IREIT Global Reports Stable 3Q2024 Performance Despite Challenges in Spanish Portfolio

IREIT Global has released its 3Q2024 business update, showcasing a stable performance with a continued focus on maintaining portfolio resilience and a healthy balance sheet. The report highlights several key points and developments that shareholders need to be aware of, which may affect share values.

Key Highlights from 3Q2024 Report

• Occupancy Rate: The overall portfolio occupancy rate stands at 89.6%, slightly down from 89.8% as of June 30, 2024, primarily due to a lower occupancy rate in the Spanish portfolio.
• Aggregate Leverage: Aggregate leverage has improved to 37.7%, down from 37.9% at the end of 2023, due to the repayment of borrowings related to the divestment of Il∙lumina. This is lower than the S-REITs office subsector average of 43.6% and the overall S-REITs sector average of 39.4%.
• Weighted Average Interest Rate: The weighted average interest rate remains stable at 1.9% with no debt maturity until January 2026. Notably, 97.1% of all bank borrowings have been hedged.
• Weighted Average Lease Expiry (WALE): The WALE has slightly decreased to 4.6 years from 4.9 years as of June 30, 2024, due to new leases within the portfolio.

Strategic Portfolio and Asset Management

IREIT Global continues to actively manage its portfolio across key European markets, with a total portfolio valuation of €855.6 million and 53 properties comprising office and retail spaces:

• Germany: The portfolio includes five office properties with an occupancy rate of 88.0%. Significant developments include new lease agreements at the Darmstadt Campus, expected to increase occupancy to 45%, and a proposed repositioning of the Berlin Campus into a multi-let, mixed-use asset with 20-year lease agreements targeted for signing by 1Q2025.
• Spain: The Spanish portfolio, comprising four office properties, has secured new tenants for approximately 2,200 sqm and renewed one tenant for 2,500 sqm, boosting occupancy to around 73%. However, challenges remain as 1,200 sqm were vacated in Parc Cugat Green in 2Q2024.
• France: The French portfolio includes 44 retail properties with an occupancy rate of 100%. Two development projects are ongoing within the B&M portfolio to create additional value for unitholders.

Financial and Capital Management

IREIT Global maintains a healthy financial position with gross borrowings of €359.2 million and an interest coverage ratio of 8.1x. The weighted average debt maturity stands at 2.0 years. Ongoing negotiations are in place for the debt refinancing of the German portfolio as part of the Berlin Campus repositioning.

Looking Ahead

The European real estate investment market is showing signs of growth, with office letting gaining momentum and the retail market experiencing an uptick in demand. Key future strategies include:

• Signing new leases to improve occupancy rates, particularly in the Darmstadt Campus and Berlin Campus.
• Commencing the repositioning of Berlin Campus into a multi-let, mixed-use asset in 2025, with anticipated 20-year lease agreements covering 17,000 sqm.
• Maintaining a diversified portfolio across asset classes and Western European countries to deliver sustainable returns for unitholders.
• Continuing to maintain a healthy financial position and debt profile while broadening funding sources and flexibility.

Shareholders should note that the 2025 distribution is expected to be impacted due to the absence of income from the Berlin Campus during its repositioning phase.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors are advised to conduct their own research or consult a financial advisor before making investment decisions. The performance of IREIT Global and its management is subject to various risks, uncertainties, and assumptions that may cause actual results to differ materially from those anticipated.

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