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Operator: Good day, and thank you for standing by. Welcome to Kiwi Property FY '26 Interim Results. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Clive Mackenzie, Chief Executive Officer; and Steve Penney, CFO from Kiwi Property. Please go ahead.
Clive Mackenzie: Thank you, Maggie. Kia ora, and good morning, everyone. Thank you for joining us for Kiwi Property's interim results announcement for the 6 months ended 30 September 2025. I'm Clive Mackenzie, the CEO of Kiwi Property. And today, I'm joined by Steve Penney, our CFO; and Fraser Gunn, our Head of Investor Relations. I assume you have a copy of our presentation in front of you. If not, you can access one from the Investors section of our website at kp.co.nz. A quick reminder that as usual, we have included detailed financial and property information in appendices to the interim financial presentation. Turning now to Slide 4 to look at our progress on key priorities over the last 6 months. Kiwi Property is focused on increasing long-term returns for its investors. We do this through the ownership, development and management of a portfolio of high-quality real estate. At the core of our strategy is an ambition to be New Zealand's leading creator and curator of retail-led mixed-use communities. We believe our strategic mixed-use assets located in metropolitan areas with great transport access such as Sylvia Park, LynnMall, Drury and The Base will continue to grow and that by prioritizing them, we will create the greatest value for our shareholders in the years ahead. We are pleased with our achievements in the first half of FY '26, making strong progress against each of our strategic priorities. The first priority we identified at our annual results earlier this year was to efficiently manage the balance sheet and free up additional investment capacity. As at the 30th of September, gearing remained relatively flat at 38.5% with the operation of the dividend reinvestment plan funding our CapEx requirements. Since balance date, we have agreed the sale of Sylvia Park Lifestyle to a large-format retail fund managed by Mackersy Property. The proceeds from this sale is approximately $53 million, with some of the proceeds to be reinvested into growth opportunities. The pro forma impact of the sale reduces gearing to 37.5%. The second priority was to continue to drive rent growth. Despite a weak economy and a challenging leasing market, during the first half of the financial year, we have delivered strong leasing outcomes across the portfolio with total rental movements, including new leasing and rent reviews up 3.5%. Office leasing spreads were up 3.4%, supported by the ASB lease extension and encouraging tenant demand for premium office space within the Vero Centre. Mixed-use leasing spreads were up 3.2%. Now turning to Slide 5. The third priority was to maintain strong discipline on costs. Through controlled management and a culture of continuous improvement, our employment and administrative expenses were down by 5% when compared to the same period last year and adjusted for one-off costs. The fourth priority was to progress the sell-down of Drury large-format retail sites. Around 77% of the large-format retail land intended to be sold at the development is now under contract with settlement and profit recognition expected from FY '27 to FY '29. I'll talk through the conditional sales of land in further detail later in this presentation. Drury land sales will help to fund the project's capital expenditure with minimal net gearing impact on the Kiwi Property balance sheet expected from the development. Now turning to Slide 6. As well as strong progress on our key priorities, a number of other business highlights over the last 6 months are worth noting. Strong leasing momentum was seen in a number of our assets. ASB's lease at their North Wharf headquarters was extended through to 2040, which was a significant milestone and provides long-term certainty of tenure at the asset. Resido, our build-to-rent asset adjacent to Sylvia Park, was 99% leased at the end of the period, and Vero Centre's leasing is progressing well with occupancy now at 94.3%, up from 92.4%. Sales and foot traffic were marginally up at our mixed-use centers over the last 12 months. Positively, sales are showing signs of improvement, up 1% in the last 6 months compared to the prior 6 months. Catalysts for further sales growth are expected through improving customer spend conditions following interest rate cuts and IKEA's first New Zealand store opening adjacent to Sylvia Park in early December. In November last year, we provided a convertible loan to Mackersy Property with the intention that this would convert to equity. With the earnings milestone in the loan agreement now met, we can confirm that this loan will convert to a 50% equity stake in early December, unlocking an additional source of capital and potential earnings growth over time. Mackersy has launched a new large-format retail fund with Sylvia