12 STRATEGICALLY ADVANCING ESR-REIT has been Rejuvenating its portfolio of assets through the divestment of non-core assets as well as undertaking redevelopment and asset enhancement initiatives (“AEIs”), with the objective to improve portfolio and earnings quality. While divestments, ongoing AEIs and early decommissioning of 2 Fishery Port Road in preparation for redevelopment resulted in income loss, the divestment of S$534.6 million of non-core assets in FY2023 and FY2024 mitigated the impact of declining valuations due to higher capitalisation rates, and the strategic use of the proceeds from the divestments to repay debt shielded ESR-REIT from the perils of high debt financing costs. From left to right: MR. ADRIAN CHUI Chief Executive Officer and Executive Director MS. STEFANIE YUEN THIO Independent Non-Executive Chairperson Dear Unitholders, FY2024 was a year of economic uncertainty. Persistent inflation plagued the first half of the year, raising concerns of higher-for-longer interest rates. However, with inflation rates in the U.S. dipping below 3.0% for the first time in three years in June 2024, this paved the way for the U.S. Federal Reserve to implement three interest rate cuts between September 2024 and December 2024. Despite that, the year ended with greater uncertainty and volatility in the global economy with the return of the Trump administration in the U.S., as the possibility of trade tariffs, regulatory easing and tax cuts brought about renewed concerns of high inflation. In spite of these uncertainties, we remained committed to executing our 4R Strategy — Recapitalising balance sheet, portfolio Rejuvenation, capital Recycling, and Reinforcing Sponsor support. MESSAGE TO UNITHOLDERS
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