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A very good evening to everyone. Thank you for making time to attend Mapletree Commercial Trust Results Briefing for Second Quarter and Financial Period from 1st of April to 30th of September 2019. For all those who are tuning in via webcast, a very warm welcome as well.
Today, I'm very pleased to introduce MCT's management team with us today. They are Ms. Sharon Lim, Chief Executive Officer; Ms. Janica Tan, Chief Financial Officer; and Mr. Koh Wee Leong, Head of Investment & Asset Management. Today's presentation is based on the results presentation deck that was just published on SGX, which you can download easily from our website as well.
So we shall start with the financial results to be presented by Janica and Wee Leong will then bring us through the operational performance of our assets. So I would now like to invite Janica to start with the financial results presentation. Janica, please.
Okay. Good evening. Okay, we are pleased to share the continued steady performance of our existing portfolio for second quarter FY '19/'20 despite some tenant changeover at Mapletree Anson.
So some key highlights. Gross revenue and NPI registered year-on-year growth of 1.9% and 1.7%, respectively. DPU for the quarter was up 2.2% to $0.0232. In terms of portfolio performance, VivoCity continued its robust performance. Gross revenue grew 5.1% and NPI 4.9% versus last year.
So during the quarter, VivoCity's tenant sales held steady on a year-on-year basis. Momentum of shopper traffic and tenant sales has picked up with the progressive opening of the new store at B2 and Level 1 as well as FairPrice. FairPrice started operation in mid-July.
Okay. On 27 September, we announced the proposed acquisition of MBC II at an agreed property value of $1.55 billion. Unitholder's approval has been obtained at the AGM held earlier today. So with the addition of MBC II, MCT -- about 80% of MCT's portfolio in terms of valuation and NPI shall be from the best-in-class assets in the retail and the business asset class sector. The acquisition is also expected to be NPI, DPU and NAV per unit accretive.
In terms of capital management, we have secured $100 million term loan facility and is on track to refinance the balance $50 million MTN deal in November.
Okay. Going into more details, gross revenue $112 million for the quarter, 1.9% higher year-on-year. This was largely driven by higher contribution from all property except Mapletree Anson. The high contribution were mainly from step-up brands in existing leases and positive rental reversion and also at VivoCity, the AEIs.
Second quarter NPI, $87.7 million, 1.7% up against the same period last year. Interest expense, $17.7 million, started to stabilize, is about 1.9% higher than last year due to higher floating rates in the earlier quarter and also higher percentage of fixed rate debt. Distributable income for the quarter, $66.2 million, and DPU $0.0232, 1.9% and 2.2% higher, respectively, versus second quarter last year.
For first half, actual versus last year, distributable income was $134.1 million, 3% higher due to higher NPI by 2.2%, offset by higher finance expense, 2.9% higher at $35.3 million. So DPU, $0.046 for first half are 2.9% higher year-on-year.
In terms of balance sheet, in conjunction with the proposed EFR to fund the acquisition of MBC II, we did a revaluation to our existing portfolio. So our existing portfolio's valuation increased by 4.4% to $7.35 billion. So this is mainly due to compression of cap rates for the office and business park portfolio and better underlying performance for VivoCity. NAV per unit is now at $1.70.
Key indicators. Total debt remain unchanged -- total debt outstanding remain unchanged, $2.35 billion, of which 82.6% is fixed by way of interest rate swap of fixed rate debt. Gearing dropped to 31.7% from 33.1% last quarter and this is mainly due to the upward revaluation of our value -- property value. Interest coverage unchanged, 4.5x. Term to maturity, 3.1 year and with the average all-in cost at 3%. Moody's has reaffirmed our rating at BAA1 post acquisition -- post our announcement on the acquisition.
This is our debt maturity profile. It's the same, remained well spread, and this is the distribution detail. Other than the $0.0232 per unit for the quarter, the rest of the distribution timetable, we will make announcement in due course.
Thank you. Wee Leong?