Park Lifestyle as a cornerstone asset and is currently seeking investor interest. I'll talk through the new LFR proposition in further detail later in the presentation. Over now to Slide 7. With New Zealand's first IKEA opening next week adjacent to Sylvia Park, it would be remiss not to mention its significance for the Sylvia Park Precinct today. IKEA is one of the most highly anticipated retail openings in recent years. And once open, it is expected to act as a significant draw card to the Precinct. To ensure the seamless integration of the 2 sites, we have completed a pedestrian walkway between IKEA and Sylvia Park to encourage cross-shopping. This walkway entry point on Level 1 will be beneficial in driving foot traffic to Sylvia Park's upper floor retail. We anticipate that the opening of IKEA will drive additional customer activity and reinforce the long-term value proposition of Sylvia Park. Now turning to Slide 8. Among others in the property industry, Kiwi Property discussed the country's seismic regulations with government ministers and raised whether the mitigation costs associated with appropriately sized compared to the risk. We are pleased to see the proposed changes announced in September by Minister Chris Penk, which are expected to provide greater clarity regarding seismic strengthening obligations. Proposed legislation will remove the new building standards ratings. Instead, the legislation will target buildings posing substantive risk to life in medium or higher seismic zones. Auckland is set to be removed from the earthquake-prone building regime altogether due to low seismic risk, meaning seismic strengthening would not be mandatory for Auckland buildings. Kiwi Property's portfolio is predominantly Auckland-based with 86% of our assets based there when excluding held-for-sale assets. In the valuations of Kiwi Property's Auckland's assets, we currently have a combined present value of $83 million in seismic CapEx assumed to be spent over time. Across our portfolio, including held-for-sale assets, the total seismic CapEx provision have a present value of $116 million, which could significantly reduce once this legislation is passed and implemented. Kiwi Property's valuations currently remain unchanged and any potential CapEx savings from the reduced seismic upgrade requirements will depend on a variety of factors, including market reaction, tenant commitments and lender expectations. Over now to Slide 9. We're pleased to have continued to maximize the day-to-day operational performance of our assets. Despite the challenging leasing market, we have continued to grow rents and increased both our weighted average lease term and occupancy. As you can see on this slide, total rental growth from mixed-use office and retail leasing activity was up 3.5% for the half year. Driven by the renewal of ASB's lease at North Wharf, over 28% of our office space was re-leased or renewed with a spread of 3.4%. At the half year, 68% of our total portfolio of our income was subject to either a fixed or CPI-based review, allowing for future rental growth. Overall portfolio occupancy has increased 96.9% to 97.9% over the period. This increase was primarily due to the lease-up of Resido, which had 293 of 295 apartments leased as at 30 September and positive leasing momentum in the Vero Centre and Sylvia Park adjoining properties. Our weighted average lease expiry increased from 3.8 years to 4.3 years over the period, primarily due to the lease extension at North Wharf for a further 9 years. Turning now to Slide 10. Sales across our total portfolio were margin lower, down by 0.6% over the last 12 months. However, sales and foot traffic at our mixed-use assets were marginally up by 0.2% and 1.1%, respectively, compared to the previous period. Stronger mixed-use sales in the second half, up by 1%, shows there's momentum heading into the Christmas shopping period. Total occupancy costs were up to 15.5% from 14.5% across the mixed-use assets with a target TOC of 17% to 18%. This provides further scope for rental growth. Overall, sales appear to be recovering, and our hope is that this theme continues over the coming months. On now to Slide 11. Kiwi Property's asset values were marginally lower over the year with a fair value movement for the total portfolio down by 0.9% or $30.3 million over the last 6 months. Values look to have stabilized as interest rates continue to decrease with the investment portfolio capitalization rate broadly flat versus the prior year. The base valuation increased by 1.9%, thanks to continued strong leasing activity with a spread of 5.8% and occupancy at more than 99%. On the other hand, our Drury landholding valuation has seen a small decrease of $4.3 million or down 2.6%. This is primarily due to ongoing development investment. These capital works are expected to enhance the site's long-term value with short-term valuation movements expected during active project phases. I'll now pass over to Steve to talk through our FY '26 interim financial results on Slide 13.
