ESR Cayman Limited (Incorporated in the Cayman Islands with limited liability) Stock Code: 1821 REACHING NEW HEIGHTS ANNUAL REPORT 2021
SPACE AND INVESTMENT SOLUTIONS FOR A SUSTAINABLE FUTURE ESR is APAC’s leading real asset manager powered by the New Economy. On the back of the accelerating advancement, broad-based adoption and high frequency usage of technology, we are witnessing a once-in-a-multi-generation change in real estate and our vision is to deliver a fully integrated solution to leading global capital partners and customers. As a part of this continuous pursuit, we will leverage our scale, extensive offerings, capabilities and resources to provide a suite of best-in-class real estate development products and real asset investment solutions that spur meaningful, long-term sustainable growth of the business, the economy and the environment. We are fully focused on contributing to a positive impact for our employees, customers, investors and the communities around us. Visit esr.com for more information. FUND MANAGEMENT We manage a broad range of funds and investment vehicles that invest in a portfolio of premium real assets in various stages of the property life cycle, providing a single interface with multiple investment opportunities for our capital partners. DEVELOPMENT Our development platform with an end-to-end integrated suite of technical capabilities and services covers every stage of the development cycle including land sourcing, design, construction and leasing. INVESTMENT Our investment platform includes completed properties held on our balance sheet, our co-investments in the funds and investment vehicles and the public REITs we manage, as well as other investments.
The figures in this report may be subject to rounding differences. CONTENTS 92 Financial Contents 93 Directors’ Report 124 Independent Auditor’s Report 129 Consolidated Statement of Profit or Loss and Other Comprehensive Income 130 Consolidated Statement of Financial Position 132 Consolidated Statement of Changes in Equity 134 Consolidated Statement of Cash Flows 137 Notes to the Consolidated Financial Statements 239 Group Financial Summary 241 Unaudited Pro Forma Financial Information of the Enlarged Group ESR STANDALONE FY2021 FINANCIAL STATEMENT 74 Overview of ESR Group 76 Our Purpose 77 Highly-Scalable Asset-Light Business Model 78 Our Values 79 Establishing a Fully Integrated Closed Loop Solutions Ecosystem for Our Capital Partners 80 Key Trends To Support Our Growth Strategies 82 Operations Review 82 At A Glance 84 Investment Segment 86 Funds Management Segment 89 Development Segment PRO FORMA ESR GROUP 8 FY2021 Financial Highlights 10 FY2021 Operational Highlights 12 FY2021 Year In Review 14 FY2021 Awards & Accolades 16 FY2021 Financial Review 20 FY2021 Capital Management 22 FY2021 Property Portfolio 26 ESG Performance ESR STANDALONE FY2021 STRATEGIC REPORT 36 Message from Chairman 40 Message from CEOs 44 Board of Directors 52 Group Leadership Team & Business Leadership Team 54 Corporate Structure 56 Investor Relations & Corporate Communications 59 Risk Management 64 Corporate Governance Report CORPORATE GOVERNANCE End Corporate Information
ESR Chigasaki Distribution Centre, Japan SEIZING NEW OPPORTUNITIES
ESR’s landmark acquisition of ARA Asset Management (“ARA”) enables us to capitalise on collective experience and expertise to further strengthen the Group’s business in diverse and dynamic ways. The addition of LOGOS – ARA's subsidiary who is a logistics and data center specialist, cements ESR's position as the region’s largest New Economy real estate platform in the APAC region. 17.7MILLION SQM IN DEVELOPMENT PIPELINE IN CAPITAL FUNDRAISING US$5.8BILLION RECORD
43 Newton Road, Wetherill Park, New South Wales, Australia ENHANCING CORE COMPETENCIES
Our integrated business model enables us to tap into today’s secular trends with a dedicated focus on e-commerce tenants within APAC. Guided by key growth strategies led by a capable management team, we will optimise our capabilities and resources and transform them into sustainable value for our stakeholders. 94%HIGH OCCUPANCY ACROSS PORTFOLIO IN FY2021 US$3.3BILLION OF NEW DEVELOPMENT STARTS
Opo Logistics Park, South Korea GENERATING GREATER YIELD
59.1% NET DEBT/EQUITY We believe in creating value for the future. In our continuous pursuit of excellence, we will seek to better leverage our scale, offerings and capabilities to provide a suite of best-in-class real estate development products and real asset investment solutions that generates long-term returns for our business, customers and investors. 3.9MILLION SQM ROBUST LANDBANK OF
Notes: 1 Core PATMI is calculated as profit after tax and minority interests, adding back equity-settled share option expense and transaction costs relating to ARA, and less the effect of fair value gains on completed investment properties (net of tax). Refer to non-IFRS measures reconciliation on page 240. 2 Based on 4,471,294,303 of total outstanding issued shares as at 24 March 2022. ESR STANDALONE FY2021 FINANCIAL HIGHLIGHTS WEIGHTED AVERAGE INTEREST COST 4.1% FUND MANAGEMENT EBITDA US$199 MILLION MARKET CAPITALISATION2 US$14.0 BILLION CORE PATMI1 US$316 MILLION CASH US$1.6 BILLION TOTAL SEGMENTAL EBITDA US$777 MILLION 17.2% 34.8% 21.6% R E A C H I N G N E W H E I G H T S 8 ESR STANDALONE FY2021 STRATEGIC REPORT
Adjusted EBITDA3 (US$ million) FY2018 FY2017 240 182 FY2019 359 FY2020 366 431 FY2021 FY2018 FY2017 254 153 FY2019 357 FY2020 388 404 FY2021 Revenue (US$ million) FY2018 FY2017 213 201 FY2019 278 FY2020 315 4105 FY2021 Profit after Tax (US$ million) BALANCE SHEET (US$ million) FY2017 FY2018 FY2019 FY2020 FY2021 Total Assets 3,055 4,432 6,352 7,687 9,338 Cash and bank balances 601 581 884 1,515 1,638 Bank and other borrowings 833 1,460 2,571 3,295 4,248 Net debt4 233 879 1,687 1,780 2,610 Net debt/total assets 7.6% 19.8% 26.6% 23.2% 27.9% Notes: 3 Adjusted EBITDA is calculated as profit before tax, adding back depreciation and amortisation, exchange loss/(gain), finance costs, equity-settled share option expense, write-off related to loss of property, plant and equipment, transaction costs relating to ARA and the listing expenses, and eliminating the effect of interest income, one-off insurance compensation and fair value gains on completed investment properties and investment properties under construction. 4 Net debt is calculated as bank and other borrowings less cash and bank balances 5 Excludes transaction costs related to ARA * EBITDA, Adjusted EBITDA and Core PATMI are non-IFRS measures. These measures are presented because the Group believes they are useful measures to determine the Group’s financial condition and historical ability to provide investment returns. EBITDA, Adjusted EBITDA and Core PATMI and any other measures of financial performance should not be considered as an alternative to cash flows from operating activities, a measure of liquidity or an alternative to net profit or indicators of the Group’s operating performance on any other measure of performance derived in accordance with IFRS. Because EBITDA, Adjusted EBITDA and Core PATMI are not IFRS measures, these may not be comparable to similarly titled measures presented by other companies. Refer to non-IFRS measures reconciliation on page 240. 30.4% 17.7% 4.1% Total Segmental Result (US$ million) Development Investment Fund Management FY2018 FY2017 FY2019 FY2020 FY2021 424 183 234 110 115 256 132 245 289 235 199 342 148 226 79 162 459 633 663 777 17.2% 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 9
