ESR-REIT reported net property income of S$328.7 million for the year ended Dec 31 2025, up 25.6 per cent year-on-year, driven by newly acquired assets and stronger leasing spreads, the industrial landlord said in its full-year results filing on Wednesday.
Gross revenue rose 20.4 per cent to S$446.0 million, while total distribution per unit increased 3.4 per cent to 21.914 Singapore cents. Core DPU, which now accounts for about 98 per cent of payouts, climbed 7.6 per cent to 21.440 cents. The second-half distribution of 10.675 cents will be paid on Mar 24 2026 to unitholders on record as of Feb 12 2026.
The earnings lift was attributed to first-time contributions from ESR Yatomi Kisosaki Distribution Centre in Japan and 20 Tuas South Avenue 14 in Singapore, both completed in November 2024, as well as positive rental reversions averaging 11.7 per cent across the portfolio. Logistics leases renewed at a 12.4 per cent premium, while high-specifications industrial space booked a 22.2 per cent uplift. Portfolio occupancy held at 91.1 per cent with a weighted average lease expiry of 4.4 years.
Borrowing costs and perpetual securities expenses rose in tandem with the late-2024 acquisitions, but were partially offset by higher operating income. As a result, distributable income to unitholders grew 7.3 per cent to S$176.1 million. Gearing stood at 43.4 per cent; management said pro-forma gearing would fall to 38.5 per cent once announced divestments are completed and proceeds used to pare debt. All-in funding cost eased to 3.35 per cent from 3.84 per cent after refinancing at lower margins and securing a BBB credit rating from Fitch. About 68.4 per cent of debt is on fixed rates.
Operationally, the trust completed an asset-enhancement initiative (AEI) at 16 Tai Seng Street in July, adding 2,793 sq m of high-spec industrial space and securing 50 per cent occupancy by year-end. A separate AEI at 29 Tai Seng Street was 76 per cent finished and is slated for completion in the first half of 2026, targeting a 6.4 per cent yield on cost. On the recycling front, ESR-REIT agreed to divest 11 non-core properties for about S$456 million in aggregate, at modest premiums to valuation.
Looking ahead, the manager outlined a “Total Return Strategy” that seeks 8-10 per cent annualised unitholder returns and an expansion of assets under management to roughly S$8 billion within five years. Pillars include active asset management, redevelopment of short-lease sites, selective overseas deals sourced from sponsor ESR’s pipeline and a gearing band in the mid-30s to low-40s.
Chief executive Adrian Chui said the improved earnings base and investment-grade rating provide a stronger footing to “deliver progressive distributions and sustainable capital appreciation” despite macro-economic headwinds. He noted that logistics and high-spec industrial demand remains resilient, although rental growth may moderate as new supply enters the market, adding that the trust will continue pruning non-core assets and recycling capital to maintain balance-sheet flexibility.