IREIT Global Review @ 2 March 2023
Basic Profile & Key Statistics
Main Sector(s): Office & Retail
Country(s) with Assets: Germany, Spain & France
No. of Properties (exclude development/associate/fund): 37
Key Indicators
Performance Highlight
Gross revenue and NPI improved yoy mainly due to contribution from French Portfolio and Parc Cugat which were acquired in 3Q 2021, and also due to step-up rents and CPI indexation. However, income available for distribution has declined yoy mainly due to higher finance costs, 100% management fees payable in cash (vs 50% for 1H FY21), significantly higher administrative costs and other trust expenses, higher tax expenses and straight-line rent adjustment.
Rental Reversion
Rental Reversion is at positive 5.2%.
Distribution Breakdown
Distributable Income Breakdown:100% from Operation
Distribution = 90% of Distributable Income
Related Parties Shareholding
REIT Sponsor's Shareholding: Above median for more than 20%
REIT Manager's Shareholding: Below median for more than 20%
Directors of REIT Manager's Shareholding: Above median for more than 10%
Lease Profile
Occupancy: Below median for more than 5%
WALE: Above median for more than 10%
Highest Lease Expiry within 5 Years: Above median for more than 10%; Falls in 2024
Weighted Average Land Lease Expiry: 100% freehold properties
Debt Profile
Gearing Ratio: Below median for more than 10%
Cost of Debt: Below median for more than 20%
Fixed Rate Debt %: 100%
Unsecured Debt %: 0%
WADM: Above median for more than 20%
Highest Debt Maturity within 5 Years: Above median for more than 20%; Falls in 2026
Interest Coverage Ratio: Above median for more than 20%
Diversification Profile
Top Geographical Contribution: Below median for more than 20%
Top Property Contribution: Above median for more than 20%
Top 5 Properties' Contribution: Above median for more than 20%
Top Tenant Contribution: Above median for more than 20%
Top 10 Tenants' Contribution: Above median for more than 20%
Key Financial Metrics
Property Yield: ± 10% from median
Management Fees over Distribution: Below median for more than 10%; $9.01 distribution for every dollar paid
Distribution on Capital: ± 10% from median
Distribution Margin: ± 10% from median
Trends
Uptrend: NAV per Unit
Flat: Interest Coverage Ratio
Downtrend: DPU, Occupancy, Property Yield, Distribution on Capital, Distribution Margin
* DPU and NAV per Unit are in Euro
Relative Valuation
P/NAV - Below average for 1y; Below -1SD for 3y & 5y
Dividend Yield - Average for 1y, 3y & 5y
Author's Opinion
The occupancy rate has decreased to 88.3%, primarily because Deutsche Telekom vacated the Darmstadt Campus at the end of November 2022. However, the manager has stated that they are currently in advanced discussions with a few potential tenants. Additionally, the IREIT has hedged all of its borrowing with interest rate swaps and caps, and there is no debt maturity until 2026, which helps to mitigate the impact of rising interest rates.
You could also refer below for more information:
SREITs Dashboard - Detailed information on individual Singapore REIT
SREITs Data - Overview and Detail of Singapore REIT
REIT Review - List of previous REIT analysis posts
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