24 STRENGTH IN UNITY BEST-IN-CLASS ASSET PORTFOLIO Operating fundamentals for the Group’s New Economy assets remain robust, with the Group leasing a record 5.3 million sqm of space4 in 2023. Furthermore, as at 31 December 2023, the portfolio occupancy rate4,5 for the Group’s New Economy assets remained above 91% (98%, excluding Mainland China) on the back of strong weighted average rental reversions4,6 of approximately 8.2% (14.3%, excluding Mainland China). Leases in Australia and Korea accounted for the highest rental growth rates, achieving approximately 19.5% in the year. This significantly mitigated the cap rate expansion for assets in Australia and Korea, save for those with longer WALE. Additionally, the Group has been extremely selective in China, with nearly 70% of stabilised properties located in major economic hubs along the Yangtze River Delta and Greater Bay Area whereby demand is driven by strong Notes: 4. New Economy assets only and excludes listed REITs and Associates. 5. Stabilised New Economy assets only. 6. Weighted by AUM. 7. Based on revenue for 2023. activity propelled by renewable energy industries and cross-border e-commerce. ESR’s New Economy assets are built to exacting standards in terms of functionality and sustainable practices and remain well-sought after by customers and capital partners alike. This can be evidenced by ESR’s well-diversified customer base, with over 920 customers, of which 65% of customers are operating in New-Economy related sectors7 such as e-commerce and third-party logistics providers. The top 10 customers, who are well-established leaders in their respective industries, account for approximately 25% of FY2023 rental income. ESR’s lease expiry profile remains well-staggered with a healthy WALE of 4.6 years and 4.4 years by income and area respectively. Mainland China South Korea Japan Australia/ New Zealand SEA India Occupancy4,5 (%) 82 97 98 99 96 97 Weighted average rental reversion rate4,6 (%) –3.0 19.5 2.9 19.4 2.5 23.4 Portfolio Leasing Metrics4 (million sqm) FY2022 FY2023 Renewals 1.3 1.2 New Leases 3.3 4.1 Total Space Leased 4.6 5.3 Top 10 Global New Economy Customers by Revenue (%) 8.7% 4.8% 1.8% 1.7% 1.6% 1.4% 1.4% 1.3% 1.3% 1.2% Well-Staggered Lease Expiry Profile4 1% 1% 1% 0.1% 1% 1% 15% 13% 13% 10% 13% 31% 2024 2025 2025 2026 2027 2028 and beyond Assets held on Balance Sheet Assets held in Funds and Investment Vehicles (by area)
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