IREIT Global suffers from sponsor uncertainty

SINGAPORE (Nov 25): DBS Group Research is cautious over IREIT Global maintaining a “hold” call with a target price of 75 cents, citing uncertainty with its new sponsor, Tikehau Capital.

Lead analyst Mervin Song notes that IREIT offers an attractive yield of over 8%, however, coupled with uncertainty over its sponsor, might cap the REIT’s near-term performance.

“Furthermore with IREIT’s gearing at 42%, any growth plans is likely to entail an equity-raising exercise to fund the acquisition of new properties in Europe, with may be DPU dilutive in the near-term, given IREIT’s already high distribution yield,” says Song.

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