ESR IR 2021 - EN

15 ESR Interim Report 2021 Management Discussion and Analysis Fund Management Segment Logistics funds continued to accelerate further in the first half of 2021 as institutional investors started to strategically reallocate their portfolios to enhance diversification 5 , after a year of economic lockdowns and restrictions that has disrupted the traditional real estate asset classes. The new trajectory of logistics real estate is still in its early phase, and institutional investors will look to increase their exposure to logistics assets by 40–50% in the near term 5 . The Group remains agile to robust customer-led demands, as it adapts to the changing consumption habits and structural shifts in the new economy sector. In 1H2021, ESR continued to see strong capital flows and raised over US$2.5 billion through the establishment and/or re-ups of new funds across Japan, South Korea and Australia. These include a JPY75 billion (approximately US$675 million) expansion of RJLF3 with APG and another global institutional investor, a US$500 million upsize investment with CPP Investments in the Korea Income Joint Venture, and a US$1 billion investment partnership with GIC for a newly formed investment vehicle, EMP, for the Milestone Portfolio acquisition in Australia. We expect to continue to deepen our strong relationships with new and existing capital partners, while maintaining our asset-light fund management strategy. In August 2021, the Group announced the formation of a US$1 billion equity new development joint venture, ESR China Development Platform (“ ECDP ”), together with existing capital partners APG and another global institutional investor. Note: 5. JLL, A New Trajectory For Logistics Real Estate In Asia Pacific, Asia Pacific, July 2021. Development Segment The Group will continue to strengthen its market leadership position across its core markets. As at 30 June 2021, the Group has a development pipeline of over 16.1 million sqm across its portfolio, including a robust landbank of over 2.9 million sqm. As more institutional investors make logistics a core part of their portfolios, they focus on high quality assets anchored by global or regional occupiers with strong credit quality and can commit to long leases 5 . Demand for these assets is primarily driven by multinational e-commerce operators and 3PLs. Focusing on quality projects with increased scale and higher value, ESR is well-positioned to benefit from a strong pipeline of large scale quality developments to be delivered over the next few years. • By end-2021, the Group expects the completion of ESR Shanghai Qingpu Yurun Phase I, a high- standard logistics facility with a total planned GFA of over 340,000 sqm which includes cold storage space. Construction of Phase II commenced in Q4 2020 and is expected to be completed by 2023. • The Dushangang project in Jiaxing, China is scheduled for completion in 2022 with a total planned GFA of over 235,000 sqm. • In Japan, the Group has commenced construction of the second phase of the master-planned ESR Yokohama Sachiura Logistics Park at over 195,000 sqm and is set to be completed in early 2023. The multi-phase development, at approximately 800,000 sqm over four phases, is set to the largest logistics park in Japan when fully developed.