were at. I think the key point here is to highlight the strong demand that we are seeing from retailers for our malls. Again, we have alluded to the fact that we have significantly improved the performance or the quality of the portfolio that we have today. That is also one of the key drivers as we continue to see strong demand because retailers want to be in malls that they could probably do better.
They want to be in stronger, more dominant malls, of which we have four out of the 10 in terms of the largest malls across Singapore. That actually put us in a very good state to continue the trajectory of getting good occupancy. In terms of the negative impact of leakage, I presume you are talking about comparing different trades across the retail market. It is true because our portfolio largely provides basic essentials. Whether you travel or you do not travel, most of the item products that you find at our malls are basic necessities, things that you will need on a daily basis. The impact could be less affected by traveling. Of course, traveling will still impact the market overall because people are away from Singapore at a certain point in time.
But nonetheless, I think because the nature of our product will ensure that the community still comes to the mall because that is what they need on a daily basis. I think there is also one question you talked about whether back to office has some impact. Yes and no. There are two sides to the coin for that. What you are seeing is that the traffic numbers has grown, meaning that probably we are seeing more people going back to the office because by and large, a lot of the commuters are residing near to our mall. So when they go back to work, they do go to the mall. But at the same time, we are not really seeing an impact because our sales continue in a very good, strong, positive trajectory.
We do see from both aspects, people do go back to work more, but I think there is still a proportion of people working from home. Also, people are spending more at our malls. I hope that answers your first part of the question.
Audrey, you want to take on the interest rate question?
Yeah. Jonathan, your question says, for quarter-on-quarter, there is a savings of 20 bps in terms of the cost of debt. That is mainly because we actually repaid some of the higher interest rates debts using the divestment proceeds and also the EFR proceeds, pending the deployment to fund the acquisitions of NEX. Coupled with the fact that we have also entered into IRS in December and January, that helps to bring down the average cost of debt.
All right. Jonathan, hope we answered your questions.
Yes. Thank you for the color. Thank you very much.
Thank you. We will move on to the next question from Derek Chang , Morgan Stanley. Please go ahead.
Hey, thanks, Fung-Leng. Hi, Richard and team. Can you hear me?
Yes. Loud and clear. Thanks.
All right. Perfect. I just want to ask a question on management fees taken in units. I think this half, you took about 82% in units, significantly higher than usual. Just wondering, is this just to soften the timing gap between the placement and the full contribution from NEX, or will this be a more permanent feature?
I would say it is not a permanent feature, but, especially as and when we do AEI, I think this is something that we shared with you guys and also with the investors, that whenever we do AEI, any shortfall in the results or the financial performance of the asset that is undergoing AEI will then be supplemented from AMCs to cover that shortfall. So one of the key attributes to this higher than usual AMCs for this quarter is because the fact that Tampines 1 is more or less in a stage of full-blown AEI works, and that is a significant impact to the bottom line, and that can be using AEI to cover the shortfall. That is one.
The other one is also, as you are probably aware, for NEX, we are actually taking 100% AMCs in units. The combination of those two led to the higher than usual AMCs. Once Tampines 1 AEI is completed, you will see that AMCs's numbers coming down.
Once that's complete, we'll be seeing it go back towards the 20% number, 45% number?
The 20% will be for most of the rest of the portfolio. But I mentioned that for NEX, we are taking 100% of the fees in unit.
Okay. Understood. All right. Thanks, Richard.
All right. Thank you. Moving on to the next question from Yew Kiang , CLSA. Please go ahead.
Hi, Richard. Can you hear me?
Yeah, sure.
Yeah. I have two questions. First is on NEX. Is the reversions tracking ahead of your portfolio or below? As in your portfolio is doing 7.5%. I just want to know that number. And then for tenant sales-wise, is it also tracking above your portfolio average or below? And then the second question is on Central Plaza. Can you talk about the occupancy and also, seems like the reversions for that office is tracking below some of your other office peers.
Okay. Let me take the first part. Maybe, Pauline, you want to take on the Central Plaza question. For NEX, we cannot share with you the specifics, but happy to say that inside the reversion is very strong, and it is above the average number you are seeing. All right? I think this is something that we have shared when we talked about the acquisition recently. We said that we see opportunity for us to gain organic growth from the asset through rental reversion, some remixing, and also, especially in terms of looking at how can we rightsize some of the tenants, et cetera. This is bearing fruits, and we are seeing a very strong reversion from NEX.
At the same time, the sales is pretty much in line in terms of the growth that we are seeing for the mall. Right? That hopes to answer your question on NEX. Pauline, you want to take on the Central Plaza?
Yep. Hi, Yew. Sorry, I got distracted by your question on NEX. You were asking about the reversion, right, for Central Plaza?
Yeah.
Okay. Actually, it is a very--
No, no, no. I mean Central Plaza, just to talk about the occupancy has been coming down, and in terms of the office reversion, it is weaker than some of the other office peers that we are seeing.
