36 Value Creation ESR-REIT has, over the years, strengthened its foundation through its “4R Strategy” with a clear focus on disciplined capital management, proactive portfolio optimisation and operational resilience. Building on this solid platform, ESR-REIT is now advancing into its next phase of growth with renewed strategic clarity – sharpening its focus on value creation, pursuing selected acquisitions, asset enhancement and redevelopment initiatives, to capitalise on opportunities aligned with evolving tenant needs and market dynamics. This progression reflects a deliberate shift from strengthening and repositioning to unlocking sustainable growth, underpinned by a resilient portfolio and a continued commitment to delivering long-term value for all stakeholders. OUR COMPETITIVE STRENGTHS OUR TOTAL RETURN STRATEGY OUR ASSETS THE FIVE PILLARS OF ESR-REIT’S TOTAL RETURN STRATEGY FOCUSES ON TARGETING 8-10% TOTAL UNITHOLDER RETURN AND GROWING AUM TO S$8.0 BILLION OVER THE NEXT FIVE YEARS Drive sustainable total Unitholder return through active asset management • Key initiatives to address short land lease assets • Rejuvenate portfolio via major AEIs and/or redevelopments Increase target AUM to S$8.0 billion over the next five years, capturing benefits of scale and improved liquidity • Target accretive acquisitions, enhancing overall portfolio income quality • Organic growth through select redevelopment opportunities in Singapore Retain core focus in Singapore, while taking advantage of compelling international opportunities • Singapore to represent >50% of portfolio value • Grow exposure to international markets with strong growth tailwinds Leverage ESR’s pipeline and presence across developed APAC and selected markets • Capitalise on ESR’s regional pipeline and local teams in target markets to source offmarket growth opportunities Maintain prudent leverage to enhance return and disciplined capital management approach • Maintain aggregate leverage target of mid-30% to low-40% across the cycles to enhance total return • Take advantage of more stable interest rate environment and positive yield spread in Singapore Resilient and Balanced Portfolio A balanced portfolio with 70 quality incomeproducing industrial properties aggregating S$5.9 billion in total assets across four subasset classes in key industrial zones across Singapore, Australia and Japan, together with three investment funds. We have improved diversification to our portfolio by sub-sector type, tenants and geography. Asset Type: Business Parks which are properties that cater to industries/ businesses relating to hightechnology, research and development (R&D) value-added and knowledge-intensive sectors. Tenant Profile: Companies that engage in a range of activities which are technology and research-oriented industries and non-manufacturing in nature such as technical support, informationcommunication, product design, research and development (R&D), call and service centre and back-end office function. Read more on pages 68 to 69 Asset Type: Logistics properties are typically equipped with high floor loading and high floor-to-ceiling heights suitable for tiered storage of cargo. Tenant Profile: Third-party logistics providers, wholesalers, distributors and import/export companies. Read more on pages 76 to 83 Asset Type: Mixed-use industrial buildings typically used for higher value industrial activities like testing and certification, research and development (R&D), and clean room activities. These buildings have modern facades, air-conditioned units, sufficient floor loading, ceiling height and electrical power capacities to enable both manufacturing and supporting office functions to be carried out concurrently. Tenant Profile: Companies in technology, R&D and knowledgeintensive sectors involved in light industrial activities such as precision engineering and data centres. Read more on pages 70 to 71 Asset Type: General industrial buildings can be single or multi-storey facilities dedicated to general and heavy manufacturing or factory activities. Tenant Profile: Companies that engage in general manufacturing activities. Read more on pages 72 to 75 Business Park High-Specifications Industrial General Industrial Diversified Tenant Network An extensive tenant base of 382 tenants creates a tenant network that reduces exposure to any one particular sector. Prudent and Balanced Capital and Risk Management ESR-REIT has a stable and secure income stream supported by prudent capital and risk management strategies. Diversified sources of funding ensure ESR-REIT can tap into alternative pools of capital to optimise Unitholder returns. Active Asset Management Maximising the growth potential of the portfolio is conducted through proactive asset management focusing on marketing and leasing, delivering high standards of property and customer service, improving operational efficacy and costs, and engaging in asset enhancement initiatives. Experienced and Professional Management Teams ESR-REIT’s management team comprises real estate and finance professionals with proven track record and a wealth of experience across local and regional real estate companies and financial institutions, setting the tone for a collaborative team culture focused on results. Backed by Strong and Committed Sponsor ESR-REIT is sponsored by ESR, APAC’s #1 real asset manager powered by the New Economy and is ESR’s flagship regional listed vehicle. Continued Commitment Towards Sustainability ESR-REIT’s sustainability approach reinforces the integration of environmental, social and governance (ESG) risks and opportunities into its business strategy, asset and property management activities, creating value for its key stakeholders. Logistics ESR-REIT ANNUAL REPORT 2025
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