Steve Penney: Thanks, Clive, and good morning, everyone. Kiwi Property has delivered a strong overall rental performance in the last 6 months with net operating income up 5.7% across our portfolio compared to the prior period. Our focus on mixed-use assets has delivered through cycle net operating income growth of 6.9%. At Sylvia Park, the lease up of Resido has contributed to an additional $3.8 million in income compared with September 2024, while the ASB lease deal at Geneva House added $900,000. The Base continues to perform well with Te Awa's new medical and entertainment tenancies in Level 1 driving higher income up $0.5 million. These results reflect our ongoing commitment to optimizing portfolio performance even when market conditions are challenging. Turning now to Slide 14. Adjusted funds from operations, or AFFO, increased by $3.5 million or 7.2%. This was driven by higher net rental income and stable finance expenses over the period. Employment and administration expenses when normalized for one-off costs associated with the ASB lease extension and other transaction costs were lower by $600,000 or 5.1%, reflecting our continued focus on controlling costs and delivering operational efficiency. Although our half year dividend of $0.028 per share reflects an 88% AFFO payout ratio, we expect the final FY '26 dividend payout ratio to be at the lower end of our 90% to 100% AFFO target range. Turning over to Slide 15. Our total property assets, including our investment properties and Drury land classified under inventories was $3.3 billion as at 30 September 2025. Gearing remains relatively flat at 38.5% with proactive capital spend reduction and the dividend reinvestment plan supporting the stability. Pro forma gearing is expected to reduce to 37.5% following the completion of the LFR fund transaction. Net tangible assets per share were marginally lower at $1.12, down by 2% from $1.14. The interest cover ratio was 3.1x, up from 2.9x in March. Now over to Slide 16. Kiwi Property continues to be well supported by our banking group. In August, we increased our bank facilities by $35 million with headroom of $248 million as at 30 September. Our weighted average term to debt maturity was flat at 3.1 years. During the period, Kiwi Property took advantage of lower cost facilities during the refinance while still ensuring a healthy term to maturity was retained. To take advantage of lower relative interest costs after balance date, we refinanced the recently matured $100 million KPG040 green bond series with bank debt. Moving now to Slide 17. As a result of declining interest rates and lower cost bank facilities in our recent refinance, our weighted average cost of debt reduced by 41 basis points to 4.89% over the last 6 months. In this half year period, we entered into $95 million of new interest rate swaps. The proportion of fixed rate debt has decreased from 88% to 76% with an anticipated reduction in debt levels after completing proposed asset sales. We will continue to actively manage our hedging profile to provide greater certainty around interest costs. I'll now hand back to Clive who will resume on Slide 19.
