ESR Group Limited Annual Report 2022 19 out of which New Economy AUM4,5 grew by 85% to US$73 billion, including a new Pan Asia discretionary logistics vehicle. The Group’s Fund Management segment also benefitted from ARA’s recurring and stable fee revenue. As global institutional investors sought to rebalance their portfolio allocations in light of the growth in Asia Pacific, we raised US$7.6 billion in committed capital across 28 new or upsized funds and mandates. In expanding our Fund Management business, we have a record US$19.9 billion of “dry powder” to capitalise on new opportunities, giving us the agility to take advantage of market dislocation. Powered by the New Economy With the growth in e-commerce and the need for greater local supply chain resilience, ESR has tapped the rising demand for large-scale and high-quality New Economy assets by scaling up our development starts and completions substantially to reach new heights. We achieved US$6.5 billion6 worth of development starts, as well as US$5.5 billion6 in completions, which accelerated in the second half of 2022. Given the record low vacancy rates across the portfolio, the Group substantially increased our development starts by 94% year-on-year Notes: 4. Based on constant FX translation as of 31 December 2021 for a like-for-like comparison. Based on FX translation as of 31 December 2022, Fund AUM would be US$142 billion (US$10 billion FX translation impact) and New Economy AUM would be US$68 billion (US$5 billion FX translation impact). 5. Refers to the sum of (i) the fair value of the properties held in the private funds and investment vehicles we manage; (ii) the total uncalled capital commitments in the private funds and investment vehicles; (iii) the additional debt that is estimated to be incurred with reference to the target leverage ratio of the relevant private funds and investment vehicles we manage when all capital is called and invested; and (iv) the appraised carrying value of listed REITs. 6. New Economy assets only. Excludes listed REITs and Associates. 7. Net Debt/Total Assets. to US$6.5 billion6 which was further complemented by development completions which increased by 304% year-on-year to US$5.5 billion6. To further capture the favourable operating backdrop, we are very pleased that our development workbook has reached a record US$11.9 billion, which remains the largest in APAC. Robust capital management and asset light strategy Our robust capital management has given us a strong and well-capitalised balance sheet with US$1.8 billion in cash and a healthy gearing7 of 22.8% as of 31 December 2022. Throughout the year, we continued to expand and diversify our funding and capital structure which is crucial for fuelling the Group’s long-term growth. Staying focussed on our asset light approach, we divested US$1.7 billion of assets from our balance sheet to ESR managed funds in FY2022, achieving 3 times our annual historical target with a specific focus on crystalising gains from selected China balance sheet assets. Our sell-down of a 850,000 sqm portfolio in China represented the Group’s largest self-developed balance sheet sell-down to date. The Group also executed on the successful tender of our 18.16% holding in China Logistics Property Holdings Co., Ltd in May 2022, receiving US$349 million and delivering a strong return on this four-year investment. ESR Jiangsu Friends III, Kunshan, China STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENT
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