Esr-reit · SGX:9A4U
Esr-reit — FY2024 Earnings Presentation
57 slides from Esr-reit's earnings presentation, 2025
Slide 1: Financial Results Presentation FY2024
Financial Results Presentation FY2024
Slide 2: Contents
Contents A FY2024 Results Highlights B FY2024 Results 1. Financial Performance 2. Asset Management 3. Investment Management 4. Capital Management C ESG D Conclusion and Outlook E Appendix 2
Slide 3: FY2024 Results Highlights
FY2024 Results Highlights SESR
Slide 4: FY2024 Overview and Looking Ahead
FY2024 Overview and Looking Ahead FY2024 DPU 2.119 cents Expected trough, given income loss from: ▪ c.$534.6m of non-core divestments undertaken in FY2023 – 2024 ▪ c.$800m proceeds from divestments and EFR used to reduce debt pending deployment for majority of FY2024 amidst rapidly rising interest r
Slide 5: Looking Ahead – Expected Revenue Increases While Managing Operating Expenses
Looking Ahead – Expected Revenue Increases While Managing Operating Expenses Contribution to NPI expected to increase due to full year rental contributions in FY2025 from (a) completed acquisitions (b) AEIs and (c) positive rental reversions, while managing operating expenses Expected Increased in R
Slide 6: Looking Ahead – Interest Costs Expected to be Lower
Looking Ahead – Interest Costs Expected to be Lower A. Lower all-in cost of debt from 4.03% (as at 30 Jun 2024) to current 3.84% Cost of Debt • Early refinancing of existing 2025 debt at c.15 bps lower margins • Acquisition loans for 20 Tuas South Avenue 14 and ESR Kisosaki DC – both of which were d
Slide 7: FY2024 Results Highlights
FY2024 Results Highlights Financial Portfolio Capital Updates Updates Management Gross Revenue Positive Rental Reversion Gearing S$370.5 million +10.3% 42.8% as at 31 Dec 2024 -4.1% y-o-y (FY2023: +11.1%) Cost of Debt Healthy Occupancy Rate 3.84% per annum 92.3% (31 Dec 2023: 3.91%) Net Property Inc
Slide 8: Year-on-Year DPU Waterfall Chart
Year-on-Year DPU Waterfall Chart ▪ Embarked on “4R Strategy” from FY2023, accelerating non-core divestments to rejuvenate portfolio & earnings quality and lengthen portfolio land lease ▪ Consequently, FY2024 lower DPU due to (a) lower NPI from the divestments of 12 non-core assets in FY2023 – 2024 (
Slide 9: FY2024 Results
FY2024 Results REIT
Slide 10: 1. Financial Performance
1. Financial Performance ESR
Slide 11: Summary of Financial Results FY2024 vs FY2023
Summary of Financial Results FY2024 vs FY2023 FY2024 FY2023 +/(-) (S$ million) (S$ million) (%) Lower gross revenue and NPI were mainly due to the loss of income from: (i) the divestment of non-core assets aggregating S$440.6 million in FY2023, 182-198 Gross Revenue 370.5 386.4 (4.1) Maidstone Stree
Slide 12: Summary of Financial Results 2H2024 vs 2H2023
Summary of Financial Results 2H2024 vs 2H2023 2H2024 2H2023 +/(-) (S$ million) (S$ million) (%) Higher NPI was mainly due to the contributions from the acquisitions of ESR Yatomi Kisosaki Gross Revenue 189.6 189.5 0.0 Distribution Centre completed on 15 Nov 2024 and 20 Tuas South Avenue 14 completed
Slide 13: Financial Position
Financial Position As at As at 31 Dec 2024 31 Dec 2023 (S$ million) (S$ million) ▪ The increase is mainly due to the acquisitions of 20 Tuas South Avenue 14 and ESR Yatomi Kisosaki Distribution Centre in Nov 2024. The increase is partially offset by the (i) divestment of 182-198 Maidstone Street loc
Slide 14: Financial Position (cont’d)
Financial Position (cont’d) As at As at 31 Dec 2024 31 Dec 2023 (S$ million) (S$ million) Net Assets Attributable to: - Perpetual Securities Holders 405.2 302.1 ▪ This increase is mainly due to the S$100.0 million perpetual securities issued in August 2024 ▪ The decrease is mainly due to the fair va
Slide 15: Distribution Details and Timetable
Distribution Details and Timetable Distribution Details Distribution Period 1 July 2024 – 10 November 2024 11 November 2024 – 31 December 2024 2H2024 0.275 cents(2) Distribution Rate 0.722 cents(1) comprising: 0.997 cents • 0.275 cents taxable income per Unit Record Date : 5 February 2025 Distributi