Clive Mackenzie: Thanks, Steve. We're pleased that our investment in Mackersy Property is progressing to the next phase, creating value for KPG shareholders. The strategy behind our investment in Mackersy was to support the growth of Kiwi Property by providing us with a potential new source of capital and delivering earnings growth from a scalable business. The original loan arrangement supported the growth of Mackersy's business before our investor converted from debt to equity. Mackersy has made strong progress over the last 12 months, and the equity criteria for conversion of loan has been met as expected. This will result in the conversion of our original $6.5 million loan to equity in early December. We look forward to becoming a 50% shareholder in the Mackersy Investment Management business, which currently has over $2.2 billion in assets under management. Over now to Slide 20. We are pleased to announce that Mackersy launched a new large-format retail fund, also known as the Mackersy LFR Fund in early November. The new LFR seed asset will be Sylvia Park Lifestyle, which is our LFR property adjacent to Sylvia Park. The fund will be managed by Mackersy with Kiwi Property retaining property management and leasing of its contributed assets. Kiwi Property intends to maintain a long-term interest of between 25% and 50% in the fund with the fund intended to grow over time. This transaction highlights the benefit of our investment in Mackersy, which can provide us with new sources of capital to support our strategic objectives. The LFR fund structure will enable us to release approximately $53 million in capital upfront, maintain control of key land holdings within the Sylvia Park precinct and partner on any future potential LFR developments at existing Kiwi Property sites. Turning now to Slide 21. With asset sales providing some capital for reinvestment, we expect to commence several key development projects in the near term, subject to Board approvals and final designs. These projects include an Asian supermarket, a new pedestrian plaza at Sylvia Park as well as an expansion of available retail space at The Base. These initiatives will diversify our tenant mix, revitalize key precincts and create additional retail space to meet growing demand. The estimated spend for these projects is approximately $32 million. Moving now to Slide 22. At Drury, we are pleased to be able to announce 3 further sales of large-format retail land following the unconditional sale of 1.2 hectares to Foodstuffs in April. Earlier this month, we confirmed the conditional sale of 6.4 hectares to Costco Wholesale, a major international retailer. This significant agreement will serve as a catalyst for further development and growth at the site. This sale, along with conditional sales to the Briscoes Group and Harvey Norman, will provide capital for reinvestment. Together with the recent Stage 2 Fast-track approval, this validates the strategic vision for Drury as Auckland's next major metropolitan center. Proceeds from all sales to date totaled $115 million with settlement and profit recognition expected in FY '27 to FY '29. Stage 1 civil works and power connections for the large-format retail sections are underway, and Stage 2 has now been granted consent under the Fast-track Approvals Act 2024, increasing the consented developable area to around 140,000 square meters. Turning now to Slide 23. Our Drury development covers a gross land area of 53.3 hectares with total acquisition and development costs to date of $141.4 million. The current market value at September 2025 is $162 million with a salable land area of 39 hectares. CapEx remaining post 30 September is estimated around $161 million with an estimated completed value of around $387 million. And our capital allocation framework, the Drury project, is classified as opportunistic with a target IRR of 15% to 20%, supporting our long-term value creation strategy. And finally, over to Slide 25 for our priorities and guidance for the remainder of the financial year. Kiwi Property delivered a robust operating result in the first 6 months of FY '26 and delivered on our key strategic priorities. Heading into the remainder of FY '26, we will continue to focus on our 4 key priorities, which we know will make an impact. First, we will continue to efficiently manage the balance sheet. Asset sale proceeds will allow us to enhance our existing high-quality assets and progress other investment opportunities as market conditions allow, in line with our capital allocation framework. Secondly, we will continue to drive rental growth with a focus on maximizing the operational performance of our high-quality assets. Thirdly, we look to maintain strong discipline on costs and great progress made to date in this area. And finally, we will look to progress the Drury Stage 1 civil works, which will bring land sales closer to settlement. This follows the 4 large-format retail land sales we have achieved at Drury over the last few months. As a business, our goal is to deliver sustainable earnings and dividend growth for our shareholders. I'm pleased to reconfirm the FY '26 full year dividend guidance of $0.056 per share. This represents a 3.7% increase on the prior year, in line with our intention to continue to deliver dividend growth over time. Kiwi Property has made great strategic progress over the last 6 months, and we will continue to look for ways to add shareholder value over the rest of the financial year. Thank you for joining us today. That concludes our overview of Kiwi Property's interim financial results for the 6 months to 30 September 2025. Today's presentation, along with our FY '26 interim report, is available on the Kiwi Property website. I'll now pass over to the moderator who will open the phone lines for questions.
Operator: [Operator Instructions] First question comes from Nicholas Hill from Craigs Investment Partners.
Nicholas Hill: I'd like to kick things off with a couple of questions on the performance of your retail and mixed-use assets. Would it be possible to talk to what was behind the decrease in specialty sales per square meter?
