1Q2019 Results Presentation 15 May 2019
Important Notice This presentation may contain forward-looking statements that involve assumptions, risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from other developments or companies, shifts in expected levels of occupancy rate, property rental income, charge out collections, changes in operating expenses (including employee wages, benefits and training costs), governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the current view of management on future events. The information contained in this presentation has not been independently verified. No representation or warranty, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Neither IREIT Global Group Pte. Ltd. (the “ Manager ”) or any of its affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising, whether directly or indirectly, from any use, reliance or distribution of this presentation or its contents or otherwise arising in connection with this presentation. The past performance of IREIT Global (“ IREIT ”) is not indicative of the future performance of IREIT. Similarly, the past performance of the Manager is not indicative of the future performance of the Manager. The value of units in IREIT (“ Units ”) and the income derived from them may fall as well as rise. Units are not obligations of, deposits in, or guaranteed by, the Manager or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Investors should note that they will have no right to request the Manager to redeem or purchase their Units for so long as the Units are listed on the Singapore Exchange Securities Trading Limited (the “ SGX-ST ”) . It is intended that unitholders of IREIT may only deal in their Units through trading on the SGX-ST. Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. This presentation is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for Units. 2
Agenda Slide 1 About IREIT Global 4 2 Key Highlights 6 3 Portfolio Summary 14 4 European Market Review 17 5 New Strategic Investor 20 6 Looking Ahead 22 3
1 About IREIT Global Berlin Campus 4
About IREIT Global First Singapore-listed REIT with Europe-focused Mandate Investment Mandate: Principally invests, directly or indirectly, in a portfolio of income-producing real estate in Europe which is used primarily for office, retail and industrial (including logistics) purposes, as well as real estate-related assets Current Portfolio: 5 freehold office assets in Germany, with total NLA of c.200,600 sqm and valuation of €504.9m Manager: IREIT Global Group Pte. Ltd., a subsidiary of pan-European asset management and investment group Tikehau Capital Distribution Policy: At least 90% of annual distributable income; distributions to be made on a semi-annual basis Valuation as at 31 Dec 2018 Net Lettable Area as at 31 Mar 2019 Concor Park, Concor Park, Berlin Berlin 14.0% 15.6% Campus, Campus, 39.4% 37.8% Münster Münster Campus, Campus, 9.8% 13.6% Bonn Darmstadt Darmstadt Bonn Campus, Campus, Campus, Campus, 21.4% 17.1% 15.1% 16.3% 5
Key Highlights 2 Bonn Campus 6
Key Figures At A Glance Financial Portfolio Capital Management 3 Management 3 Performance Gross Revenue Occupancy Rate Aggregate Leverage +1.4% YoY 98.6% 38.0% Distribution per Unit Appraised Value Interest Rate -2.7% YoY 1 €504.9m 1.5% WALE 4 Annualised DPU Yield % of Loans Hedged 7.6% 2 4.2 years 100.0% 1 In S$ terms 2 Based on IREIT’s 1Q2019 DPU of 1.42 Singapore cents and closing unit price of S$0.745 as at the last trading day of 1Q2019 3 As at 31 Mar 2019 4 Weighted average lease to expiry 7
Key Highlights 1Q2019 net property income was 1.8% lower than that of 1Q2018 mainly due to the increase in property operating expenses by 30.2% DPU for 1Q2019 came in at 1.42 Singapore cents, down 2.7% YoY, representing an annualised distribution yield of 7.6% 1 Stable Results Portfolio occupancy rate as at 31 Mar 2019 remains unchanged QoQ at 98.6% WALE at 4.2 years, with 91.3% of the portfolio leases due for renewal from FY2022 and beyond Healthy Portfolio On 1 Feb 2019, IREIT drew down the new loan facilities of € 200.8m to repay the then existing borrowings, taking advantage of the current low interest rate environment With the successful refinancing of its term loans, IREIT will benefit from Successful comparatively lower interest rates and not have any refinancing requirements until Refinancing 2026 1 Based on IREIT’s 1Q2019 DPU of 1.42 Singapore cents and closing unit price of S$0.745 as at the last trading day of 1Q2019 8
