Table of contents

[Virtual Presenter] Hello everyone, and welcome to this presentation on covertitle coverdate by the Central Group of Company. In this session, we will explore the exciting developments and progress made by one of the most prominent organizations in the industry. Let's dive into the impressive accomplishments of the Central Group of Company..

[Virtual Presenter] This text highlights the second slide that outlines the structure of a presentation on ESR Thailand. The presentation begins with an executive summary, followed by Thailand Market Overview, Current Status of ESR Thailand, ESR Thailand Growth Strategy, Projected Pipeline, and real-life examples and case studies. The table serves as a guide to navigate through the information presented..

[Virtual Presenter] Moving on to the third slide, the focus will be on ESR Asia Suvarnabhumi Park. This particular project has been under development since early 2020 and is currently being constructed. It will provide about 148000 square meters of space to meet the strong demand in the logistics sector of Thailand once completed. This project is a significant milestone in the growth of ESR Thailand, which is committed to finding innovative and valuable solutions to logistical issues in the industry. The project's expected completion date is in the second half of 2022, and it will undoubtedly enhance ESR Thailand's excellent reputation in the industrial real estate market..

[Audio] Slide four provides an overview of the executive summary of ESR Thailand. ESR Thailand was established in 2022, and it has a massive industrial market size of 5.6 million m². In Jan 2022, a joint venture was signed with Asia Industrial Estate to extend ESR Thailand's business reach, securing two new projects with a total buildable GFA of 340000 m². The organization has a highly skilled team of 14 professionals with a target to expand the portfolio to 2 million m² by 2027. Bank financing is in place, and attractive THB financing terms are available, with 46000 m² of the space leased out already. A further 100000 m² leasing target has been set for 2023. The total investment value is $1.2 billion, with an equity requirement of $500 million. The team of ESR Thailand is constantly growing, and the addition of two new team members is planned for April 2023. ESR Thailand is well-positioned, highly motivated, and fully equipped to take up industrial real estate growth opportunities in Thailand..

[Audio] Slide five contains a motivational speech that highlights the significance of personal and professional development. As a worker in Thailand, it is vital to recognize and appreciate your unique abilities and experiences that add value to your company. Having faith in oneself and being confident in one's skills is crucial, and challenging oneself beyond comfort zones is imperative. Success is not only about attaining the goal but also enjoying the journey and overcoming challenges. The attitude and the mentality that focuses on the solutions rather than the problems are essential. Seeking help from mentors and colleagues is significant. Remaining motivated, having a growth mindset, and learning continuously are the keys to achieving great things. Remember, your possibilities are limitless, so keep striving to reach your full potential..

[Audio] On slide six, there is an overview of the Thailand market. The data provided in the table indicates that Thailand is a rapidly growing and promising market for logistics and industrial real estate. Thailand is well positioned to take advantage of the booming e-commerce industry in the region due to significant infrastructure developments like the Eastern Economic Corridor and the government's commitment to improving the country's transport links. Additionally, the availability of affordable labour and the country's central location in Southeast Asia make it an attractive destination for investors seeking opportunities in the logistics sector. Overall, Thailand's strong economic growth prospects, favourable demographics, and strategic location make it an appealing market for industrial real estate development..

[Audio] The presentation includes a breakdown of the Thailand market overview data on slide seven. Thailand has a population exceeding 70 million and a GDP growth rate of 2.7% between 2020-2029, creating an appealing environment for investors due to its active and dynamic economy. In Thailand, logistics market size is roughly 5.6 million square meters, with slightly under ten percent categorized as modern logistics facilities. The yield on cost ranges from 8-10%, and the cap rate ranges from 5-6%. The LTV rates are typically around 50%, and the debt rate is between 3.5% - 4.5%. These factors combine to make the predicted development IRR range between 15% - 16%, which is notably inviting for investors. Also, the country has plans to reinforce infrastructure and rate of support for the logistics industry with initiatives like Bangkok and the Eastern Economic Corridor (EEC) 1 projects. ESR Thailand is optimistic about taking advantage of opportunities in this fast-growing and frequently engaging market as a result of these factors and working with local partners..

[Audio] Moving on to slide eight, we have a chart that displays the market share of major players in Thailand's industrial real estate market. Frasers Property Trust and WHA hold the dominating share, accounting for 85%, while other players are left with only 15%. The market size has experienced a massive growth of almost tripled size from 2012 to 2020 and now covers 4.35 million square meters of net leasable area in the prime grade stock primarily around Bangkok. Despite the challenges brought by Covid-19, the e-commerce industry is experiencing significant growth, leading to an increased demand for modern logistics facilities in Thailand. This growth presents a promising opportunity for ESR Thailand, and our efficient and sustainable solutions leave us in an advantageous position to contribute to the industry's growth. Through innovation, strategic partnerships, and leveraging our experienced team, we believe we can carve out a significant share of the Thai industrial real estate market and be among the key players in the near future..