Okay. So quickly going through portfolio updates. So on the portfolio, revenue-wise, gross revenue is up about 2.6% year-on-year and net property income is up 2.2%. All assets contributed positively to the increase in net property income except for Mapletree Anson. There is some changeover of tenants at Mapletree Anson currently. About 3 floors, 3.5 floors currently are vacant, but new tenants has already taken over currently to ease it up. So that cash flow will come in progressively in the current quarter through to the beginning of the -- through to the fourth quarter of our financial year.
Okay. So you can see the drop in occupancy for Mapletree Anson where, on a physical occupancy basis, is about 75%, but committed occupancy is still about 99%. The remaining assets still remains -- still see fairly good occupancies. The only one that maybe is a little bit -- except for Mapletree Anson, the only one that's a little bit of a drop there is PSA Building. But for PSA building because of the rents that we charged to the outgoing anchor tenant, the property is still positive in terms of revenue and net property income contributions.
On a leasing basis, retail is still going fairly -- still fairly healthy. Rental reversion is about 6.8%. On the office and business park side, it's currently about 0.7% net of reversions.
The lease expiry profile still remains fairly well spread out, with currently no more than about 51% -- sorry about that -- no more than about 25-ish percent expiring in 1 year and on the -- with average lease expiries about 2.8 years.
So driving down a little bit into the other performance of VivoCity, you see that shopper traffic and tenant sales are both down a little bit on the first half basis against the previous year. Shopper traffic largely due to 2 main factors. One is of course the fact that we did not have a gross operating in the month for the first 3.5 months of the financial year. And on the other end is that even though we had a very big Mid-autumn Festival event this year with Alice In Wonderland at the Sky Park, last year, where we have collaborated with Disney to do a Tsum Tsum Event, that was significantly more popular and had quite a bit more footfall.
On the tenant sales side, the biggest contributor is actually the fact that there was no gross operating for the first 3.5 months, right. And you see only a first full month contribution in August, in August just passed, as well as together with the other AEI units that have been opened at Basement 1 and Level 1. So if you just look at the asset enhancement initiatives, we completed the changeover of the grocer. So like I mentioned, FairPrice opened towards the end of July, I think 26th of July was the opening date. So first month contribution was in August and then September.
In general, their sales performance have been fairly strong, definitely better than the outgoing tenant. At the same time, together with the changeover of the grocer, we are taking back a bit of space from them. The previous grocer took up 115,000 square feet thereabouts. The new grocer is taking about 100 -- taking about 91,000 square feet. The 24,000 square feet difference we have leased out to specialty tenants, so there's an uplift in terms of rentals from an anchor rental to specialty rentals.
On Level 1, where we cut out the entrance slightly, we have given the space partly to UNIQLO so that we can have a larger anchor store. We also took part of the space to give to a café music concept. So first TV shop we have at the mall in many, many years. In Basement 2, where the cashier counter of the previous grocer used to be, we have converted that into a row of F&B shops. The intent there was actually to actually improve the mix of low- to mid-end restaurants in the mall, especially in terms of having a bit more halal-certified halal restaurants and quite a few of the restaurants in the basement to stretch our halal.
Okay. So the -- probably the bigger news in the quarter is actually the acquisition of -- announced acquisition of MBC Phase 2. Together with the parts of MBC that MCT doesn't currently already own. We had our AGM this afternoon so that has already been approved by unitholders. And I think they clearly also see the quality of the building as well as the benefits of the deal. It definitely adds another best-in-class asset to MCT's portfolio. Together with MBC I as well as VivoCity, MCT's portfolio will be anchored about 80% in terms of revenue by 2 best-in-class assets. This asset will add about another 1.2 million square feet of business park space to the portfolio. The length tenure, of course, is similar to MBC I and it's the longest length tenure for business park space in Singapore currently. And rentals are actually on the high side for where business park spaces are, which is in the condition of the positioning of the property, where its location is and the quality of the specifications of the building.
