Message from Group Co-founders and Co-CEOs ESR Group Limited Annual Report 2023 15 2023 was a year of focused execution for ESR, and we are proud to have delivered growth in our funds management business on the back of strong operating performance, underpinned by our high-quality real assets, record leasing track record and strong commitment to ESG practices. Outstanding operating performance with strong underlying fundamentals In the year ended 31 December 2023, our operating fundamentals for New Economy assets remained resilient, with the Group achieving a record leasing of 5.3 million sqm1 of space. Our managed portfolio of New Economy assets maintained close to full occupancy, thus driving strong double-digit rent renewals in several of our key APAC markets. We closed the year positively with a portfolio occupancy1,2 rate of above 91% (98% excluding Mainland China) for our New Economy assets, and we secured strong rental reversions1,3 of approximately 8.2% (14.3% excluding Mainland China). Notes: 1 New Economy assets only. Excluding listed REITs and associates. 2 Stabilised New Economy assets only. 3 Weighted by AUM of each respective country. We recorded very high rental growth rates in Australia and South Korea at approximately 19.5%. This growth significantly mitigated the cap rate expansion for assets in the two countries, save for those with longer Weighted Average Lease Expiry (“WALE”). As for Mainland China, we would like to provide assurance that we have been very selective, with nearly 70% of the stabilised properties located in major economic hubs in the Yangtze River Delta and Greater Bay Area where demand is driven by the strong activity in renewable energy industries and cross-border e-commerce, respectively. In addition, we continue to maintain a well-staggered lease expiry profile with WALE of 4.6 years1 (by income) with a diverse customer base of over 920 across our New Economy portfolio. Large New Economy development workbook for future earnings growth To drive future fees and development profit, we have a large development pipeline of over 24.5 million sqm of GFA, including a sizeable landbank of about 7 million sqm STUART GIBSON AND JINCHU SHEN Group Co-founders and Co-CEOs Enhancing investor value remains a key priority for us, and we remain positive on the demand for New Economy assets across APAC which continues to benefit from long-term structural tailwinds... " " STRATEGIC REPORTS CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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