IReit Global’s H2 DPU falls 26.6%
Sign up now: Get ST's newsletters delivered to your inbox
For the full year, IReit Global reported gross revenue of €65 million, up 5.4 per cent on year.
PHOTO: IREIT GLOBAL
Raphael Lim
SINGAPORE - Europe-focused real estate investment trust (Reit) IReit Global reported on Feb 22 a 26.6 per cent decline in distribution per unit (DPU) for the second half, on the back of lower income to be distributed and a larger unit base.
DPU for the six months ended Dec 31, 2023, fell to 0.94 euro cents, from 1.28 euro cents in the prior year period. Meanwhile, income to be distributed fell 13.5 per cent year on year in the second half to €12.8 million (S$18.6 million).
The manager said the performance was mainly due to retention of the dilapidation cost payable to finance the repositioning of Berlin Campus, rent-free periods granted to tenants at Bonn Campus and Darmstadt Campus, and an enlarged unit base.
Gross revenue for the second half rose 15.7 per cent on year to €36.5 million, while net property income increased 14.6 per cent to €27.9 million.
The increase was mainly due to contribution from the acquisition of 17 B&M retail properties in France starting from September, as well as other income from dilapidation cost payable by the main tenant of Berlin Campus.
For the full year, the Reit reported gross revenue of €65 million, up 5.4 per cent on year, while net property income rose 2.3 per cent to €49.9 million.
Income to be distributed was down 19.2 per cent to €25.2 million, while DPU fell 30.5 per cent on year to 1.87 euro cents.
As at December 2023, portfolio occupancy stood at 90.4 per cent, higher than the 88.3 per cent a year earlier. This was driven by the addition of the B&M Portfolio which was fully occupied, as well as the signing of a 15-year new lease for 25 per cent of Darmstadt Campus in April 2023.
Mr Louis d’Estienne d’Orves, chief executive of the manager, said the key focus looking ahead is to increase the occupancy rate of IReit’s portfolio assets, particularly Darmstadt Campus, and to refurbish and reposition Berlin Campus into a multi-let asset if the main tenant leaves in December 2024.
“In 2024, performance is likely to benefit from positive rental escalations, end of rent-free periods granted to tenants within IReit’s portfolio, and full-year contribution from B&M Portfolio,” he said.
The manager expects the European real estate market to improve in 2024, but noted that challenges remain, amid the uncertain geopolitical environment and economic outlook.
As at Dec 31, 2023, the Reit’s aggregate leverage ratio stood at 37.9 per cent, up from 32 per cent a year earlier. Its interest coverage ratio stood at seven times, while weighted average interest rate was 1.9 per cent.
Net asset value per unit fell to 41 euro cents as at December 2023, down from 54 euro cents in December 2022.
Units of IReit Global closed unchanged at 38.5 cents on Feb 22, before the announcement. THE BUSINESS TIMES
