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This will be a very quick update on IREIT Global.
When I blogged about IREIT Global in February, I said I wasn't doing a Chicken Little because the vacant asset in Darmstadt would be progressively filled.
I also said that rental escalation was likely to continue as inflation remained elevated in Europe which would lead to higher asking rents as rents were linked to CPI.
The latest news from the management of IREIT Global is that 25% of Darmstadt Campus has been leased to a German federal government body.
The lease has rent secured at the prevailing market rate and it starts on the 1st of June and will last for 15 years.
Yes, 15 years.
This development is encouraging.
I believe that IREIT Global's management is competent and that the REIT owns quality assets which are very desirable.
Regular long time readers might remember that I also like the fact that IREIT Global's sponsors own approximately 50% of the REIT's units which means they have plenty of skin in the game.
Although this latest development is very good news, 75% of the asset in Darmstadt still needs to be filled.
So, I remind myself there is no hurry to increase my investment in the REIT as we are not out of the woods yet.
I will wait and see while my war chest continues to be refilled by incoming dividends.
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14 comments:
Dear AK,
I read about your experience with intermittent fasting. I have been trying it out recently. Must say that its very effective in aiding weight loss. If anyone needs to lose weight for health reasons, always worth a consideration. But, I cannot do one meal a day. That requires too much discipline liao. (;
To the main point of the post. I have been a long time reader. I agree with your thoughts about ireit. Financial position is not a concern. Properties on freehold land. And German properties are very well positioned. I looked at google maps to verify the annual report. Darmstadt for example, is walking distance from the main train station. All in all, nothing to worry about till the next refinancing in 2024.
I think a more stable currency exchange + higher occupancy can only be positive for the reit.
Hi passive investor,
I agree that one meal a day intermittent fasting is very demanding and most people won't be able to do it. -.-"
I do like IREIT Global for the various reasons I talked to myself about in the past and they are still valid points. :)
I am also happy to note that the Euro has appreciated against the S$ as the ECB continues to increase interest rate to fight inflation.
All else being equal, this would boost NAV and also income distribution in S$ terms.
Good luck to both of us. :D
Dear AK,
When I saw your blog mentioning you did OMAD for a couple of months, I was very impressed with your perseverance and discipline. Its very very difficult to do and not cheat along the way.
Please continue to speak to yourself loudly. I benefit from the ideas when I eavesdrop. I have no exposure to our local banks and would look forward to the next correction as well.
I thoroughly agree ireit is a fundamentally sound reit, that is enough said. Assuming MAS does not continue to appreciate our local currency, a stronger Euro would provide some tailwind.
I would like to apologise for one wrong statement in my post. I relooked at the annual report. The next time they have to repay loans would be in 2026 and not 2024.
All the best AK. Wish you good health.
Do you keep the distribution as Euro and convert it later at your own or the bank would direct convert it to SGD for you?
Hi passive investor,
It really wasn't too difficult because I progressed from OMAD from 16 hours intermittent fasting.
So, my body was already used to a longer fasting period and OMAD meant shrinking the eating window to just 2 hours a day for me.
However, I lost so much weight that people around me started to comment and it got my mom worried.
I found out I was borderline underweight and decided to abandon OMAD.
It was just too difficult to get sufficient nutrition doing OMAD.
As for IREIT's refinancing, yes, they have no refinancing requirement until 2026 which is one reason why I like the REIT.
If we take care of the downside, the upside should take care of itself. :)
Wishing you good health too. :D
Hi Andrew,
I have no use for EUR and simply accept the dividend in SGD at the prevailing exchange rate.
Thanks! Great that I'm not the only one who thinks that way too.
Hi Andrew,
I will leave the speculative trading of EUR/SGD to the FOREX traders.
That is way too stressful for a simple investor for income like me to do. ;p
Hi AK, looks like IREIT is going to France as well! And we get to participate in the preferential offering.
hi AK,
with a 75% empty space in germany and then now I see that they are going to buy some property in france and need money, do you still think this is a good buy? the pricing looks low now compared to what i bought it at (55cents) but am thinking it will go lower currently with the france purchase.
Hi keng,
They are already in France. ;p
They are expanding their footprint. :D
Hi E,
I expect their Darmstadt asset in Germany to backfill slowly.
As for the proposed purchase of 17 properties in France, it would further diversify the income base with relatively long master leases.
I rather like the idea. :)
Oh ya you are right.
Merci! :P
Hi keng,
Pas de problème mon ami. ;p
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