ESR STANDALONE FY2021 OPERATIONAL HIGHLIGHTS RECORD FUNDRAISING OF US$5.8 BILLION of new capital from nine new/upsized funds/mandates E-COMMERCE AND 3PLS REMAIN KEY DRIVERS OF DEMAND REPRESENTING 67% of portfolio leases2 UNCALLED CAPITAL OF US$5.7 BILLION committed to be invested RECYCLED CAPITAL OF OVER US$800 MILLION by divesting balance sheet assets into ESR managed funds RECORD FUND AUM OF US$35.6 BILLION a year-on-year increase of 31% RECORD LEASING OF 3.3 MILLION SQM of space1 across portfolio Notes: 1 Based on investment properties on balance sheet and investment properties held in funds and investment vehicles. 2 Based on FY2021 income 3 Based on estimated total cost 4 Based on investment properties on balance sheet and portfolio investment properties in funds and investment vehicles by leased area and by income as at 31 December 2021. R E A C H I N G N E W H E I G H T S 10 ESR STANDALONE FY2021 STRATEGIC REPORT
RECORD DEVELOPMENT STARTS OF US$3.3 BILLION3 STRONG PORTFOLIO OCCUPANCY OF 94%1 >90% of WIP to be completed 2022-2024 ASIA’S LARGEST DEVELOPMENT WORKBOOK US$7.1 BILLION of Work-In-Progress (“WIP”)3 ROBUST LANDBANK OF 3.9 MILLION SQM of GFA WELL-STAGGERED PORTFOLIO WALE OF 3.9 YEARS4 ESR Yokohama Sachiura Distribution Centre 1, Japan 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 11
APRIL • ESR acquired its first key data centre asset in Osaka, Japan, which will be developed into a multi-phase data centre campus. • In India, ESR leased 108,000 sq. ft. of industrial space at ESR Oragadam Industrial & Logistics Park to CUBIC. FEBRUARY • ESR Australia partnered with DHL Supply Chain to develop a 70,000 sqm custom solar-powered and carbon-neutral pharmaceutical distribution facility at ESR Bringelly Road Business Hub. MARCH • ESR was selected as a constituent of Hang Seng Composite Index, and included in the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect programmes. • In India, a 38-acre industrial and logistics park is planned in Chakan, to serve as the hub for light manufacturing and logistics in the country’s western region. • In Australia, ESR acquired a fully leased office and warehouse complex in Macquarie Park NSW for A$71 million, that is slated for a planned redevelopment into A-Grade office buildings. • ESR issued S$200 million NC5 fixed rate perpetual resettable step-up subordinated securities at a distribution rate of 5.65%. MAY • In Japan, ESR and M&G Real Estate Asia (“M&G”) purchased a significant stake in ESR Ichikawa Distribution Centre through a longterm core investment joint venture, from ESR-managed Redwood Japan Logistics Fund II (“RJLF II”). • ESR acquired its first strategic asset in Hong Kong’s Kwai Chung district, which will be converted into a data centre. • ESR entered into a joint venture with BW Industrial Development Joint Stock Company (“BW”) for a 240,000 sqm industrial development project near Ho Chi Minh City, marking its maiden entry into Vietnam. • ESR divested 10.0% of stake in ESR Australia Logistics Partnership (“EALP”) to ESR-REIT for A$60.5 million, marking ESR-REIT’s first acquisition from the Sponsor's pipeline and overseas expansion. • In Australia, ESR secured pre-commitments of 36,000 sqm of warehouse space from two anchor tenants at ESR Horsley Logistics Park. FY2021 YEAR IN REVIEW 71-93 Whiteside Road, Clayton South, Victoria, Australia R E A C H I N G N E W H E I G H T S 12 ESR STANDALONE FY2021 STRATEGIC REPORT
JUNE • Construction commenced on 195,373 sqm ESR Yokohama Sachiura Distribution Centre 2, the second phase of the masterplanned ESR Yokohama Sachiura Logistics Park which is set to be the largest logistics park in Japan when fully completed. • ESR Australia completed the acquisition of A$3.8 billion Milestone Portfolio and its associated operating business from Blackstone, in partnership with GIC. • ESR Australia commenced redevelopment of Acacia Ridge Business Park in Brisbane, Australia. • ESR issued a further S$150 million NC5 fixed rate perpetual resettable step-up subordinated securities at a distribution rate of 5.65% JULY • ESR Japan Logistics Fund III (“RJLF3”) was upsized to JPY150 billion to fund development of large-scale logistics facilities in the major metropolitan areas of Japan. • In India, ESR signed a MOU with the Government of Tamil Nadu Government to set up two industrial parks for INR 550 crores. • ESR announced its plan to develop a 36.5-acre Grade A industrial and logistics park in North Gujarat, India. • ESR Clayton Business Hub is fully pre-committed ahead of its expected completion in mid-2022 with a 10-year lease signed with a global toy retailer. • ESR Australia Logistics Partnership II (“EALP II”), an extension of ESR’s core plus logistics strategy in Australia, received an initial A$600 million commitment. • M&G committed A$200 million to ESR Australia Development Partnership (“EADP”). 34 Davis Street, Wetherill Park, New South Wales, Australia NOVEMBER • ESR’s proposed acquisition of ARA was approved by shareholders with over 90% approval at its EGM. • ESR secured its first Sustainability-Linked Loan of US$700 million, which was subsequently upsized to US$1 billion at Libor +2.25% and Libor +2.75% for 3-year and 5-year tranches, respectively. OCTOBER • ESR announced proposed merger of ESRREIT with ARA LOGOS Logistics Trust to form a future-ready New Economy APAC S-REIT named ESR-LOGOS REIT. • ESR launched its new ESR Japan Income Fund ("JIF") with US$750 million of equity commitments. AUGUST • ESR announced its proposed acquisition of ARA Asset Management (ARA) (including LOGOS) for US$5.2 billion. • In China, ESR established ESR China Development Platform (“ECDP”) with an initial equity commitment of US$1 billion with APG Asset Management (“APG”) and another global institutional investor. • In Japan, ESR and M&G acquired a significant stake in ESR Yatomi Distribution Centre from RJLF II. • ESR entered into a US$400 million senior unsecured corporate term loan facility at Libor +2.75% and Libor +3.25% for 3-year and 5-year tranches, respectively. • Canada Pension Plan Investment Board (“CPP Investments”) and ESR upsized their investments in the Korea Income Joint Venture to US$1 billion. • ESR received its inaugural MSCI ESG Rating of ‘A’ in recognition of its ESG practices. ESR Oragadam Industrial & Logistics Park, India E S R C A Y M A N L I M I T E D A N N U A L R E P O R T 2 0 2 1 13