So in terms of financial attributes, it's NPI yield-accretive, which is the current asset, the property we are purchasing is trading at about 5% yield based on the agreed property price. The current portfolio NPI yield is about 4.7%. It is DPU-accretive and this 4% DPU accretion in a pro forma basis is based on the $2.10 issue price, 45% loan-to-value ratio for acquisition debt and acquisition debt assumption of 2.9% all-in cost. Together with the fact that for the property that we are purchasing, the management fees will be taken entirely in cash rather than 50/50 cash and units. Lastly, it is on NAV per unit basis also accretive about 2.2%.
So post acquisition, the MCT's asset value will increase from $7.4 billion to $8.9 billion, market capitalization expected to increase about 14% thereabouts, assuming the sponsor stake remains constant.
Okay. So completing now the presentation, we'll take any questions that you might have.
[ Huay Fai ] from UBS. Would you be able to share who took out the space at Mapletree Anson or what trade sector?
Okay. It's a combination. I think we will not hide, I think we did talk about we were taking a portion of it. And that's one shipping, okay?
And a media company.
And a media company. So they are all doing fit-out, that's why when you look at our occupancy, don't get too shocked with 75%, we count on a cash flow basis. So it will only have one unit and the unit is taken up on a 15 -- paying cash on a 15 is 50%, okay? So those 2 floors are undergoing fitting out. So progressively, they will stop paying rent after their fitting out period, some in November, December and one in January, yes. So in terms of committed, it's close to 100%, yes. So this was the ex Sumitomo space and -- yes, that we did quite a while ago, and WeWork, yes.
Jason from Goldman. Now with the acquisition of MBC II operation, what would you say your areas of focus are in the next 12 months?
Next 12 months, get the team in order, look at how we can shift a little bit in terms of better manpower usage. I think we can merge some of the technicians and reassign some of the work. Then, of course, for the leasing team, it's additional 1.2 million square feet, yes. So that's quite a bit. But there's not much tenancies up for renewal. So in that case, focus will be a lot on the bigger tenants. I think a lot of people are wondering what am I going to do with Google. But Google is still 2 years to go, so we will just carry on working with them. And if you look at -- maybe just to dabble a bit on Google again, I'll repeat again. The Google leases are not all expiring at one time, they took out one portion of lease this year. So in 2 years' time, it's only a portion not everything. And he's also taking up space in my neighbor because we couldn't satisfy the whole entire over 1 million square feet, and that's only starting in 2020.
So a lot of focus is on getting all the renewals in time. But of course, it's way too early to even start talking about renewals. But nothing is pointing to us that they're moving out, yes, because it's new lease. One part of this lease start in June this year, new lease starting in 2020. So I think when we look at his profile pick up, I think he likes -- we'd like to think he likes the location.
So this quarter, I think Vivo is still coming up strong, a little bit on rate indicators, but I think can be explained. One is Tsum Tsum on the traffic. And in terms of sales, the first quarter, quite clearly, I did have a grocer, okay? Definitely, NTUC is doing better than Giant. On the first month of sales, it was already what sales Giant took 12 years to build up to. So I think we're set -- we're in a good shape in terms of getting NTUC and I think that's the right strategy, yes. So as NPI growth is in close to -- in order of close to 5%, about 4.9%, so it's still growing very, very steady. Reversions, I think looking quite still strong, still in the 6s. So I think Vivo is still in good steady state. When we -- today we got approval, after this acquisition, MBC I and II, together with Vivo, is 79% contribution. Two nice solid core assets that will anchor down for us. Yes.
Sharon, just your thoughts on the backfilling of the PSA spaces, wondering whether are you actively pre-marketing any indicative spaces.