Yep. Okay. For Central Plaza, in terms of the occupancy, I would say it's still at a respectable level. It's above 90%, 90%-over , close to the mid-90s. In terms of reversion, what we have shown here is only for one space per se, right? But if I can bring you back to the, we were showing the revenue and the NPI. If you look at it on a year-on-year basis, it has actually been on the uptick.
Okay.
You see the revenue.
Yeah. Last question. Can you talk about plans for the AEI for NEX? There was this mention in a press release. Just want to know how much can you do. Is it a big chunk, or is it 5% of the total NLA, or how much can you squeeze out?
Yeah. We did indicate that overall, there's a potential to do about 60,000 sq ft of space. But of course, subject to what we can achieve or what will the approval comes back with, that is the maximum amount, right? We are working very hard with the consultants to push for as much as possible. But at the same time, we also want to create space that makes sense, right? I mean, 60,000, it's available, but it has to also make sense. That's one point, right? And we also shared that we'll be looking at between 15- 18 months in terms of getting the approval. So now we are in the process of going through that motion.
That 60,000 space is existing, or are you carving out? That means are you improving the efficiency, or are you getting additional GFA?
Okay. This is actually GFA that was previously used when they compute the car park development. All right. Because that is the old way of computation, back then, the guidelines would necessitate the use of GFA to build car park space. But it has since changed, meaning that now you can unlock this GFA without actually removing the car park. Just to, again, be very clear because NEX, you don't have enough car parks. In fact, we will be putting more car park as part of the AEI. But the underlying area that was computed as car park usage previously can now be unlocked and convert into commercial revenue-generating space. It's an addition to whatever NLA that we have today, if you look at it from that perspective, just to simplify it.
Okay.
Yew Kiang , if I may, put it into perspective. If you look at the NLA for NEX, it's about 600 over 1,000, right? This 60,000 sq ft is actually GFA. If you are able to get very high efficiency from that GFA, it's quite close to that 10%, right? If you are able to convert that GFA. Yeah.
Okay.
Info.
Thanks. Thank you.
All right. Moving on to the next question from Geraldine Wong, DBS. Please go ahead.
Morning. Thank you for taking my question. The first one will be on reversions. Can we expect Tampines 1, when it starts to contribute, to deliver above portfolio average reversions, maybe in a double-digit range? White Sands looks a bit weaker, potentially from the Pasir Ris Mall. Do you expect this to stay on throughout the first leasing cycle as that asset ramp up?
Yeah. Okay. For Tampines 1, as we have shared, because what we are expecting a return from our investment in the AEI, it is about 8%. Right? So that comes from the uplift in overall revenue or rental that is going to be generated as part of this AEI. So, if you look at this pure reversion, I think it is pretty much aligned with what we are getting right now. Some spaces, of course, will be higher than others, but overall, it is about that range, 7%+, 8% reversion. For White Sands, you highlighted that, yes, this is one of the softer reversion that we are seeing in terms of our portfolio.
Partly, we have done a lot of work around remixing our trade mix, strengthening our trade mix, and to complement what is coming up at Pasir Ris Mall. It is a deliberate effort for us to improve some of the tenants or rather, replacing some of the non-performing tenants with better performing tenants, better brands. And like what I said, this is in our effort to complement the upcoming opening of Pasir Ris Mall.
Richard, if I may supplement on.
Sure.
Tampines 1 AEI. Richard mentioned earlier that, in terms of the ROI, we are seeking that 8%. One of the key aspects of unlocking value is actually transferring the space from, say, a weaker, lower-rent area to a higher-yielding area. You see post-completion, we have actually moved or increased the space at some of the prime areas or prime levels like Level 1, basement, and so forth. In terms of overall rent or average rent for the mall, it will pick up post-AEI. That repositioning that we are undertaking to strengthen, it has this young and trendy positioning, T1. It will then future prove it for that stronger sales and that will then in turn drive the rental reversion for this mall.
I am not sure whether that gives you a little bit more perspective on your rental question.
Yeah. Thanks, Pauline. Very competitive in Tampines. If I could just squeeze one more in on utilities cost, I understand that there is some cost savings this year. Are you able to share any numbers, year-on-year savings or any form of quantum that we can expect?
I think we have indicated before that currently the utility cost is about 10% of our overall OpEx, and we expect this to go up by 1 percentage point to about 11%. We have done a lot of initiatives or rolling out a lot of initiatives in terms of cost savings, but not all of them will be completed ahead or on time or rather, some of the works are ongoing and may take a while before completion. The overall savings may not be achieved in this FY alone. We are still expecting the utility cost to go up by about 1 percentage point to about 11% of our OpEx.
Okay. Thanks, Richard. That is all from me.
All right. Thank you. Moving on to the next question from Joel Siew, DBS. Please go ahead.
Hi, Richard and team. Thanks for the presentation. I just had two questions. The first is regarding Tiong Bahru Plaza. Looks like the revenue dropped a little despite the higher occupancy year-on-year. Just wondering if you guys could elaborate on it. Is this due to sales turnover or some transition?
