IREIT Global's Bonn Campus (Photo: IREIT Global)IREIT Global's Bonn Campus (Photo: IREIT Global)

Singapore-listed, Europe-centric office REIT, IREIT Global (SGX:UD1U), announced on 17 February that it has achieved a distribution per unit (DPU) of 1.62 Singapore cents for its 4Q 2015, missing its forecast of 1.75 cents made at IPO by 7.4%.

However adjusting for new units distributed pursuant to a rights issue, variance between DPU paid for the quarter and the DPU at forecast would have been an increase of 1.9%.

Gross revenue for the quarter came in at EUR8.62 million while net property income (NPI) was recorded at EUR7.66 million, beating forecasts by 53.0% and 52.7% respectively.

“FY2015 has been a good year for IREIT. We were able to expand our foothold in Germany and increase IREIT’s portfolio with a good sizeable asset to boost income”, said Itzhak Sella, CEO of IREIT Global. “Through the acquisition of the Berlin Campus, we were able to demonstrate our experience and expertise in completing acquisition deals given the competitive market environment”, he added.

IREIT Global’s total portfolio asset size stood at a valuation of EUR441.4 million as at 31 December 2015 while its aggregate leverage ratio has reduced to 42.6% from 43.4% at the end of the previous quarter.

“In view of the foreign currency fluctuations, management has taken the decision to hedge a large part of the forecast distributable income for 2016”, said the REIT in its statement. “80% of the forecast distributable income for 2016 has been hedged at an average exchange rate of approximately SGD1.52 per Euro”, it added.

Portfolio occupancy for the quarter was at 99.7% while weighted average lease expiry (WALE) by gross rental income as at 31 December 2015 was at 6.8 years.

IREIT has indicated in its statement that it is optimistic on the economic conditions ahead. “The economic conditions in Germany continued to drive investments in office properties in the country, making this sector the most preferred asset class by local and foreign investors”, it said, adding that office rental rates in the country generally point to a positive trend.

Together with the DPU of 1.41 cents achieved for 3Q 2015, a DPU of 3.03 cents for the period from 1 July 2015 to 31 December 2015 will be paid to unitholders. Units of IREIT Global finished the trading day 1.5% higher from its previous close on the Singapore Exchange to end at SGD0.68.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.