IREIT GLOBAL SGD forum
UD1U Financial Performance (1H2024):
Gross revenue for the first half of 2024 increased by 28.8% year-on-year to €36.6 million.
Net property income rose by 22.8% to €27.0 million.
The revenue increase was primarily driven by contributions from the B&M Portfolio in France, which was acquired in September 2023.
Other income sources included €5.2 million from dilapidation costs at the Berlin Campus and rental income from the Darmstadt Campus.
Distribution:
The total income to be distributed to unitholders for 1H2024 was €12.9 million, representing a 3.9% increase year-on-year.
The distribution per unit (DPU) stood at €0.96 cents, an increase of 3.2% year-on-year.
Leasing and Occupancy:
IREIT Global secured new leases totaling 3,100 sqm at Darmstadt Campus with an average unexpired lease term of around 10 years. This improved the occupancy rate to over 36% for the property.
Refurbishment works were completed on two office properties in Barcelona, Spain, positioning the buildings to attract more tenants.
Berlin Campus Developments:
The main tenant at Berlin Campus, Deutsche Rentenversicherung Bund, has decided not to extend its lease, which expires on December 31, 2024. As compensation, the tenant paid a lump sum of €15.5 million, equivalent to 16 months of rent.
IREIT Global plans to reposition the Berlin Campus into a multi-let, mixed-use asset. Advanced lease agreements are already in place for approximately 9,500 sqm each with a leading hotel brand and long-stay hospitality operators.
Strategic Focus:
The REIT is focused on repositioning Berlin Campus and securing new leases to enhance the overall portfolio’s value proposition.
The strategic shift is expected to benefit from lower inflation, rising real wages, and interest rate cuts that are expected to revitalize the European real estate market.
Valuation and Outlook:
IREIT Global currently trades at 0.6x price-to-book (PB) with a dividend yield of 9%.
The consensus target price is S$0.37, representing a potential upside of 19.4% from the current share price.