EUROPE-FOCUSED real estate investment trust IReit Global on Tuesday (Nov 12) announced a portfolio occupancy of 89.6 per cent for its third quarter ended Sep 30, and suggested that the market there appears to have bottomed out and is showing the first signs of growth.
Its Q3 portfolio occupancy was a shade glummer than that of the previous quarter ending Jun 30 at 89.8 per cent, revealed the group in a bourse filing of its Q3 business update.
It attributed the “marginal” decrease to lower occupancy rates among the properties in its Spanish portfolio.
IReit Global’s portfolio comprises 53 properties – 44 in France, five in Germany and four in Spain. The French properties boast an occupancy rate of 100 per cent, and the German properties, 88 per cent.
The Spanish properties, which account for 15 per cent of the group’s portfolio, have an occupancy rate of 70.1 per cent.
In Q2, about 1,200 sq m was vacated in Parc Cugat Green, an office building in Barcelona, said the group. Advanced negotiations with three other potential tenants to take up leases in the currently vacant space in other properties in the country could push up occupancy in the Spanish portfolio to more than 77 per cent, it added.
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The weighted average lease expiry of the trust for the latest quarter stood at 4.6 years, down from 4.9 years in the previous quarter.
Its French properties have the longest weighted average lease expiry, at 6.9 years, compared to 6.6 years for the Spanish properties and 2.9 years for the German ones.
IReit Global believes office letting is gaining momentum, with volume increasing year on year for the second straight quarter in Q3 2024; however, it acknowledges an increased leaning towards newer and prime assets that are located in central business districts and compliant with ESG (environmental, social and governance) considerations.
It added that the retail market is showing an uptick in the demand for space, with retailers viewing physical retail as the key to their consumer-engagement strategy.
The trust expects its 2025 distribution to be affected because of the absence of income from its Berlin Campus, which it intends to reposition into a multi-let, mixed-use asset. It expects to obtain a building permit by the second quarter of 2025.
IReit Global said it will continue focusing on building a “diversified portfolio across asset classes and western European countries”.
Its units closed unchanged at S$0.29 on Tuesday.
