IREIT Global

[frus]

I believe that iReit has both assets and liabilities in EUR. So the Debt/Equity ratio should not move simply because of a move in EUR/SGD. The value of the properties (in EUR terms) would have to fall.

[Dosser]

IREIT posted Q3 DPU of 1.41 cents. However, this only included contribution from the newly acquired Berlin property from August 6th. If you adjust for a full quarter's contribution (using the Q3 forecast DPU for the existing portfolio vs the actual Q3 result and then adjusting the difference for a full quarter), I get a "normalised" DPU of 1.61 cents for the quarter or annual 6.46 which gives you around 9.5% yield. NAV is now EUR 0.41 per share or SGD 62.7 cents, so current price of 67.5 cents is about 8% above book. There is a negative valuation adjustment for the newly acquired property of EUR 7.9MM which is not very well explained. Overall, it looks solid enough

Good call. Q4 DPU came in at 1.62 cents, so you were almost right on target:

http://infopub.sgx.com/FileOpen/IREIT_SG...eID=389929

(Vested)

[butcher]

Noted IREIT gearing have 42.6% which have exceeded the 40% gearing limit.

Just curious to know if there will be any penalty? (Not vested)

Source: http://reitdata.com/

[Nick]

Noted IREIT gearing have 42.6% which have exceeded the 40% gearing limit.  

Just curious to know if there will be any penalty?  (Not vested)

Source: http://reitdata.com/

The gearing limit is 45%

(Vested)

[butcher]

Noted Nick, appreciated. However, also curious to know what are the repercussion if any if the gearing exceeds the 45% limit?

[butcher]

Deutsche Telekom Subsidiary Exercises Option in IREIT Global’s Munster South Property

IREIT Global Group Pte. Ltd., as the manager of IREIT Global (”IREIT”), is pleased to announce
that Deutsche Telekom’s real estate leasing subsidiary, GMG Generalmietgesellschaft mbH
(“GMG”), will be renewing the lease extension option in the Münster South office building on the
existing rental rate. The Münster Campus is comprised of 3 buildings: 2 six-storey office
buildings, Münster North and Münster South, and an external multi-storey carpark. The total net
lettable area of the Münster Campus is 27,183 square metres (“sqm”) with 588 carpark spaces.
The initial lease term for the Münster South building will end on 31 March 2017 with 5 tenant
extension options of 2.5 years each. As per the lease agreement, GMG has notified IREIT of the
intention to exercise its option and continue to occupy 5 of the 6 floors in the Münster South
building. The Münster South building has approximately 12,218 sqm of net lettable office space of
which 1,796 sqm will be available for lease to other parties from 1 April 2017. The lease term for
the Münster North office building and carpark will expire on 31 March 2022.

IREIT’s Chief Executive Officer, Mr. Itzhak Sella confirms, “We are pleased that GMG has
affirmed its committment to remain in our Münster Campus. We believe in the long term
prospects of this property and look forward to working with Deutsche Telekom as our tenant for
many more years."

The vacancy rate in Münster is currently below 3% (2.6% as reported by Savills Research).
Average rental rates are stable and according to Colliers International, Münster experienced a
record take-up in the central business district (“CBD“) area of 80,300 sqm in 2015. The Münster
Campus is located in the Zentrum Nord office park, which is outside the CBD. In 2015, prime
rents in the Münster CBD averaged €13.50 per sqm per month, while in Zentrum Nord the
average rent was €9.00 per sqm per month.

Adina Cooper, Chief Investment Officer of IREIT notes, "The Münster Campus is one of the
newer properties in the area and we are pleased that our tenant is paying higher than average
rental rates of approximately €11.00 per sqm. We believe we will be able to attract new tenants
who will appreciate the quality of our building and lease this space.

Following the exercise of the option by GMG, on a pro forma basis, the weighted average lease
expiry of the Münster Campus as at 31 December 2015 will increase from 3.8 years to 4.9 years.

While IREIT has executed tenancy expansions for Allianz, Yamaichi, ST Microelectronics and
others, the Münster South renewal is by far the most significant leasing initiative since IREIT was
listed in August 2014.

- End -

About IREIT Global
IREIT Global (SGX-UD1U) which was listed on 13 August 2014, is the first Singapore listed REIT
established with the investment strategy of principally investing, directly or indirectly, in a portfolio
of income-producing real estate in Europe that is primarily used for office purposes, as well as
real estate-related assets.
IREIT Global’s portfolio comprises five freehold properties strategically located in the key German
cities of Berlin, Bonn, Darmstadt, Münster and Munich with total net lettable area of 200,603 sqm
and 3,441 car park spaces.