Slide 16: 2. Asset Management
2. Asset Management ESR
Slide 17: Proactive Lease Management with Well-distributed Lease Expiry Profile
Proactive Lease Management with Well-distributed Lease Expiry Profile Leasing Metrics (FY2024) Lease Expiry Profile (as at 31 Dec 2024) WALE of 4.2 years (FY2023: 3.4 years) 233,214 sqm 27.2% Renewals [A] (75.0% of Total Leases Secured) 23.8% 22.4% 77,620 sqm New Leases [B] (25.0% of Total Leases Se
Slide 18: New Economy Sectors Expected to Lead Positive Rental Reversions
New Economy Sectors Expected to Lead Positive Rental Reversions Albeit at a Slower Pace Stabilised Occupancy 100.0% 100.0% 100.0% 97.5% 95.7% 92.8% 92.3% 89.9% 89.8% 89.0% 86.3-89.9% 2H2024 3Q2024 National 3Q2024 JTC Average(1) Average(2) Greater Nagoya & Greater Tokyo(3) FY2023 FY2024 FY2023 FY2024
Slide 19: New Economy Sectors Expected to Lead Positive Rental Reversions
New Economy Sectors Expected to Lead Positive Rental Reversions Albeit at a Slower Pace ESR-REIT Asset Class Breakdown Passing Rents(1) vs Market Rents(2) (by Rental Income) (in S$psfpm) 70.2% of portfolio in New Economy sectors, with Most of the REIT’s portfolio passing rents are at lower bound of
Slide 20: Well Diversified Tenant Network
Well Diversified Tenant Network Top 10 Tenants(1) Breakdown of Trade Sectors By EGR Top 10 tenants remains stable, accounting for 33.2% Portfolio of 379 diverse tenants as at 31 Dec 2024, of Effective Gross Rents as at 31 Dec 2024 an increase against 365 tenants in 31 Dec 2023 1.1% 0.6% 0.6% 1.4% 1.
Slide 21: 2H2024 Leasing Update
2H2024 Leasing Update Approximately 211,000 sqm of New Leases and Renewals Key tenants secured during 2H2024 A Business Park B Logistics C High-specifications KWE-Kintetsu World Express (S) Pte Ltd Karitsu Co., Ltd Focuslight Singapore Pte. Ltd. Name of Tenant ESR BizPark @ Changi ESR Kisosaki Distr
Slide 22: 3. Investment Management
3. Investment Management ESR
Slide 23: Completed 2 Acquisitions Expected To Be +3.0% DPU Accretive
Completed 2 Acquisitions Which Are Expected To Be +3.0% (1) DPU Accretive Key Benefits of Acquisitions: 100% of the trust beneficiary interest in ESR Yatomi 1 Kisosaki Distribution Centre (“Japan Acquisition”) 1 4R Acquisitions are “On-Strategy” to ESR-REIT 2 Acquisitions are expected to be +3.0% DP
Slide 24: Completed Divestments at Premium to Valuation
Completed Divestments at Premium to Valuation ▪ We are targeting c.S$200m of non-core assets divestments in FY2025, continuing our portfolio rejuvenation strategy ▪ Currently, the REIT has c.13% of assets (by valuation) with <15 years land lease remaining 182-198 Maidstone Street, Altona, Victoria 8
Slide 25: Portfolio Rejuvenation Through Ongoing Redevelopments and AEIs
Portfolio Rejuvenation Through Ongoing Redevelopments and AEIs ▪ Full year rental contribution in FY2025 from completed AEIs is expected to improve DPU ✓ AEIs were completed in phases in FY2024 and only contributed c.60-70% of full year income ▪ Ongoing redevelopments and AEIs present immediate orga
Slide 26: 4. Capital Management
4. Capital Management ESR
Slide 27: Prudent Capital Management with Expected Lower Interest Costs in FY2025
Prudent Capital Management with Expected Lower Interest Costs in FY2025 ✓ Debt cost reduced to 3.84% (from 4.03% in 1H2024) Debt Breakdown (at 31 Dec 2024) – By Type ✓ Going forward, lower interest cost trend expected from: Total Debt of S$2,269.7 million ➢ Interest savings from expiring FY25 debt w
Slide 28: Proactive Debt Management with No Refinancing Risk
Proactive Debt Management with No Refinancing Risk ✓ Well spread-out debt expiry profile post completion of acquisitions in 4Q2024 ✓ No FY2025 refinancing risk: 2025 expiring term loan has been refinanced at c.15 bps lower margins ✓ Potential early refinancing of 2026 debt expiring at lower margins,