Clive Mackenzie: Yes, there's probably a couple of things that are driving that. The first one, obviously, the economic climate would be the obvious one. But the other thing is we've seen, especially at Sylvia Park and The Base, a lot of our previously categorized specialty stores go up to many majors as they've increased their store size. And so those sales have gone out of the specialty store sales numbers.
Nicholas Hill: Okay. And then just looking at Centre Place North, I believe, was the Kmart lease renewal the main driver increasing income? Or has there also been a change in occupancy?
Clive Mackenzie: Sorry. Are you talking about The Plaza or Centre Place?
Nicholas Hill: Sorry, I got my wires crossed. What's the one with the Kmart renewal?
Clive Mackenzie: We did the Kmart renewal at The Plaza. Sorry, what was the question?
Nicholas Hill: Was that the main driver in the increase in rental income? Or has there been a change in occupancy?
Clive Mackenzie: That was the main driver, yes.
Nicholas Hill: Okay. And then I guess just to clarify something for me. You've announced that you're selling effectively a 50% interest in the Sylvia Park lifestyle asset to Mackersy Fund for $90 million. That equates to about $45 million, but you say that it will release $53 million from capital. Where does the other $8 million come from?
Steve Penney: So the gearing in the fund is slightly higher. So that's -- we get proceeds from the sell-down, and then we [indiscernible] gearing [indiscernible].
Nicholas Hill: Okay. And then last one for me before I let someone else have a go. How is the inquiry going for the last 2,000 square meters of the Vero Centre?
Clive Mackenzie: Great question. In fact, we're very close to securing another 1,200 square meters of space. We're just getting the lease signed at the moment, which will take us down to effectively just under a floor.
Operator: Next, we have Bianca Murphy from UBS.
Bianca Fledderus: First question for me is just on Drury. So given the conditional nature of the land sales, are you able to share what specific conditions remain outstanding and what the key risks are to settlement timing there?
Clive Mackenzie: Thanks, Bianca. Obviously, with [ fall ] sales, there's a number of conditions that need to play out. Firstly, we obviously have to do all the earthworks in terms of putting in the roads and the infrastructure so we can get a title. And for some of the international tenants, they require OIO as well. So those will be the main conditions across those tenants here -- or buyer, sorry.
Bianca Fledderus: Yes. Yes. Okay. That's helpful. And then just on the Mackersy Fund, could you talk about which other assets in your portfolio you see as suitable to be transferred to the LFR funds at some point?
Clive Mackenzie: In terms of the assets that we have in our portfolio, there's probably potential new developments. So for example, at Drury, there is still some LFR land that we haven't sold that could potentially end up in the Mackersy LFR fund. Also, there's an LFR site adjacent to the IKEA development, which also -- one develop could also be sold into that fund as well. So those are some of the more immediate ones, yes.
Operator: Next, we have Nick Mar from Macquarie.
Nick Mar: Just in terms of valuations, sort of intriguing you've executed the lease renewal at ASB, but the valuation is sort of flat despite cap rates. Can you just talk what else has sort of gone on there? What it would [ imply ] is what you're spending is in line or more than what the value of the issued [indiscernible].
Clive Mackenzie: I'll kick off, and then I'll hand over to Steve. Effectively, the valuers haven't moved the valuation. They've looked at market evidence out in the market. And I don't believe that the current market evidence justifies movement in the valuation. So that's probably the first point. I don't know, Steve, if there's anything else you want to add to that?
Steve Penney: It's probably market reads as well, Nick. Sort of a soft listing office market in the moment.
Nick Mar: But I guess you've just reset the rent on -- and the value [ has moved ] the cap rate, which would suggest that they have viewed it as a more attractive asset than it was prior to the lease renewal, so it's just a little bit intriguing, but no, that's fine. And then with the sort of where you've kind of cut up the portfolio between core and noncore. What is the sort of process around the balance of the noncore assets and how you want to sort of exit these over time?
