Message from Group Co-founders & Co-CEOs ESR Group Limited Annual Report 2022 21 ESR delivered a set of outstanding results in 2022 — a transformational year for the Enlarged Group after the acquisition of ARA. With increased scale and reach, the Group continued to leverage APAC’s leading New Economy real estate platform, which further propelled our strength and resilience as Asia Pacific’s largest real asset manager. Despite the challenging global macro issues, ESR has entered 2023 from a position of fundamental strength with a well-capitalised balance sheet to take advantage of market dislocation and seize on new opportunities. Exceptional fund management performance In 2022, we generated an exceptional year of raising capital as APAC remains the engine of growth for New Economy assets (i.e. logistics and data centres). The region’s industrial and logistics sector grew through the pandemic and will continue to generate more opportunities as China finally emerged from its zero-COVID policy. Given the under allocation of funds in Asia Pacific, and the secular trends that underpin the Group’s growth, a big focus for us is to drive investments in sectors which are adjacent to logistics, such as renewables, data centres, life sciences and infrastructure to drive synergies, which add significantly to what we do. Our key milestone fund initiatives in 2022 include our US$1 billion inaugural APAC data centre fund comprising a development pipeline of eight seed projects; our first US$1 billion infrastructure and renewables fund in ASEAN, in partnership with Export–Import Bank of China and our first collaboration between ESR and LOGOS in the Pan Asia core plus discretionary fund with US$250 million of initial equity commitments, investing in prime logistics assets in the APAC region. Record high leasing and rental reversions with close to zero vacancies in most markets We are pleased that the Group achieved strong leasing in 2022 with a record of over 4.6 million sqm1 of space leased, driven by e-commerce acceleration and supply chain resilience which continues to generate demand for modern, institutional-grade logistics facilities in key gateway markets. We have witnessed the portfolio occupancy at record levels of 95%1 (98%1 ex-Greater China), with close to full occupancies in Australia/ New Zealand, Japan, India and South Korea. With high occupancy generating strong rental growth in many of the markets where the Group operates, ESR has seen an overall positive weighted average portfolio rental reversion of 7.5%1,2 which was recorded across the New Economy portfolio. In fact, with one-third of our leases due in the Notes: 1. Stabilised New Economy assets only. Excludes listed REITs and Associates. 2. Weighted by AUM. STUART GIBSON AND JINCHU SHEN Group Co-founders & Co-CEOs The transformational integration after the acquisition of ARA has expanded ESR's size and scale, and we are continuously harnessing areas of synergies across our businesses, overall capabilities, scope and market presence to drive efficiencies. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENT
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