IREIT Global's 2H FY23 Result Review

Basic Profile & Key Statistics

Key Indicators

Performance Highlight

Gross revenue and NPI have improved YoY due to the recognition of dilapidation costs, which are accounted for on a straight-line basis from June 2023 to December 2024. Income available for distribution has declined YoY primarily due to higher property expenses, higher finance costs, higher tax expenses and rent-free provision for tenants at Bonn Campus and Darmstadt Campus. DPU has declined to a greater extent due to an increase in units from a preferential offer.

Rental Reversion

Rental reversion is at 0.5%.

Acquisition & Divestment

IREIT acquired 17 retail properties in France in September 2023 and divested a Spanish office building in January 2024.

Related Parties Shareholding

The REIT sponsor holds a relatively high proportion of shares, while the REIT manager and directors of the REIT manager hold a relatively low proportion.

Lease Profile

While the WALE is long and all properties are freehold, the committed occupancy is relatively low, and lease expiry is concentrated.

Debt Profile

The cost of debt is low, and the adjusted interest coverage ratio is high. Additionally, the fixed-rate debt proportion is high. However, debt maturity is concentrated, and all debt is secured debt.

Diversification Profile

The portfolio shows geographical diversification, but there are concentrated property and tenant contributions.

Key Financial Metrics

All distributions are sourced from operations. Furthermore, the management fee is low compared to operating distributable income.

DPU Breakdown

• TTM Distributable Income Breakdown:
• 100% from Operation
• TTM DPU = 90% of Distributable Income

Trends

• Flat: NAV per Unit, Property Yield
• Downtrend: DPU from Operation, Committed Occupancy, Adjusted Interest Coverage Ratio, Operating Distributable Income on Capital, Operating Distributable Income Margin

Relative Valuation

• Dividend Yield - Average for 1y & 5y; Above +1SD for 3y
• P/NAV - Above +2SD for 1y; Above +1SD for 3y; Average for 5y

Author's Opinion

Compared to the previous half-year, gross revenue and NPI have improved due to the acquisition of France properties, while DPU remains similar due to an enlarged unitholder base. For debt, IREIT repaid the debt due in January 2024 following the divestment of Il∙lumina, with no refinancing requirement until Jan 2026.

For more information, check out:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and details of Singapore REIT

REIT Review - List of previous REIT review posts

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*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my findings and should not be considered professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.