ESR eyes stake in Cromwell Property Group amidst Singapore REIT’s floundering overseas assets.

ESR Holdings, a Hong Kong-listed company, is considering divesting at least $1 billion in assets this year to focus on its fund management business. Among the potential disposals is ESR’s 31 per cent stake in Cromwell Property Group, which holds a 27.8 per cent stake in Cromwell European REIT listed in Singapore. ESR inherited its interest in Cromwell Property Group by acquiring ARA Asset Management in 2022.

During an earnings webcast, Chairman Jeffrey Perlman revealed the company’s evaluation of its stake in Cromwell. The move is part of ESR’s strategy to streamline its portfolio and prioritize assets that can grow to a meaningful size and scale. Perlman stated that the sale of these assets and other subscale REITs in their portfolio could free up to $750 million in capital. This capital would generate fee-based assets under management (AUM), making the business more straightforward and transparent.

Cromwell Property Group reported a loss of A$129.5 million (now $86.1 million) for the six months to December 2022 due to declining property valuations. Chairman Gary Weiss mentioned the group’s efforts to simplify its operating structure, enhance staff engagement, and manage the balance sheet by selling non-core assets.

ESR’s shift towards an “asset-light” model and a focus on fund management revenues is driven by its divestments of $1.1 billion in assets in China last year. Perlman highlighted that mainland assets would continue to be a significant portion of the properties sold this year, appealing to deep-pocketed local investors looking for logistics assets. Additionally, ESR is preparing for the launch of its China-listed REIT, offering potential portfolio assets to strengthen its presence in the market further.

ESR’s financial performance has been robust, with a 10 per cent increase in profit reported last year. The growth in fee income from its fund management business contributed to the company’s earnings before interest, tax, depreciation, and amortization (EBITDA), rising to $1.15 billion in 2022, up from $1 billion the previous year. The overall group revenue also saw a 7.1 per cent increase to $821 million in 2022.

ESR’s assets under management reached a record high of $156 billion in 2022, reflecting an 11 per cent year-on-year growth. This increase was driven by completing the $5.2 billion acquisition of ARA and successful fundraising efforts, which expanded the company’s cash reserves for deployment to $19.9 billion.

Singapore-listed real estate investment trusts (S-REITs) with foreign assets face challenges. Manulife US REIT recently confirmed discussions with Mirae Asset Global Investments regarding a potential sale of shares in the trust holding US office properties. Some prominent investment managers are also re-evaluating their positions in Singapore-listed property vehicles.

In late 2022, BlackRock sold 59,900 units of Cromwell European REIT, reducing its stake below the 5 per cent threshold to be considered a substantial unitholder. Consequently, it is no longer required to disclose its interest or changes in interest in the trust’s voting shares. Despite a 3.3 per cent increase since the beginning of 2023, the trust’s share price has declined by more than 31 per cent over the past 12 months.

ESR控股在新加坡房地信托(REIT)的海外资产陷入困境之,正关注Cromwell Property Group的股

ESR Holdings(ESR控股)是一家在香港上市的公司,考虑今年剥离至少10亿美元的资产,以专注于其基金管理业务。潜在的剥离项目之一是ESR在Cromwell Property Group的31%股权,而Cromwell Property Group又持有新加坡上市的Cromwell European REIT 27.8%的股权。ESR在2022年收购ARA Asset Management时继承了对澳大利亚房地产公司Cromwell Property Group的兴趣。

在上个月的盈利网络直播中,主席Jeffrey Perlman透露了公司对Cromwell股权的评估。此举是ESR优化其投资组合并优先考虑可实现有意义规模和规模增长的资产的战略的一部分。Perlman表示,出售这些资产以及投资组合中的其他规模较小的房地产投资信托(REIT),可释放高达7.5亿美元的资本。这笔资本将用于生成基于费用的资产管理(AUM),使业务更加简单明了。

由于房地产估值下降,Cromwell Property Group报告称,2022年12月的六个月亏损达1.295亿澳元(现在为861万美元)。主席Gary Weiss提到,该集团正在努力简化运营结构,提高员工参与度,并通过出售非核心资产来管理资产负债表。

ESR转向“轻资产”模式和注重基金管理收入的转变是由于去年在中国剥离了价值11亿美元的资产。Perlman强调,内地资产将继续占据今年出售的房地产的重要部分,以吸引富有的本地投资者寻找物流资产。此外,ESR正在准备推出在中国上市的房地产投资信托(REIT),提供潜在的投资组合资产,进一步加强其在市场上的存在。

ESR的财务业绩强劲,去年利润增长了10%。来自基金管理业务的费用收入增长,使公司2022年的利息、税项、折旧和摊销前利润(EBITDA)从前年的10亿美元增加到11.5亿美元。整个集团的总收入也在2022年增长了7.1%,达到8.21亿美元。

ESR的管理资产达到了创纪录的1.56万亿美元,较上年增长了11%。这一增长得益于完成对ARA 52亿美元的收购和成功的筹款活动,这将使公司的可部

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