Europe-focused IREIT Global UD1U has posted distribution per unit (DPU) of 0.96 Euro cents (1.39 cents) for 1HFY2024 ended June 30, 3.2% higher y-o-y. This is despite a 0.2% increase in unit base, following acquisition fees paid in the form of 2,847,629 units issued in September 2023 and a preferential offering in July 2023.
The record date is Aug 15 and distributions will be paid on Aug 28.
Income to be distributed to unitholders rose 3.9% y-o-y to EUR12.9 million, while net property income (NPI) rose 22.8% y-o-y to $27.0 million during the period.
Gross revenue similarly rose 28.8% y-o-y to $36.6 million in 1HFY2024.
The increase was mainly due to the contribution from B&M Portfolio in France following the completion of its acquisition in September 2023, recognition of dilapidation cost paid by the main tenant at Berlin Campus and rental income from Darmstadt Campus, says the manager on Aug 6.
Dilapidation cost of EUR5.2 million recognised as other income on a straight-line basis from January to June was retained for the repositioning of Berlin Campus.
See also: IREIT Global confirms key tenant vacating Berlin property, may top up distribution in interim
As at June 30, IREIT Global has an occupancy rate of 89.8%, down slightly from 91.5% in the previous quarter.
Weighted average lease expiry remained stable at 4.9 years, unchanged since 3QFY2023. In 2QFY2024, IREIT Global saw some 6,700 sq m of new lease take-up, with 5.9% rental escalation year-to-date.
In 1HFY2024, the manager secured new leases totalling approximately 3,100 sq m at Darmstadt Campus for a weighted average unexpired lease term of approximately 10 years. This will increase the property’s occupancy rate to over 36%.
See also: IREIT Global's manager announces changes in its top management
In addition, the manager has completed the refurbishment works on the common areas of its two office properties in Barcelona, Spain.
Aggregate leverage rose slightly to 37.2% as at June 30, from 37.0% as at March 31, and down from 37.9% at end-2023.
The weighted average interest rate remained stable at 1.9%, unchanged q-o-q. With outstanding gross borrowings of EUR359.2 million as at June 30, IREIT Global has no debt maturing until January 2026, and 97.1% of all bank borrowings are hedged.
Net asset value per unit fell 2.4% h-o-h to 40 Euro cents as at June 30, compared to end-2023.
IREIT Global saw a 4.8% h-o-h decline in its portfolio valuation to EUR855.6 million, primarily due to fair value losses and divestment of Il∙lumina in Spain on Jan 31.
As reported on June 24, the main tenant at IREIT Global’s Berlin Campus has said it will not extend its lease when it expires on Dec 31.
A lump-sum of EUR15.5 million, equivalent to over 16 months of its total current rent, was paid by the tenant as dilapidation cost in June.
See also: IREIT Global portfolio occupancy up to 91.5% in 1QFY2024, gearing falls slightly to 37%
The manager says it is repositioning the property into a multi-let, mixed-use asset once it is vacated, and it is already in “advanced stages” to enter into 20-year lease agreements with two hospitality operators (short and long-term stays) for some 9,500 sq m each.
Another lease agreement is expected to be concluded with a federal government agency for some 4,000 sq m of office space, says the manager. When these leases are secured, over 28% of the property would be pre-let.
Louis d’Estienne d’Orves, CEO of the manager, says: “We are heartened to achieve a firm performance in 1HFY2024, delivering gross revenue growth of 28.8% y-o-y despite the challenging market environment. This set of positive results underpin our diversification strategy and active asset management efforts.”
The manager revealed in July that d’Estienne d’Orves will assume a senior role in Tikehau Capital, one of the REIT’s two owners, and will relinquish his role as CEO.
Replacing him is Peter Viens, who is presently a fund manager at Sofidy, a European real estate asset manager which is part of the Tikehau Capital group.
Meanwhile, Emilio Velasco has been identified to assume the CIO appointment on a part-time basis. Velasco is presently the head of real estate (Spain & Portugal) of Tikehau Capital.
These changes will take place in 1Q2025.
Units in IREIT Global opened flat at 18.5 Euro cents on Aug 7.
