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    J91U   SG1T70931228

ESR-REIT

(J91U)
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Asset Acquisitions And Disposals :: Esr-REIT To Divest 45 Changi South Avenue 2 For S$11.1 Million

08/30/2021 | 07:02am EDT

(Constituted in the Republic of Singapore pursuant to a trust deed dated 31 March 2006 (as amended))

NEWS RELEASE

For immediate release

ESR-REIT to Divest 45 Changi South Avenue 2 for S$11.1 million

Singapore, 30 August 2021 - ESR Funds Management (S) Limited, the manager of ESR-REIT (the "Manager"), is pleased to announce that RBC Investor Services Trust Singapore Limited (in its capacity as trustee of ESR-REIT) has entered into an agreement to divest 45 Changi South Avenue 2 (the "Property"), a general industrial building, for a sale consideration of S$11.1 million (excluding divestment costs and applicable goods and services tax) (the "Sale Consideration").

The Sale Consideration represents a 7.8% premium to the fair value of the Property of S$10.3 million1. The divestment of the Property (the "Divestment") is not expected to have a material impact on ESR- REIT's net asset value and net property income for the financial year ending 31 December 2021. The net proceeds from the Divestment will be deployed to repay outstanding borrowings, finance upcoming asset enhancements and/or fund general working capital requirements.

Mr. Adrian Chui, Chief Executive Officer and Executive Director of the Manager, said, "This Divestment represents an opportunity for us to divest one of our non-core assets at a premium to book value. Consistent with our ongoing portfolio optimisation strategy to focus on core properties, the Divestment will enable us to recycle capital for opportunities with higher returns, thus improving the quality of ESR- REIT's portfolio while optimising Unitholders' returns. We will continue to actively review our portfolio to deliver greater income stability and identify opportunities for growth."

Following the Divestment, ESR-REIT's diversified portfolio will consist of 57 properties located across Singapore with a total gross floor area of approximately 15.6 million square feet. The Divestment is subject to approval by JTC Corporation and is expected to be completed in 1Q2022.

About the Property

45 Changi South Avenue 2 is a 4-storey general industrial building located within the Changi South industrial estate. The Property has a gross floor area of 73,684 square feet.

-End-

1 Based on independent valuation conducted by Knight Frank Pte Ltd as at 31 December 2020.

For media and analyst enquiries, please contact:

ESR Funds Management (S) Limited

Gloria Low

Lyn Ong

Corporate Communications Manager

Investor Relations Manager

Tel: +65 6222 3339

Tel: +65 6222 3339

Email: gloria.low@esr-reit.com.sg

Email: lyn.ong@esr-reit.com.sg

2

About ESR-REIT

ESR-REIT has been listed on the Singapore Exchange Securities Trading Limited since 25 July 2006.

ESR-REIT invests in quality income-producing industrial properties and as at 30 June 2021 holds interest in a diversified portfolio of 58 properties located across Singapore, with a total gross floor area of approximately 15.6 million square feet and an aggregate property value of S$3.2 billion2. The properties are in the following business sectors: Business Park, High-Specs Industrial, Logistics/Warehouse and General Industrial, and are located close to major transportation hubs and key industrial zones island-wide.ESR-REIT also holds a 10.0% interest in ESR Australia Logistics Partnership, a private fund comprising 37 predominantly freehold logistics properties all located in Australia.

The Manager's objective is to provide Unitholders with a stable income stream through the successful implementation of the following strategies:

  • Acquisition of value-enhancing properties;
  • Proactive asset management;
  • Divestment of non-core properties; and
  • Prudent capital and risk management.

ESR Funds Management (S) Limited, the Manager of ESR-REIT, is owned by namely, ESR Cayman Limited ("ESR") (67.3%), Shanghai Summit Pte. Ltd. (25.0%), and Mitsui & Co., Ltd (7.7%).

For further information on ESR-REIT, please visit www.esr-reit.com.sg.

About the Sponsor, ESR

ESR is the largest APAC focused logistics real estate platform by gross floor area ("GFA") and by value of the assets owned directly and by the funds and investment vehicles it manages with a growing presence in data centres. ESR and the funds and investment vehicles it manages are backed by some of the world's preeminent investors including APG, CPP Investments, JD.com, Oxford Properties, PGGM and SK Holdings. The ESR platform spans major economies across the APAC region, including China, Japan, South Korea, Singapore, Australia, India, Vietnam and Indonesia. As of 30 June 2021, the fair value of the properties directly held by ESR and the assets under management with respect to the funds and investment vehicles managed by ESR recorded approximately US$36.3 billion, and GFA of properties completed and under development as well as GFA to be built on land held for future development comprised over 22.6 million sqm in total. Listed on the Main Board of The Stock Exchange of Hong Kong Limited in November 2019, ESR is a constituent of the FTSE Global Equity Index Series (Large Cap), Hang Seng Composite Index and MSCI Hong Kong Index.

For more information on ESR, please visit www.esr.com.

2 Includes 100% of the valuation of 7000 Ang Mo Kio Avenue 5 and 48 Pandan Road, in which ESR-REIT holds 80% interest in 7000 Ang Mo Kio Avenue 5 and 49% interest in 48 Pandan Road, but excludes the effects arising from the adoption of Financial Reporting Standard (FRS) 116 Leases which became effective on 1 January 2019.

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Important Notice

The value of units in ESR-REIT ("Units") and the income derived from them may fall as well as rise. Units are not investments or deposits in, or liabilities or obligations, of ESR Funds Management (S) Limited ("Manager"), RBC Investor Services Trust Singapore Limited (in its capacity as trustee of ESR- REIT) ("Trustee"), or any of their respective related corporations and affiliates (individually and collectively "Affiliates"). An investment in Units is subject to equity investment risk, including the possible delays in repayment and loss of income or the principal amount invested. Neither ESR-REIT, the Manager, the Trustee nor any of the Affiliates guarantees the repayment of any principal amount invested, the performance of ESR-REIT, any particular rate of return from investing in ESR-REIT, or any taxation consequences of an investment in ESR-REIT. Any indication of ESR-REIT performance returns is historical and cannot be relied on as an indicator of future performance.

Investors have no right to request that the Manager redeem or purchase their Units while the Units are listed. It is intended that investors may only deal in their Units through trading on Singapore Exchange Securities Trading Limited (the "SGX-ST"). Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. This news release may contain forward-looking statements that involve assumptions, risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments, shifts in expected levels of occupancy or property rental income, changes in operating expenses, governmental and public policy changes and the continued availability of financing in amounts and on terms necessary to support ESR-REIT's future business. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the Manager's current view of future events.

This news release is for information purposes only and does not have regard to your specific investment objectives, financial situation or your particular needs. Any information contained in this material is not to be construed as investment or financial advice and does not constitute an offer or an invitation to invest in ESR-REIT or any investment or product of or to subscribe to any services offered by the Manager, the Trustee or any of the Affiliates.

4

Disclaimer

ESR-REIT published this content on 30 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 August 2021 11:01:02 UTC.


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Number of Analysts 7
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Average target price 0,51 SGD
Spread / Average Target 8,69%
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Adrian Chui Chief Executive Officer & Executive Director
Wee Kiat Chan Chief Financial Officer
Yuen Thio Independent Chairman
York Ying Loy Head-Compliance & Risk Management
Cheng Aun Lim Independent Non-Executive Director
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