AWARDS & ACCOLADES CORPORATE EXCELLENCE MIPIM ASIA AWARDS 2020 • Gold Award, Best Infrastructure, Community & Civic Building ESR Amagasaki Distribution Centre REALTY+ CONCLAVE & EXCELLENCE AWARDS 2021 • Best Industrial Project of the Year ESR Chakan 1 Industrial & Logistics Park ESR Amagasaki Distribution Centre 2021 PERE GLOBAL AWARDS • Deal of the Year: Asia Acquisition of ARA Asset Management • Industry Figure of the Year: Asia Jeffrey Perlman, Chairman, ESR / Managing Director, Head of Asia Pacific Real Estate and Southeast Asia, Warburg Pincus EY ENTREPRENEUR OF THE YEARTM 2021 – REAL ESTATE CATEGORY • Jinchu Shen and Stuart Gibson, Co-founders & Co-CEOs, ESR AUSTRALIA’S TOP FIVE PROPERTY PLAYERS IN 2021, THE AUSTRALIAN FINANCIAL REVIEW MAGAZINE • Philip Pearce, CEO, ESR Australia IR MAGAZINE AWARDS – GREATER CHINA 2021 • IR Magazine’s Choice Award for Innovation in IR 6TH GOLDEN HONG KONG STOCK AWARDS • Best Hong Kong Stock Connect Company PERE 2021 APAC FUND MANAGER GUIDE • 5th of “Asia’s Top Fundraisers” IREI GLOBAL INVESTMENT MANAGERS 2021 SPECIAL REPORT Largest Investment Managers by Region: • 3rd of “Top 10 Managers Based on Asia Assets (US$ million)” Total Assets Rankings: • 44th of “Total Gross Value of Real Estate Assets Under Management (US$ million, as of 31 Dec 2020)” • 48th of “Advisory Separate Accounts by Investor Domicile (gross, US$ million, as of 31 Dec 2020)” • 36th of “Value and Number of Vehicles Under Management (gross, US$ million, as of 31 Dec 2020)” Indices Inclusions • Constituent of Hang Seng Composite Index from 15 March 2021 • Constituent of Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect programmes from 15 March 2021 PRODUCT EXCELLENCE R E A C H I N G N E W H E I G H T S 14 ESR STANDALONE FY2021 STRATEGIC REPORT
GLOBAL REAL ESTATE SUSTAINABILITY BENCHMARK (GRESB) • South Korea: ESR Kendall Square Development JV 1 named “Regional Sector Leader” in the Development Benchmark, industrial real estate sector. Obtained 5* rating, topped five “GRESB Development” rankings. • Japan: Redwood Japan Logistics Fund II LP, RJLF 3 Co-Investment Platform and PGGM RJLC LP topped several “GRESB Development” rankings. All funds obtained 5* rating. • China: Redwood China Logistics Fund LP topped the “China industrial distribution warehouse non-listed” of “GRESB Development” category. Received 1st of “GRESB Score within industrial non-listed opportunistic” category in the “GRESB Standing Investments” Benchmark assessment. THE ASSET ESG CORPORATE AWARDS 2021 • Titanium Award winner: ESR-REIT SUSTAINABLE BUILDING CERTIFICATIONS IN 2021 Leadership in Energy and Environmental Design (LEED) Certifications • Gold: 3 assets • Silver: 6 assets • Certified: 3 assets Comprehensive Assessment System for Built Environment Efficiency (CASBEE) • 5 assets International WELL Building Institute (WELL) • 22 assets Building-Housing Energy-Efficiency Labeling System (BELS) Certification • ESR Yatomi Kisosaki Distribution Centre (5*) SUSTAINABILITY Refer to ESR’s ESG Report 2021 for more information on Sustainable Building Certifications at www.esr.com/en/esg/esg-reports/ ESR Yatomi Kisosaki Distribution Centre, Japan MSCI ESG RATING ASSESSMENT – “A” 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 15
FINANCIAL REVIEW INVESTMENT 29% FUND 60% MANAGEMENT DEVELOPMENT 11% FY2021 REVENUE BY SEGMENT The Group has delivered another outstanding performance for the year ended 31 December 2021, with a robust and well-capitalised balance sheet backed by US$1.6 billion cash balance and net debt over total assets of 27.9% as of year-end. This is in line with ESR’s focus on advancing its asset light strategy and disciplined capital management. Key Financial Highlights: • Revenue (excluding construction revenue) increased by 21.7% from US$296.2 million in FY2020 to US$360.6 million in FY2021; • Adjusted EBITDA increased by 17.7% from US$366.0 million in FY2020 to US$430.8 million in FY2021; • Fund management EBITDA (segment result) increased by 34.8% from US$147.6 million in FY2020 to US$199.0 million in FY2021; • PATMI (excluding transaction costs related to ARA) increased by 31.7% from US$286.5 million in FY2020 to US$377.3 million in FY2021; and • Profit for the year (excluding transaction costs related to ARA) increased by 30.4% from US$314.7 million in FY2020 to US$410.5 million in FY2021. CHINA 34% SOUTH KOREA 15% JAPAN 30% AUSTRALIA 12% SINGAPORE 7% INDIA/OTHERS 2% FY2021 REVENUE BY COUNTRY* Revenue The Group’s revenue increased to US$404.4 million in FY2021 from US$388.3 million in FY2020. Total group revenue (ex-construction) increased by 21.7% from US$296.2 million in FY2020 to US$360.6 million in FY2021, driven by higher fees from the fund management segment. Management fees increased by 28.9% from US$189.3 million in FY2020 to US$244.0 million in FY2021, supported by well-established fund management platform with record AUM growth of US$39.4 billion, up 32% year-onyear (“YoY”). Construction revenue were from outstanding projects executed after disposal of construction arm by ESR Australia in September 2020. Accordingly, overall construction revenue decreased by 52.5% from US$92.2 million in FY2020 to US$43.8 million in FY2021, while the cost of sales also decreased correspondingly. Rental income increased by 9.0% from US$101.4 million in FY2020 to US$110.5 million in FY2021. Excluding the effect of disposal of ESR Australia Logistics Partnership (“EALP”) in June 2020, rental income increased by 30.3% YoY, driven by robust demand and leasing from customers in the New Economy sector. Geographically, revenue from Australia made up of 21.6% of the Group’s revenue, decreased from US$141.2 million in FY2020 to US$87.5 million in FY2021 mainly due to disposal of construction arm. Excluding construction revenue, revenue from Australia made up of 12.1% of the Group’s revenue. China, Japan and South Korea markets accounted for 79.2% of the Group’s revenue (exconstruction). These four markets collectively made up of 91.3% of the Group’s revenue. Singapore and India made up of the remaining 8.7%. *excludes construction revenue R E A C H I N G N E W H E I G H T S 16 ESR STANDALONE FY2021 STRATEGIC REPORT
