45 Operations Review CREATING VALUE FOR UNITHOLDERS ESR-REIT remains committed to deliver sustainable returns for our Unitholders. To create a leading New Economy and Future-Ready Asia-Pacific S-REIT, and to ride on the changes in economic structural trends and continued supply chain disruptions, the Manager has continued its rebalancing efforts to increase its exposure to the New Economy sectors of Logistics and HighSpecifications Industrial assets. This has led to strong rental reversions and stable occupancy achieved in our portfolio. Over the medium to long term, the Manager expects significant opportunities from its S$5.2 billion1 portfolio of 70 properties, investment in joint venture and three property funds. This includes the conversion of existing properties with dated specifications to New Economy assets such as Logistics and High-Specifications Industrial assets as well as the optimisation of the overall portfolio through divestments of non-core assets in order to meet industrialists’ evolving business needs. The Manager’s objective for each property in the portfolio is to generate stable income for the benefit of the Unitholders of ESR-REIT. DIVESTMENT ACTIVITY In FY2025, the Manager successfully completed the divestment of two assets aggregating S$16.7 million as part of its continued efforts to enhance income resilience and redeploy the sale proceeds to pare down debt and fund AEIs, redevelopments and future asset acquisitions. The divestments of 1 Third Lok Yang Road and 4 Fourth Lok Yang Road, Singapore, a part two-storey and part single storey warehouse with a mezzanine and four levels of ancillary office was completed on 24 March 2025 Property Brief Description of Asset Sale Consideration (S$ million) Valuation (S$ million) Buyer Completion Date Divestments 1 Third Lok Yang Road and 4 Fourth Lok Yang Road A logistics asset in Singapore with a site area of 6,313.2 sqm, GFA of 10,601 sqm, and is 100% owned by ESR-REIT 6.8 6.62 Chempark Logistics (Pte) Ltd 24 March 2025 79 Tuas South Street 5 A general industrial asset in Singapore with a site area of 12,431.6 sqm, GFA of 6,312 sqm, and is 100% owned by ESR-REIT 9.9 9.73 Anderco Pte Ltd 28 March 2025 while 79 Tuas South Street 5, Singapore, a four-storey light industrial building was completed on 28 March 2025. In December 2025, ESR-REIT also announced the divestment of a portfolio comprising eight non-core assets in Singapore for an aggregate sale consideration of S$338.1 million, representing a 2.0% premium to independent valuation. This divestment represents a disciplined and strategic step in ESR-REIT’s ongoing portfolio rejuvenation and capital recycling efforts, and is expected to further strengthen the quality and fundamentals of ESR-REIT’s portfolio. The divestment portfolio comprises: 46A Tanjong Penjuru, 86 & 88 International Road, 120 Pioneer Road, 21 & 23 Ubi Road 1, 24 Jurong Port Road, 13 Jalan Terusan, 60 Tuas South Street 1 and 43 Tuas View Circuit. Real Estate Transactions in FY2025 1 As at 31 December 2025 2 Based on independent valuation of S$6.6 million conducted by Jones Lang LaSalle Property Consultants Pte Ltd as at 31 December 2024 using discounted cash flow method. 3 Based on independent valuation of S$9.7 million conducted by Jones Lang LaSalle Property Consultants Pte Ltd as at 31 December 2024 using the income capitalisation method and discounted cash flow method. We seek to actively optimise the portfolio assets to stay ahead of industry trends and be future-ready ESR-REIT ANNUAL REPORT 2025
RkJQdWJsaXNoZXIy NTM2MDQ5