56 STRATEGICALLY ADVANCING Wakefield (Valuations) Pty Ltd, Savills Japan Valuation G.K. and Colliers International Japan KK. In determining the fair value of ESR-REIT’s portfolio, the direct comparison method, capitalisation approach, discounted cash flows method and residual value approach were used. The valuation methods used are consistent with that used in prior years. The change in fair value of investment properties of approximately S$220.2 million in FY2024 comprised the following: • fair value loss of S$219.0 million based on the independent valuations of the investment properties as at 31 December 2024; and • adjustments for the effect of lease incentives and marketing fee amortisation for FY2024 of S$1.2 million. Change in Fair Value of Investment Properties In accordance with the Code on Collective Investment Schemes issued by the Monetary Authority of Singapore, the valuation of ESR-REIT’s investment properties must be conducted at least once every year. Any increase or decrease in fair value is credited or charged to the Statement of Total Return as change in fair value of investment properties. Such fair value changes are not taxable/tax deductible and therefore, have no impact on distributable income. As at 31 December 2024, independent valuations for investment properties were undertaken by Colliers International Consultancy & Valuation (Singapore) Pte Ltd, Edmund Tie & Company (SEA) Pte Ltd, Savills Valuation and Professional Services (S) Pte Ltd, CBRE Pte. Ltd., Jones Lang LaSalle Property Consultants Pte Ltd, Cushman & Wakefield VHS Pte. Ltd., Cushman & Net Assets Attributable to Unitholders 31 December 2024 31 December 2023 Variance S$’000 S$’000 % Total Assets 6,007,400 5,106,309 17.6 Total Liabilities 3,331,724 2,341,031 42.3 Net Assets Attributable to Unitholders 2,213,895 2,463,150 (10.1) Net Asset Value (“NAV”) per Unit (cents) 27.5 32.0 (14.1) Total assets increased by 17.6% from S$5.1 billion as at 31 December 2023 to S$6.0 billion as at 31 December 2024. The increase was mainly due to the acquisition of ESR Yatomi Kisosaki Distribution Centre in Japan and 20 Tuas South Avenue 14 in Singapore, partially offset by the divestment of 182-198 Maidstone Street located in Australia and 81 Tuas Bay Drive located in Singapore. Total liabilities increased by 42.3%, to S$3.3 billion as at 31 December 2024 mainly attributable to additional debt drawn to partially fund the acquisition of ESR Yatomi Kisosaki Distribution Centre and 20 Tuas South Avenue 14. Net assets attributable to Unitholders decreased by 10.1% to S$2.2 billion as at 31 December 2024 as compared to S$2.5 billion as at 31 December 2023. NAV per Unit as at 31 December 2024 was 27.5 cents as compared to 32.0 cents as at 31 December 2023. The decrease in NAV per Unit was mainly due to the fair valuation loss on investment properties and the depreciation of the Australian dollar against the Singapore dollar between 31 December 2023 and 31 December 2024. Rental collection for FY2024 has remained healthy with approximately 98% of total receivables collected. Accounting Policies The financial statements of ESR-REIT are prepared in accordance with the recommendations of the Statement of Recommended Accounting Practice (“RAP”) 7 ‘Reporting Framework for Investment Funds’ issued by the Institute of Singapore Chartered Accountants, the applicable requirements of the Code on Collective Investment Schemes issued by the Monetary Authority of Singapore, and the provisions of the Trust Deed. RAP 7 requires that accounting policies adopted should generally comply with the recognition and measurement principles of Singapore Financial Reporting Standards.
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