Message from Chairman FORWARD TOGETHER 20 Laser-focussed on business transformation and simplification A key emphasis for us has been to drive business transformation and simplification, which underscore our commitment to delivering long-term shareholder value. We have achieved approximately US$15 million of cost synergies from the integration of ARA, exceeding our target plan, and successfully integrated part of the LOGOS business. We expect to create additional synergies as we further integrate various aspects of the LOGOS business over the next 12 months. As part of our priority to streamline and further simplify the business, the Group is evaluating an additional up to US$750 million of non-core divestments with the plan to redeploy the capital back into core areas of growth. We have also further lowered our average co-investment stake to 7.4%, placing us in a good position to take on greater development capacity without increasing our existing balance sheet annual commitments. The Group’s business transformation backed by our asset light model has provided us with robust liquidity to redeploy the capital back into our New Economy focus areas. This includes creating our data centre platform with the first close of the US$1 billion ESR Data Centre Fund and investing in market leaders through our recent strategic investment and partnership with BW Industrial Development in Vietnam to provide best-in-class development, leasing and other fund management services to the company. Anchored by three key pillars of growth On the back of strong secular trends, we will focus on three pillars of growth — New Economy, Alternatives (including infrastructure and renewables) and REITs. With e-commerce expanding at 10% across APAC through 2025, hyperscale data centres growing at a 30%+ CAGR through 2025, and heightened focus on R&D and pharmaceuticals, we will continue to seize opportunities to deploy capital into sectors including data centres, logistics, life sciences and high-tech industrial. The New Economy Pillar will in turn fuel the growth of our Alternatives segments such as infrastructure and renewables as well as our REIT business. With the largest amount of rooftop space in APAC, the Group started an ambitious rollout of solar projects with the support of our capital partners. These renewable opportunities will power New Economy assets such as data centres and cold storage across the Group. In addition, with the APAC REIT market expected to grow by a 12% CAGR to reach US$1.3 trillion of market capitalisation by 2030, ESR is in a unique position to grow our REITs over time. Our capital partners are increasingly turning to us to sell down high-quality assets and there is positive REIT legislation that will continue to open new markets and opportunities for us across the region. Our potential C-REIT spinout is a testament to how REITs remain as the natural takeout of New Economy assets upon stabilisation. Leading the way forward in ESG At ESR, we believe in doing what is right for the environment and the communities that we operate in. During the year and with the support of multiple stakeholders, we have achieved great progress on our ESG initiatives including the appointment of two new female independent non-executive directors, Ms Serene Nah and Ms Kwee Wei-Lin, maintaining a diverse Board composition with the appropriate mix of gender, background and experience. As a result, 60% of our independent non-executive directors are women at the Board level. Other key highlights include becoming a signatory of the United Nations-supported Principles for Responsible Investment (UN PRI), reinforcing our commitment to adopting and promoting responsible investment and asset management practices as part of the Group’s ongoing ESG efforts. In line with international ESG benchmarks and global ratings, ESR continues to be recognised for our robust and exemplary ESG disclosure practices with creditable 2022 rankings in the Global Real Estate Sustainability Benchmark (“GRESB”) Assessment, MSCI ESG Ratings and Sustainalytics ESG Risk Ratings. I am proud that every day we are making a choice to raise the bar for ESG integration and deliver on our ESG Roadmap. Appreciation and looking ahead I would like to extend my sincere gratitude to our Board of Directors for their invaluable support. I am also delighted to welcome Serene and Wei-Lin to the Board as Independent Non-executive Directors. I thank our management team led by Stuart and Jeffrey and all our employees who strive each day to be the best at what they do. To our capital partners, customers and shareholders, we thank you for your unwavering trust and support. The scale of ESR today is truly remarkable. As APAC’s largest real asset manager powered by the New Economy and the biggest REIT platform across the region, we remain a trusted partner for 12 of the top 20 global capital partners to deploy capital across APAC. Despite the growing uncertainty in the market — geopolitical, future rate hikes, inflation and others, ESR is armed with a well-capitalised balance sheet to capture the right opportunities, chart the next chapter of our growth and deliver long-term value for shareholders. JEFFREY DAVID PERLMAN Chairman 22 March 2023
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