CapitaLand Integrated Commercial Trust 100 Risk Management Material Risks Key Mitigating Actions Geopolitical Volatility in the geopolitical environment, including shifts in international policies or relations, political instability, affecting investors’ sentiments, capital flows and operations in key markets where CICT Group operates. • Proactively monitor the geopolitical environment, government policies and regulatory changes, with timely assessments, to inform strategic and investment decisions. • Establish good working relationships with local authorities to keep abreast of regulatory and policy changes, and engage with local authorities. Investments and Divestments Deployment of capital into loss-making or below-target return investments due to wrong underwriting assumptions or poor execution. Inadequate planning to identify suitable divestment opportunities. • Review hurdle rates and weighted average cost of capital annually based on relevant risk-adjusted input parameters that serve as investment benchmarks and make necessary adjustments accordingly. • Maintain a robust investment approval process including comprehensive due diligence supported by an inter-disciplinary internal team, and/or local independent consultants to advise on legal, tax, building design, quality, environmental, health & safety, security, and compliance with local laws and regulations. • Evaluate all investment and divestment proposals against a rigorous set of criteria which includes potential for growth in yield, rental sustainability and potential for value creation. • Rigorous review of key financial assumptions and key sensitivity analysis are undertaken. • Identify potential risks associated with proposed projects and issues that may affect smooth implementation or attainment of projected outcomes at the evaluation stage and devise action plans to mitigate such risks as early as possible. • Integrate sustainability in real estate life cycle from the earliest stage of our investment and redevelopment. • The Board reviews and approves all major investment and divestment decisions.
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