[Audio] Slide nine presents an overview of the submarkets and rental trends in Thailand's industrial real estate sector. The market in Thailand is divided into six submarkets, with the Eastern Vicinity and Eastern Seaboard submarkets being in high demand from e-commerce and 3PL players, thus commanding relatively higher rental rates. Despite the steady supply of new stock over the past decade, rents in Thailand have remained mainly stagnant in recent years. However, the increasing growth of the e-commerce industry presents an opportunity to increase rental rates in these submarkets. ESR Thailand is well-positioned to capture this growth opportunity by leveraging strategic partnerships, innovative solutions, and experienced team members. Delivering sustainable and efficient solutions that exceed client expectations while remaining flexible in this fast-changing environment will remain our focus. By being proactive, we aim to stay ahead and continue to meet the needs of our clients..

[Audio] On slide ten, the Eastern Economic Corridor (EEC) is highlighted as a pivotal area for logistics and industrial real estate. This region, housing the deep-sea port of Laem Chabang and numerous industrial estates, drives economic growth in Thailand. Stretching across Rayong, Chonburi, and Chachoengsao provinces, the EEC offers excellent locations for logistics facilities, thanks to world-class infrastructure and transportation links. Moreover, the Thai government promotes the EEC as part of a plan to transform Thailand into a high-value industry hub (robotics, medical equipment, aviation, etc.). Consequently, ESR Thailand can take advantage of the EEC's exponential growth in demand for logistics facilities and support e-commerce's development in Thailand. Leveraging our expertise, network, and innovative solutions, we can expand our portfolio and attain our objectives..

[Audio] Slide eleven presents the current status of ESR Thailand, including our operations in Higashi Ogishima, Japan. This location was carefully selected for its robust logistics infrastructure and reasonable labor costs, making it an optimal site for our enterprise. Our expansion in Japan is a key aspect of our growth strategy as we work towards expanding our market presence in the Asia-Pacific area. We also have two secure projects in Thailand and are actively seeking additional opportunities to increase our portfolio to reach our goal of 2 million square meters by 2027. Our commitment to innovation, sustainability, and consumer satisfaction has earned us a reputable position in the industry, and we are eager to further enhance that by means of strategic investments and partnerships. Our aim for ESR Thailand is to be the preferred option for logistics and industrial real estate solutions in the region, and with our proficient team, streamlined procedures, and unwavering pledge to excellence, we are confident in our ability to make it happen..

[Audio] Moving on to the next section, we have a detailed overview of ESR Thailand's current status. Our team comprises 14 members across key disciplines, driving our expansion plan, and we have completed the acquisition of our first project: ESR Asia Bangkok 1. The site has been master planned for approximately 254000 square meters of building areas and is planned to be 100% leased by 1Q27. We are also in the process of acquiring ESR Asia Laemchabang 1, with the closing of the second phase planned for July 2023. Our established relationships with local commercial banks and ongoing discussions with banks for project financing are underway. We are continuously looking for new opportunities to grow our business through acquiring more land and forming strategic partnerships. On the next slide, we will delve deeper into the team member chart, which highlights the key personnel driving our success in Thailand..

[Audio] Slide thirteen provides insight into the experienced team responsible for the success of ESR Thailand. Jai Mirpuri, our Head of Singapore and Thailand, boasts 18 years of real estate investment and fund management experience in Asia, with 14 years dedicated to ESR and prior positions at esteemed banking institutions like Deutsche Bank and Capital One Bank. Accompanying Jai are industry veterans Wimonwan Khachonpisitsak, Chumpol Hinthong, Sayarm Tongkrabin, and Piyanath Sritapanu. Wimonwan, our Chief Financial Officer, has over 20 years of experience in investment banking, fund management, and real estate development, with extensive involvement in various transactions such as M&A, capital raising, REITs, and infrastructure fund establishment. Chumpol, our Director of Projects, offers more than 23 years of experience in real estate investment and asset management, with specialized expertise in deal sourcing, feasibility study, due diligence, investment and tax structuring, and tenant management. Sayarm, our Director of I.

