IREIT Global Review @ 26 August 2022

Basic Profile & Key Statistics

• Main Sector(s): Office & Retail
• Country(s) with Assets: Germany, Spain & France
• No. of Properties (exclude development/associate/fund): 37

Key Indicators

Performance Highlight

Gross revenue, NPI and income available for distribution improved yoy due to contribution from the French properties and Parc Cugat in 3Q 2021. However, DPU is slightly lower due to management fees being paid 100% in cash as compared to 50% previously.

Related Parties Shareholding

• REIT sponsor's shareholding: Above median for more than 20%
• REIT manager's shareholding: Below median for more than 20%
• Directors of REIT manager's shareholding: ± 10% from median

Lease Profile

• Occupancy: ± 5% from median
• WALE: Above median for more than 10%
• Highest lease expiry within 5 years: Above median for more than 10%; Falls in 2024
• Weighted average land lease expiry: 100% freehold properties

Debt Profile

• Gearing ratio: Below median for more than 10%
• Cost of debt: Below median for more than 20%
• Fixed rate debt %: 100%
• Unsecured debt %: 0%
• WADM: Above median for more than 20%
• Highest debt maturity within 5 years: Above median for more than 20%; Falls in 2026
• Interest coverage ratio: Above median for more than 20%

Diversification Profile

• Top geographical contribution: Below median for more than 20%
• Top property contribution: Above median for more than 20%
• Top 5 properties' contribution: Above median for more than 20%
• Top tenant contribution: Above median for more than 20% 
• Top 10 tenants' contribution: Above median for more than 20%

Key Financial Metrics

• Property yield: ± 10% from median
• Management fees over distribution: Below median for more than 10%; $8.77distribution for every dollar paid 
• Distribution on capital: ± 10% from median
• Distribution margin: Above median for more than 10%

Trends

* DPU and NAV per Unit are in Euro

• Uptrend: NAV per Unit, Interest Coverage Ratio
• Slight Downtrend: Occupancy
• Downtrend: DPU, Property Yield, Distribution on Capital, Distribution Margin

Relative Valuation

• P/NAV - Below -1SD for 1y, 3y & 5y
• Dividend Yield - Average for 1y, 3y & 5y

Author's Opinion

Favorable	Less Favorable
Diversified Sector	Low REIT Manager's Shareholding
High REIT Sponsor's Shareholding	Concentrated Lease Expiry
Long WALE	0% Unsecured Debt
100% Freehold Properties	Concentrated Debt Maturity
Low Gearing Ratio	High Top Property & Top 5 Properties Contributions
Low Cost of Debt	High Top Tenant & Top 10 Tenants Contributions
100% Fixed Rate Debt	DPU Downtrend
Long WADM	Property Yield Downtrend
High Interest Coverage Ratio	Distribution on Capital Downtrend
Low Top Geographical Contribution	Distribution Margin Downtrend
Competitive Management Fees
High Distribution Margin
NAV per Unit Uptrend
Interest Coverage Ratio Uptrend

Performance has improved as compared to 1H 2021 due to the full half yearly contribution from new properties which were acquired in 3Q 2021. However, from the presentation, manager has mentioned that the key markets have slowed down in 2Q2022 due to economic uncertainty caused by the war in Ukraine, high inflation and rising financing costs.

You could also refer below for more information:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

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*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions and loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.