INVESTMENT 44% FUND 26% MANAGEMENT DEVELOPMENT 30% PATMI AND EBITDA EBITDA increased by 16.3% from US$571.2 million in FY2020 to US$664.2 million in FY2021. PATMI (excluding transaction costs related to ARA) increased by 31.7% from US$286.5 million in FY2020 to US$377.3 million in FY2021. Higher PATMI and EBITDA were driven by accelerating growth in the Group’s fund management AUM, coinvestments in associates and joint ventures. Fair value gain on investment properties increased by 22.2% to US$274.5 million in FY2021 from US$224.7 million in FY2020. The increase was mainly contributed by completed and development assets in China, as well as data centre assets acquired in Osaka, Japan and Hong Kong during the year. The Group’s share of profits from joint ventures and associates increased close to 60.0% from US$105.1 million in FY2020 to US$168.1 million in FY2021. The growth is driven by the Group’s investment in South Korea and ESR Milestone Partnership (“Milestone Portfolio”) in Australia. The acquisition of the A$3.8 billion Milestone Portfolio comprising 45 high-quality, income producing assets over 3.6 million sqm and the associated operating business, by ESR Australia was completed in June 2021. Milestone Portfolio value that has increased by 5.5% in six months since acquisition contributed to the Group’s share of its results. Additionally, the Group recorded higher share of results in its co-investment in South Korea driven by higher assets value appreciation. The Group’s weighted average interest rate cost as of 31 December 2021 was 4.1% compared to 4.6% as of 31 December 2020. Overall finance cost increased by US$16.1 million or 10.9% in FY2021 despite total borrowings increased by 28.9% year-on-year. With the Group’s disciplined capital management, it has continued to lower its borrowing costs. Administrative expenses increased by 19.9% from US$201.7 million in FY2020 to US$241.8 million in FY2021 primarily due to higher non-recurring professional fees incurred for acquisitions of assets and investments, and operating costs to support growth and expansion of the Group. Excluding transaction costs related to ARA, administrative expenses increased at a modest pace of 6.1% from US$201.7 million in FY2020 to US$214.0 million in FY2021. SEGMENT RESULTS FY2021 SEGMENTAL RESULTS (EBITDA) Investment segment results increased by 51.6% from US$225.9 million in FY2020 to US$342.5 million in FY2021. The increase was mainly contributed by (i) fair value gain from the Group’s investment properties in China, and newly acquired data centre assets in Hong Kong and Osaka, Japan; and (ii) Higher share of results from co-investments in South Korea and Milestone Portfolio in Australia. In FY2021, the Group recorded dividend income of US$32.6 million received from Japan co-investments. Accordingly, the Group recorded share of reduction in the carrying value in these co-investments of US$32.0 million in aggregate. Excluding such amount, the change in carrying value of financial assets and liabilities at fair value through profit or loss would have been a gain of US$28.1 million. The fund management segment result increased by 34.8% from US$147.6 million in FY2020 to US$199.0 million in FY2021. The increase was driven by fund AUM growth across its Australia, Japan and South Korea platforms and higher recurring income base. The Group saw higher growth in fund management EBITDA of 34.8% vis-à-vis 28.9% growth in fund management revenue benefitting from the economies of scale achieved to date in its fund management platform. 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 17
FINANCIAL REVIEW The development segment result decreased by 18.6% from US$289.2 million in FY2020 to US$235.3 million in FY2021. The decrease was attributable mainly to gain on disposal of Higashi Ogishima Site A amounted to US$19.4 million; and a gain on sale of development management rights of US$12.3 million in Australia to one of the Group’s joint ventures. There were no such material divestments of assets by the Group’s subsidiaries in FY2021. In addition, the Group recorded a lower share of fair value of its coinvestments in funds post-completion of development and sell down of assets held by its co-investments in FY2020. The decrease in development segment result is partially offset with the increase in fair value from new developments in China. ASSETS The Group had a robust and well-capitalised balance sheet with US$1.6 billion in cash. Total assets increased from US$7.7 billion as of 31 December 2020 to US$9.3 billion as of 31 December 2021. Increase in total assets was mainly driven by new investments in associates in Australia and China, acquisitions of strategic data centres assets; as well as goodwill arising from Milestone Operations Limited (“MOL”). Investment properties increased by 39.1% to US$3.7 billion as of 31 December 2021 (FY2020: US$2.7 billion). The increase was contributed by ESR’s strategic acquisitions of prime assets near Osaka CBD, Japan that will be developed into a 98 MW multi-phase data centre campus; and an asset in Kwai Chung in Hong Kong that will be redeveloped into a 25 MW data centre; development of projects including ESR Shanghai Qingpu Yurun Phase II, an ESR flagship project, as well as fair value appreciation across ESR’s properties portfolio. Investment in joint ventures and associates increased by 23.0% to US$1.3 billion as of 31 December 2021 (FY2020: US$1.1 billion) contributed by the Group’s acquisition of ESR Milestone Partnership in June 2021, in addition of higher share of results from existing joint ventures in China and South Korea. Increase in goodwill of US$202.4 million to US$542.6 million as of 31 December 2021, was from acquisition of MOL. The Group also recorded an increase in intangible balances, net of amortisation; and deferred tax assets from the acquisition of MOL. Investment in listed securities decreased by 11.3% to US$779.4 million (FY2020: US$878.3 million), which was mainly due to a disposal of Centuria Capital Group (“CNI”) shares during the year. The reduction was partially offset with an increase in holding of the Group’s existing investments in ESR Kendall Square REIT on the KRX KOSPI market and increase