Investor Presentaiton
Conclusion
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TAT
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Strong Positive Portfolio Rental Reversions and Resilient Operational Performance
Portfolio rental reversion at +11.6% in 1H2023, led by New Economy sectors comprising c.63.2% of portfolio
Resilient operational performance with high occupancy of 92.9% as at 30 June 2023 underpinned by stable demand and limited supply of quality spaces
Well-staggered lease expiry profile, with strong rental collections at 98.5% of total receivables
Prudent Capital Management
Gearing at 39.4% (reducing to 33.6% (1) upon repayment of debt with divestment proceeds), with 74.8% of borrowings on fixed interest rates
All FY2023 expiring debt has been refinanced – no refinancing risk for remaining of FY2023
Weighted average all-in cost of debt maintained consistently at 3.96% p.a.
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ESR-LOGOS
REIT
Portfolio Rejuvenation and Capital Recycling
Announced AEls and redevelopments are on track
Proposed divestments of seven non-core assets aggregating S$337.0 million; proceeds to repay debt in the interim
Divestment proceeds provide significant debt headroom and financial strength to capitalize on investment recycling opportunities amidst asset repricing
Market Outlook Remains Cautious Against Backdrop of High Interest Rates
Continued rises in interest rate coupled with tepid growth is expected to impact economic growth in 2H2023
Expected increase in capitalisation & discount rates and the strength of the SGD are expected to negatively impact asset valuations
Key risks in 2H2023 will be the continued rising interest rates' impact on gearing, NAV and DPU
Mitigating factors: Post repayment of loans from divestment proceeds (a) Low gearing ratio (b) high fixed interest rates (c) <10% of loans up for refinancing each
year till 2025 (d) well-spread out debt expiry profile and (e) the continued favorable demand/supply dynamics of the Logistics segment in Singapore and Australia
Note: (1) On a FY2022 pro forma basis, adjusted for (i) the Equity Fund Raising and the divestment of 49 Pandan Road, assuming the net proceeds from the Equity Fund Raising and the
divestment of 49 Pandan Road, together with the net proceeds from the divestments announced on 23 June 2023, were fully used to repay existing debt and (ii) the redemption of perpetual
securities completed on 1 February 2023.
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