ESR Group Reports FY2024 Results | Demonstrates business resilience as its clear core focus on logistics real estate, data centres, and infrastructure drives next phase of growth

Key Highlights: 

• Total Fee-related AUM^[1][2] at US$71.4 billion, of which approximately 60% was contributed by New Economy businesses
• US$5.4 billion of capital raised with New Economy mandates accounting for over 75% of total
• Optimised the balance sheet with US$1.1 billion of capital recycling completed
• Achieved robust leasing, occupancy, and rental reversion in logistics real estate, first-mover advantages in data centres, and inroads for its pan-APAC infrastructure platform

HONG KONG, 25 March 2025 – ESR Group Limited (“ESR” or the “Company”, together with its subsidiaries as the “Group”; SEHK Stock Code: 1821), Asia-Pacific’s (“APAC”) leading New Economy real asset manager, today announced its results for the financial year ended 31 December 2024 (“FY2024”).

Despite persistent macroeconomic headwinds, ESR achieved significant progress on its key business priorities – namely, ongoing balance sheet optimisation, streamline and simplify business, and delivering on business integration as one ESR for investors and customers – further strengthening the Group’s overall resilience.

With a renewed focus, the Group is well-positioned to capture the next phase of growth through its logistics real estate, data centres, and infrastructure platforms – a clear and sustainable business strategy that has been affirmed by the Consortium^[3] proposing to take ESR private. Underscoring investor confidence amid a tough fundraising environment and robust fundraising for its core businesses, ESR raised US$5.4 billion in capital in FY2024.

Executing on its asset-light strategy, ESR completed over US$1 billion of asset syndications, including the injection of seed assets into the newly listed ESR China REIT (“ESR C-REIT”). Post non-core divestments to simplify the business, the Group’s New Economy platforms gained an increased proportion of Total Fee-related Assets Under Management (“AUM”) – accounting for approximately 60% – and also booked over 75% of new capital raised. A further US$2.7 billion of balance sheet assets and non-core divestments are earmarked for subsequent sell-down.

As one unified Group, ESR grew its pan-APAC data centre and infrastructure platforms to deliver diversified investment solutions that enable investors to capture opportunities in digitalisation and decarbonisation.

Building on its accelerated data centre momentum, ESR successfully raised a combined US$2 billion across two funds in FY2024. Additionally, the Group completed its first hyperscale asset within the US$2 billion, 130-megawatt^[4] (“MW”) ESR Cosmosquare Data Centre campus in Japan, which will be co-developed and operated in a joint venture with global data centre provider CloudHQ. This development is part of the Group’s strategy to deliver against its expanded pipeline of over 2-gigawatt of secured land and power.

At the same time, ESR has been actively laying the foundations for its infrastructure platform, which will deliver investment solutions backed by equity interests in assets, companies or platforms that drive decarbonisation initiatives, data transmission and use, and supply chain efficiencies.

Jeffrey Shen, ESR Group Co-founder and Co-CEO, said, “As we reflect on our achievements in FY2024, it is clear that our commitment to sustainable growth and operational excellence as One ESR has been pivotal in the Group continuing to realise long-term value for investors, customers, partners, and employees. We remained focused on executing and delivering on our business priorities, making solid progress in optimising our balance sheet and growing our perpetual ESR-managed vehicles with our core logistics fund in South Korea and the positive market response to our ESR C-REIT listing.”

Stuart Gibson, ESR Group Co-Founder and Co-CEO, said, “2024 was a transformative year for ESR, marked by our decisive pivot towards data centres and infrastructure while building on our leadership and track record in logistics real estate. Having sharpened our focus, we accelerated ESR’s data centre business growth across APAC, including completing ESR Cosmosquare OS1 data centre and entering into a joint venture with CloudHQ. With our augmented capabilities as one ESR, our unified pan-APAC platform positions us well to capitalise on robust GDP and e-commerce growth, strong demand in artificial intelligence, Cloud and 5G, and adjacencies in emerging infrastructure demand.”

FY2024 Financial Summary

For FY2024, ESR recorded Total Revenue of US$639 million, 78% of which was Fund Management Segment Revenue. Fund Management EBITDA was US$321 million in FY2024, compared to US$579 million in FY2023, due to the lack of promote fees in the current year.