Operating & Financial Performance 1Q2019 1Q2018 (€ ‘ 000) Variance (%) Gross Revenue 8,696 8,579 1.4 Property Operating Expenses (1,109) (852) 30.2 Net Property Income 7,587 7,727 (1.8) Income Available for Distribution 6,285 6,316 (0.5) Income to be Distributed to Unitholders 5,657 5,684 (0.5) 1Q2019 net property income was 1.8% lower year-on-year mainly due to the increase in property operating expenses by 30.2%. As explained in the results announcement for 4Q2018, the facility management fees for FY2018 were recognised in 4Q2018 following the finalisation of the services contracts In addition, there was also an increase in repair and maintenance expenses for the upkeep of the properties 9
Distribution Per Unit Distribution per Unit 1Q2019 1Q2018 Variance (%) Before Retention € cents 0.99 1.00 (1.0) - S$ cents 1.58 1 1.63 (3.1) - After Retention € cents 0.89 0.90 (1.1) - 1.42 1 S$ cents 1.46 (2.7) - DPU in S$ terms was impacted by weaker SGD/EUR exchange rates 1 1Q2019 DPU translates to an annualised distribution yield of 7.6% 2 1 The DPU in S$ was computed after taking into consideration the forward foreign currency exchange contracts entered into to hedge the currency risk for distribution to Unitholders and is for illustrative purpose only. IREIT makes distributions on a semi-annual basis based on its half-yearly results and the next distribution will be for the period from 1 Jan 2019 to 30 Jun 2019 2 Based on IREIT’s closing unit price of S$0.745 as at the last trading day of 1Q2019 10
Financial Position € ‘000 As at 31 Mar 2019 As at 31 Dec 2018 Variance (%) Investment Properties 504,900 504,900 - Total Assets 527,723 528,875 (0.2) Borrowings 199,429 193,215 3.2 Total Liabilities 228,854 223,268 2.5 Net Assets Attributable to Unitholders 298,869 305,607 (2.2) NAV per Unit (€/unit) 1 0.47 0.48 (2.1) NAV per Unit (S$/unit) 2 0.72 0.75 (4.0) The decrease in NAV per Unit in S$ terms was more pronounced due to a weaker EUR/SGD exchange rate 1 The NAV per Unit was computed based on net assets attributable to Unitholders as at 31 Mar 2019 and 31 Dec 2018, and the Units in issue and to be issued as at 31 Mar 2019 of 634.6m (31 Dec 2018: 633.4m) 2 Based on S$1.5223 as at 31 Mar 2019 and S$1.5618 as at 31 Dec 2018 extracted from MAS website 11
Capital Management As at 31 As at 31 Debt Maturity Profile Mar 2019 Dec 2018 € ’million Post-refinancing Gross Borrowings (as at 1 Feb 2019) 200.8 193.5 Outstanding (€’m ) 200.8 Aggregate Leverage 1 38.0% 36.6% Pre-refinancing (as at 31 Dec 2018) Effective Interest 1.5% 2.0% Rate per Annum 2 96.9 96.6 Interest Coverage 10.0x 8.4x Ratio 3 Weighted Average 6.8 years 1.1 years Debt Maturity FY2019 FY2020 FY2021 …. FY2025 FY2026 On 1 Feb 2019, IREIT drew down the new loan facilities of €200.8m maturing in Jan 2026 to repay the then existing bank borrowings of € 193.5m Concurrent to the debt drawdown, interest rate swaps were entered into to hedge 100% of the interest of the new loan facilities, resulting in an all-in cost of debt of c.1.5% p.a. over the loan tenure 1 Based on total debt over deposited properties 2 Effective interest rate computed over the tenure of the borrowings 3 Based on respective net property income over interest expense for 1Q2019 and 4Q2018 12
Forex Risk Management Use of € -denominated borrowings acts as a natural hedge to match the currency of assets and cashflows at the property level Distributable income in € will be paid out in S$. From FY2019, in accordance with its currency hedging policy, IREIT will be hedging approximately 80% of its income to be repatriated from overseas to Singapore on a quarterly basis, one year in advance 13
Portfolio Summary 3 Darmstadt Campus 14
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