ESR-REIT Annual Report 2024 37 OUR ACHIEVEMENTS IN 2024 Operational Highlights • Achieved positive rental reversion of 10.3% in FY2024, marking its third consecutive year of double-digit rental reversion • Achieved high occupancy of 92.3%, consistently above market average • Completed transformational DPU accretive acquisitions of ESR Yatomi Kisosaki Distribution Centre in Nagoya, Japan, and 51% interest in 20 Tuas South Avenue 14, Singapore • Ongoing asset enhancement initiatives at 16 Tai Seng Street, Singapore • Divestment of two non-core assets at premium over valuation: o 182-198 Maidstone Street, Victoria, Australia o 81 Tuas Bay Drive, Singapore • Identified c.S$200 million of non-core assets to be divested in FY2025 Read more on pages 45 to 52 Financial Highlights • Gross Revenue dipped 4.1% year-on-year to S$370.5 million • Net Property Income dipped 4.2% year-on-year to S$261.7 million • Amount available for distribution of S$164.1 million • Distribution per Unit of 2.119 Singapore cents for FY2024 Read more on pages 53 to 56 Investor Engagement • Awarded Best Real Estate Manager award at the AsianInvestor Asset Management Awards 2024 • Awarded Best Real Estate Award at SBR National Business Awards 2024 by Singapore Business Review • Actively engaged with Securities Investors Association (Singapore) to co-organise multiple webinars and dialogues to engage with Unitholders Read more on pages 40 to 44 Capital Management • Announced ESR-REIT’s inaugural sustainability-linked loan via entry into S$200 million sustainability-linked revolving credit facility • Issued S$174.75 million 6.00% subordinated perpetual securities, comprising S$74.75 million of new securities issued as part of the exchange consideration for the Series 006 perpetual securities and S$100.0 million of additional new securities • Launched preferential offering on the basis of 4 preferential offering units for every 100 existing units to raise gross proceeds of up to approximately S$94.0 million as part of the financing for the acquisitions of ESR Yatomi Kisosaki Distribution Centre, and 51% interest in 20 Tuas South Avenue 14 • Issued 39.6 million new Units (“Consideration Units”) at an issue price of S$0.305 per Unit as partial consideration for the acquisition of 51% interest in 20 Tuas South Avenue 14 • Entered into S$225 million unsecured sustainability-linked term loan facility and JPY15.5 billion unsecured term loan facility • Entered into JPY22.8 billion onshore secured term loan facility • Entered into S$341.5 million term loan with a green loan1 component • Achieved gearing of 42.8% amidst “higher-for-longer” interest rate environment • Achieved high fixed rate hedge of 74.8% • Substantial debt headroom of S$790.2 million available Read more on pages 57 to 59 ESG • New Board Sustainability Committee to provide strategic oversight on ESG policies and implementation • Decarbonisation Roadmap to be implemented and executed with clear steps, targets, and timeline • Portfolio has a total of 18 properties with green certifications in portfolio, an increase from 10 in previous year • Solar capacity for the Singapore portfolio increased approximately 12% from 13.8 MWp in FY2023 to 15.5 MWp in FY2024 • Achieved 568 hours of staff volunteerism hours, exceeding target of 500 hours • Achieved GRESB score of 2 Star (73 points), an improvement from the score achieved in FY2023 (66 points) Read more on pages 121 to 190 1 The S$341.5 million term loan was obtained by Tuas South Avenue Pte. Ltd., of which ESR-REIT has a 51% ownership interest. OUR PRIORITIES FOR 2025 1. Rejuvenation of portfolio through acquisitions, redevelopments and AEIs 2. Continue optimisation of portfolio via divestments of noncore assets and redirecting proceeds to reduce gearing, fund future acquisitions or asset enhancements and redevelopments to improve portfolio returns 3. Carry out selective asset optimisation and improvements to capitalise on the Manager’s AEI capabilities to optimise portfolio value 4. Source for income-producing quality assets locally and regionally; with growth consistently supported by the Sponsor 5. Leverage on Sponsor’s New Economy pipeline for potential accretive acquisition opportunities 6. Strengthen collaboration with strategic partners to capture growth opportunities in the region 7. Prudent management of capital structure and cost of financing 8. Broadening of banking relationships and alternative pools of capital 9. Proactive marketing and leasing of space to maintain a healthy portfolio occupancy and rental reversion rate 10. Reducing environmental footprint and mobilising resources to create a positive impact on the industrial real estate ecosystem 11. Implementation of Decarbonisation Roadmap to encompass overseas portfolio in Australia and Japan
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