The Group’s EBITDA was negative US$80 million, compared with US$885 million in FY2023. PATMI was negative US$360 million, compared with US$400 million in the prior year. The EBITDA and PATMI for FY2024 were significantly impacted by marked-to-market losses tied to non-core divestments, as well as asset and project revaluations which are non-cash in nature. They are not reflective of the long-term performance of the Group.

The Group’s underlying business is fundamentally resilient, underpinned by the sustained growth in recurring core fee income from asset management, investment management, and property management – recording a 6.6% increase year-on-year despite downward pressure on valuations.

Through proactive capital and interest rate management, ESR’s liquidity position remains sound. As of 31 December 2024, the Group reported cash balances and committed loan facilities of approximately US$4 billion, at a weighted average debt maturity of five years. ESR successfully secured a US$2.5 billion syndicated sustainability-linked facility, which will be largely utilised for the Group’s refinancing and capital requirements in 2025 and 2026. In addition, the Group achieved a 60-basis-point reduction in weighted average interest cost of its debt portfolio to 4.7% for FY2024.

Growth Strategy

Renewed Focus on Logistics Real Estate, Data Centres, and Infrastructure and Renewables

As of 31 December 2024, ESR managed US$42.6 billion of New Economy Fee-related AUM and maintained one of APAC’s largest development workbooks of about US$11.4 billion, which strategically positions the Group to deliver space and investment solutions in large-scale logistics and data centres. ESR’s workbook in FY2024 included Keihana Data Centre in Japan, Busan New Port logistics park in South Korea, and Moorebank Intermodal Precinct in Australia.

Portfolio occupancy rate for the Group’s New Economy assets^[7] stood at 87% (95% excluding Mainland China). The reduction relative to FY2023 was attributable to a portfolio of almost 2 million square metres (“sqm”) of newly stabilised assets in Japan and Mainland China that came on-stream in FY2024. These assets are on an extended runway towards achieving their target occupancy levels over time.

ESR advanced its growth pipeline with Data Centres taking up 23% of development starts and 16% of total development workbook in FY2024. ESR achieved its announced target and started 375 MW of projects under construction in 2024. The Group’s first hyperscale data centre site completed in August 2024, ESR Cosmosquare OS1, in Osaka, Japan will be ready for service in June 2025.

For its infrastructure segment, ESR is leveraging the natural adjacencies across ESR’s real estate business, its APAC-wide footprint, site acquisition prowess and inherent capabilities to provide immediate access to a proprietary pipeline of infrastructure assets.

In October 2024, ESR invested in Leader Energy Group Berhad’s renewable power generation and transmission portfolio in Southeast Asia through China-ASEAN Investment Cooperation Fund II (“CAF II”), which is sub-advised by ESR. Complementing the existing US$1 billion CAF II, ESR will be launching a new fund in 2025 to offer investors value-add and growth strategies across energy transition, digital infrastructure and logistics infrastructure predominantly focused on the developed markets of APAC.

Accelerated Business Integration to Realise Synergies as One ESR

ESR has made significant progress integrating its businesses to form One ESR, positioning the unified platform to capitalise on revenue opportunities and cost synergies across the Group. The accelerated integration of LOGOS in 2024 has streamlined operations, driving both cost synergies and greater efficiency.

FY2024 Operational Summary

Robust Capital Raise Amid Tough Fundraising Environment

Despite a muted fundraising environment for the sector, ESR raised US$3.1 billion in capital in the second half of 2024, with an aggregated total of US$5.4 billion for the year, including recapitalisations across Australia, South Korea, Japan, China, and Singapore. New Economy capital raising was strong at US$4.2 billion, an increase of 53% year-on-year.

In line with ESR’s strategic focus, over 75% of capital raised was focused on industrial logistics and data centre projects. Additionally, the Group raised approximately US$2.3 billion from new investors, accounting for 42% of total capital raised.

As of 31 December 2024, the Group had substantial uncalled capital of US$$22.3 billion for deployment to further grow Fee-related AUM.

Diversified Portfolio to Tap APAC’s Growth Opportunities

ESR has established a diversified footprint across APAC, with starts, work-in-progress, and completions spread across all major Tier 1 APAC markets and concentrated in highly sought-after sub-markets. As of 31 December 2024, ESR’s APAC workbook stood at US$11.4 billion with more than half of that in Australia & New Zealand, Japan, and South Korea.

