REAL estate investment trust (Reit) IReit Global : UD1U 0% on Thursday (Aug 3) posted a distribution per unit (DPU) of 0.93 euro cent for the six months ended Jun 30, following a preferential offering in July enlarging its unit base. 

Its first-half DPU is 23.8 per cent lower than its restated DPU for the corresponding year-ago period, which stands at 1.22 euro cents after taking into account the new preferential offering units. The offering raised gross proceeds of around S$75.9 million to fund the acquisition of 17 retail properties in France and issued around 186 million new units. 

IReit Global’s distributable income fell by 24.3 per cent year on year (yoy) to 12.4 million euros (S$18.2 million), from 16.4 million euros. This was attributed to higher finance costs and tax expenses.

The Reit manager said the lack of car park and rental income due to the vacancy at Darmstadt Campus in Bonn, Germany, and one-off rent-free period in Bonn Campus, Munster Campus and Sant Cugat Green, impacted distributable income by 3.4 million euros and 1.4 million euros respectively. 

Its gross revenue decrease of 5.5 per cent to 28.4 million euros from 30.1 million euros was also due to these reasons, although it was partially offset by the increase in consumer price index indexation. 

Net property income also slipped 10.1 per cent to 22 million euros from 24.4 million, due to higher property operating expenses. 

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The manager noted that high inflation rates, tighter lending conditions and uncertain macroeconomic conditions continue to impact the European real estate market and capitalisation rates, resulting in a broad-based decline in the independent valuations of IReit Global’s properties. 

The Reit’s portfolio valuation therefore dipped 2.9 per cent to 922.7 million euros, as at Jun 30, from 950.5 million euros as at Dec 31, 2022. 

Overall occupancy also declined to 88.7 per cent, from 95 per cent a year earlier, as the Darmstadt Campus had been vacant since December 2022. 

Louis d’Estienne d’Orves, chief executive of IReit Global’s manager, noted that the departure of the large single tenant at Darmstadt Campus at end-November 2022 “highlighted the importance of active asset management and diversification” in its portfolio. 

Despite this, the Reit will maintain a “healthy” aggregate leverage of 34.2 per cent after the acquisition of the 17 retail properties in France. 

The manager noted that it was well below the regulatory limit of 50 per cent, providing “ample debt headroom” for future growth opportunities. 

Units of IReit Global closed at S$0.43 on Thursday, up 1.2 per cent or S$0.005, before the release of its financial results.