in fair values of the Group’s other existing listed securities investments. LIABILITIES Total bank and other borrowings as of 31 December 2021 were US$4.2 billion compared to US$3.3 billion as of 31 December 2020. With cash balance of US$1.6 billion, the net debt to total assets as of 31 December 2021 was 27.9% (FY2020: 23.2%). During the year, the Group continued to diversify its funding sources and lower its borrowings costs to support its long-term growth: • In April 2021, ESR entered into US$400 million (with a US$100 million incremental option) unsecured term loan facility which consists of a three-year tranche of US$267 million at Libor plus 2.75% and a five-year tranche of US$133 million at Libor plus 3.25%. • In November 2021, ESR closed its first SustainabilityLinked Loan (“SLL”) of US$700 million which was subsequently upsized to US$1 billion at Libor plus 2.25% and Libor plus 2.75% for 3-year and 5-year tranches respectively. The loan has a tiered incentive mechanism whereas ESR will be entitled to an interest reduction as sustainability targets are achieved. The first US$500 million was drawn down in November 2021 and another US$500 million has been drawn down post year-end. Further to refinancing with longer tenor corporate borrowings, the Group’s weighted average debt maturity had increased to approximately 4.5 years (31 December 2020: 3 years) as of 31 December 2021. R E A C H I N G N E W H E I G H T S 18 ESR STANDALONE FY2021 STRATEGIC REPORT
TOTAL EQUITY Total equity has increased from US$3.8 billion as of 31 December 2020 to US$4.4 billion as of 31 December 2021, primarily from net profit for the year of US$382.7 million and US$256.3 million (net of issuance costs) from the perpetual securities. In March 2021, the Company issued an aggregate principal amount of S$200 million (approximately US$148.6 million) NC5 fixed rate perpetual resettable step-up subordinated securities at a distribution rate of 5.65% ("Perpetual Securities NC5 5.65%") under its US$2.0 billion Multicurrency Debt Issuance Programme. In June 2021, the Company issued a further tranche within the Perpetual Securities NC5 5.65% with an aggregate principal amount of S$150 million (approximately US$111.6 million) bringing the aggregate total amount to S$350 million (approximately US$260.2 million). In addition, there was a gain of US$45.7 million arising from mark-to-market of Group’s investment in listed securities (classified as financial assets at fair value through other comprehensive income). The above increases are partially offset by decreases contributed by translation exchange difference of US$50.9 million mainly from the Group’s Japan and Korea operations arising from strengthening of US dollars against Japanese Yen and Korean Won during the year; and share repurchased of US$42.1 million during the year. 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 19
CAPITAL MANAGEMENT ESR adopts a proactive and disciplined capital management approach, and regularly review its debt maturity profile and liquidity position. The Group maintains a well-capitalised balance sheet, and actively diversifies its funding sources through a combination of facilities with both local and international banks, and capital market issuances in optimising its costs of debt. ESR continues to be disciplined in executing its capital recycling programme, and prudently redeploying capital to support growth. During FY2021, the Group continues to be focused on its asset light approach, with over US$800 million of divestments from balance sheet to ESR managed funds and received over US$500 million net cash which was subsequently recycled back for future growth. In May 2021, ESR-REIT embarked on its maiden overseas acquisition outside Singapore by taking a 10% stake in ESR Australia Logistics Partnership (“EALP”), an existing Australian core fund managed by ESR’s Australian platform. This transaction also marked ESR-REIT’s first acquisition from the Group’s APAC pipeline. In June 2021, ESR Kendall Square REIT also completed the acquisition of the Anseong Logistics Park from the existing core fund managed by ESR’s Korean platform. In July 2021, the Group fully exited its investment in Centuria Capital Group (“CNI”), a leading real estate fund manager in Australia, with A$272 million (approximately US$207.4 million) of total gross proceeds. The investment generated a 23.0% unleveraged IRR1. Total borrowings of the Group was US$4.2 billion as of 31 December 2021. With well-capitalised balance sheet at US$1.6 billion in cash, the net debt over total assets was 27.9% as of 31 December 2021. On a pro forma enlarged group basis as of 31 December 2021, post-completion of acquisition of ARA Asset Management Limited and its subsidiaries (“ARA Acquisition”), the net gearing has been reduced to 20.4%. Throughout the year, the Group continues to expand and diversify its funding and capital structure, which is crucial for fuelling the Group’s long-term growth. • In March 2021, ESR issued S$200 million (approximately US$148.6 million) NC5 fixed rate perpetual resettable step-up subordinated securities at a distribution rate of 5.65% (“Perpetual Securities NC5 5.65%”) under its US$2.0 billion Multicurrency Debt Issuance Programme (“EMTN Programme”). • In April 2021, the Group entered into a US$400 million (with a US$100 million incremental option) unsecured term loan facility which consists of a three-year tranche of US$267 million at Libor plus 2.75% and a fiveyear tranche of US$133 million at Libor plus 3.25%. There were 10 banks participating in the new facility which included both international and Asian financial institutions. • In June 2021, ESR issued a further tranche within the Perpetual Securities NC5 5.65% amounting to S$150 million (approximately US$111.6 million), bringing the aggregate total amount to S$350 million (approximately US$260.2 million). • In November 2021, the Group closed its first Sustainability-Linked Loan (“SLL”) of US$700 million which was subsequently upsized to US$1 billion, at Libor+2.25% and Libor +2.75% for 3-year and 5-year tranches respectively. The loan has a tiered incentive mechanism whereas ESR will be entitled to an interest Debt Maturity Profile of Borrowings As at 31 December 2021 (US$ million) Within one year In the second year In the third to fifth year, inclusive Beyond five years 1,313 31% 46% 16% 7% 1,968 671 295 Note: 1 Includes dividends. R E A C H I N G N E W H E I G H T S 20 ESR STANDALONE FY2021 STRATEGIC REPORT
