ESR-Reit H2 DPU up 7.1% to S$0.10675
The distribution for H2 will be paid out on Mar 24, following the record date of Feb 12
[SINGAPORE] The manager of ESR Real Estate Investment Trust (ESR-Reit) on Wednesday (Feb 4) posted a distribution per unit (DPU) of S$0.10675 for its second half ended Dec 31, 2025, up 7.1 per cent from S$0.0997 in the year-ago period.
This brought total DPU for FY2025 to S$0.21914, up 3.4 per cent year on year. There was a higher applicable number of units for DPU calculation, mainly due to the preferential offering completed in Q4 2024 for acquisitions, but partially offset by unit buy-backs completed in the first half of 2025.
The distribution for H2 will be paid out on Mar 24, following the record date of Feb 12.
Distributable income grew 10.4 per cent to S$85.9 million for the half-year period, from S$77.8 million in the same period the year before.
Revenue was up 17.6 per cent at S$223.1 million for the half year, compared with S$189.6 million the previous year, while net property income (NPI) grew 21.4 per cent to S$162.4 million, up from S$133.8 million in the year-ago period.
For the full year, total income available for distribution grew 7.3 per cent to S$176.1 million, compared with S$164.1 million in the year-ago period. Revenue was up 20.4 per cent at about S$446 million, from S$370.5 million in the year-ago period.
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This was primarily due to income contributions from the strategic acquisitions of ESR Yatomi Kisosaki Distribution Centre and 20 Tuas South Avenue 14, positive rental reversions from lease renewals and contributions from assets that completed enhancement initiatives.
As a result, NPI for FY2025 grew 25.6 per cent to S$328.7 million, up from S$261.7 million in FY2024.
The logistics and high-specifications industrial sectors drove positive rental reversions, with the Reit recording an 11.7 per cent rise in FY2025 across its portfolio, up from 10.3 per cent in FY2024.
Portfolio occupancy remained stable at 91.1 per cent, supported by resilient structural demand for logistics and high-specifications industrial assets. This was a slight dip from 92.3 per cent in FY2024.
With the divestments completed and proposed in FY2025, ESR-Reit expects the proportion of assets with under 15 years left on their leases to reduce to 10.8 per cent. Its manager noted that it is looking to address short land lease assets through its “Total Return Strategy”, which includes rejuvenation via asset enhancement initiatives and redevelopments.
It said 68.4 per cent of the Reit’s debt is on fixed rates, down from 74.8 per cent as at Dec 31, 2024.
As at end-December 2025, gearing stood at 43.4 per cent. Its cost of debt fell to 3.4 per cent, from 3.8 per cent at the end of 2024.
It expects to benefit from a lower cost of debt through the refinancing of FY2026 Singdollar-term loans and revolving credit facilities, which have been secured at about 30 basis points lower margins.
Outlook
In the upcoming financial year, Adrian Chui, chief executive officer and executive director of the manager, expects to deliver progressive distributions alongside sustainable capital appreciation, supported by improved portfolio performance, the completion of asset enhancement initiatives and opportunistic acquisitions.
“Logistics and high-specifications industrial assets are expected to remain key drivers of portfolio performance amid resilient structural demand, even as rental growth may be moderated by increased supply,” said the Reit manager.
It noted that “the real estate outlook for 2026 is poised to be one of cautious optimism,” with the new economy sectors particularly expected to continue leading growth.
The Reit manager also unveiled its total return strategy to drive sustainable income growth and long-term value creation. The strategy targets total unitholder return of about 8 to 10 per cent and aims to grow assets under management to S$8 billion over the next five years.
It plans to undertake active asset management, including initiatives to address short land lease assets and rejuvenate the portfolio through asset enhancement initiatives and selective redevelopments.
The Reit will also retain its core focus in Singapore, which is expected to continue representing more than 50 per cent of portfolio value, while selectively pursuing international opportunities, said the manager.
Units of ESR-Reit rose 0.4 per cent to close S$0.01 higher at S$2.71 on Tuesday.
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