Broker: CGS International Securities
Date of Report: October 30, 2025
Excerpt from CGS International Securities report
- ESR-REIT reported 9M25 distributable income of S\$134.6m, in line with forecasts, supported by acquisitions, positive rental reversions, and lower utilities costs.
- Portfolio occupancy dipped slightly due to lease expiries in Singapore and Japan, but rental reversions remained strong at +8.4% YTD, outperforming guidance.
- Gearing increased to 43.3%, but cost of debt fell; management expects interest savings in FY26 as older, higher-margin loans are refinanced at better terms.
- Ongoing asset enhancement initiatives aim to upgrade industrial properties, with one major project expected to complete in 1H26.
- ESR-REIT maintains a positive outlook with a target price of S\$3.64, offering an attractive 7.8% DPU yield for FY25; potential catalysts include accretive acquisitions and ESG improvements.
- Risks include unfavorable exchange rates and unexpected lease non-renewals.
- ESR-REIT is actively engaged in ESG initiatives, targeting significant improvements in energy efficiency, solar capacity, and green certifications by 2030.
Above is an excerpt from a report by CGS International Securities. Clients of CGS International Securities can be the first to access the full report from the CGS International Securities website: https://www.cgs-cimb.com
