14 STRENGTH IN UNITY Optimising our balance sheet With a rigorous focus on the balance sheet, we continued to further syndicate assets from our balance sheet into funds managed by the Group, with a particular focus on Greater China. We are set to finalise announced transactions worth approximately US$800 million and aim to achieve an additional US$1.5 to US$2 billion of balance sheet asset sell-downs and syndications over the next 12 months. These planned divestments to ESR-managed vehicles, alongside announced non-core divestments, will enhance recurring fee revenue and are anticipated to further decrease the Group’s Gearing (being net debt over total assets) in the medium term. The resulting interest savings from reduced Gearing could contribute to potential distributions or be allocated for future share buybacks. Simplifying our business In line with our focus on New Economy, we identified up to US$750 million of non-core divestments in 2023, which would complement our balance sheet optimisation. In March 2024, a significant milestone was reached when we announced the sale of the ARA Private Funds business, and we have additional non-core divestments in various stages of progress. Additionally, the Group is working towards the final stages of the LOGOS integration over the balance of the year. The successful integration will deliver a combined Australia/ New Zealand business that will represent the largest New Economy developer and the second largest New Economy manager (by AUM and deployment of uncalled capital). It will also create further scale in data centres with complementary funds and strategies. To date, the overall ARA business integration has achieved US$35 million of cost synergies. Further revenue and cost synergies are expected in FY2024 and FY2025 from a fully integrated APAC New Economy platform. Appreciation and looking ahead I would like to extend my sincere gratitude to our esteemed Board of Directors for their support and insight and would also like to welcome Joanne McNamara as our newest Non-executive Director. I would also like to thank our management team, led by Stuart and Jeffrey, and all our dedicated employees, for their unwavering commitment and hard work which have been instrumental to achieving our core priorities in the year. To our capital partners, customers, and shareholders, your trust and support remain the bedrock of our success. Looking ahead, I am confident in our ability to capitalise on emerging opportunities and to drive long-term sustainable growth. The Group has substantial dry powder to deploy on behalf of investors when asset pricing is becoming more favourable and development returns are strong. As a fully integrated developer and fund management platform, we are well-positioned to drive recurring fee growth by providing a full suite of best-in-class solutions and product platforms to deliver sustainable value for all stakeholders. JEFFREY DAVID PERLMAN Chairman 21 March 2024
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