Bank and Other Borrowings As at 31 December 2021 USD 51% RMB 15% JPY 13% SGD 12% AUD 6% HKD 3% Cash and Bank Balances As at 31 December 2021 USD 41% RMB 18% AUD 15% JPY 13% SGD 9% HKD 2% KRW 1% OTHERS 1% reduction as sustainability targets are achieved. The first US$500 million was drawn down in November 2021 and another US$500 million has been drawn down post year-end. Subsequent to year-end, the Company further secured a 5-year senior unsecured, committed corporate SLL of JPY28 billion (approximately US$243 million) with an option to upsize to JPY35 billion (approximately US$303 million). Similar to the SLL US$1 billion corporate facility, the Company will be entitled to a reduction of interest rate (currently at Tibor plus 1.80%) as sustainability targets are achieved. On 3 February 2022, the Company made repayment in full of its S$350 million 6.75% fixed-rate notes issued pursuant to the EMTN Programme. Together with new borrowings entered into during FY2021, these have further lowered the Group’s overall cost of funding. The Group manages its interest rates exposure by maintaining a combination of fixed and floating rate borrowings. As of 31 December 2021, 30% of the Group’s borrowings were on fixed rate while the remaining 70% were on floating rate basis. In managing the interest rate profile, the Group considers interest rate outlook and holding periods of its investment profile. The Group’s weighted average interest rate was 4.1% at end-December 2021, 50bps lower than 4.6% at end-December 2020. The Group manages and monitors its debt maturity profile proactively. It also ensures sufficient cash reserves are maintained and disciplined in refinancing existing borrowings to meet the Group’s short-term obligations, ongoing developments, and investments opportunities. After refinancing with longer tenor corporate borrowings, the Group’s weighted average debt maturity had increased to approximately 4.5 years as of 31 December 2021, from 3 years as of 31 December 2020. Subsequent to year-end, the Group had repaid approximately US$450 million (i.e., 35%) of the US$1.3 billion borrowings due within a year which included the S$350 million 6.75% fixed-rate notes; with another US$425 million (i.e., 32%) relating to its US$425 million 7.875% fixed-rate notes to be repaid on 4 April 2022. The Group has exposures to foreign exchange rate fluctuations primarily from its investments and income from its subsidiaries, associates and joint ventures in China, Japan, South Korea, Australia, Singapore and India. The Group manages and minimises its foreign currency exposures by natural hedges using various currencies via project and corporate level. Operating and development activities of each country are funded mainly through project level debts and operating income that are in their respective local currencies. At corporate level, the Group currently fund some of its investments through corporate borrowings in the currency of the country in which the investment is located. The Group continues to closely monitor the interest and exchange rates movements and evaluate such impact to its portfolio. The Group will consider using financial derivatives as additional tools when appropriate to manage foreign currency and interest rate exposures. As of 31 December 2021, currency profile of the Group’s cash and bank balances; and bank and other borrowings are as below: CHARGE OF ASSETS As of 31 December 2021, certain of the Group’s assets were pledged to secure bank and other borrowings granted to the Group. The details of charged assets are disclosed in Note 25 to the Consolidated Financial Statements. Except for the aforementioned charges, all the Group’s assets are free from any encumbrances. CONTINGENT LIABILITIES As of 31 December 2021, neither the Group nor the Company had any significant contingent liabilities. 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 21
PROPERTY PORTFOLIO Development properties held on balance sheet As at 31 December 2021 City Property Name Status Estimated Completion Year GFA (sqm) Interest held by our Company Type CHINA Chengdu Chengdu Qingbaijiang (Phase I, II III), Gaoping Nan Road South, Tongxin Road East, Qingbaijiang District, Chengdu Superstructure in progress 2022 113,112 51% Logistics Facility Fenhu Fenhu Dafuhao, Fenhu Road No. 558, Lili Town, Wujiang District, Suzhou City Superstructure in progress 2023 221,689 100% Logistics Facility Kunshan Kunshan Zhonggang, Shuanghua Road No. 168, Huaqiao Town, Kunshan City, Jiangsu Province Land 2023 150,842 100% Land Shanghai Shanghai Yurun (Phase I and II) No. 2989 Baishi Highway, Baihe Town, Qingpu District, Shanghai Superstructure in progress 2022 and 2023 559,637 70% Logistics Facility Shanghai Yinu, Yinzhong Village, Qingpu Town, Qingpu District Land 2023 120,729 100% Land Suzhou Suzhou Yixiang, No. 28 Yongchang Road, Xiangcheng Economic Technology District Superstructure in progress 2022 191,530 100% Logistics Facility Jiaxing Jiaxing Haining, East of Haining Avenue and north of Anzheng Shishang, Haining Economic Development Zone, Haining Interior finishing 2022 108,161 100% Logistics Facility JAPAN Tokyo RW Higashi-Ogijima DC, Site B 23-1 and other tracts, Higashiogishima, Kawasaki-ku, Kawasaki-shi, Kanagawa-ken Planning N/A 305,997 70% Logistics Facility ESR Sachiura 2A DC, 8-5, Sachiura 1-chome, Kanazawaku, Yokohama-shi, Kanagawa-ken, 236-0003 Land N/A 167,366 100% Land ESR Sachiura 2B DC, 8-4, Sachiura 1-chome, Kanazawaku, Yokohama-shi, Kanagawa-ken, 236-0003 Land N/A 163,622 100% Land R E A C H I N G N E W H E I G H T S 22 ESR STANDALONE FY2021 STRATEGIC REPORT
PROPERTY PORTFOLIO Major Investment properties held on balance sheet As at 31 December 2021 City Project Name Status GFA (sqm) Tenure Lease Expiry Interest held by our Company Type CHINA Changsha Changsha EDZ P1, No. 1 Huangjiachong Lane, Langli Sub-district, Changsha County, Changsha, Hunan Province Completed 22,426 Leasehold 2067 100% Logistics Facility Changsha EDZ P2, No. 18 South Dongshier Road, Changsha Economic Development Zone, Changsha, Hunan Province Completed 63,881 Leasehold 2067 100% Logistics Facility Chongqing Chongqing Yongxiang, Zone M, Chayuan Group, Nan’an District, Chongqing Completed 148,057 Leasehold 2067 100% Logistics Facility Dongguan Dongguan Machong, Xinji Village, Machong Town, Dongguan City, Guangdong Province Completed 85,066 Leasehold 2062 100% Logistics Facility Dongguan Hongmei, Hongwuwo Village, Hongmei Town, Dongguan, Guangdong Province Completed 62,343 Leasehold 2063 100% Logistics Facility Dongguan Hongmei - Mingfeng, Hongwuwo Village, Hongmei Town, Dongguan, Guangdong Province Completed 40,383 Leasehold 2062 100% Logistics Facility Fenhu Fenhu Quansheng, East of Lianqiu Road and north of Datong Road, Lili Town, Wujiang District, Suzhou, Jiangsu Province Completed 29,287 Leasehold 2069 55% Logistics Facility Jilin Jilin Daling, South of Fumin Street, Daling Vehicle Logistics Park, Gongzhuling, Jinlin Province Completed 94,412 Leasehold 2068 100% Logistics Facility Jurong Xiexin Jurong, No 188 Konggang Road, Konggang New district, Guozhuang Town, Jurong City Completed 165,098 Leasehold 2067 100% Logistics Facility Kunshan Jiangsu Friend - I, No. 718 & 818 Xinsheng Road, Huaqiao Town, Kunshan, Jiangsu Province Completed 135,081 Leasehold 2054 100% Logistics Facility Jiangsu Friend - II, No. 516 Fengshan Road, Huaqiao Town, Kunshan, Jiangsu Province Completed 85,674 Leasehold 2056 100% Logistics Facility 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 23