[Audio] Slide fourteen demonstrates the skilled professionals responsible for ESR Thailand's triumph. Senior Architect Manus Sripila, with 8 years of experience, spearheads our team, particularly in residential, hospitality, and industrial advancement. Additionally, Thaweesak Kamsoda, our Senior Manager of Leasing, brings 5 years of expertise in asset management, investment, and development, particularly in managing and analyzing industrial and logistics properties for executing asset divestment, enhancement, and development. Our Assistant Investment Manager, Lisa Leow, and Manager of Leasing, Nuttapol Chaichavananit, both contribute 15 years of experience in sales and leasing solutions for industrial, warehouse, and logistics industries. Moreover, Netrnapa Wadviengkha, our Senior Manager of Projects, possesses 17 years of knowledge in project development management and structural design of diverse developments. Our team's collective knowledge, energy, and commitment to excellence are the driving force..

[Audio] Our talented team at ESR Thailand comprises several key directors driving our success. Kejnaphat Ungsurungsee, our Director of Legal, brings 22 years of experience in real estate and litigation, having previously served at several reputable law firms in Thailand, and as a former legal counsel for luxury hotel chains and real estate investment funds. Varindra Laohalertdecha, our Director of Human Resources, has 17 years of experience in consulting and generalist human resources, providing effective manpower planning and adapting to changing trends in the global large company environment. Sukanya Ngamvivittavorn, our Director of Accounting, has over 20 years of experience in accounting, treasury, and tax operations for companies like Danone Dairy and Siam Piwat. Meanwhile, Vatcharee Pattarasittiseree, our Office Manager and Executive Assistant, brings 20 years of experience in office and administrative functions within the real estate and hospitality industries, among others who also form our remarkable team..

[Audio] The table on this slide showcases ESR Thailand's growth strategy as we move forward. Our upcoming project in Chakan, India involves exploring opportunities for industrial and logistics developments. Our team's experience, processes, and dedication enable us to deliver exceptional results for our clients and stakeholders. Our commitment to innovation, sustainability, and customer satisfaction sets us apart and drives our expansion to reach new horizons. We aspire to be the preferred provider of real estate solutions in the region and we are well on our way to achieving this goal. Keep an eye out for more updates on our progress including in-depth information about our projects and key personnel..

[Audio] The ESR Thailand team aims to challenge the dominance of local operators in the market by creating a development and acquisition platform. They strive to achieve a portfolio size of around 2 million sq. m. with a 25% market share, necessitating a total investment of over USD 1 billion and an asset under management of USD 1.5 billion. The team seeks to offer top-grade A+ product types that suit e-commerce clients and will practice the best environmental, social, and governance (ESG) practices. They plan to utilize their expertise and vast network to gain a substantial market share in industrial and logistics developments in Thailand and beyond. With their devotion to innovation, sustainability, and customer satisfaction, they are confident in achieving their vision and the exciting opportunities that lie ahead..

[Audio] To move forward, comprehending the regulatory challenges in Thailand is vital. The regulations in Thailand have specific conditions to be met, such as Thai nationals holding not less than 51 percent of the total registered capital, and foreign majority ownership not being permitted. To set up a logistics park, the project must meet precise criteria like investment of at least THB1 billion and a warehouse with advanced technology and computerized systems. Distribution center projects have additional requirements, like investment of at least THB 100 million and the distribution of goods to a minimum of 5 countries. Although the conditions are strenuous, we believe in our experience, network, and commitment to excellence to meet them. The subsequent slide will give insight into ESR Thailand's ongoing projects in the area, so await more information on our continuous aim to be the trusted logistics provider..

[Audio] ESR Thailand has a unique structure that enables strategic partnerships and investments. The process involves establishing a JVCo in Thailand with a 51-49 equity shareholding. Then, the JVCo invests in land parcels with a shareholding pattern of 51%, and ESR or its partners can hold a 49% stake at the property level. The structure also allows third-party capital partners to bring in capital via ESR's funds management platforms. The approach has received approval from top law firms like Siam Premier, Allen & Overy, and Latham & Watkins, and a formal opinion is available for further review. This innovative structure enables ESR and offshore LPs to effectively own about 74% of projects and have joint control via unanimous approval conditions. Through this approach, ESR can leverage its strengths and align with key partners towards its vision of being the preferred option..

[Audio] ESR Thailand values strong local connections as a key component of its strategic partnerships. The company has partnered with ESR Asia Bangkok 1 and ESR Asia Bangkok Laemchabang 1, both part of the Bangkok Bank family, to secure bank financing for its projects and gain valuable local insights and expertise. Discussions are ongoing to consolidate distribution centers and logistical warehouses owned by subsidiaries within well-established conglomerates such as Lotus's, Makro, and CP 7-11. Moreover, ESR Thailand is exploring joint venture opportunities with Formerly known as Thai Factory Development Public Company Limited, one of the largest industrial landlords in Thailand that operates various industrial estates..