Okay. We have pre-marketed, we have done 60%. There's another 40% to go. I think we should be in good shape. The other question I think a lot of people are asking us is how much do we have WeWork. I've been answering that on the road for a good whole entire week. So nothing to hide, WeWork will be in order on an expanded basis, full-on basis about 2.7%, okay? I'm more than happy if he doesn't want to -- if he wants to get back the space, I'm more than happy. I think we should be able to handle the space. Because if we look at some of the tenancies that they signed within the WeWork space, it's a little bit more back-to-back, not short-term leases on a membership style. So nothing stops me from like one -- there's one tenant per 2 floors, yes, out of the Anson 3, 4 floors. So nothing stops me from going. If something happens to them, not that I'm hoping that he go bust, but if something goes wrong, nothing stops me from going direct to them.
So his mode of operation is slightly more different in Singapore, as I understand. There's more matching of long-term liability, i.e., their leases together with what they lease out versus membership staff to come in for the day and so on and so forth, yes. So that's how we do it. WeWork is still contained at about [ 20% ] we are very careful with the tenant. From day 1, we also want to be a bit measured in terms of the amount of space that we give for co-working.
We looked at the numbers. We looked at the general market even 2, 3 years ago. We were very careful, because, especially for one building, one owner -- one building, one tenant type, your ability to seek financing may be a bit affected. It is co-working, yes? Because I think the banks are not over the line 100%.
So that is always at the back of mind. We -- 2 years ago, if you remember, we had a huge flood of supplier and a huge supplier -- demand was taken up by co-working space. So the question is whether you keep it vacant and wait for the other tenant to come in 9 months later or you take the cash and hope he doesn't fall and lease the downtime for later if something happens.
So I think a little bit of realistic approach that a lot landlord too would take the cash first than to let it vacant and wait. So for us as a group, we are very clear, co-working, we'll contain them. We couldn't 100% live with them 2 years ago, but I think it's still manageable. It's still in the order of [ 20% ], yes. So I perfected my answer because every investor was asking last week when we went on a roadshow on an NDR, so yes, just explained to them.
So WeWork is across a few buildings, right, is it?
WeWork is in Anson and will take up some in PSA, so I'm counting everything in when he completes.
Okay, sorry, just last question. I'm just wondering now you've MBC II, right? It's going to be very, very sizable. I think previously we talked about you taking more risk in terms of development, but is that something that you are planning at this point?
Okay. I -- if I talk about contractually without talking about building in specific, I'm not against it. We just have to measure in terms of: one, what is the drag on my DPU if I do it? And what is the potential upside if I do it, okay? So that's the broad consideration. The other point to look at is, did a party reach to 1 million to be a partner, okay? If we talk about our internal pipeline, can I JV? I would tell you I'd love to. Question is whether he wants me or whether the group wants me in terms of value added. I have vested interest. So like I always share, I have vested interest in the outcome on the final product because I have a ROFR. So whether it's formal or informal, we will try to give our two cents' worth, yes. Maybe just to share as a group thinking, I generally sense that the -- my sponsor prefers commercial development over a residential development if they have a choice. Because resi is a little bit more one-off, very spiked and dropped in terms of P&L. But commercial is a little bit long-term investment. And it's a very good complementary, especially to retail. Because it's the highest used and density amongst all the use class, yes? So if they need to -- if they are looking at reconceptualizing certain things, I'm quite confident to say that commercial will be a -- office will be a very key component.
We have a couple of questions from the online participants. First from Terence of JPMorgan. If you were to strip out the impact of Tsum Tsum and the grocer's downtime, how are the footfalls and tenant sales recovering in VivoCity?
Okay. The Tsum Tsum -- if I put back Tsum Tsum, I'm fine in short, okay? Then if we took out the tenant sales itself, I throw back what I think that on the -- this Giant -- sorry, NTUC would do, I think we will be fine. If you look at Quarter 1 to Quarter 2, is definitely narrowing, okay? It's not full quarter of entire NTUC sales. But let's realistically say there are some ups, there are some downs in the group sales. I'll give you some highlights here. My Cinema is not doing fantastically because there's no blockbuster, it's close to minus 10. I think you can ask any of the -- any landlord they should give you the same number because they are very blockbuster driven.
