As of November 2022, IREIT Global is experiencing a little pain from its achilles heel – large dependence on a single tenant, DT.
At the moment DT is downsizing and moving out a large part of its operations from IREIT Global’s premises. As the space vacated is large, the REIT is facing challenges finding a tenant that can digest the vacated space in its entirety. As such, IREIT is now looking to lease the vacated space out on a multi-tenancy basis. The REIT has had about 12 enquiries for this space, said its CEO.
But generally, the “breaking down” of large spaces vacated by major tenants will require lots of refit and CAPEX. This may eventually erode net property income for the REIT in the coming quarters.
A factor that is going for the REIT is the burgeoning logistics market in Europe. The REIT does not yet own a logistics asset, but it is exploring the space given that it is well within its investment mandate. The REIT’s interests costs are still relatively low, and is well-positioned to carry out acquisitions.