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The European real estate market has in general experienced rising rents, decreasing vacancy rates and attractive spreads between property yields and government bond yields.
With a portfolio backed by a blue-chip tenant base and none of the leases expiring in 2018, the operating performance of IREIT’s existing properties is expected to remain stable for the year. Ahead of the various lease expiries in 2019, IREIT has started discussions with the existing tenants for a possible extension in lease tenures. In respect of Berlin Campus, IREIT is expected to be notified by Deutsche Rentenversicherung Bund pertaining to the lease break option around the middle of 2018. The office space that is subject to the lease break option represents approximately 6.1% of IREIT’s total gross rental income as at 31 March 2018.
IREIT will make the last partial loan repayment of €1.275 million in May 2018 in accordance with the loan amortisation schedule for the short-term loan facility provided by HSH Nordbank AG. As previously announced, the maturity date of the remaining principal of €18.5 million has been extended by two years from July 2018 to August 2020, without amortisation until the maturity date.
Looking ahead, IREIT will focus its efforts on three key areas, namely acquisitions, upcoming lease expiries and debt maturities, in order to build a sustainable return for Unitholders.