The plus is my F&B is up 10, okay? So there's a bit of cushioning in terms of that. The one that I personally saw was quite stuck was my potato chips guy, he's not doing the millions anymore. I shouldn't say who. I think it's a fact that came very strongly, that now the salted potato chips is not as -- not putting -- they used to like very small kiosks, talking millions here of sales. So that guy is dwindling off. So I can attribute $1 million, $2 million sales to him already.
Yes. So this round we announced and finished the story around the Giant conversion into NTUC is in good shape. I think we've done the right thing. The F&B are okay. It's got a few more other options which I like. And we actually do a bit of supple things that you may not notice which is you see the opening of the door, the widening of the corridor leading for the compound, indoors are very subtle. We upgraded all the lobbies, very subtle.
So I think this changing of the grocer to me, personally, is the right move. This guy is a better operator, better procurement, operations stronger, fresh and grocery is stronger, which is still the main focus, which is about 80% of the entire space that they use. We cut them down, we cut up the space. The other ROI is about 40%, 50%. So that gives me additional money and also incremental income plus also the additional trade. But even just hypermarket to hypermarket, the balance of space is already about 15% higher. So all in all, this is a very nice change in my view that can take us at least through the next couple of years before, maybe, new trend comes up.
There is a follow-up question from Tan Xuan of CLSA. So in that case, what would be the occupancy cost for VivoCity?
Okay, you see my rental is going faster than my sales. So slightly higher, about 20, 21 thereabouts, yes.
Okay. [indiscernible] from Macquarie has a question. Can you share the breakdown of cap rates from August 2019 valuation?
Okay, cap rates in the -- is in -- I think it's in the slides, right? The -- can we flash the slides?
The cap rate is actually in our AGM slides or our slides on the proposed acquisition of MBC II, all the information is in there.
Okay, I can give you a quick rundown. VivoCity, this round of August valuation, the cap rates is from 4.6% to 4.625%, okay? Because we did -- every valuer cannot do more than 2 times, so there's a rotation. Even when there's an expansion of cap rate, the numbers do go up because the underlying was still growing. Every company or every valuer has different set of assumptions, their own-house view. But overall, it's about the same.
They can expand a little cap rate, they may tighten a little bit discount rate overall, the number is about the same. So it's just different house views. So cap rate widened but the number of change, there's still about 1.9% up in terms of valuation change. The PSA office, 10% there's 4.1% to 4%, okay? Then ARC is about 4.85%. MBC is about 3.9% for Office. Then the Business Park is 4.95%, then the Merrill Lynch is 3.9%, Anson is 3.5%. MBC II, as per the circular, is about 5% -- it's 5% -- 4.95%. Yes, 4.9% and 5%, so average 4.95%, Vivo is 5%, that's right. I'm quite impressed with myself that I can roughly remember.
One more question. Can you talk about the leasing interest and demand for office and retail in the market?
Okay, retail, I think, we are in good steady state. I think fashion don't count on them too much here. Realistically, casual fashion don't count too much, okay? The rest of the sectors are not too -- I'm not very concerned. It's still okay, as per normal. But just don't bank too much on casual fashion. The -- definitely, the interest is definitely weaker than before. Not that it's 0 but it's weaker than before.
Now going to Office. Office, I think, the sentiments, as per what I said, is not as bad as 2 years ago, okay? It's better than 2 years ago but it's not like in fantastic shape, okay? So I think when we were in Hong Kong, a couple of Hong Kong investors were asking us whether they saw -- we saw a lot of demand coming from Hong Kong side. They're saying that they are hearing a lot things of shift in terms of commercial space, demand moving from Hong Kong to Singapore. So I'd say wait to be seen. I think a lot of things is still very preliminary. So that has been the general sentiment that everybody feels that a lot of demand will move from Hong Kong to Singapore. That's what I got the sense from Hong Kong is -- Hong Kong fund managers, yes.