In addition to portfolio diversification, the Group broadened its customer and investor base. ESR delivered robust leasing performance in FY2024, with approximately 8 million sqm of space leased, a year-on-year increase of 50%, strengthening relationships with key customers looking to tap ESR’s regional footprint and in-market expertise to scale across multiple markets.

Weighted average rental reversions improved to 12.6% (21.2% excluding Mainland China), as leases in Australia & New Zealand and South Korea achieved strong positive rental reversions of approximately 26% and 27.9%, respectively.

Steadfast Progress on Environmental, Social and Governance (“ESG”) Roadmap

In FY2024, ESR made significant progress against its ESG 2030 Roadmap, which underscores the Group’s commitment to harness synergies and drive sustainable growth across the three key pillars under its ESG Framework: Human Centric, Property Portfolio, and Corporate Performance.

On the environmental front, approximately 154 MW of rooftop solar power capacity as well as approximately 800 Electric Vehicle charging stations were installed across the Group’s portfolio, representing a like-for-like^[8] increase of 38% and 32% from FY2023, respectively. Additionally, ESR obtained sustainable building certifications and ratings for approximately 42% of its portfolio of completed, directly managed assets, comparable on a like-for-like basis with the prior year. The Group’s social impact initiatives included over 4,500 volunteer hours clocked by employees in supporting local communities.

ESR continues to be recognised for its performance across global ESG benchmarks, including GRESB, the global ESG benchmark for financial markets, as well as the Institutional Shareholder Services QualityScores. The Group also maintained its “Low Risk” rating for the Sustainalytics ESG Risk Rating.

Outlook – Focused on Delivering Long-term Sustainable Value

Philip Pearce, ESR Group Deputy CEO and CEO of ESR Australia & New Zealand, said, “Building on the strong business momentum that we are seeing with our renewed focus on our core businesses and integrated One ESR platform, our priority in 2025 is to grow Fee-related AUM and drive value and growth for our stakeholders.

“With digital transformation and decarbonisation ranking among the top priorities for businesses, economies, and society as a whole, our clear strategy in logistics real estate, data centres, and infrastructure positions us well for sustainable growth.

“Despite the uncertain near-term outlook, we remain optimistic about the demand for space and investment solutions across APAC. Focused on delivering long-term sustainable value, we are strengthening our financial position, diversifying our base of capital partners, simplifying our business by completing remaining non-core divestments, and recycling capital into growth opportunities.”

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[1] Based on FX rates as at 31 December 2024.
[2] Fee-related AUM excludes AUM from Associates and levered uncalled capital. Reported figure of US$71.4 billion is subsequent to the completion of the sale of ARA Private Funds, ARA US Hospitality Trust Manager and interest in ARA US Hospitality Trust.
[3] On 4 December 2024, a consortium led by Starwood Capital Group, Sixth Street and SSW Partners (the “Consortium”), and ESR Group Limited issued a joint announcement on the Consortium’s proposal (collectively the “Proposal”) to privatise ESR Group by way of a scheme of arrangement under section 86 of the Companies Act and the withdrawal of the listing of the shares in ESR Group from the Hong Kong Stock Exchange. Refer to relevant documents relating to the Proposal at https://www.consortiumproposalannouncements.com/
[4] Building Load.
[5] Calculated as (loss)/profit before tax, adding back depreciation and amortisation and finance costs (net). Excludes changes in fair value of financial derivative assets in relation to an associate, impairment losses on non-core divestments/business or near-term divestments, share of fair value losses relating to Cromwell, share-based compensation expense; and transaction costs related to a possible privatisation of the Company, which, if proceeded with, could result in a delisting of the Company from the Stock Exchange (“Transaction Costs related to Proposed Privatisation”).
[6] Refers to (loss)/profit after tax and minority interests. Excludes the amortisation of intangible asset attributable to the ARA acquisition (net of tax), changes in fair value of financial derivative assets in relation to an associate, impairment losses on non-core divestments/business or near-term divestments, share of fair value losses relating to Cromwell, share-based compensation expense related to ARA; and Transaction Costs related to Proposed Privatisation.
[7] Stabilised New Economy assets; excludes listed REITs and Associates
[8] Like-for-like refers to year-on-year comparisons, excluding divestments.