SINGAPORE - Real estate investment trust IREIT Global plans to acquire its first office building in Berlin, Germany for 144.2 million euros (S$217.7 million).
The property - two connected building sections of eight storeys and 13 storeys - is located six kilometres east of Berlin's city centre and near the Media Spree area, which is popular with internet, media and technology companies, the Reit manager IREIT Global Group said on Tuesday.
The property was marketed by German investment fund WealthCap.
The acquisition, to be funded with a mix of equity and debt, will lift IREIT's total portfolio value to 438.0 million euros from 290.6 million euros, and to four properties in various German cities.
When completed, the Berlin property will also be the largest asset in IREIT's portfolio.
IREIT is expecting a net property income of 7.1 per cent from the Berlin acquisition, thanks to the building's "strong principal tenant" - federal pension fund Deutsche Rentenversicherung Bund (DRB), the Group said in a release.
DRB occupies 98.8 per cent of the property's total lettable area on a lease expiring in June 2024, is backed by the German government and has a "AAA" credit rating.
IREIT announced a rights issue to raise gross proceeds of about S$88.7 million, and intends to raise some 102 million euros through a bank loan facility.
The announcements were made after the market closed. IREIT units closed 0.5 cent down at 80 cents on Tuesday.
IREIT Global was listed on the Singapore Exchange in August last year.