So generally, not as bad as 2 years ago, but not as beautiful as where I want it to be. But my Office portfolio, which is Anson, Merrill Lynch, PSA, 20%. And Merrill Lynch, I don't have to talk about it. Anson is already 90%, it's [ set to lease ] it out temporarily. It's only left PSA.
So PSA, we just have to deal with the couple of flaws that's coming up. I think that's generally where we are in terms of the Office leasing, yes.
Nicholas from Credit Suisse. Sounds like still quite a lot things to -- a lot more opportunities in Singapore. So do you assume basically that there's not much interest to go overseas?
I would say that our stand is still the same. We just acquired a very -- haven't completed, approved acquisition of very big Giant, $1.5 billion. Focus is still Singapore. I think after this round of dealing with -- and seeing all the fund managers is to reinforce that MCT, they like it for Singapore risk and the 2 assets. So I think for the near future, even when we just finish our 5-year review together with the Board and management all agreed, we will stay in Singapore in the near term.
Tan Xuan from CLSA has another question. Can you share a bit more about the drop in actual occupancy in Mapletree Anson, please?
Oh, okay. It's the -- what we calculate is based on the cash flow basis. The committed is close to 99%. So what is the variance between 75% and 99% is 4 tenants doing fitting out which will start progressively paying us rent in November, December and one in January, okay? So cash flows are -- in a way, it's coming in. Now fitting up, they don't pay rent, they don't pay us any cash. So that's where you see the occupancy dropping to 75%. Because how we calculate, we show you on physical, on a cash flow basis. So if they are there but don't pay us money, it's still 0.
Do you see tenants moving from CBD to the Fringe of a, like...
Mostly for Business Park inquiries is very high for bigger spaces. We are currently lying close to like 100% in MBC II. I think there's a bit more request for bigger space. Whatever that you see build to suit has come to MBC II before to ask for space -- new space, okay? So I think it's good news on that part, but not so much like for example for the centralized office, they are talking about bigger tracks of space moving from the CBD, yes.
Mervin from JPMorgan has a few questions. First the Office and Business Park rental reversion was plus 0.7%. Could we get a breakdown between the Office and the Business Park sector? And any thoughts on the rental reversion for VivoCity going into FY '21? Are there any mini anchors that we should be aware of? And also, are there any updates on Deutsche Bank's lease?
So the rental reversions for Office and Business Park actually are -- okay, so for Office except for one of the leases that Mapletree Anson, their lease was actually quite negative in terms of rental reversion because the previous tenant was signed at the peak of the Office cycle -- the previous Office cycle about 6 years, 7 years ago, right? So their rentals ended actually in the high 9, on those range.
Mapletree Anson's market rentals now in the high 8 to low 9 range. So that gave us the bulk of the negative rental reversions.
So again, rental reversions actually tend to have a tendency to float where -- vary based on where those previous leases were signed. Like I mentioned, Mapletree Anson, this one large lease was signed at the peak of the previous -- I think close to 2 cycles ago, right? And that high rental reverted down to market.
The Business Park rentals are still slightly positive and the -- slightly positive at the reversions. Generally, the leases -- because of the fact -- generally we have a little bit of pricing power simply because MBC I and II are both close to being fully occupied. So there is a shortage of supply in terms of good quality Business Park space in the City Fringe area. Because of that, we have a little bit of pricing power. So on that front, our Business Park rentals, we are seeing a little bit of -- we do see a little bit of slightly positive rental reversions as opposed to what we had for the previous few years.
Oh, so the other question was on Deutsche Bank space. Currently, they still occupy 2 floors at Mapletree Business City, and we'll continue to be in dialogue with them regarding what they want to do with their space.
[indiscernible]
MBC.
So your last question which is on the rental reversion on the Vivo for the 2021, we hope to be positive, Mervin. I still got '21 and -- '21, yes, so looks positive, we hope to be positive.
