IReit’s portfolio valuation falls by 2.6% to $1.3 billion

SINGAPORE - IReit Global’s portfolio valuation as at Dec 31, 2023, stood at €899 million (S$1.3 billion) across its properties, based on the latest external valuation conducted by Savills.

This was 2.6 per cent lower than the real estate investment trust’s (Reit) portfolio value of €922.7 million as at June 30, 2023, and 5.4 per cent lower than the €950.5 million it reported the year before.

Mr Louis d’Estienne d’Orves, chief executive of the manager, said that since the Covid-19 pandemic and interest rate hikes, IReit’s office portfolio valuation has fallen by only 5.6 per cent, supported by active leasing and stable leases; its retail portfolio valuation actually rose by 1.4 per cent, he said.

The manager said that the September 2023 acquisition of 17 retail properties in France highlighted the importance of its strategy of diversifying the Reit’s portfolio from geographical and asset class standpoints.

On a like-for-like basis excluding the 17 retail properties, IReit’s portfolio would have fallen by 13.6 per cent year on year, triggered mainly by the weak performance of its properties in Germany, the manager added.

Compared with its total initial purchase consideration of €775.6 million, IReit’s portfolio valuation as at Dec 31, 2023, was still up by €123.4 million, or 15.9 per cent.

As at Dec 31, IReit’s gearing stood at approximately 37.4 per cent. This was higher than the 34.4 per cent it reported in its third-quarter 2023 update. The gearing ratio, also known as aggregated leverage, is the ratio of a Reit’s total debt to its total assets.

The manager now anticipates IReit’s net asset value (NAV) per unit to be approximately 40 euro cents.

It said: “Based on the last closing unit price of 40.5 cents, IReit still trades at an attractive 30.7 per cent discount to its NAV.”

Units of IReit were down 1.2 per cent, or 0.5 cent, at 40 cents at the close of trading on Jan 22. THE BUSINESS TIMES