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控股在新加坡房地产投资信托（REIT）的海外资产陷入困境之际，正关注对Cromwell Property Group的股权。
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。
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。
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