Okay. From that perspective, if you go to Tiong Bahru Plaza, you would have seen that some minor AEI work was carried out, in which we recover or rather we took back some space from the food court previously and also amalgamate that space to provide or rather to create a space and brought in Don Don Donki. All right. Now we have also a smaller food court, which is actually doing better, more efficient, and a new tenant in terms of having Don Don Donki in the mall. Because of that, work has created some downtime during the period, and that's one of the reason why you saw a lower financial performance from Tiong Bahru Plaza. But that is actually something we feel is more sustainable going forward.
Yeah.
Okay.
Richard, it's not just the food court space, it's also another mini anchor space that was recovered for the reconfiguration.
Yeah. That is amalgamated to create that space for Don Don Donki.
Yeah. In terms of the sales performance, it has actually panned out quite well post reconfiguration. That will then provide that trajectory for growth for this asset going forward.
Okay, thanks. My next question is regarding the tapping the bond market. I understand previously you guys shared that bank loans are cheaper than bonds. Is this still the case? I think the bulk of your retail bond peers actually trade at high- 3s or lower on the secondary. This compares against, I think, 4.1% of your average cost of funding. Just wondering, what are your thoughts around this?
Maybe I can take this question. For bond, it is always opportunistic, and it fluctuates from time to time. When we look at the refinancing for the upcoming FY, we definitely explore all options, be it bond or bank loans, and assess accordingly. Yeah.
Okay, sure.
Yeah.
Yeah. Or is it because you do not want to lock in a higher rate for longer? I am just wondering.
Yeah. We will explore and see what makes sense for the vehicle. At the end of the day, bring down the average cost of debt and exploring the various options that is in the market. Yeah.
Okay. Sure.
Yeah. Just to add, I think we always look at having a wider range of options available in terms of financing. But then it has to make sense, right? So at some point in time, we will also want to look at that market and not just rely on bank financing.
Yeah.
Got it. Thank you. That is all from me.
Right. Thank you. Moving on to the next question from Terence Khi. Please go ahead, Terence.
Hey, thanks. Thanks, Richard and team. I apologize if this has been asked before, as I dialed in late, but I wanted to check on revenue and NPI from NEX, essentially. It is very, very volatile. You have SGD 20 million up and down from second half of last year to first half of this year. It is almost like a 25% change. Could you share a little bit on what has been happening there? Thanks.
Fung-Leng, can you pull that slide?
No, no. To be specific, I am comparing against second half of last year versus first half of this year. I think on a year-on-year basis it looks flattish. But, yeah. So on a H- on- H basis. Yeah. Rather than year- on- year.
Oh, you are talking about quarter- on- quarter basis. There was a SGD 20 million movement. Are you referring to the distribution or the?
Both on revenue and NPI. Half on half. Essentially, if you look at second half last year, I think your NPI margins for NEX was close to 80%, and then first half last year was 76%, and then now it is normalized back to 77%. There seems to be quite a bit of noise coming from NEX.
Okay. Honestly, I think we need to compare those numbers, but from what we could see, in fact, the performance of NEX has continued to be very strong. Of course, there is some cost pressure coming from inflationary impact in terms of utilities, in terms of the cleaning and so on cost. But honestly, I do not think there is a movement about SGD 20 million, but we need to check on that. Pauline, do you have any visibility on that? Because I do not remember that.
No. Actually, it is like what you said, it is actually been improving. Can we tell you are looking at the same basket now because there is a change in the percentage over the period. Could it be distorting the numbers?
Yeah, possibly.
Yeah.
Maybe I will get back to you separately on that.
Yeah, maybe we can take this offline.
Yeah, we can take this offline. Yeah.
Yeah.
If I could ask on financing costs, maybe could you share a little bit on what is the expectations for financing costs for this FY, given that we saw a little bit of a dip in financing costs? Thanks.
We reckon that barring unforeseen circumstances, the average cost of debt for this FY should be around low- 4s.
Okay, that's great. That's all I have for now.
Thanks.
All right. Thank you. It looks like there's no questions in the queue at the moment. If you have any questions, please feel free to raise your hand. It appears there's no further questions from the audience. Maybe we can invite Richard to do a wrap and, yeah, Richard?
Yeah, thanks. Thanks, Fung-Leng. Just wanted to give a quick wrapped up of our performance. Like what we said, we are actually very happy to be able to share a set of healthy results, both from the financial front and also what you could have seen from the operating side of things, right? We were asked, I think, when we did our first- Q business update in terms of what we expect from the market, and our tune back then was that we are positive with the market and it's rightly so, as you can see from these numbers, and we continue to remain positive, of course, barring any unforeseen circumstances that in terms of traffic visibility, in terms of the performance of the mall.
I shared a bit about underpinned by limited supply, strong demand from retailers coming into the mall, strong performance by our retailers and so on. This is actually panning out as what we have expected. We hope that we will continue to be able to deliver on the same trajectory for the rest of the year. With that, I will end our presentation. Thank you so much for joining us today.
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