IREIT Global reports 8.9% decline in DPU for 1Q 2017

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Singapore-listed IREIT Global announced on 11 May that it has achieved a DPU of 1.44 Singapore cents for its 1Q 2017, a decline of 8.9% compared to the 1.58 cents achieved in the corresponding period of 2016.

Gross revenue for the period slid by 0.4% to EUR8.7 million (SGD9.46 million) although net property income (NPI) increased by 3.5% to EUR7.8 million.

Correspondingly income to be distributed to unitholders came in EUR5.8 million, 8.7% lower from what was issued in 1Q 2016.

The REIT’s portfolio occupancy rate for the quarter was at 99.8% with a weighted average lease expiry (WALE) of 5.7 years.

GMG – Deutsche Telekom remained as the REIT’s largest tenant representing 52.5% of its total leases, while the next largest tenant, Deutsche Rentenversicherung Bund, takes up a further 33.8%.

Aggregate leverage for the period was at 42.1%, with total outstanding borrowings of EUR198.6 million and an effective interest rate of 2.0% per annum.

The REIT has expressed optimism for the quarters ahead, citing sustained economic growth in Europe, decreasing vacancy rates, and attractive yield spreads.

“We are presently looking into a number of opportunities and plan to diversify by asset class, country [within Europe], tenant and lease expiry”, said Aymeric Thibord, CEO of the REIT’s manager.

“A broader and larger portfolio will enhance IREIT’s long term recurring income and earnings visibility”, he added.

IREIT Global finished the trading day about 1.3% higher from its previous close on the Singapore Exchange to end at SGD0.76.

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Ridzwan Rahmat has been analysing Singapore-listed REITs and business trusts, since 2008. For disclosure purposes, Ridzwan is currently vested in Mapletree Greater China Commercial Trust, Mapletree Industrial REIT and Mapletree Logistics Trust.

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