3 Things That Investors Should Know About IREIT Global’s Latest Financial Performance

IREIT Global (SGX: UD1U) has five freehold properties in Germany. These properties are located in the key German cities of Berlin, Bonn, Darmstadt, Münster and Munich.

The REIT recently announced its 2017 fourth quarter (4Q 2017) earnings. In this article, I will share three things from the latest presentation.

An overview of the financial metrics

Source: IREIT Global’s Results Presentation

The above is a slide from IREIT Global’s 4Q 2017 results presentation.

The growth in revenue and net property income were due to continued strong rental income from its portfolio of five quality freehold assets in Germany, as well as a 10% rental uplift at Bonn Campus after the inflation-linked hurdle rate was crossed in December 2016.

The reduction in income to be distributed to unitholders was due to income retention in line with the REIT’s distribution policy, which directly impacted distribution per unit.

Tenant mix

Source: IREIT Global’s Results Presentation

The above is a slide showing IREIT Global’s tenant mix.

Here, we can see that the top five tenants accounted for 97.4% of the total rental income. What’s more, Deutsche Telekom accounts for 52.3% of the total income.

Thus, investors should be comfortable with the tenant concentration risk when investing in the REIT.

Lease expiry profile

Source: IREIT Global’s Results Presentation

The above is a slide showing the lease expiry profile, as at 31 December 2017.

Overall, IREIT Global has a relatively long lease expiry profile of 5.1 years (based on gross rental income), with no expiry from now until 2018.

One positive of its lease expiry profile is that only around 17% of leases will expire before 2022. This will provide strong visibility of income for the REIT in the next few years.

We believe we’ve identified a dividend dynamo whose financials are strong enough to qualify its dividend as “safe” – and have profiled this stock in a research report that’s now available to download completely free of charge. Simply click here to claim your copy today!

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.