Good morning, ladies and gentlemen. Welcome to the results briefing for Frasers Property Limited First Half FY24 Results. My name is Gerry, I take care of investor relations for Frasers Property Limited. I have with me today in the room our Group CEO Panot Sirivadhanabhakdi, our Group CFO Loo Choon Leong, our Singapore CEO Soon Su Lin, our Industrial CEO Reini Otter, Hospitality CEO Eu Chin Fen, and joining me online are also the CEOs of our business units. Without further ado, I'm going to hand over now to Panote to go through our results slides. Panote, please.
Thank you, Gerry. Good morning, ladies and gentlemen. Thank you for joining us again today for the briefing. I definitely would like to begin with sharing with you more detail of our Group key highlight on our first half and overall of FPL financials. In our first half of FY2024, we were affected by our non-cash fair value loss and as well as the impairment due to the persistent weak market sentiment in the U.K. office sector, as well as high interest rate environment. As Choo Leong will go through with more detail on our results and financials later, after what I can share to you in overall of what we see, how we have achieved our strategy, and what we have laid down over the long-term goals.
The Group financial performance continued to be challenged by the headwinds of the market, so our focus is to remain in what we can control. As we shared during FY20 23 full year's results, we have continued to unlock value as part of our capital optimization initiative and increasing our development exposure for better risk-adjusted returns. In addition, we maintain our disciplined drive for return of recurring income and fee income on our asset class. Through our new property opening and AEI, we have continued to scale up our key markets and drive value creation as part of our active asset management initiative. To become more resilient through market cycle, our refreshed leadership team will continue to focus on our core competitive advantage as well as our optimizing of our portfolio mix and capital structure.
So as you have seen on the numbers as has been shown here, in addition to what the key factor behind FPL first half financial performance that we have mentioned earlier, lower residential contribution from Singapore and Thailand also impact our earnings as well. Cushioning the impact of our unrealised fair value loss were fair value gains on I&L properties both in Australia and in Europe on the back of rental growth. So in view, our residential development is a focus area moving forward, but we continue to adopt a prudent approach towards this asset class. And firstly, we are focused on segment with robust domestic demand. D omestic demand is driven by market fundamentals that are very localized, which is where we are strong regional platform come in.
Our establishment of local networks, know-how, and in good position to select, project manage, and ultimately deliver projects with better risk-adjusted returns. On this note, I'm happy to share that Park Greenwich, our EC project in Singapore, has attained TOP last Thursday. So we recognize the earning of EC projects on completion, so the earning of Park Greenwich will flow through in the second half. Secondly, we are using capital efficiency structure in addition to participate in joint venture from tender stage. We have been bringing in capital partners for ongoing development projects. Deploying the same amount of capital across more projects helps us to manage the risk and partially mitigate the inherent lumpiness of residential development contribution. As you see in here, beyond just residential development, we are leveraging on our development capability in non-residential assets as well.
This built-to-core approach allows us to strengthen our asset portfolio in our preferred location and select it through the sector that delivers attractive return. The ability to develop our own property gives us the option to create differential products offering uniquely to the market. In our first half, we complete about 360,000 sq m of development projects. Ending the period will be closer to 1.1 million sq m on our pipeline projects under development. At the bulk of that are in I&L projects. We continue to pursue strategic investment in developing land banks in our key core market. This shown you on our recurring income and fee income fronts from focusing in strengthening the resilience of our income stream, which from substantial base of our earning, in addition to leveraging our core capability to scale up in the key market via capital efficient structure.
Our hospitality business has been deepening its presence in key gateway city via management agreements. I'm sure some of you are keen to hear what has been on the progress of our development of One Bangkok. I'm pleased to share that after almost a decade, now we are welcoming our first office tenant at One Bangkok Tower 4 in March, and this marked the starting of our One Bangkok opening before the end of this year. The majority of One Bangkok retail office tower, as well as two hotels that will be opening end of this year, which is the first Andaz and first Ritz-Carlton in Bangkok, will be opening by the end of this year as well. On top of the new opening, we have been ongoing in AEI initiative as part of our active asset management.
Beyond enhancing the value of our asset, all AEI projects are undertaken with the goals to maintain the relevance of our asset. Ultimately, it's about enhancing the property ability to produce more sustainable income over the long period. This view over the action has been taken as well to make capital available for development where it can deliver better risk-adjusted return. We have continued to unlock value via our Group REIT and capital partner and sales directly to third party as well. As mentioned over the last time I mentioned that over the first half, we divest our stake in NEX to FCT and four German I&L assets to FLCT. We also partner with Mitsui Fudosan on ongoing residential development projects in Brisbane. Capital partner ongoing development projects are serving two key benefits.