Now that you have MBC and VivoCity, just wondering what's your -- what's the group's direction going forward? Is it going more to retail office or commercial space?
I think we are open to retail and office just by virtue of our name, which is commercial. I like retail for wider cap rates, but it needs a lot of men to sweat it out, yes? I think we have the ability, but let's be very realistic. In Singapore, not many good retail change -- exchange hands. So likelihood will be more office. But I personally prefer retail. You get it right, you got to maintain right, and it's a wider cap rate which is not very common in the region, yes? It's by virtue of the lack of transactions in Singapore. So if you ask me, I like retail. But you got to be very selective in your retail. Not all entire 50 million stock is going to do well. And I think -- but there's nothing to talk about. I don't foresee any good retail changing hands. Actually, you don't see any in the next 1, 2 years.
Sharon, sorry. Just following up in your comments that your fashion tenants at Vivo, you don't count on them. I am just wondering whether specifically on this particular subsector right? If just you look at occupancy costs vis-a-vis their own operational footprint in Singapore, are they doing better at Vivo...
Okay. Actually, it's a very mixed feeling that we have when it comes to the big group fashion retailers. I personally had a one-on-one meeting with -- one of our big retailer. Interestingly, he tells me that, hey, I need some help. My ops is not doing fantastic. So I say what's wrong, doesn't look so. He said I measure it on the Southeast Asia, my biggest hole is in Hong Kong. My next hole is in Thailand. I need to reach our goal. I need help.
So it's quite odd that I think Singapore amongst the -- if the whole regionally and they are measured against regionally, they have a huge hole to patch. Hong Kong is big for them, big down. Then comes to Thailand, he said is also not fantastic.
So Singapore, it can help -- might help to cover. So quite interestingly I have to cover regionally for retailers here.
So I'm holding back by this -- I think we have to be realistic. How many of these good fashion retailers are out there? I think recently last -- is it 2 weeks ago for us any one died. Not unexpected. They were in a mall 1.5 years ago, we exited them. It was -- some of them -- we were kind of the view that not all was that bad over a period of time. So long and short of it, I'm saying that the traditional, a lot of demand usually comes from fashion retailers 10 years ago and 10 years now. Definitely not as strong as 10 years ago, okay?
Now when -- Hong Kong, if it's regional, gets down, they will be a little bit more skittish in terms of expansion. They've got to clean up their own P&L, yes, in Asia. You don't talk about Singapore centric, you talk about group fashion brands who owns a few brands. They have to clean up their books. Because definitely they're not going through a good time. And Hong Kong is a very big piece for most of them. They don't even dare to telling me how many months, they say first month is really down to a tee, don't even dare to think. And it's a very huge portion of their P&L as a group for Asia, yes.
Brandon from Citi. Just want to ask about the media anchors that Mervin was asking just now, can you share if there's any plans for the space for GV, Toys"R"Us and BEST Denki.
Okay, GV, we just renewed them. That's why you see the rental reversion in high singles, okay? There's a portion of it attributed by him. He's the best operator today. There's no reason for me to change him. He sales is always very cyclical, so don't read too much to it. Tomorrow, there's Star Wars. You see up the mall there's no Star Wars, you don't see -- it's very real and very linked.
So I'm not going to change GV. There's no other -- I think they are the one of the better operators already, not that many, yes. Then comes Toys"R"Us. Toys"R"Us is okay with us. So that unit is not the easiest to deal with. I'm not going to actively move him out. Obviously, I also don't like him to think that I'm not going to move him out. If you notice the unit now, the unit is smaller, frontage is very deep, okay? So I think he fits that area. He's not giving me any headache status, he's okay. Now comes to BEST Denki, we will -- I think we will share the next round, we are rechecking a little bit of things with him. We have not 100% rolled it out but is certain things that we rechecking a little bit of that space for the better, for the better. So let me save another story for next quarter also, yes.
Any other final questions from the floor? If not we can perhaps wrap up the session.
Thank you very much.
Thank you.