IReit Global posts 14.7% fall in H2 DPU to 1.28 euro cents on higher expenses
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THE manager of Europe-focused IReit Global reported a distribution per unit (DPU) of 1.28 euro cents for the six months ended Dec 31, 2022, down 14.7 per cent from 1.50 euro cents for the same period in 2021.
This was due mainly to greater property operating expenses related to higher portfolio vacancy, increased tax costs, and management fees being 100 per cent paid in cash (up from 50 per cent in cash in FY2021), the real estate investment trust’s (Reit) manager said on Thursday (Feb 23).
Gross revenue rose 10.7 per cent to 31.6 million euros in the period, while net property income (NPI) grew 5.2 per cent to 24.4 million euros.
The Reit manager said that the increase in revenue in H2 2022 was due to contributions from its acquisition of 27 Decathlon retail properties across France in April 2021, and from the Reit’s Parc Cugat property in Spain.
For the full year ended Dec 31, 2022, DPU fell 8.2 per cent to 2.69 euro cents, while gross revenue gained 18.2 per cent to 61.7 million euros. NPI for FY2022, meanwhile, registered a 14.9 per cent increase to 48.8 million euros.
IReit’s weighted average lease expiry improved to five years as at Dec 31, 2022, from 3.8 years in 2021. This was the result of a six-year lease extension for its Bonn Campus, along with a 12-year lease for a data centre space at its Sant Cugat Green property in Spain, the manager said.
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Portfolio occupancy, however, was down to 88.3 per cent as at Dec 31, 2022, from 95.7 per cent in 2021. This was due mainly to the Reit’s Darmstadt Campus in Germany being vacant since December, after the departure of its sole tenant, Deutsche Telekom.
The vacancy contributed partially to IReit’s portfolio value dipping 2.5 per cent from 2021, to 950.5 million euros in 2022. This “may have some impact” on future distributions, the Reit manager said.
“We will continue to proactively engage our existing tenants to retain them, as well as focus on filling up the vacant spaces at IReit’s portfolio assets in 2023,” said chief executive Louis d’Estienne d’Orves.
Units of IReit Global closed 2.8 per cent or S$0.015 lower at S$0.515 on Thursday, prior to the earnings announcement.
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