IREIT Global - RHB Invest 2020-03-03: Stable High Yielding German Office Play; BUY

IREIT GLOBAL (SGX:UD1U) | SGinvestors.io IREIT GLOBAL (SGX:UD1U)

IREIT Global - Stable High Yielding German Office Play; BUY

  • We like IREIT Global (SGX:UD1U) – whose office portfolio comprises nine office assets valued at EUR630m – for its exposure to the resilient German economy and good quality stable tenant profile. It is also led by a capable sponsor and strategic investor.
  • IREIT Global’s yield is an attractive c.100bps, 200bps, and 800bps higher than its peers, the SREIT average, and 10-year German bonds, which we believe is due to a lack of analyst coverage and unfamiliarity over its assets.



Investment Highlights


A stable portfolio located across key German and Spanish cities.


Good quality and a stable tenant profile offers income stability...


…with near full occupancy since listing.


CPI indexed in-built rent escalations for all assets.


Minimal lease expiries until 2021, office rentals on an uptrend.


Spanish portfolio offers room for growth.


On the lookout for new CEO.


Acquisition of remaining 60% stake in the cards.


Minimally impacted by COVID-19, overseas SREITs could see more fund flows if the outbreak worsens in Asia.


Strong local sponsor and an experienced strategic investor.


Long-term growth based on four key pillars.


Fee structure based on DPU and growth.





Valuation



Trading at an attractive valuation when compared to its peers.






Vijay Natarajan RHB Securities Research | https://www.rhbinvest.com.sg/ 2020-03-03
SGX Stock Analyst Report BUY INITIATE BUY 0.92 SAME 0.92



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