ESR Cayman posts 1H21 net profit jumped around 61 percent, driven by fund investments

U.S. one-dollar currency notes; taken September 2018.U.S. one-dollar currency notes; taken September 2018.

ESR Cayman reported Friday its first half net profit climbed 60.9 percent on-year to US$213.95 million on growth in co-investments in funds, associates and joint ventures, as well as lower borrowing costs.

Revenue for the January-to-June period increased 3.4 percent on-year to US$204.4 million, the company said in a filing to SGX.

“The Covid-19 pandemic continues to accelerate the growth of e-commerce where ESR sits at the heart of the central nervous system delivering the core New Economy infrastructure to its best-in-class clients,” the company said in the statement.

“Having witnessed sustained strong capital inflows and leasing demand, the logistics market has solidified its position as the preferred real estate asset class in Asia. It is expected that e-commerce acceleration and supply chain transformation will continue to benefit ESR as it extends the platform deeper into existing markets as well as new markets over the next 12 months,” it added.

ESR Cayman is organised into three operating segments: The investment segment, which includes properties, co-investment funds, investment vehicles and REITs it manages; the fund management segment, which earns fee income for managing assets via funds and investment vehicles; and the development segment, which develops and sells investment properties.

Fund AUM climbs

The fund management segment posted revenue climbed 48.2 percent on-year to US$123.9 million on drivers including growth in the fund AUM, robust development work-in-progress in funds, and strong leasing activity across the portfolio.

Fund assets under management (AUM) increased 38 percent on-year to US$32.7 billion, ESR Cayman said.

“The  group continues to see strong capital flows into logistics as global institutional investors are seeking to strategically rebalance their portfolios. Underpinned by the strong capital partner relationships and track record ESR has built over the years, the group raised US$2.5 billion in committed capital via new and/or upsized vehicles across Japan, South Korea and Australia,” the company said.

Earnings before interest, taxes, depreciation and amortisation (ebitda) for the fund management segement rose 51 percent on-year to US$97 million, ESR Cayman said.

The investment segment posted ebitda of US$183 million for the first half, up 51 percent on-year, while development ebitda increased 7 percent on-year to US$135 million.

No dividend was declared for first half, unchanged on-year.

Read ESR Cayman’s filing on its results.