EUROPE-FOCUSED IReit Global : UD1U 0%’s portfolio occupancy grew to 91.5 per cent for the first quarter ended Mar 31, up slightly from 90.4 per cent in the preceding quarter, it said in a bourse filing on Monday (Apr 29).

This was attributed to new leases and its divestment of Spanish property Il-lumina, which has a “low occupancy rate” of 72 per cent as at Dec 31, 2023.

Its portfolio is valued at 874.5 million euros (S$1.3 billion), based on gross rental income as at Mar 31, 2024. This is down from 899 million euros, as at Dec 31.

The weighted average lease expiry was 4.9 years in Q1 2024, unchanged from the previous quarter.

The aggregate leverage for the quarter stood at 37 per cent, down from 37.9 per cent, due to repayment of existing borrowings related to its divestment of Il-lumina.

The weighted average interest rate remained unchanged at 1.9 per cent per annum as at Mar 31. The real estate investment trust (Reit) noted that 97.1 per cent of all its bank borrowings are hedged, and all debts will mature from January 2026 onward.

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IReit Global recorded a lettable area of 425,116 square metres across its 53 properties in Germany, France and Spain.

It has “well-staggered leases with blue-chip tenants” and actively manages its assets to optimise its portfolio, the Reit said.

Looking ahead, IReit Global said the European real estate market should improve this year, but continues to face challenges from lower but still-elevated financing costs compared to the last five years, high inflation and ongoing adjustments in workplace arrangements and workplace devaluations.

“The repricing of assets may bring about attractive investment opportunities, allowing IReit to continue to diversify and strengthen its long-term income streams,” it added.

It expects its portfolio to benefit from positive rental escalations, the end of rent-free periods granted to tenants within its portfolio, and a full-year contribution from key tenant B&M’s portfolio.

In 2024, its manager will also continue to increase occupancy rates of its assets, particularly Darmstadt Campus. It also plans to transform Berlin Campus into a multi-let asset if the main tenant leaves in December 2024.

Units of IReit Global closed unchanged at S$0.325 on Tuesday, before the announcement.