ESR-REIT reported distributable income of 44.8 million Singapore dollars for the first quarter ended Mar, 31 2026, an increase of 1.4% year on year.

Gross revenue slipped 0.4% to 110.1 million Singapore dollars, although on a same-store basis it gained 1.4%. Net property income decreased 2.3% to 80.6 million Singapore dollars, or a marginal 0.1% decline on a same-store basis, mainly due to divestments completed in fiscal 2025 and the sale of a hotel asset at ESR BizPark @ Changi that contributed no income after the lease expiry in Sep, 2025.

Portfolio metrics remained resilient: committed occupancy stood at 91.3% versus 91.6% a year earlier, while rental reversions were positive at 9.2% (1Q2025: 8.6%). The trust derived 83.6% of rental income from Singapore assets and 72.2% from logistics and high-specifications industrial properties.

Capital management remained a focus. Aggregate leverage was 44.3% as at Mar, 31 2026, with a pro-forma ratio of 39.5% after factoring in announced divestments. The weighted average cost of debt edged down to 3.34% per annum from 3.35% at Dec, 31 2025, with 66.1% of debt on fixed rates and a weighted average debt expiry of two years. The Monetary Authority of Singapore interest-coverage ratio was 2.5 times, and Fitch Ratings maintained an investment-grade “BBB” rating with a stable outlook.

During the quarter, ESR-REIT completed the divestment of the hotel at 2 Changi Business Park Avenue 1 for 101.0 million Singapore dollars, in line with valuation. It also continued preparations to close the previously announced 338.1 million Singapore dollars sale of eight non-core Singapore assets, expected to cut gearing and provide funds for redevelopment.

Asset-enhancement initiatives progressed with a near-completed upgrade of 29 Tai Seng Street, targeted for 1H2026 completion, and planning underway for a 200-250 million Singapore dollars redevelopment of 2 Fishery Port Road into a modern cold-storage and food-processing facility starting in 4Q2026.

Looking ahead, management expects rental reversions to moderate to single-digit gains over the next two years amid rising energy costs and a larger warehouse supply pipeline. The REIT has secured refinancing for 2026 Singapore-dollar loans at margins about 30 basis points lower, helping offset anticipated increases in Japanese yen and Australian dollar base rates.