IREIT Global posts 9.6% decline in 3Q DPU to 1.42 cents after hedging and income retention

IREIT Global posts 9.6% decline in 3Q DPU to 1.42 cents after hedging and income retention

By: 
Michelle Zhu
10/11/17, 07:50 am

SINGAPORE (Nov 10): The manager of IREIT Global has announced a distribution per unit (DPU) of 1.42 cents for 3Q17, down 9.6% from its 3Q16 DPU of 1.57 cents.

This comes after taking into consideration forward foreign currency exchange contracts entered into to hedge the currency risk for distribution to unitholders, as well as the retention of part of the REIT’s distributable income for the period.

Without factoring in retention, DPU for 3Q would have been 1.6 cents, up 1.9% from 1.57 cents a year ago.

In euro terms, total distribution per unit for the quarter was 10.7% lower at 0.92 € cent compared to 1.03 € cents in 3Q16, after factoring retention.

Gross revenue for the quarter grew 1.7% to €8.7 million as net property income (NPI) increased to €7.9 million, up 2.3% from €7.7 million in the previous year, underpinned by firm rental contribution from its portfolio of five office assets in Germany.

Similarly, distributable income rose by 1.6% year-on-year for 3Q17.

As at end-Sept, IREIT’s overall portfolio occupancy rate was close to 100% with a weighted average lease expiry of 5.3 years.

In a Thursday filing, the manager says one of IREIT’s key tenants at Concor Park has exercised its prolongation option to extend its lease for another three years, one year ahead of its lease expiry.

It adds that the REIT has undertaken further hedging in respect of its distribution for FY18

IREIT Global has also established a formal currency hedging policy for its income to be repatriated from overseas to Singapore starting from FY19 which will based on the use of currency forwards on a quarterly basis to hedge approximately 80% of the expected EUR-denominated income to be repatriated, one year in advance.

“Looking ahead, we will forge ahead with our growth strategy to grow and diversify our portfolio across Europe to enhance IREIT’s long-term income and returns for unitholders,” says Aymeric Thibord, CEO of the manager.

Units in IREIT Global closed 0.65% lower at 76 cents on Thursday. 

Sasseur REIT rides on China's love for luxury goods

SINGAPORE (Apr 23): Following a site visit to Sasseur REIT’s outlet malls – Chongqing mall and Hefei mall – during their annual Spring sale, the REIT has attracted the attention of Phillip Capital. In an unrated report on Monday, analyst Natalie Ong says, “Sasseur’s outlet malls not only offer large discounts on branded goods targeted at the middle class, brand-conscious consumer, but also incorporate numerous activities and entertainment programmes to engage different age group.” According to Ong, luxury retail demand is expected to grow in China. Globally, Chinese consumers....
Read More >>

Don't demonise China but neither be its vassal state: Ho Kwon Ping

SINGAPORE (Apr 23): The current United States and China trade tensions, businessman Ho Kwon Ping thinks, is not about a trade war but about a paradigm shift towards China becoming a major global player who does not want to play by Western rules. Ho says: “The current US-China tensions are not only not about the trade war, it is not even about geopolitical or geo-economic rivalry. It is about an entire paradigm shift in civilisational relationships which has not happened for the last 200 to 300 years ever since the ascendancy of Western civilisation to become the dominant civilisation in t....
Read More >>

UOB KayHian remains positive as SPH turns to student accommodation to arrest flagging media business

SINGAPORE (Apr 23): Despite continued weakness in its core media business, UOB Kay Hian is staying positive on Singapore Press Holdings (SPH) on the back of its foray into the student accommodation segment. SPH last week announced it has acquired a portfolio of three purpose-built student accommodation (PBSA) assets in the UK for £134 million ($237 million). See: SPH expands UK student dorm portfolio with $237 mil acquisition The assets span three cities in the UK – Southampton, Sheffield and Leads – and has a total capacity of 1,243 beds, bringing SPH’s total portfolio to over....
Read More >>