ESR closes JPY28 billion Sustainability-Linked Loan

SINGAPORE/HONG
KONG – Media
OutReach – 30 January 2022 – ESR
Cayman Limited (“ESR” or the “Company”, together with its subsidiaries as the “Group”; SEHK Stock Code: 1821) has secured a Sustainability-Linked
Loan (“SLL”) of JPY28 billion (approximately US$243 million) with an option to
upsize it to JPY35 billion (approximately US$303 million). This represents an
important step for ESR as an enlarged platform in further strengthening its
commitment in Environmental, Social and Governance (“ESG”), following the
recent completion of the acquisition of ARA Asset Management (“ARA”).

The Group has secured the loan from a
consortium of leading Asian banks, including the Group’s strategic investor Sumitomo
Mitsui Banking Corporation (“SMBC”) which acted as Sustainability Advisor and
Mandated Lead Manager. Other Mandated Lead Managers included Mizuho Bank, Ltd.
(“Mizuho”) and E.Sun Commercial Bank, Ltd. (“E.Sun”). 

The five-year senior unsecured, committed corporate facility is designed
with the same tiered incentive mechanism as the Group’s inaugural US$1 billion sustainability-linked
loan which closed in November 2021. ESR will be entitled to a reduction of interest
rate (currently at Tibor plus 1.8%) as sustainability targets are achieved. The
proceeds will be used to fund the Group’s refinancing of existing borrowings,
working capital requirements and for general corporate purposes. This JPY28
billion SLL also comes on the heels of the ARA US$1 billion
sustainability-linked loan which recently closed in January. Structured as a dual currency USD-SGD facility, ARA’s five-year unsecured committed
facility is also designed with a
pricing incentive mechanism to the extent it achieves its sustainability
targets.

Jeffrey Perlman, Chairman of ESR, said: “ESG sits at the heart of our
business, playing a key role in each and every part of our operations. With the
closing of this financing, I am very pleased that the Group is already
realising on its cost-of-capital synergies from the ARA acquisition. As the
largest real asset manager in APAC, we have a strong sense of common purpose
and a vision to focus on the well-being and long-term priorities of our broader
community and environment. We
look forward to using the proceeds of this loan to sustainably enhance our
assets, operations and the communities in which we work.”

Jeffrey Shen and Stuart Gibson, Co-founders and Co-CEOs of ESR, said: “We
would like to express our gratitude to SMBC, Mizuho and E.Sun for their recognition
of the Group’s achievements and continued progress and emphasis on
sustainability. We are also delighted to have expanded our relationship with
SMBC which became ESR’s strategic investor as a part of the ARA acquisition. Together with the
two sustainability-linked loans ESR and ARA closed previously, these facilities
are important milestones as we seek to integrate sustainability in all aspects
of our business in pursuit of our goal of creating a positive impact on our stakeholders and the communities where
we operate.”

With the completion of the ARA acquisition, ESR
has emerged as APAC’s largest real asset manager powered by the New Economy and the third largest listed real estate investment
manager globally with a gross AUM of US$140 billion^[1]. The integration with ARA, including its subsidiary LOGOS, also drives
the Group to further strengthen its ESG leadership and offerings. The JPY28
billion SLL backed by SMBC, Mizuho and E.Sun is a demonstration of such
efforts, in addition to ESR and ARA’s respective recent US$1 billion sustainability-linked
loans.