Core Viewpoint - The REITs market in China has developed significantly since its inception in June 2021, becoming an important part of the capital market, aligning with the country's high-quality economic development [1] Group 1: Market Development - The public REITs market in China has evolved from a pilot phase to a crucial component of the capital market over four years [1] - ESR Group has actively participated in the Chinese REITs market, with the Zhonghang Yishang Warehousing Logistics REIT listed on the Shanghai Stock Exchange in January 2025 [1][5] - The demand for warehousing logistics services is expected to rise due to ongoing recovery in industrial production and consumption [1] Group 2: Company Strategy - ESR Group's strategy in China is driven by a recognition of the country's key role in the global supply chain since its establishment in 2011 [2] - The company defines "new economy" real estate management as encompassing logistics real estate, data centers, and infrastructure platforms, aiming to capture growth opportunities [2] - As of December 31, 2024, ESR Group's assets related to new economy management fee income reached $42.6 billion, with a project reserve of approximately $11.4 billion [2] Group 3: Operational Insights - Logistics real estate serves as the core growth engine for ESR, meeting the demand for large-scale, high-quality logistics assets in the Asia-Pacific region [3] - The data center segment leverages strong demand in AI, cloud computing, and 5G, allowing ESR to flexibly meet diverse customer needs [3] - ESR manages nearly 180 assets in China, with about 70% located in key economic hubs like the Yangtze River Delta and the Guangdong-Hong Kong-Macau Greater Bay Area [3] Group 4: Market Demand and Trends - The rapid growth of e-commerce and increasing demand for supply chain integration in manufacturing are driving the need for refined warehousing logistics management [4] - ESR provides not only warehouses but also high-standard hardware facilities and energy-efficient park concepts, which are core competitive advantages [4] Group 5: REITs Performance - The Zhonghang Yishang Warehousing Logistics REIT is seen as a vital pillar for ESR's long-term development in the Chinese market [5] - The underlying assets of the REIT consist of three logistics parks in Kunshan, Jiangsu Province, with a historical average occupancy rate of over 90% over the past five years [6] - As of the end of Q1 2025, the project had a rental rate of 85.57%, with expectations to reach 90% due to new tenant arrivals in Q2 and Q3 [6]