ESR AR 2019 EN

Our investment segment is divided into three main categories: (i) completed properties that we hold on our balance sheet, from which we derive total return, including rental income and appreciation in value; (ii) our co-investments in the funds and investment vehicles and the REITs we manage, from which we derive dividend income, pro rata earnings and/or pro rata value appreciation; and (iii) other investments, including our minority equity stakes in other companies. We use our strong balance sheet to acquire and own assets that have attractive risk-reward profiles and capture opportunities which may not fit the current investment criteria of our funds, and which may be used to seed future funds that we may establish. We are able to develop properties without the need to source equity for every individual project and can warehouse properties on our balance sheet if needed. This provides attractive visibility to prospective capital partners and is an important advantage of our platform, which facilitates faster fundraising and enables us to realize development profits. Additionally, our investments in properties through our co-investments in the funds and investment vehicles we manage allow us to align our interests with those of our capital partners. Operations Review Investment Segment Balance Sheet Properties The total AUM for the investment properties held on our balance sheet was US$2.9 billion, accounting for approximately 13% of total AUM of across the portfolio as at 31 December 2019. Refer to “Property Portfolio” on pages 57 to 59 for information on the assets. DIVERSIFIED TENANT BASE AND FOCUS ON FY2019 ‹ KEY HIGHLIGHTS › E-commerce and 3PLs comprise 60% of portfolio leased area Healthy weighted average lease expiry of 4.2 years Jiangsu Friend – III Logistics Park, Kunshan, China 42 Focused