23 Annual Report 2025 management contracts, while Eslead College Gate Kindaimae, a student accommodation property in Japan, is under a master lease. Growth Income For FY 2025, approximately 35% of CLAS’ gross profit was from growth income sources, which are management contracts of serviced residences and hotels. Management Contracts of Serviced Residences and Hotels Under a management contract without minimum guaranteed income, the income stream to CLAS is dependent on the operating performance of the property. In a market upturn, properties under management contracts provide the greatest growth potential. 28 of CLAS' operating serviced residences and hotels across Australia, China, Indonesia, Japan, Malaysia, The Philippines, Singapore, USA and Vietnam are on management contracts. The lease expiry profile of CLAS’ master leases, based on their gross rental income, is shown in the chart below. Lease Expiry for Master Leases1 As at 31 Dec 2025 2026 2027 2028 2029 and beyond 2030 78% 9% 3% 7% 3% 1 Percentage of gross rental income for master leases expiring at respective years over the total gross rental income for all master leases. The weighted average remaining tenure (by valuation) of CLAS’ 28 master leases is approximately 11 years. The weighted average lease expiry (by valuation) of the master leases that were renewed in FY 2025 is about 11 years. Management Contracts with Minimum Guaranteed Income Management contracts are entered into between CLAS and the operators and managers of its properties. Guests then lease the units directly from CLAS, including its subsidiaries (for properties outside of Japan) or other entities acting on behalf of CLAS (for properties within Japan3). An MCMGI enables CLAS to capture the upside during a market upturn, while the minimum income guarantee from the operator mitigates downside risks. As at 31 December 2025, 12 of our properties across Australia, Belgium, Ireland, Singapore, Spain and United Kingdom are on MCMGI. The weighted average remaining term of CLAS’ MCMGI is around 14 years. Living Sector Properties CLAS’ living sector portfolio comprises rental housing and student accommodation properties. Rental housing and student accommodation are counter-cyclical lodging asset types with long average length of stay of two years and one year respectively. Given the long leases and high average occupancies, these properties provide CLAS with income stability and resilience through market cycles. As at 31 December 2025, CLAS has 26 rental housing and eight student accommodation properties under 3 In Japan, CLAS’ interests in properties are indirectly held as trust beneficial interests through the godo kaisha and tokutei mokuteki kaisha structures and Singapore special purpose vehicles. Note: A waiver from the Monetary Authority of Singapore was obtained in relation to paragraphs 11.1(c) (iv) and (v) of the Property Funds Appendix regarding the disclosures of lease maturity profile and weighted average lease expiry for properties under management contracts, subject to the following disclosures: (1) the average length of stay of guests of properties under the management contracts (combined for both management contracts with and without minimum guaranteed income) for current year and past five years; and (2) the weighted average remaining term of the MCMGI.
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