ESR IR 2021 - EN

13 ESR Interim Report 2021 Management Discussion and Analysis Robust development activities and leasing performance ESR has over 19.7 million sqm of GFA in operation and under development across its portfolio and a landbank of over 2.9 million sqm, as of 30 June 2021. Its Asia Pacific (“ APAC ”) wide portfolio achieved outstanding performance across multiple fronts, from new development starts to leasing. Development demand remained robust with WIP growing by 57% to a record US$5.5 billion in 1H2021. The Group achieved US$1.2 billion worth of development starts (vs US$0.8 billion in 1H2020) and US$0.9 billion in development completions during the period. ESR owns one of the largest development pipelines in the region, totalling over 16.1 million sqm across its portfolio. It will continue to leverage third-party capital to fund development starts and exercise a disciplined asset light approach to achieve its targeted development completions. In addition to strengthening its market leadership position in core markets, the Group has also sought to expand its footprint in Southeast Asia, one of the fastest growing regions in the world. In May 2021, the Group entered the Vietnamese market via a joint venture with the leading local logistics and industrial developer and operator, BW Industrial, to develop a 240,000 sqm project in Binh Duong, a major industrial development hub in southern Vietnam. E-commerce acceleration and supply chain resilience have spurred demand for modern, institutional-grade logistics facilities, driving the solid performance of ESR’s leasing activities. The Group maintained a healthy occupancy rate of 89% across its entire portfolio 1 , and achieved record leasing of over 1.6 million sqm of space. Notes: 1. Based on stabilised investment properties on balance sheet as at 30 June 2021. 2. Includes dividends. Strong balance sheet and continued asset light trajectory As of 30 June 2021, ESR has a robust and well-capitalised balance sheet with US$1.1 billion in cash, and net debt over total assets of 30.6%. ESR continues to expand and diversify its funding and capital structure, which is crucial for fuelling the Group’s long-term growth. In April 2021, it 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 five-year 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 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. 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). The Group continues its asset light approach focusing on active recycling of capital to scale its business platform 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 ”), which is an existing Australian core fund managed by ESR’s Australian platform. This transaction also marks 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 ”) with A$272 million (approximately US$207.4 million) of total proceeds. The investment generated a 23.0% unleveraged IRR 2 .