OPERATIONS REVIEW DEVELOPMENT SEGMENT Development WIP of US$10.5 billion – the largest in APAC Record new development starts of US$5.4 billion Strong landbank of over 5.1 million sqm across combined portfolio Robust development pipeline of 24.3 million sqm FY2021 KEY HIGHLIGHTS DEVELOPMENT SEGMENT We have established efficient, high-quality and scalable capabilities for greenfield and brownfield developments in each country where we operate. Our extensive inhouse expertise includes selection and acquisition of sites to the design, construction and leasing of modern logistics facilities. These facilities are characterised by several attributes that differentiate modern logistics (greatly preferred by today’s e-commerce tenants) from the existing installed base of traditional warehouse: • Optimal space utilisation: Large floor plates, high ceilings and wide column spacing • High floor load capacity: to support the increased weight of taller racking and automation equipment • High operating efficiency: Spacious loading and parking areas equipped with modern loading docks • Storage safety: Security and surveillance features, proper ventilation and basic fire-fighting features such as sprinkler systems • Flexibility to provide customised features: Office space, air-conditioning and refrigeration/freezing. We capitalise these development projects through our funds and investment vehicles that we manage and/ or through our balance sheet. We earn development fees from our partners when we use capital from Fund Management (attributed to the Fund Management segment), and we earn development profit upon sale of completed properties when we use our balance sheet. We also derive pro rata earnings and pro rata value appreciation through the development activities of the development funds and investment vehicles we manage in proportion to our co-investments in those funds and investment vehicles. All of our development related capital gains are attributed to our Development segment. ESR continues to leverage third-party capital to fund developments and exercise a disciplined asset light approach to achieve our targeted development completions. In FY2021, the total estimated investment value of new development starts totalled US$5.4 billion, primarily in Japan, Australia, China, Japan, South Korea, Southeast Asia and India. The new projects represented 5.3 million sqm across the Enlarged portfolio. ESR Chengdu Qingbaijiang 1, China PRO FORMA ESR GROUP E S R C A Y M A N L I M I T E D A N N U A L R E P O R T 2 0 2 1 89
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