11 ESR Group Limited Interim Report 2024 On business streamlining, the Group has also made significant progress on non-core divestments, with approximately US$335 million to be realised from the completion of the sale of ARA Private Funds7 (which is pending final regulatory approval and satisfaction of related condition precedents) and the ARA US Hospitality Trust management platform and units (which was completed in July 2024). The net proceeds from these divestments are intended to be used to repay the Group’s borrowings. Investments in Joint Ventures and Associates (“JVA”) by Sector As at 30 June 2024 76% New Economy 24% Traditional Economy US$3.3 billion Investments in JVA (New Economy Sector) by Region As at 30 June 2024 24% Australia 23% Mainland China 22% India & SEA 13% Hong Kong 18% South Korea US$2.5 billion On 21 and 26 July 2024, ESR announced the completion of its acquisition of the remaining shares in LOGOS from the founders of LOGOS8, ahead of the January 2025 deadline. The combined platform would cement ESR’s New Economy leadership position in APAC, with US$72 billion of New Economy AUM, as well as APAC’s largest development workbook of approximately US$13.1 billion. The unified platform also puts ESR on the pathway to be the number one New Economy manager9 in Australia and New Zealand, including the Data Centre business which is a key Notes: 7. Refer to the announcement dated 11 March 2024 on the discloseable transaction in relation to the sale of the ARA Private Funds business 8. Refer to the announcements dated 21 and 26 July 2024 on the acquisition of the remaining interest in LOGOS 9. On deployment of committed capital growth driver moving forward. Furthermore, it would also position ESR as a market leader in all key Southeast Asia markets and bolster its market-leading position in South Korea. An additional US$50 million of cost synergies are targeted from the ongoing streamlining of the business across the Group. ESR’s next phase of growth lies in data centres, infrastructure and its sizeable and well-diversified logistics portfolio and development workbook. Since its IPO, ESR’s development workbook has grown nearly fourfold to approximately US$13.1 billion as at 30 June 2024. The workbook is increasingly focused on data centre development, which accounted for 34% of development starts in 1H2024. The demand for data centres is expected to grow significantly on the back of increasing reliance on digital technology, cloud storage, remote work and the rise of AI. ESR’s robust data centre capability is underpinned by more than 2GW of extended pipeline. This puts ESR in a strong position to capitalise on this and grow to be a major player in the region. ESR’s multi-model approach would enable it to deliver bespoke solutions both in business model and service provision to customers and adapted for both operator requirements and unique attributes in each market ESR operates in. This is a key differentiation to its peers. The Group’s infrastructure platform is focused on sectors strategically positioned to grow with and benefit from key megatrends such as decarbonisation, digitalisation, and other key factors. At present, it has over US$1 billion of equity raised and various multiple in-country renewable energy joint ventures in operation. Leveraging existing adjacencies within the New Economy real estate business, the Group is confident of the growth potential in ESR’s infrastructure and renewables platform. FUND MANAGEMENT: FUND MANAGEMENT EARNINGS UNDERPINNED BY STABLE MANAGEMENT FEES ESR Group’s Fee Income for 1H2024 was US$254 million, underpinned by stable management fees. Excluding promote fees, Fee Income was 5.0% year-on-year ("y-o-y"), primarily due to slower development progress and project delays in Japan and South Korea. Excluding
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