50 STRATEGICALLY ADVANCING OPERATIONS REVIEW Portfolio Lease Expiry Profile In line with its proactive leasing strategy, the Manager engages its tenants ahead of lease expiries to manage vacancy risk. As at 31 December 2024, the lease expiry profile for ESR-REIT remained healthy with a portfolio weighted average lease expiry (“WALE”) (by gross rental income) of 4.2 years. For new leases in FY2024, the WALE (by gross rental income) based on the date of commencement was 3.1 years and they accounted for 4.0% of gross rental income for the year. The WALE (by gross rental income) for renewed leases in FY2024 is 3.2 years as at 31 December 2024. No more than 27.2% by gross rental income and 26.0% of the portfolio’s total leases by net lettable area (“NLA”) will expire in any year over the next five years. ESR-REIT’s leases have either marked-to-market rent reviews at fixed periods or include annual rental escalations throughout the lease term. Some leases are also on a triple-net basis where tenants are responsible for property expenses such as property tax, land rent, insurance, and maintenance. For multi-tenanted buildings in Singapore, lease terms are typically shorter at between one to five years, depending on the approvals obtained by tenants from JTC. For multi-tenanted buildings in Australia and Japan, the lease terms are typically longer at between three to ten years. % of Gross Rental Income % by NLA 2025 27.2% 26.0% 2026 22.4% 24.5% 2027 14.2% 10.9% 2028 8.5% 10.1% 2029 3.9% 3.8% 2030 and beyond 23.8% 24.7% 22.7% 4.5% 19.0% 3.4% 13.6% 0.6% 6.9% 1.6% 3.5% 0.4% 7.6% 16.2% Lease Expiry Profile (by Gross Rental Income) Single-tenanted Buildings Multi-tenanted Buildings 2025 2026 2027 2028 2029 2030+ 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Land Lease Expiry Profile As at 31 December 2024, the weighted average land lease expiry of ESR-REIT’s portfolio was 43.8 years by valuation, up from 40.6 years a year ago, mainly due to its recent acquisitions of a freehold asset in Japan and the longer leasehold asset in Singapore, as well as the divestment of non-core assets with shorter land leases. Land Tenure Expiry Business Park High-Specifications Industrial Logistics General Industrial Total No. of Properties Asset Value (S$m) No. of Properties Asset Value (S$m) No. of Properties Asset Value (S$m) No. of Properties Asset Value (S$m) No. of Properties Asset Value (S$m) 0 to 20 years 1 162.5 0 0.0 8 636.0 7 111.6 16 910.1 20.1 to 30 years 0 0.0 3 139.8 3 134.5 7 222.8 13 497.1 30.1 to 40 years 1 27.7 3 445.4 4 165.4 9 263.8 17 902.3 40.1 to 50 years 1 447.0 3 1,015.2 7 3 236.0 8 3 58.7 10 1,756.9 99 years9 0 0.0 0 0.0 16 884.1 0 0.0 16 884.1 Total 3 637.2 9 1,600.4 7 34 2,056.1 8 26 656.9 72 4,950.6 7 Includes the valuation of logistics warehouses at 20A Tuas South Avenue 14. 8 Excludes the valuation of logistics warehouses at 20A Tuas South Avenue 14. 9 For calculation purposes, freehold properties are treated with 99.0 years land lease remaining.
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