It helps us recycling our capital, and more importantly, it's sharing value development costs as well to overall risk-adjusted return for us. We divest non-core asset to third party as well, and we expect to complete the divestment of Capri by Frasers in Changi City by the end of the financial year. This first half, FCT completed the divestment of Changi City Point and its stake in Hektar REIT in Malaysia. Total capital recycling through Group discipline and consistent approach, it totaled SGD 1.1 billion in this first half. Our REIT platform can only be effective capital recycling vehicle if they offer an attractive proposition to the investing community. With this inclusion of FCT to the STI in March this year, the Group now has two REITs that are constituents in a meaningful index.
We'll continue to actively seek collaboration opportunity with like-minded partners and for both capital efficiency structure for new development as well as value capital partners for ongoing development and completing investment property as well. We have been progressing well in those fronts in our core market that we are doing. Important part on our future, we look as well as how we build core capability in real estate in a meaningful progress on our environmental commitment. As part of our ESG transparency and accountability, we have published the Group's first ESG Databook of FPL, FCT, and FLCT in February 2024. Together with its accompanying basis of preparation document, it will set out the foundation of our carbon accounting methodology, scope, and assumptions. This information contained within the databook also has been externally assured. So the ESG book is on its way to progressively quantifying our decarbonization efforts.
It's publicly available on our website, so please take a look at how we comply to look at overview how we achieve our goal in ESG. So, zooming out to looking at the entire portfolio, this is a snapshot of the operational performance of our portfolio in this first half. As at March 31st, 2024, we now manage SGD 48.9 billion of assets under management across five chosen asset classes. We are in it for the long term for our chosen asset classes in geographic markets, and we know that real estate moves in cycles. Drawing from our on-ground capability and multi-market insights, we have laid a clear set of priorities for each asset class in each of the key markets.
We continue to build on domain knowledge and have developed over the years as well as synergy that we are generating across our platform now to drive value creation, sustainability in our portfolio return. In this, I would like to thank you and hand over to Choo Leong to take you through to financial. Choo Leong , please.
Thank you, Panote. Morning, ladies and gentlemen. Thanks for being here today. I will go through in detail, a little bit more detail about our results and financials for the six months ended 31 March 2024. As most of you would be aware, we had a profit guidance announcement on the 9 of April foreshadowing our numbers, which are primarily affected by impairments and fair value losses of certain U.K. commercial properties arising from the current weak market sentiment in the U.K., which resulted in expansion of cap rates. In addition to that, there's also the impact of the lumpiness of residential development profit recognition that affects almost all developers. And last but not least, affecting everyone as well is the specter of the higher-for-longer interest rate environment. I'll dwell a little bit more into that.
Certain business parks in the U.K. recorded non-cash unrealized fair value losses and impairments due to significant yield expansion. This was primarily on the back of the reducing time to lease expiry of certain significant tenancies against the backdrop of persistent weak business sentiments in the U.K. The lack of current business confidence and market comparisons of transactions was also a key factor behind the impairment of commercial property in the U.K. The combined impact of these unrealized non-cash fair value losses and non-cash impairments amount to around SGD 115 million. Cushioning the impact were net fair value gains that we got from our industrial and logistics properties, primarily in Australia, on the back of rental growth like what Panote mentioned earlier, which more than offset a slight expansion in the cap rates.
Moving on, if we look at operating profit, PBIT, as I mentioned earlier, lumpy contributions affected residential development profits. We do see higher contributions from China and Australia on the back of settlements following project completions during the first half. However, it was offset by lower settlements in Thailand and the absence of contribution from Rivière, which was completed last January. Meanwhile, the hospitality sector experienced a spike in relocation demand in Singapore in the first half of last year, which has since normalized. As a result, there was a reduced contribution from the Singapore hospitality portfolio this first half. Improved contributions from industrial and logistics, however, helped to offset some of these declines. So overall, we do see a drop of 15.7% on a total basis, but part of the impairments I mentioned in the U.K. were actually taken against PBIT. But that's an accounting classification.
