Singapore’s only Europe focused office REIT, IREIT Global (SGX:UD1U), announced on 30 June that it has entered into a conditional sale and purchase agreement to acquire an office property in Berlin for EUR144.2 million (SGD217.7 million)

The property comprises of two fully connected building sections with 8 storeys and 13 storeys, respectively giving a net lettable area of about 79,000 square metres. Committed occupancy for the office complex as of 1 May 2015 stands at 99.2%.

“IREIT was attracted to the Berlin property due to the strong principal tenant, Deutsche Rentenversicherung Bund (“DRB”), a federal pension fund and the largest of the 16 federal pension institutions in Germany, and the opportunity for rental and value growth in this increasingly popular location”, said the REIT in an official statement on the acquisition.

DRB occupies 98.8% of the Berlin Property’s total lettable area on a lease expiring in June 2024 and contributes 99.6% to the property’s gross rental income.

Upon completion of the acquisition, IREIT’s total portfolio value will grow to EUR438.0 million (SGD661.4 million) from EUR290.6 million (SGD438.8 million) previously with a lengthened weighted average lease expiry (WALE) of 7.5 years.

The acquisition, expected to be yield-accretive, will be funded by a combination of equity and debt. IREIT has said that it plans to raise gross proceeds of SGD88.7 million with the issue of 187 million new units to be priced at SGD0.468. The new units will be issued to eligible unitholders on pro rata basis of forty-five rights units for every one hundred existing units held as at a date and time to be determined.

IREIT will also draw down a loan of approximately EUR102 million from a local German bank to diversify its source of funding.

Units of IREIT Global last changed hands on the Singapore Exchange at SGD0.80.