Capital Management CLCT adopts a prudent capital management approach, emphasising diversification of funding sources, including sustainable financing solutions, to strengthen financial resilience. We strive to achieve a balanced debt maturity profile while optimising funding costs to support long-term growth and stability. In addition, we actively monitor market conditions to capitalise on lower onshore interest rates, further strengthening our capital structure amid evolving economic landscapes. In 2024, China reduced its five-year Loan Prime Rate (LPR) by 60 basis points to 3.6%. Leveraging the favourable RMB rate environment, CLCT enhanced its natural hedging strategy to benefit from RMB interest rate reductions and lower borrowing costs. A key milestone was the successful issuance of a RMB400 million bond in October 2024 at a competitive interest rate of 2.9% per annum, maturing in 2027. This issuance replaced higher-interest SGD loans, delivering tangible interest savings while strengthening CLCT’s natural hedge position. Looking ahead, CLCT aims to increase its RMB-denominated debt to approximately 50% by December 2025, further strengthening its natural hedge position and capturing additional cost efficiencies. To support our refinancing needs and working capital requirements, we maintain access to a diverse range of capital sources, including both financial institutions and capital markets. CLCT has ample untapped facilities, with approximately S$425.6 million in undrawn loan facilities and S$676.50 million available under our S$1 billion Multicurrency Debt Issuance Programme. As at 31 December 2024, CLCT’s total gross borrowings stood at about S$1.9 billion, with an aggregate leverage of 41.9% and an average cost of debt of 3.51% per annum. As per MAS regulations for REITs updated on 28 November 2024, all REITs are now subject to a unified aggregate leverage limit of 50% and must maintain a minimum interest coverage ratio (ICR) of 1.5 times at all times. CLCT’s ICR remained healthy at 3.0 times. If we fully utilise the MAS limit of 50% leverage, we could access an additional debt headroom of approximately S$0.7 billion (RMB3.8 billion), should future acquisitions be entirely debt-funded. This ample headroom not only supports strategic growth but also provides the flexibility to navigate unforeseen market conditions. SGD- Denominated Debt 57% RMB- Denominated Debt i 35% MTN 8% FUNDING SOURCE i Includes FTZ Bond, RMB Bond as well as Cross Currency Interest Rate Swaps (CCIRS) on SGD loans to RMB. Including forward hedges as at 31 December 2024, total RMB as % of Total Debt is approximately 38%. Key Financial Indicatorsi As at 31 December 2024 As at 31 December 2023 Total Gross Borrowingsii S$1,857.3 million S$1,956.4 million Aggregate Leverageiii 41.9% 41.5% Interest Coverage (times)iv 3.0 3.1 Average Term to Maturity (years) 3.4 3.5 Average Cost of Debtv 3.51% 3.57% i All key financial indicators exclude the effect of FRS116 Leases effective from 1 January 2020. ii Excludes unamortised transaction costs and modification gain. iii In accordance with the Property Funds Appendix, the aggregate leverage is calculated based on the proportionate share of total borrowings and deferred payments over deposited properties. CLCT does not have any deferred payments. The Manager is of the view that the higher aggregate leverage will not have a material impact on the risk profile of CLCT as it is still within a manageable range in the short-term and the Manager will remain prudent and disciplined in managing the overall leverage profile of CLCT. iv The ratio is calculated by dividing the trailing 12 months EBITDA (excluding effects of any fair value changes of derivatives and investment properties, and foreign exchange translation) by the trailing 12 months’ interest expense, borrowing-related fees and distributions on hybrid securities (i.e. perpetual securities) in accordance with the revised Property Funds Appendix guidelines with effect from 28 November 2024. v Based on the consolidated interest expense for the respective financial year reflected over weighted average borrowings on balance sheet for that financial year. 25 Annual Report 2024
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