For IREIT Global enquiries, please contact:
Mr Choo Boon Poh
Chief Financial Officer
IREIT Global Group Pte. Ltd.
Tel: +65 6718 0598
Email: ir@ireitglobal.com

Important Notice
This Announcement is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for units in IREIT Global (“IREIT”, and the units in IREIT, the “Units”).
The value of the Units and the income derived from them may rise or fall. The Units are not obligations of, deposits in, or guaranteed by, IREIT Global Group Pte. Ltd., as manager of IREIT (the “Manager”), or any of its affiliates. Investors have no right to request the Manager to redeem their Units while the Units are listed.
It is intended that unitholders of IREIT may only deal in their Units through trading on Singapore Exchange Securities Trading Limited (the “SGX-ST”). Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. The past performance of IREIT or the Manager is not necessarily indicative of the future performance of IREIT or the Manager. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested.
This announcement may contain forward-looking statements that involve assumptions, risks and
uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in
forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative
examples of these factors include (without limitation) general industry and economic conditions, interest rate
trends, cost of capital and capital availability, competition, shifts in expected levels of property rental income,
changes in operating expenses, property expenses, governmental and public policy changes and the
continued availability of financing in the amounts and the terms necessary to support future business.
Investors are cautioned not to place undue reliance on these forward-looking statements, which are based
on the Manager's current view of future events.

http://ireitglobal.listedcompany.com/new...FHQ1.1.pdf

[laksaman57]

What I like about ireit are its 100% free hold properties. Effectively collecting dpu perpetually 👍

[GreedandFear]

What I like about ireit are its 100% free hold properties.  Effectively collecting dpu perpetually 👍

I like :

(1) Their strategy of buying prime properties in secondary cities and secondary properties in prime cities. This has worked well so far.
(2) Their long term leases with quality tenants
(3) Decent dividend yield of 7.5% backed by the aforementioned quality leases, however, until end of FY2016, policy was to distribute 100% of net income. From FY2017 policy is to distribute "at least 90%", hence dividend yield could fall.

What worries me is :

(1) The shares are trading at 77 cents but the NAV is 64 cents. That is a 20% premium to NAV which is uncomfortable for me. I prefer to buy at a discount to NAV and I would normally sell if the premium exceeds 5-10% (I think some premium is justified because you get to buy a building in a tax efficient REIT structure and in a more liquid share format)
(2) The management company was sold to a European real estate company. The new owner may not run the REIT as well as the old one and the new owner also wants to explore buildings outside of Germany and outside of the office space. This all adds uncertainty. In addition, new acquisitions would probably involve the issuance of more shares which is never a good thing when the shares are priced at a premium to NAV.
(3) Right now EUR is strengthening against SGD but that could change. Need to ensure that there is enough safety margin in the price to account for a potential FX loss.

I remain vested but I am tempted to divest.

[laksaman57]

What I like about ireit are its 100% free hold properties.  Effectively collecting dpu perpetually 👍

I like :

(1) Their strategy of buying prime properties in secondary cities and secondary properties in prime cities. This has worked well so far.
(2) Their long term leases with quality tenants
(3) Decent dividend yield of 7.5% backed by the aforementioned quality leases, however, until end of FY2016, policy was to distribute 100% of net income. From FY2017 policy is to distribute "at least 90%", hence dividend yield could fall.

What worries me is :

(1) The shares are trading at 77 cents but the NAV is 64 cents. That is a 20% premium to NAV which is uncomfortable for me. I prefer to buy at a discount to NAV and I would normally sell if the premium exceeds 5-10% (I think some premium is justified because you get to buy a building in a tax efficient REIT structure and in a more liquid share format)
(2) The management company was sold to a European real estate company. The new owner may not run the REIT as well as the old one and the new owner also wants to explore buildings outside of Germany and outside of the office space. This all adds uncertainty. In addition, new acquisitions would probably involve the issuance of more shares which is never a good thing when the shares are priced at a premium to NAV.
(3) Right now EUR is strengthening against SGD but that could change. Need to ensure that there is enough safety margin in the price to account for a potential FX loss.

I remain vested but I am tempted to divest.

Like Viva or LMIRT trust, mkt  already pricing in future growth and willingness to pay more for stable but lower yield. Ireit give investor great opportunity to invest into good quality FREEHOLD properties beyond just Germany, as compared to  Singapore reit with progressively shorter land lease.  Relatively  it's a very good buy and hold just, like lmirt/viva in their early  days when ppl shun them. Moreover with new mgr targeting logistic properties, it's in the right growth strategy.

[laksaman57]

Have accumulated LMIRT, Viva & Accordia in the past that paid off greatly now. I see same opportunity and accumulating Ireit now. Hope I will be fourth time right 😆