ESR-REIT FY2025 Results: 7.6% Core DPU Growth, 21.914 Cents Total DPU, Dividend Details & Portfolio Highlights

ESR-REIT FY2025 Financial Results: Steady Growth, Portfolio Rejuvenation, and Prudent Capital Management

ESR-REIT, a leading Singapore-focused industrial real estate investment trust, delivered its FY2025 results with clear signs of operational improvement, portfolio optimization, and enhanced capital management. The REIT continues to position itself as a flagship regional vehicle, targeting scale, resilience, and increased total unitholder returns. Below, we provide a detailed analysis of key financial metrics, performance trends, corporate actions, and strategic outlook based strictly on the reported data.

Key Financial Metrics and Performance Table

Metric	FY2025	FY2024	YoY Change
Gross Revenue (S\$ million)	446.0	370.5	+20.4%
Net Property Income (NPI, S\$ million)	328.7	261.7	+25.6%
Core Distributable Income (S\$ million)	172.3	154.4	+11.6%
Total Distributable Income (S\$ million)	176.1	164.1	+7.3%
Core DPU (cents)	21.440	19.930	+7.6%
Total DPU (cents)	21.914	21.190	+3.4%
NAV per Unit (S\$)	2.55	2.75	-7.3%
Gearing	43.4% (38.5% pro-forma)	42.8%	+0.6pts (will decrease post-divestment)
All-in Cost of Debt	3.35%	3.84%	-0.49pts
Proposed Distribution (2H2025, cents)	10.675	9.970 (2H2024)	+7.1%

Historical Performance Trends

ESR-REIT has demonstrated a strong turnaround and improvement in FY2025, marked by robust YoY growth in revenue (+20.4%) and NPI (+25.6%). Core distributable income and DPU also posted healthy gains, reflecting the positive impact from strategic acquisitions and asset enhancement initiatives (AEIs). However, NAV per unit declined due to fair valuation losses on investment properties, which were partly offset by portfolio optimization and the addition of longer land lease assets.

Divestments and Asset Sales

Completed S\$16.7 million non-core asset divestments.
Announced divestment of a portfolio of 8 non-core assets totaling S\$338.1 million (at a 2.0% premium to valuation) and the Hotel Strata Lot at ESR BizPark @ Changi for S\$101 million (at valuation).
These divestments are expected to rejuvenate the portfolio, reduce exposure to short land lease properties, and improve gearing to 38.5% (pro-forma).

Capital Management and Fundraising

Issued S\$125 million perpetual securities in March 2025 and redeemed S\$75.3 million of Series 006 perpetuals in May 2025.
Completed a 10:1 unit consolidation in May 2025 for capital structure optimization.
Successfully refinanced 2026 SGD term loans and revolving credit facilities at c.30 basis points lower margins, resulting in lower debt costs and extended debt maturity.
Assigned a ‘BBB’ investment grade rating with a stable outlook by Fitch Ratings, supporting future financing flexibility and lower borrowing costs.

Share Buybacks, Dilution, and Placements

Preferential offering completed in 4Q2024 for acquisitions, partially offset by unit buy-backs in 1H2025.
Number of units outstanding increased 3.8% YoY due to fundraising activities.

Portfolio and Tenant Highlights

Positive rental reversion of +11.7% for FY2025, with a well-distributed lease expiry profile and portfolio WALE of 4.4 years.
Portfolio occupancy at 91.1%, with significant exposure to Singapore (83.8% of rental income) and the resilient logistics/high-specs industrial sector (71.6% of portfolio).
Diversified tenant base, with the top 10 tenants representing 33.5% of effective gross rents.

Asset Revaluation and Exceptional Items

Reported a fair valuation loss on investment properties, contributing to a lower NAV per unit.
Lower other gains distributable income in FY2025, resulting in a lower contribution to total DPU from this segment compared to the previous year.

Outlook and Market Environment

ESR-REIT is targeting to grow AUM to S\$8.0 billion over the next 5 years, through a combination of organic growth (redevelopments, AEIs) and accretive acquisitions, while maintaining Singapore as the core market.
Expectations for a more stable interest rate environment moving forward, which should support capital management and refinancing activities.
Industrial market fundamentals in Singapore, Australia, and Japan remain resilient, with stable occupancy and moderate rental growth outlooks.

Chairman’s Statement

The report does not contain a dedicated Chairman’s Statement. However, the management tone throughout the report is positive, emphasizing DPU growth, operational excellence, prudent capital management, and the execution of a clear total return strategy.

Conclusion and Investment Recommendations

Overall, ESR-REIT’s FY2025 results indicate a robust financial performance, driven by strong core operational growth, successful portfolio rejuvenation through divestments, and disciplined capital management. The REIT is well-positioned to capitalize on future market opportunities with its scalable platform and diversified portfolio.

If you are currently holding ESR-REIT: The REIT’s stable and growing DPU, improved cost of debt, and visible pipeline of asset enhancements and accretive acquisitions support a continued hold. The management’s focus on capital recycling and deleveraging further enhances risk-adjusted returns. Investors may wish to monitor NAV trends given the impact of property revaluation losses, but the yield remains attractive versus peers and bonds.
If you are not currently holding ESR-REIT: With an attractive yield premium, a clear growth strategy, and improving fundamentals, ESR-REIT presents a compelling opportunity for income-seeking investors, especially in a stabilizing rate environment. Entry could be considered, particularly on any share price weakness or if the REIT trades at a discount to NAV.

Disclaimer: This analysis is based strictly on the company’s reported financial results and does not constitute personalized investment advice. All investments carry risks. Please conduct your own due diligence or consult a professional advisor before making investment decisions.