ESR-REIT likely to look overseas for growth following FY2020 DPU decline

In a results briefing on Jan 20, Adrian Chui, CEO of ESR-REIT’s manager says that he plans to look overseas for growth some time this year. Sponsor and major unitholder ESR Cayman has a presence in six countries with US$26.5 billion in assets under management. According to Chui, 30% to 40% of this portfolio could be potential acquisition targets for ESR-REIT. He is looking at both income producing properties and development properties.

“I do see better value doing overseas acquisitions than anything else,” Chui says. Since capitalisation rates are lower in Japan, with income producing properties yielding capitalisation rates of 4%, development properties make more sense. Australia is second geography that makes sense for ESR-REIT.

“Our strategy is clear, to focus on organic growth in Singapore and to grow our portfolio overseas to diversify and to impove our underlying land leases and that will add more value to my unitholders, to address underlying land leases,” Chui says. He is also open to acquiring third party portfolios in those countries where ESR Cayman has a presence.

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