City Project Name Status GFA (sqm) Tenure Lease Expiry Interest held by our Company Type Kunshan Jiangsu Friend - III, No. 369 Pengqing Road, Huaqiao Town, Kunshan, Jiangsu Province Completed 206,418 Leasehold 2056 100% Logistics Facility Langfang Langfang Weidu, No.14 Fengwu Road, Economic and Technical Development Zone, Langfang, Hebei Province Completed 71,687 Leasehold 2061 100% Logistics Facility Langfang Hengjia, No. 437 Chunhe Road, High-Tech Industrial Development Zone, Langfang Completed 81,950 Leasehold 2069 100% Logistics Facility Langfang Hongke, No. 29 Yunqi Avenue, Longhe High-tech Industrial Development Zone, Langfang Completed 34,475 Leasehold 2067 100% Logistics Facility Langfang Yisi, No. 158 Jingming Road, Langfang Hi-Tech Industrial Development Zone, Langfang Completed 72,455 Leasehold 2063 100% Logistics Facility Shanghai Jiangnan Chuanting, 4/9 Qiu, 11 Neighbourhood, Zhelin Town, Fengxian District, Shanghai Completed 35,533 Leasehold 2058 100% Logistics Facility Shenyang Shenyang Yibei, No. 1 Dongxuehu Street, Shenbei New District, Shenyang, Liaoning Province Completed 74,442 Leasehold 2066 100% Logistics Facility Tianjin Tianjin Fanbin - Warehouse#ABCEF, No. 78 Fuyuan Avenue, Dawangguzhuang Town, Wuqing District, Tianjin Completed 106,616 Leasehold 2064 100% Logistics Facility Tianjin Fanxin, No. 80 Fuyuan Road, Jingbin Public Industrial Park, Dawangzhuang Town, Wuqing District, Tianjin Completed 75,427 Leasehold 2064 90% Logistics Facility Wuhan Wuhan Denso, West of the intersection of Huayuanwan Second Street (花園灣二街) and Zhulin Fourth Road (竹林四路), Daji Street (大集街), Caidian District, Wuhan Hubei Province Completed 39,477 Leasehold 2069 100% Logistics Facility Wuxi Wuxi Lekun, No. 182 Xishan Avenue, Xinwu District, Wuxi, Jiangsu Province Completed 89,116 Leasehold 2066 100% Logistics Facility PROPERTY PORTFOLIO Major Investment properties held on balance sheet As at 31 December 2021 R E A C H I N G N E W H E I G H T S 24 ESR STANDALONE FY2021 STRATEGIC REPORT
City Project Name Status GFA (sqm) Tenure Lease Expiry Interest held by our Company Type Zhejiang Zhejiang Yijia (Tongxiang), Jinxiu Road No. 858, Chongfu Town, Tongxiang City, Jiaxing Completed 41,296 Leasehold 2060 90% Logistics Facility JAPAN Osaka IBM Nanko Data Centre 5-1 chōme, Nanko-kita, Suminoe Ward, Osaka City Completed 28,268 Freehold 100% Data Centre AUSTRALIA New South Wales 45-50 Waterloo Rd, Macquarie Park Completed 7,156 Freehold 100% Logistics Facility HONG KONG Hong Kong Brilliant Cold Storage Tower 2, Nos. 11 – 19 Wing Yip Street, Kwai Chung, New Territories, Hong Kong Completed 27,300 Leasehold 2047 100% Logistics Facility 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 25
ESG PERFORMANCE AT ESR, WE DEFINE ‘SUSTAINABILITY’ IN TERMS OF INTEGRATING ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) PERFORMANCE CONSIDERATIONS INTO EVERY ASPECT OF OUR BUSINESS. OUR OBJECTIVE IS TO ENHANCE SHAREHOLDER VALUE WHILE MAKING POSITIVE IMPACTS ON THE SOCIETY ANDENVIRONMENT FORTHE LONG-TERMBENEFIT OFALL STAKEHOLDERS. SUSTAINABILITY AT A GLANCE In 2021, we continue to organise the material ESG topics for our business into 14 Focus Areas under three pillars based on our ESG Framework. PILLAR 1 HUMAN CENTRIC PILLAR 2 PROPERTY PORTFOLIO PILLAR 3 CORPORATE PERFORMANCE Basic human needs are universal. Meeting those needs today while ensuring they can continue to be met in the future is the cornerstone of sustainable development. Our vision is to develop and manage logistics facilities for the new economy. We offer our tenants modern, state-of-the-art, focused and integrated real estate platforms. Strong corporate performance is the foundation upon which we will achieve sustained and balanced growth, resulting in stable returns over the long-term. Focus Areas: • Safety, Health & Well-being • Diversity & Inclusion • Community Investment • Managing & Developing Talent • Stakeholder Engagement Focus Areas: • Sustainable & Efficient Operations • Sustainable Building Certifications • Climate Change Resilience • Flexible & Adaptable Properties • Strategic Locations Focus Areas: • Corporate Governance • Risk Management • Responsible Investment • Disclosure & Reporting R E A C H I N G N E W H E I G H T S 26 ESR STANDALONE FY2021 STRATEGIC REPORT
The ESR ESG Report 2021, which will contain further information about our ESG management and approaches and disclosures required under the HKEX Mainboard Listing Rules, will be published on the websites of the Stock Exchange and the Company at www.esr.com/en/esg/esg-reports/ in May 2022. On 20 January 2022, ESR successfully acquired ARA Asset Management Limited (“ARA”), including its subsidiary LOGOS, to become APAC’s largest real asset manager and third largest listed real estate investment manager globally. Going forward, the scope of the ESG Report in the following year will include ARA as part of the enlarged Group. The next few pages provide an overview of our ESG priorities and performance for FY2021. ESR supports the United Nations 2030 Agenda, which identifies 17 interlinked Sustainable Development Goals (SDGs) to help create a better and more sustainable future for all. Our ESG framework aligns with six SDGs where we feel we can make the biggest contribution in the Asia Pacific region. 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 27
