IREIT Global’s manager accepts non-binding offer for 80% stake

iREIT Global logo

IREIT Global’s manager accepts non-binding offer for 80% stake

By: 
Goola Warden
26/05/16, 01:12 pm

SINGAPORE (May 26): IREIT Global’s manager has accepted a non-binding offer from Tikehau Capital, a pan-European asset management firm and investment group, to acquire 80% of the manager.

The offer from Tikehau Capital is non-binding, and is subject to certain conditions, including the receipt of regulatory approvals and due diligence to be conducted by Tikehau Capital, according to the announcement. Tikehau Capital has some 7.55 billion euros in assets under management of which 794 million euros are in real estate.

“Tikehau’s extensive pan-European network combined with strong local operational expertise and existing pipeline of real estate transactions in Europe is expected to contribute significantly to IREIT’s growth. The proposed acquisition would also enable Tikehau Capital to further consolidate its position in Asia from Singapore and to expand its pan European real-estate footprint,” says Tikehau Capital’s spokesman in a statement.

However, Religare Research wonders why Tikehau would want to own a majority stake in the manager without owning a controlling stake in IREIT Global itself. “It can be ousted anytime,’ according to Religare.

When contacted, Itzhak Sella, CEO of IREIT Global’s manager who also owns 16% of the manager, says, “Due diligence will take four to five weeks, and Monetary Authority Licensing a few months.” All REIT managers must hold a Capital Markets Services Licence by the MAS. 

Chinese property tycoon Tong Jinquan holds 65% of IREIT Global’s manager, and some 49% of the units in IREIT Global while Lim Chap Huat, founder and owner of Soilbuild Group holds 19% of both manager and REIT. Tong also owns 31% of Viva Industrial Trust’s manager and 49.5% of units in VIT.

IREIT Global in turns holds 441.4 million euros of five freehold office campus type properties in Berlin, Bonn, Darmstadt, Münster and Munich, in Germany. For the three months to March 31, it announced a distribution per unit equivalent to 1.58 cents giving an annualised DPU of 8.8%. Units in IREIT Global are trading at a 16% premium to its net asset value stood of 41 euro cents or 62 cents. At 1.07pm, units of IREIT Global were trading at 72 cents.

Management fees for the three months to March 31 rose 46.7% y-o-y to 641,000 euros or an annualised 2.56 million euros ($3.9 million) largely due to an enlarged asset base which grew by 52% over the year. The REIT’s base fees are 10.0% of IREIT’s annual distributable income and performance fee is 25% of DPU growth.

About two years ago, Canadian REIT managers were internalised at around 10 times earnings. IREIT Global’s manager does not announce earnings.

Analysts are expecting Tong to divest of his 49% stake in IREIT Global. Assuming he sells both manager and REIT units, he could net more than $200 million.

Right timing: Awaiting rebound amid accelerated decline

SINGAPORE (June 22): Here are two charts for your technical analysis this week: STI daiiy (3,356) The Straits TImes Index fell almost 70 points in the past five sessions after falling 80 points a week earlier. Down momentum is strong, but short-term indicators are becoming increasingly oversold. Short-term stochastics is at the bottom of its range, and 21-day RSI is at 30, a low level. ADX is at 32, a high level, suggesting that prices are likely to hit an excessively oversold level soon, at around mid-week next week. Volume was elevated on June 22, but once this abates, the index sh....
Read More >>

Noble up 30% on securing trade finance facilities, debt restructuring plan

SINGAPORE (June 22): Debt-laden commodities trader Noble Group said on Friday it had secured US$100 million ($136 million) in trade finance facilities from a group of investors, winning fresh support for a US$3.4 billion debt restructuring plan that is key to its survival. In a regulatory statement, Noble, once Asia's largest commodity trader, said a consortium of investors, which includes perpetual security holders Value Partners and Pinpoint Asset Management, will provide the three-year financing. The consortium, which owns about 5% of Noble stock, has agreed to back the restructuring. ....
Read More >>

Ho Bee to get a recurrent income boost from Ropemaker acquisition: Maybank

SINGAPORE (June 22): Maybank KimEng is raising Ho Bee Land’s FY18-20 EPS by 7-22% after incorporating the developer’s recent acquisition of Ropemaker Place in the UK. See: Ho Bee Land acquires Ropemaker Place in London for $1.16 bil Maybank said the deal puts Ho Bee’s conservative balance sheet to work and should enhance its recurring EBIT by 39%. And at a 7% discount to the vendor’s asking price and with yields at almost 50bps higher than prime office yields in the same locality, the price paid appears reasonable, added Maybank. After snapping up Ropemaker Place, a Grade A of....
Read More >>
High-value jobs, skilled talent in high supply at Iskandar Malaysia

SINGAPORE (June 18): Most companies setting up a division overseas struggle to find the right talent