Slide 29: ESG
5. ESG
Slide 30: Inauguration of Sustainability Committee
Inauguration of Sustainability Committee The Board is committed to further integrate ESG practices into our strategy and business decisions to deliver sustainable long-term returns Board of Directors Sustainability Committee Provides strategic oversight of ESG policies and implementation CEO Adrian
Slide 31: ESG Targets and Initiatives
ESG Targets and Initiatives that are Material Measurable and Ambitious ESR-REIT’s ESG Targets • Green Building Certification • Community ➢ 80% of Singapore buildings (By GFA) to obtain Green Mark ➢ 500 hours of staff volunteerism per year certification by 2030 • Training and Development • Social Sol
Slide 32: Pursuit of ESG Plans On Track and Will Be Enhanced
Pursuit of ESG Plans On Track and Will Be Enhanced Environmental Implementation Decarbonisation Roadmap with clear steps, targets, and timeline to ensuring a climate resilient portfolio Implementation of Developing Decarbonisation Reconciliation with Group Decarbonisation Roadmap Roadmap for Oversea
Slide 33: Green Certification and Solar PV Programme
Pursuit of ESG Plans On Track and Will Be Enhanced Environmental (cont’d): Green Certification Project (Status & Plan) Solar PV Programme (Capacity by year & Plans) GFA (Green Certified) GFA (Not Certified) GFA Percentage Existing PV Capacity NEW PV Capacity* 100% 50 80.0% 45 80% 40 Total Capacity (
Slide 34: Green Mark Certifications and Upgrades
Pursuit of ESG Plans On Track and Will Be Enhanced Environmental (cont’d): Positive Energy Building ESR-REIT achieves 32.5% Newly Certified 120 Pioneer Road 13 Jalan Terusan 5 & 7 Gul Street 1 160A Gul Circle Green GFA Coverage (SG)1 General Industrial General Industrial General Industrial General I
Slide 35: 2024 Green Initiatives
Pursuit of ESG Plans On Track and Will Be Enhanced Environmental (cont’d): 2024 Green Initiatives Green Energy Efficient Green Leases & EV Charging Automate ESG Procurement Lightings` Fit-Out Guide Implementation Data Collection Policy Convert existing lightings to To introduce a set of Green To imp
Slide 36: Social: Volunteerism, CSR and Tenant Engagement
Pursuit of ESG Plans On Track and Will Be Enhanced Social Staff Volunteerism CSR Initiatives in FY24 Targets as disclosed FY2023 FY2024 • Beach Clean-Up • Enrichment in FY2023 SR Lessons for Underprivileged • SG Her Youths Achieve at least 500 528.5 hours of 568 hours of Empowerment (SHE) hours of e
Slide 37: Governance: Board Diversity
Pursuit of ESG Plans On Track and Will Be Enhanced Governance Board Diversity Status update as at 31 Dec 2024 ✓ New Board Sustainability Committee to provide strategic oversight on ESG policies and 2 implementation Structure 2 Women ✓ Zero material incidents of non-compliance with 7 socio-economic o
Slide 38: Conclusion and Outlook
Conclusion and Outlook ESR
Slide 39: ESR-REIT Completed Phase of “4R Strategy”
ESR-REIT Completed Phase 2 of “4R Strategy” “4R Strategy” commenced in FY2023(1) to rejuvenate portfolio quality and fundamentals resulted in DPU trough in FY2024, which is expected to translate into DPU growth and better earnings quality going forward in FY2025 Reinforce Sponsor’s Commitment ✓ ▪ Ac
Slide 40: Conclusion
Conclusion Enhanced Portfolio & Earnings Quality via “4R Strategy” 1 ▪ ▪ Lengthened portfolio land lease to 43.8 years, increased freehold/longer land lease assets to 71.6% of portfolio, increased portfolio exposure to New Economy assets to 70.2% Double-digit positive rental reversions of +10.3% in
Slide 41: Appendix
Appendix ESR
Slide 42: Future-Ready APAC Industrial S-REIT
Future-Ready APAC Industrial S-REIT Portfolio of Quality Diversified Assets Across Key Gateway Markets Portfolio 72 Properties Japan Investments Singapore 2 Australia 3 Property Funds 52 18 Total Assets AUM(1) S$6.0 billion S$5.3 billion Total Gross Floor Area 2.5 million sqm Portfolio Occupancy 92.