ESG PERFORMANCE PILLAR 1 HUMAN CENTRIC The first pillar of our ESG framework focuses on the social impact of our operations; especially impact relating to tenants, people and the community. Focus Areas Target Status Stakeholder Engagement Develop and launch Tenant Engagement initiatives with monitoring and follow up actions from the Tenant Engagement Surveys Baseline surveys have been completed for our operations in Australia, China, India and Japan. In particular, ESR Australia has provided training to tenants on utilising the online portal to convey their feedback and address indoor air quality and wellness related questions to improve green building certifications. Safety, Health & Well-being Zero workforce fatalities This target was achieved in 2021. Managing & Developing Talent Develop and launch employee engagement initiatives with monitoring and follow up actions from the Groupwide Employee Engagement Survey Priority areas were identified from the Group-wide Employee Engagement Survey. Employee engagement initiatives, including MyESR and Coffee and Learn sessions, were developed and launched. Diversity & Inclusion 40% overall female participation in our workforce by 2025 In 2021, the gender ratio of women among all employees was 37.8%, up from 35.8% in 2020. Community Investment Launch ESR Community Engagement Programme Work in progress. SAFETY, HEALTH & WELL-BEING 22 assets achieved WELL Health Safety Rating in Korea In our Korea portfolio, we are pleased to share that 22 assets have achieved the WELL Health Safety Rating certification, representing over 22 million sqft. The WELL Health Safety Rating entails a third-party review process, including evaluation of cleaning and sanitisation procedures, emergency preparedness programs, among several others. This certification demonstrates our commitment to the health and well-being of our tenants. Combatting COVID-19 together As a Group, we continue to take active measures to effectively respond to the pandemic, including enforcement of consistent cleaning and implementation of safe distancing measures in our assets and offices, adoption of flexible working arrangements, provision of mental well-being webinars, and supporting individuals especially hard hit by the pandemic in our communities. In Singapore, ESR REIT launched the COVID-19 Care Initiative in support of its F&B tenants, frontline heroes, senior citizens and low-income families in the community. F&B tenants had taken a hard hit with social restrictions, and we responded by purchasing cash vouchers to help provide a boost in sales. The vouchers were distributed to individuals affected by the pandemic with the help of Kembangan Chai Chee Community Centre. R E A C H I N G N E W H E I G H T S 28 ESR STANDALONE FY2021 STRATEGIC REPORT
MANAGING & DEVELOPING TALENT ESR cares – acting on our inaugural Employee survey findings To follow up on findings from the group-wide Engagement survey held in 2020, ESR appointed employee liaison representatives to identify priorities and recommend response actions. These employee liaison representatives then partnered with Country Heads and the Group HR team to put in place recommended actions. Three priority areas were identified: Communications, Inclusion & Respect / Teamwork and Career Development. Under Communications, we launched Group-wide intranet, MyESR and organised 5 Townhall sessions. MyESR helps foster timely communication of employee news internally, in addition to serving as a one stop platform for staff to access firm resources. This was a collaborative effort among teams in the firm and an important milestone for our employee engagement journey. At Townhall sessions, updates relating to ESR’s latest business were communicated to our staff, including sharing of the roadmap ahead on the integration of ESR and ARA and addressing questions from staff. Under Inclusion & Respect / Teamwork, we organised a webinar “Collaborating Across Culture” in May 2021 hearing from an external expert on culture, leadership and inclusion. This was part of the organisation-wide “Coffee and Learn” series launch. In the “Coffee and Learn” sessions that followed, our very own staff spoke on topics of their expertise to promote internal knowledge sharing, including “Our Future Warehouse – The Impact of New Technology” and “ESG: The what, the why and the path forward…”. Under Career Development, we put in place structured performance review with target setting and formal annual review with focus on development areas. Employees receive feedback from their managers on performance and areas for improvement during this annual exercise, which aims to support our employees in achieving their performance goals and continuously develop their competencies. Our offices continue to support a culture of active learning. For example, in China, we arranged a 7-day Auto CAD certificate training program and in Australia, we obtained corporate membership to the Property Council of Australia, which provides staff access to its comprehensive learning academy and professional development events. Regional offices regularly promote training opportunities and cover employee training expenses for professional membership and examination fees, as well as participation in external training programmes and industry conferences. One highlight under diversity and inclusion is the launch of our ESG Webinar Series: “Celebrating the Women of ESR”. We heard from two speakers - Anne LeBourgeois (Hamilton Advisors) and Pat Dwyer (The Purpose Business), as well as our own colleagues, around the theme of the value and challenges of women at work. COMMUNITY INVESTMENT Converting a 40,000 sqm warehouse into COVID-19 field treatment centre Together with BW1, ESR took part in accelerating the completion of a 40,000 sqm facility in Binh Duong, Vietnam to serve as a COVID-19 treatment centre in response to the challenges posed by the pandemic. In close alliance with the People’s Committee of Binh Duong, where the facility is located, we installed electricity, water, and toilet facilities to prepare the space to be operational ready as a treatment centre. Supporting mental health for our industry – ESR Australia and Healthy Heads in Trucks & Sheds ESR Australia began supporting a new partner in 2021, Healthy Heads in Trucks & Sheds, a non-profit foundation that champions mental health and well-being for workers in road transport, warehousing and logistics industries across Australia. Prior to this partnership, ESR Australia engaged with staff members through a survey to understand charity partnership preferences, which facilitated our choice to ultimately support Healthy Heads in Trucks & Sheds. Please see our ESG report for more details on our work in community investment and the wider Human Centric Pillar. Note: 1 ESR and BW’s joint venture project was completed in January 2022. 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 29
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