IREIT Global (IPO)

IREIT Global (IPO): Has lodged its preliminary prospectus, and will be the first SGX-listed office REIT with a sole focus on Europe. The public invitation will be priced at $0.88 per unit, and comprise 169.3m shares. Another 253.9m units will be subscribed by Chinese tycoon Tong Jinquan, Chairman of real estate developer Summit Group. With Summit Group as the strategic partner, IREIT Global will have the right of first refusal to buy over Summit’s properties. In total, IREIT will raise gross proceeds of $372.4m from the IPO. IREIT’s current portfolio encompasses four high quality assets in strategic German cities, i.e. Bonn, Darmstadt, Münster, and Munich, and the REIT also expects to have an initial exposure in the UK. The weighted average lease to expiry (WALE) stands at 7.6 years, with potential rent uplift, subject to increases in inflation. IREIT is expecting to pay a 7.6% annualized yield in FY14, and projects an 8.0% yield for FY15-16. Aggregate leverage stands at ~33.1%. Backed by NAV of $0.78, IREIT Global is priced at 1.1x P/B.