Slide 43: Singapore Portfolio (75.0% of AUM)
Singapore Portfolio (75.0% of AUM) Well Located Assets Within Key Industrial Zones Portfolio of 52 assets across 4 asset classes located close to major transportation hubs and within key industrial zones across Singapore Woodlands/ 9 High-Specs Industrial Kranji/Yishun 15 Logistics 26 General Indust
Slide 44: Australia Portfolio (10.5% of AUM)
Australia Portfolio (10.5% of AUM) Exposure to Attractive Logistics Sector via Directly Held Properties Port of Brisbane, Queensland 9 Queensland 1-5 Bishop Drive, QLD 8 Curlew Street, QLD New 1 South Wales 18 Logistics 8 Victoria consisting of: 14 Freehold Assets 4 Leasehold Assets 53 Peregrine Dri
Slide 45: Japan Portfolio (9.5% of AUM)
Japan Portfolio (9.5% of AUM) Expansion of Japan exposure with acquisition of ESR Yatomi Kisosaki DC 2 Logistics ESR Sakura Distribution Centre Greater 1 Tokyo Greater 1 Nagoya ESR Yatomi Kisosaki Distribution Centre 45
Slide 46: Fund Investments (5.0% of AUM)
Fund Investments (5.0% of AUM) Exposure to Attractive Logistics Sector via Direct Portfolio and Three Funds ESR-REIT holds investments in three property funds aggregating A$308.5m 1 New LAIVS Trust 2 Oxford Property Fund 3 ESR Australia Logistics Partnership Equity Interest 49.5% (A$145.1 million) 4
Slide 47: Acquisition Announced: US$70.0m Investment in ESR Japan Income Fund
Acquisition Announced: US$70.0m Investment in ESR Japan Income Fund Investment is expected to be +1.8% DPU accretive and will pivot ESR-REIT’s portfolio towards freehold New Economy and future-ready assets Transaction Overview Current Portfolio Located Across Tokyo, Osaka and Nagoya in Japan ▪ ESR-R
Slide 48: Real Estate Portfolio Statistics
Real Estate Portfolio Statistics As at As at 31 Dec 2024 30 Jun 2024 Number of Properties(1) 72 71 GFA (million sqm) 2.5 2.1 NLA (million sqm) 2.3 2.0 Weighted Average Lease Expiry (“WALE”) (years) 4.2 3.3 Weighted Average Land Lease Expiry (years)(2) 43.8 40.0 Occupancy (%) 92.3 91.4 Number of Tena
Slide 49: Resilient and Diversified Portfolio
Resilient and Diversified Portfolio Access to Overseas and Freehold Assets Enhances Resilience Against Short Land Lease and NAV Decay Portfolio Breakdown by Lease Type(1) Portfolio Breakdown by Land Lease Type (by Rental Income) (by Valuation) Portfolio exposure to overseas geographies such as Austr
Slide 50: Singapore Industrial Market Outlook
Singapore Industrial Market Outlook While upcoming market supply continues to put pressure on rents and vacancies, New Economy sectors expected to lead in demand Singapore’s economy grew by 4.3% year-on-year in 4Q2024. The growth in Leasing Volume and Median Rental (2) 1 manufacturing sector peaked
Slide 51: Australia Industrial Market Outlook
Australia Industrial Market Outlook The weak demand and high supply for 2024F is expected to result in a rise in vacancy rates and muted rent growth The GDP for Australia continues to experience a period of weak growth, Gross Take-up By City (sqm millions) (1) 1 observing an annual growth of 0.8% in
Slide 52: Japan Industrial Market Outlook
Japan Industrial Market Outlook The influx of new supply and prolonged lease-up periods has led to increase in vacancy rates Japan’s economy is recovering moderately despite some areas of weakness. Vacancy Rate for 4 Major Metropolitan Areas (2) 1 The Bank of Japan expects to see growth as the virtu
Slide 53: Trust Structure
Trust Structure 99.0% 1.0% ESR Group Mr. Tong Jinquan Other Investors 100.0% c.20.77%(1) c.5.32%(1) c.73.91% ESR-REIT ESR-REIT Property Manager Manager Management Management services and other fees Property Property management management and services other fees ESR-REIT Acts on behalf of ESR-REIT Un
Slide 54: Creation of a Future Ready New Economy APAC REIT
Creation of a Future Ready New Economy APAC REIT Well-positioned to capture strong secular growth trends with its sizable and diversified portfolio 2017 2018 2019 2022 ▪ e-Shang Redwood acquires c.80% indirect stake in Manager ▪ Merger with Viva ▪ Acquired 48 Pandan ▪ Acquired ESR Sakura Distributio
Slide 55: Glossary
Glossary ALOG: ALOG Trust ESR Group or the Sponsor: ESR Group Limited Definitions: ▪ AUM: refers to the total value of investment properties (excluding Abbreviations: right of use of leasehold land), investments in joint venture and AEI: asset enhancement initiatives psm: per square metre property f
Slide 56: Important Notice
Important Notice This material shall be read in conjunction with ESR-REIT’s results announcements for the full year ended 31 December 2024. Important Notice The value of units in ESR-REIT ("Units") and the income derived from them may fall as well as rise. Units are not investments or deposits in, o
Slide 57: For enquiries, please contact:
For enquiries, please contact: Lyn Ong Sua Xiu Kai Senior Manager, Manager, Capital Markets and Investor Relations Corporate Communications Tel: +65 6222 3339 Tel: +65 6222 3339 Email: lyn.ong@esr-reit.com.sg Email: xiukai.sua@esr-reit.com.sg