Moving on across how we look at asset classes. As you are aware, more than 80% of our property assets are in recurring income asset classes, and this is reflected in the composition of the PBIT, whereby it comes in a similar fashion from recurring income asset classes. Industrial and logistics remain the largest component of the Group's property assets. The composition hasn't changed much since the last update. Across geography, similar stories in terms of how it's being spread across. Developed markets of Singapore, Australia, E.U., and U.K. continue to make up around more than 80% of our contribution. PBIT constitutes around 2/3 coming from these markets, and Singapore remains our largest geographic market as far as property asset distribution is concerned.
Moving on to the balance sheet and capital management, there's a drop in the equity due to the dividends that we've paid, which came out of equity. So NAV per share and NTA per share dropped slightly. Net debt to total equity is up around 80% from 76% as of the last financial year, mainly due to capital expenditure programs in Australia and Thailand as we continue to replenish our land bank in light of settlements. The combination of higher interest expenses and lumpy development contributions affected PBIT, and net interest cover was 2.3 x for this period. Our Group's balance sheet metrics remain well within our debt covenants. As at 31 March, the Group had SGD 2.6 billion of cash balances plus unutilised bank facilities. In addition, we have SGD 2.3 billion of unrecognised pre-sold revenue from contracted sales of residential units.
These are sold but not yet settled or completed residential inflow that will come over the next 12 months-18 months from our residential developments across our markets. In addition, from a capital management perspective, we continue to unlock value to optimize capital productivity. And for the six months under review, SGD 1.1 billion were unlocked from capital recycling transactions in the first half that Khun Panote has mentioned earlier. Coupled with our strong recurring income base of property assets that you saw earlier, we continue to have resilient and positive operating cash flows. And in terms of debt, as you can see, we have a high proportion of fixed-rate debt, which helped to partially mitigate the effects of high interest rates. Our Group's average cost of debt has inevitably risen and will continue to be impacted as the Group further refinances its debts amid the high interest rate environment.
As of 31 March, our average cost of debt on a blended basis was 3.8% per annum, up 30 basis points from 3.5% per annum as at 30th September 2023. We do have various funding sources in place, ranging from revolving credit facilities and loans for short-term bonds and green or sustainable financing for mid and long terms, and the net cash flows that I mentioned earlier from our businesses and our ongoing capital recycling initiatives. In addition, we have been actively exploring and diversifying our funding sources, including tapping the Japanese market as part of our efforts to manage debt costs in a higher-for-longer interest environment. We were rated AA- by the Japan Credit Rating Agency, JCR, when we successfully raised a syndicated loan facility in Japan late last year.
As such, we are confident that we have sufficient resources to meet our obligations, including the repayment of SGD 2.7 billion debt due over the remainder of FY 2024. If we were to exclude the REITs, our refinancing for FY 2024 would be around SGD 2 billion. We will continue to actively manage the Group's capital structure to optimize shareholder value. Now, I thank you for your attention. I will hand back to Gerry.
Thank you, Choo Leong . May I invite Panote to give closing remarks? Panote, please.
Thank you again for your time and your questions. Allow me to recap our main highlight today. As I mentioned, the continual market headwinds will have to continue to create a challenge for the real estate sector and for us as well. It reflects, as shown in the results. As we're looking forward to becoming more resilient through the market cycle, we have done so within the structure of capability and as well as diversifying asset portfolio. It is for us to now optimise our bottom line and capital structure, in my view. That lends to what has been kind of gauged and guided to the question as well. It's a three-focus area. One is building discipline and consistency to unlock. It's also via our REITs, via our capital partnership, or write-out sales to third parties.
That's to optimize our assets and be leveraging down our debt as well. Second is to increase our development exposure in view of whether it's residential or development for sales. It is an important part to drive short and medium term. And two, our view is to improve the risk-adjusted return on our portfolio. It is important that we choose to invest in the right sectoral trends and geographies that we are in. And with diversification of portfolio, we have the option to allow to lend through those markets with the ground capability. And the third part is to strengthen our resilience in the Group's recurring income and fee income.
It is part of what we view as new property opening in a key market and where we have sustainable competitive advantage, as well as we continue actively doing AEI to our properties and become an active asset management to our portfolio. So as we all share here, as our team, Frasers Property is built on a strong platform and a core capability over the years. And while we have not been fully mitigating the impact of external force, we are seeing the discipline to drive the return across our property cycle and helps to cushion the impact of what we cannot control. So we continue to focus on driving the balance of short-term, medium-term, and long-term value creations, leveraging and investing on our core capability, and making sure we will cement our foundation for sustainability. So thank you for your time today.
Thank you, Panote. Thank you, everybody, for your time. Have a lovely afternoon. Thank you.