IREIT Global - DBS Research 2024-08-08: No Pain, No Gain

• Improved earnings driven by backfilling at Darmstadt Campus and additional income from B&M portfolio.
• Berlin Campus to undergo a redevelopment project that will enable the asset to double rent.

1H24 revenues and NPI were significantly higher y-o-y

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• Partly also due to income from the Darmstadt Campus which was previously vacant

Additionally, dilapidation costs for the Berlin Campus were also recognised.

• EUR5.2mil in dilapidation costs was recognised for the six-month period from January 2024 to June 2024.
• A total of EUR15.5mil in dilapidation cost will be received, equivalent to 16 months of rent at the Berlin Campus.
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Excluding the EUR5.2mil in dilapidation cost recognised in 1H24, revenue would still have been ~10.6% higher y-o-y.

Distributable income and DPU were also higher y-o-y

• IREIT Global's 1H24 distributable income was 3.9% higher y-o-y.
• 1H24 IREIT Global's DPU of 0.96 EUR cents was 3.2% higher y-o-y despite the retention of 10% of income for working capital and CAPEX. The EUR5.2mil in dilapidation cost recognised in 1H24 was also retained for the repositioning of the Berlin Campus. 1H24 DPU made up only ~46% of our FY24 projections, slightly below our estimates
• The manager intends to retain the entire EUR15.5mil in dilapidation over the next few quarters for the Berlin Campus redevelopment. Retained income is to be directed towards the redevelopment cost.

Portfolio occupancy fell marginally to 89.8%

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Dale LAI DBS Group Research | Derek TAN DBS Research | https://www.dbs.com/insightsdirect/ 2024-08-08 SGinvestors.io

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