[Audio] Our organization is pleased to inform you about the latest details regarding our upcoming investment opportunities and projected pipeline, apart from our existing undertakings in India and Thailand. Our crew is actively analyzing potential prospects in Higashi Ogishima, Japan to establish a logistics facility for leasing or selling. Our vision and values drive us to pursue opportunities that are in sync with our growth strategy. The Higashi Ogishima venture is a prime example of our commitment to reaching out to new markets while maintaining high customer service standards and delivering exceptional value. We perceive this project as a significant growth opportunity and look forward to the potential it holds for our clients and stakeholders. Being an experienced and well-connected organization, we are confident in our steadfastness and ability to deliver impressive results that can propel ESR Thailand towards continuous success. Please stay tuned to our upcoming updates as we advance with this and other such exciting ventures..

[Audio] Let's review ESR Thailand's current projects and investment opportunities. They have various projects throughout different regions in Thailand, totaling approximately 5.6 million square meters. Two projects are located in the Northern region with a total GFA of 100000 square meters. In the Northeastern region, they have two more projects with a combined GFA of 100000 square meters. Three projects are ongoing in the central region with a total GFA of around 290000 square meters. Down in the southern region, two projects in Surat Thani make up a total GFA of 100000 square meters. In Bangkok, there are 21 projects, including 17 greenfield projects with a total GFA of 1.37 million square meters. Five budget projects will start in 2023, accounting for 0.63 million square meters in total. Fin..

[Audio] Let's explore ESR Thailand's expected growth in land, gross floor area, and investment from 2023 to 2027. By 2027, the company aims to reach a portfolio of 2 million square meters, with a few projects lined up for this purpose, on land size of approximately 363,403 square meters. ESR Thailand is estimated to have roughly 2.6 million square meters of gross floor area by 2027. The company's projected investment from 2023 to 2027 is about 805.4 million US dollars, aimed at achieving its ambitious growth objectives. ESR Thailand is confident that its expansion strategy will keep providing value to its clients, stakeholders, and partners in the industrial market. The team's dedication, hard work, and motivation are expected to be the driving forces behind the company's continued success in the future..

[Audio] Our most successful case study is the OZ Clayton Logistics project in Australia. It is leased to a Fortune 500 company and comprises approximately 50000 square meters of gross floor area. The facility is strategically located in Clayton, Victoria, well-connected to major highways, and close to nearby residential areas. The facility was designed with a focus on sustainability, achieving a Green Star rating, and featuring a rooftop solar power system and rainwater harvesting. This project reflects our team's commitment to delivering high-quality, sustainable, and cost-effective solutions to our clients. We are dedicated to driving value and growth for both our clients and ESR Thailand, and this project is a testament to our successful partnership and project track record. We look forward to expanding our operations and portfolio further..

[Audio] Let's delve into ESR Asia Bangkok 1, a secured project of ours. The site's ideal location is within an industrial estate, situated just a 30-minute drive away from Suvarnabhumi International Airport. The available power, water supply, and drainage with reliable road connectivity, up to the site's boundary, make it a convenient option. As conventional places are experiencing heavy congestion, customers are seeking alternative locations. Being in proximity to these conventional locations, as well as the airport, ESR Asia Bangkok 1 offers just that. Besides, Motorway 7, the primary highway to the Eastern Seaboard, is just a 15-minute drive away; thus, it is an excellent location for businesses. The project completed land acquisition in December 2022, and we intend to begin constructing the first two buildings in April 2023 to demonstrate ESR's industry-leading standards..

[Audio] Our final project, ESR Asia Laemchabang 1, is situated in Laemchabang Industrial Estate and is fully equipped with power, water supply, drainage, and road connectivity to its boundary. We acquired the first tranche of land in March 2023, and the second tranche is scheduled to be completed in July 2023. Transactions for leasing and land acquisition in the Laemchabang and Eastern Seaboard areas have been increasing since the second half of 2022, and we have signed a non-binding LOI with Advanced Energy Industries Inc. for a built-to-suit semiconductor manufacturing plant. Construction is set to commence in November 2023, with a bank loan term sheet expected to be signed within 2Q23. We anticipate an exit in 1Q26 with projected IRR of circa 17% to investors. The ESR Asia Laemchabang 1 project represents an excellent growth opportunity..