Management Discussion & Analysis FORWARD TOGETHER 14 The Group strives to maintain the highest standards of corporate governance to ensure accountability, transparency, fairness and integrity. As a signatory to the United Nations-supported Principles of Responsible Investment (UN PRI), the Group has closed a total of seven sustainability-linked loans with approximately US$4 billion as of August 2023, strengthening its leadership in sustainable financing. The Group also continues to be recognised for its robust and exemplary ESG disclosure practices with outstanding rankings across various ESG benchmarks and global ratings such as GRESB, MSCI and Sustainalytics. As the Group leads the way forward in the transition to a more inclusive, low-carbon and climate resilient future, its ESG 2030 Roadmap and enhanced Group ESG Policies will sharpen its focus in driving ESG efforts forward as an enlarged Group. LOOKING AHEAD The Group remains steadfast in its pursuit of its core New Economy focus which also underpins the growth of its Alternatives and REITs’ business. The Company is geared towards key long-term macro trends of the New Economy: e-commerce and artificial intelligence for logistics and data centres; the growth of biotech and biopharma for life sciences; and decarbonisation for infrastructure/ renewables. These are areas capital partners have un-met demand, particularly across the Asia Pacific region. The Group is navigating a challenging external environment with its strong execution, continuing its asset-light trajectory and prudent capital management in its unwavering focus to deliver resilient, long-term earnings growth. This starts on the ground with well-located, high-quality projects and assets which support attractive development yields on cost, high occupancies and long-term rental growth, providing attractive returns to its capital partners. Supporting existing and new REITs will continue to be part of the Group’s strategy for diversifying capital partnerships, supported by REIT legislation that will continue to open new markets and opportunities across the APAC region. Although the Group has leading market share across many of the regions in which it operates, it is still at a very early stage of realising the full potential of its enlarged platform and the economies of scale it provides. With the recent promotions of Josh Daitch to CIO and Matthew Lawson to COO, the Group is making tangible progress towards its business simplification and transformation goals. The Group is delivering on cost savings, it is reducing its on balance sheet exposure and although the environment has not been overly conducive, it is engaging in multiple discussions with parties on several of the non-core assets. To preserve value, the Group will not rush these deals. The Group continues to remain excited by the future. Although a lot of capital remains on the sidelines, the Group is seeing some of the most exciting underwritten returns it has seen in a while on new deals. ESR’s diversified and integrated development and fund management platform underpinned by its experienced in-country teams is well-positioned to take advantage of the opportunities to deliver long-term returns for its capital partners and investors.
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