IREIT (UD1U) H1 2024 earnings summary

Executive summary

• Net property income for 1H2024 rose 22.8% year-over-year to €27.0m, driven by contributions from the B&M Portfolio, dilapidation costs paid by the main tenant at Berlin Campus, and rental income from Darmstadt Campus.

• Gross revenue increased 28.8% year-over-year to €36.6m, mainly from the B&M Portfolio acquisition and Berlin Campus income.

• Distribution per unit (DPU) grew 3.2% to €0.96 cents, with income to be distributed up 3.9% year-over-year.

• Portfolio comprises 53 properties across Germany, Spain, and France, with major new leases and refurbishments in Spain and Germany.

• Portfolio valuation at €855.6m as of 30 Jun 2024, with 89.8% occupancy and a 4.9-year WALE.

Financial highlights

• Net property income: €27.0m (+22.8% YoY); gross revenue: €36.6m (+28.8% YoY).

• Net change in fair value of investment properties: -€19.4m (improved from -€34.1m YoY).

• NAV per unit: €0.40 (S$0.58), down 2.4% (3.3% in S$) from Dec 2023.

• Aggregate leverage improved to 37.2% (from 37.9% at Dec 2023); interest coverage ratio 7.4x.

• Cash and cash equivalents increased to €71.5m, mainly from Il·lumina divestment proceeds.

Outlook and guidance

• European office and investment markets have stabilized but remain below 10-year averages; retail market shows resilience.

• Lower inflation, rising real wages, and expected rate cuts to support recovery in European real estate.

• Plans to reposition Berlin Campus into a multi-let, mixed-use asset in 2025, with advanced lease negotiations underway.

• Focus on securing new leases and renewals to improve occupancy.