ESR-REIT Annual Report 2024 13 However, this was partially offset by new income streams from the acquisitions of ESR Yatomi Kisosaki Distribution Centre (completed on 15 November 2024) and a 51% interest in 20 Tuas South Avenue 14 (completed on 29 November 2024), alongside contributions from completed AEIs at 7002 Ang Mo Kio Avenue 5 (3Q2023) and the completed redevelopment of 21B Senoko Loop (1Q2024). Given that the newly acquired assets contributed only approximately one month of rental income in FY2024, we expect to see the uptrend in revenue and NPI from FY2025. The amount available for distribution to Unitholders stood at S$164.1 million in FY2024, representing a 14.9% decline from S$192.7 million in FY2023, primarily due to the lower NPI as well as lower distribution of capital gains. Consequently, FY2024 distribution per unit (“DPU”) was 2.119 Singapore cents, a 17.4% decrease from 2.564 Singapore cents in FY2023. Apart from the factors mentioned above, the DPU decline also reflects a 3.0% increase in the applicable number of Units to 7,742.5 million, following the equity fundraising in 1H2023 and the preferential offering in 4Q2024. Resilient Portfolio Performance As at 31 December 2024, ESR-REIT’s portfolio consisted of 72 quality and diversified assets (excluding 48 Pandan Road held through a joint venture) across key gateway markets, comprising 52 assets in Singapore, 18 assets in Australia, and 2 assets in Japan, with a total gross floor area (“GFA”) of 2.5 million square metres (“sqm”), as well as investments in three property funds in Australia. We maintained a high portfolio occupancy rate of 92.3% as at 31 December 2024, demonstrating the resilience and continued relevance of our assets in meeting current market demand. In FY2024, ESR-REIT secured a total of 310,834 sqm in leasing transactions, comprising 233,214 sqm of renewals and 77,620 sqm of new leases. The portfolio’s weighted average lease expiry (“WALE”) increased to 4.2 years, up from 3.4 years in the previous year, further strengthening income visibility and stability. For FY2024, ESR-REIT’s portfolio recorded positive rental reversion of 10.3%, which reflects the strength of our leasing team and the attractiveness of our assets. Notably, the New Economy segments, Logistics (+14.4%) and HighSpecifications Industrial (+12.0%), were key drivers of rental growth, underscoring the portfolio’s diversified strength and our team’s expertise in capturing market opportunities. In the last quarter of 2024, we capitalised on the opportunity to Recycle our capital by acquiring two highquality New Economy properties, ESR Yatomi Kisosaki Distribution Centre in Japan and a 51% interest in 20 Tuas South Avenue 14 in Singapore. These acquisitions not only strengthened our portfolio but also Reinforced Sponsor support as we continue to benefit from a steady pipeline of high-quality properties that are managed by ESR Group. Our ability to navigate persistent inflation, continued high interest rate and macroeconomic uncertainties while continuing the execution of our 4R Strategy is a testament to the proactive measures we undertook early on to Recapitalise ESR-REIT’s balance sheet as well as our agility to seize strategic growth opportunities, solidifying ESR-REIT’s position as a leading New Economy and future-ready Asia-Pacific S-REIT. The successful recycling of our capital into ESR Yatomi Kisosaki Distribution Centre and a 51% interest in 20 Tuas South Avenue 14, as well as the completion of the redevelopment of 21B Senoko Loop, are strategic growth initiatives that are expected to contribute meaningfully to ESR-REIT’s earnings as we enter FY2025. In addition, the improved portfolio and earnings quality positions us to navigate an increasingly complex business landscape under the Trump administration, where geopolitical uncertainties and evolving macroeconomic policies are expected to intensify. FY2024 Financial Performance Our financial performance for FY2024 reflects the shortterm impact of the initiatives undertaken over the past two financial years to position ESR-REIT for a sustained, long-term earnings growth and enhance resilience against uncertainties in the future. In FY2024, Gross Revenue stood at S$370.5 million, a 4.1% decrease from S$386.4 million in the previous year, while Net Property Income (“NPI”) declined by 4.2% to S$261.7 million, compared to S$273.2 million in FY2023. The decline in gross revenue and NPI were primarily due to the loss of income from the divestment of non-core assets aggregating S$440.6 million which were completed across FY2023, as well as the divestment of 182-198 Maidstone Street in Australia (2Q2024) and 81 Tuas Bay Drive in Singapore (4Q2024). Additionally, the decommissioning of 2 Fishery Port Road in preparation for redevelopment further impacted income.
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