ESR-Reit 9M distributable income up 6.8% at S$134.6 million
Net property income rises 28.6% on the year to S$247.8 million, from S$192.7 million
[SINGAPORE] The manager of ESR Real Estate Investment Trust (ESR-Reit) posted a distributable income of S$134.6 million for the nine months of FY2025 ended Sep 30. This was 6.8 per cent higher than the S$126 million in the previous corresponding period.
The improvements were mainly due to the acquisitions of 100 per cent of trust beneficiary interest in ESR Yatomi Kisosaki Distribution Centre, and of a 51 per cent stake in 20 Tuas South Avenue 14, completed in November 2024, the manager said on Wednesday (Oct 29).
However, this was partially offset by additional funding drawn to finance the acquisitions and lower capital gains distribution compared with the year-ago period.
For the nine months, net property income (NPI) stood at S$247.8 million, up 28.6 per cent from S$192.7 million in the same period in 2024.
This came amid higher NPI contributions from existing properties and the completion of asset enhancement initiatives (AEI) for 7002 Ang Mo Kio Avenue 5 in the third quarter of 2023 and for 21B Senoko Loop in the first quarter of 2024.
On a same-store basis, excluding the ESR Yatomi Kisosaki Distribution Centre and 20 Tuas South Avenue 14 acquisitions, NPI growth would have been 4.2 per cent on the year, the manager said.
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Revenue for the nine-month period stood at S$334.5 million, up 22.7 per cent from the previous corresponding period. Net asset value (NAV) per unit stood at S$2.61, against an NAV per unit of S$2.75 as at December 2024.
Overall portfolio occupancy stood at 90.3 per cent. Based on geography, portfolio occupancy was 100 per cent for Australia, 88.2 per cent for Singapore and 86.7 per cent for Japan.
In terms of asset class breakdown, the logistics sector accounted for the largest portion of the portfolio at 47.5 per cent. This was followed by the high-specification industrial sector at 23.4 per cent, the general industrial sector at 15.4 per cent and the business park sector at 13.7 per cent.
ESR-Reit posted a positive rental reversion of 8.4 per cent for the period, compared with 11 per cent for the first nine months of 2024. This was led by the logistics sector, with a positive rental reversion of 11.1 per cent.
The manager noted that the portfolio had a “well-distributed lease expiry profile”, with a weighted average lease expiry of 4.1 years and 29.6 per cent of leases expiring after 2030.
In terms of capital management, the Reit aims to lower gearing to below 40 per cent and has identified S$250 million to S$350 million of non-core assets for divestment, the manager said. For the period under review, its gearing stood at 43.3 per cent as at Sep 30, 2025, compared with 42.8 per cent as at Dec 31, 2024.
The cost of debt had fallen to 3.4 per cent per annum, from 3.8 per cent as at end-December. Weighted average debt expiry stood at 2.3 years, down from 2.8 years as at December 2024.
Total gross debt as at end-September stood at around S$2.3 billion, unchanged from Dec 31, 2024. Its interest coverage ratio was 2.4 times as at September, versus 2.5 times as at December 2024.
Ongoing AEIs and redevelopment works present “further organic growth opportunities” to repurpose and redevelop dated assets to meet future demands, the manager said.
It noted that a high-specification industrial property at 16 Tai Seng Street completed its AEI in July and another, at 29 Tai Seng Street, is set to complete its AEI in the first half of 2026. There are also plans for a logistics property at 2 Fishery Port Road to undergo an AEI.
Units of ESR-Reit closed on Tuesday 0.7 per cent or S$0.02 higher at S$2.89, before the news.
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