Clive Mackenzie: Yes. So for some time now, we've obviously called out which assets we regard as noncore. Obviously, our intention is -- and again, as we have called out before, we want to focus on mixed-use assets in the Golden Triangle, which is obviously part of the [ capital ] sort of area where we see there's the most opportunity for growth. And so that will mean, over time, we'll move out of those regional retail assets and CBD retail, which is -- sorry, CBD office, which is not [ over ] core to our strategy. So we'll continue that process. Obviously, we've got [ The Base ] held for sale so that sort of signals our intent in that direction as well.
Nick Mar: Okay. And the office assets, is that something that might be likely to help you with? Or those sort of [ outweigh ] sales? And particularly with ASB following the lease renewal, have you had much sort of unsourced interest in that? And are you going to progress that?
Clive Mackenzie: In answer to the first part of your question, yes, obviously, Mackersy is open to office assets as well as they have a number of office assets within their portfolio. Given the size of our offices, it's most likely they will be to the broader market. And yes, we have had some initial interest in ASB, but still early days in terms of progressing that.
Nick Mar: No, that's great. And then just on sort of the rent was down or the total rent went down. Can you just talk through that and talk to what the leasing spreads [indiscernible]?
Clive Mackenzie: Okay. Our leasing spreads at Sylvia Park were actually slightly up. So I'm not sure which number you're looking at in terms of that. I'll just turn to the right number. So our overall rent reviews were sort of 4.1%, and leasing spreads were sitting at around 3.2%.
Steve Penney: You're looking at Slide 27 at the rental income?
Nick Mar: Yes, yes. There's a $1.9 million surrender fee last year, so you've got to adjust it and normalize it for that.
Operator: Next, we have Rohan Smit from Forsyth Barr.
Rohan Koreman-Smit: Can I ask a couple of quick ones? Just on the second half guidance, it implies a bit of a weaker half. I believe there's a bunch of maintenance CapEx that kind of looks pretty seasonal and incentives. I think last time we spoke, you said there was going to be a reasonable number this year, and it's obviously not in the first half. Can you just give us some color on those 2 lines?
Steve Penney: Yes. Maintenance CapEx will probably tick up a little bit. And the challenge for the second half of the year from a leasing perspective is you lose 2 months to do deals. So kind of running out of time to put those deals and to do the debt upside. So that's probably what we're seeing at the moment. In terms of debtor things like that, that's really stable. The provision for debt review slightly what -- [indiscernible] slightly but everything else looks [indiscernible] So it's more about it's a timing issue with leasing.
Rohan Koreman-Smit: Sorry. You're saying the whole movement is a timing issue with leasing? Is that how I should read that because you typically...
Steve Penney: [indiscernible]
Rohan Koreman-Smit: Do you have some color on that? And also the incentives as well? I get -- I feel like maybe there's something that you provided ASB given earlier comments on the building valuation that -- are you capitalizing incentives there? Or are you running them through your P&L?
Steve Penney: Capitalized [indiscernible].
Rohan Koreman-Smit: And sorry, maintenance CapEx?
Steve Penney: Sorry, maintenance CapEx. That's generally second half of the year as soon we expect to do that and spend a bit more. So it will be pretty consistent with last year, maintenance CapEx.
Rohan Koreman-Smit: Okay. And then just on the seismic disclosures, looking at your financial reports, when you go to last year's one, you had $42.8 million as a net present value of the provisions in the valuations. But today, you're telling us it's $116 million. What happened between FY '25 and now in terms of more than doubling your seismic provisions?
Steve Penney: You're talking about different numbers. One is the movements last year, and then we reported the total number. We've never reported the total number before.
Rohan Koreman-Smit: Okay. So these movements for the last -- so '25, you added $40 million, and then '24, you added another 40-ish. So that's a cumulative number, not the total?
Steve Penney: It's the change in the period -- over the period.
