FOREIGN EXCHANGE VOLATILITY As CLCT's underlying income is denominated in RMB, movements in the RMB against SGD have an impact on net asset value (NAV) and distributable income to Unitholders. CLCT’s Approach: » Regular monitoring of key financial indicators. » Adopt prudent capital management strategies with appropriate mix of financing options or structures to limit foreign exchange exposure and boost greater financial flexibility. » Minimise the effects of foreign exchange movements by employing natural hedges, financial instruments and implementing prudent risk management strategies to mitigate exposure. » Launched the inaugural RMB600 million Free Trade Zone offshore bonds, and expanded the RMB-denominated debt facilities to achieve natural hedging from 13% as at 31 December 2022 to 20% as at 31 December 2023. For more information, please refer to the Capital Management section. CHANGING RETAIL TRENDS CLCT’s retail segment witnessed positive tenant sales and shopper traffic growth in 2023. There is an increasing emphasis on the development of memorable customer experiences. The progression of retail trends, influenced by social media and digitalisation, has redirected consumer preferences from traditional retail offerings to more immersive and innovative experiences. Hence, effectively utilising retail spaces is crucial in capturing these shifts. CLCT’s Approach: » Continuously refine tenant and trade mix strategies through asset enhancement initiatives and unit reconfigurations to adapt to changing shopper lifestyles and preferences, ensuring our retail offerings remain relevant and appealing. » Engage shoppers through organising frequent activities and events. » Prioritise the enhancement of the retail experience by harnessing the CapitaStar platform, the main digital enabler within CapitaLand's retail ecosystem. 2 3 ANNUAL REPORT 2023 27 Financials Framework Portfolio Performance Leadership Overview
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