Rohan Koreman-Smit: Yes. Yes. Okay. And then just thinking about gearing because you've got a bunch of asset sales and it's going to take a while for you to sell down this Drury land. Where is your kind of target for gearing? Are we still kind of in that 25% to 35% range? Is that where we should think about you're gearing long term?
Steve Penney: Yes. So we can see with the CapEx we've got in front of us and the asset sales that we were targeting at the moment, we can see it [indiscernible] pro forma gearing [indiscernible]. Keeping in mind that the expenditure Drury is over quite a long period of time.
Clive Mackenzie: Yes. And any additional asset sales over time would reduce that amount down for the year.
Rohan Koreman-Smit: Yes, cool. And then just last one, and I know we probably agree and disagree on this all the time, but you comment multiple times that the Drury land sales will be used to fund project CapEx, yet you're running the profit through AFFO. Are you going to be running a lower payout ratio in the medium term to retain those earnings, so to speak? Otherwise, whilst the Drury land sales will fund the project CapEx, your dividend will be part funded by debt.
Steve Penney: Yes, we expect the payout ratio to be lower if you included the jury earnings in that. Yes, that's correct. Closer to the time, we'll provide the market an update.
Operator: [Operator Instructions] Next question comes from Arie Dekker from Jarden.
Arie Dekker: Just starting with Resido, net rental income was $3.6 million for the half, and your effective occupancy was pretty high given starting point was, I think, 82%. Can you just give an update on where your sort of outlook is now that it's fully leased and the starting rents have come in for year 3 stabilized income, which, I think, last year, you sort of sized at about $11.2 million.
Steve Penney: Yes, it's probably a little bit over double what it is now, closer to $8 million, I'd say.
Arie Dekker: And in terms of year [ 3 ]?
Clive Mackenzie: Well, that's in terms of this financial year, yes. This financial year. Yes.
Arie Dekker: Yes. Yes. So in terms of like with the rental growth that you'd sort of be expecting, does that mean sort of your outlook now, say, in 18 months or so time at the 3-year point would be sort of closer to $10 million?
Steve Penney: Yes. It's come back a bit. Yes, rental is a softer market, but we expect it to pick up again [indiscernible] [ the market cycle. ]
Arie Dekker: Okay. And then just in terms of the ASB, which has sort of come up in a couple of other threads of questions. I see in the commitments that there's a $22 million commitment -- future commitment for ASB North Wharf. Can you just sort of talk a little bit about the nature of that and over what time period that $22 million will be incurred?
Clive Mackenzie: It's over the next couple of years, and it's -- there's some tenant fit out in there. There's some baseball works as well for additional space. There's a little bit of spend on green. Yes, there's bathrooms. Yes, it's basically -- it's a refresh of the tenancy for the next lease term, yes.
Arie Dekker: Okay. And then just in terms of Vero, which is also going, I guess, through a bit of a partial renewal cycle, commitments there, $12 million. Is that sort of over a similar period as well, sort of next 12, 18 months and sort of associated with CapEx and also some incentives or CapEx only?
Clive Mackenzie: That's sort of over the next 12 to 18 months, as you call out. And that's -- there's a combination of upgrading works as well sort of the entry lobbies in the trip and some CapEx as well. There's no incentives in that number.
Arie Dekker: Great. And then just the last one for me. I mean I know it's a relatively small asset. I think you sort of paid $27.5 million for it 4 years or so ago. But the site that the city Impact Church used to occupy, what's sort of the future for that site now that you've sort of sold down an interest in the lifestyle asset?
Clive Mackenzie: We're actually very close -- we're very close to finalizing a lease for the office space in that tenancy. So that vacant space will come out. But it's an asset which, over time, we may look to down weight our ownership of with regards to Mackersy into the LFR fund potentially as well, yes.
Arie Dekker: All right. Kind of go down the way of the lifestyle asset. That's good.
Operator: Thank you. Thank you for all the questions. This concludes today's Q&A session and the conference call. Thank you for participating. You may now disconnect. Have a great day.