IREIT Global : Financial Statement (834 KB)

(a real estate investment trust constituted on 1 November 2013 under the laws of the Republic of Singapore)

IREIT GLOBAL

CONDENSED INTERIM FINANCIAL INFORMATION AND DISTRIBUTION ANNOUNCEMENT FOR THE HALF YEAR FROM 1 JANUARY 2022 TO 30 JUNE 2022

Introduction

IREIT Global ("IREIT") is a Singapore real estate investment trust with the investment strategy of principally investing, 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.

IREIT's current portfolio comprises five office properties in Germany, strategically located in Berlin, Bonn, Darmstadt, Münster and Munich (the "German Portfolio"), five properties in Spain, located in Madrid and Barcelona (the "Spanish Portfolio") and 27 retail properties in France (the "French Portfolio").

German Portfolio

As at 30 June 2022, the German Portfolio has an aggregate net lettable area of approximately 201,100 square metres which comprises the Bonn Campus, Darnstadt Campus, Münster Campus, Concor Park and Berlin Campus.

Spanish Portfolio

As at 30 June 2022, the Spanish Portfolio has an aggregate lettable area of approximately 87,700 square metres which comprises Delta Nova IV, Delta VI, Il-lumina and Sant Cugat Green (the "Initial Spanish Portfolio"), which

IREIT acquired a 40% interest in December 2019 and the remaining 60% interest in October 2020; and Parc Cugat, which was acquired in September 2021.

The acquisition of Parc Cugat in September 2021 was financed through a combination of external bank borrowings and internal cash resources.

French Portfolio

In July 2021, IREIT completed the acquisition of a portfolio of 27 retail properties (the "France Acquisition") located in France. The French Portfolio has an aggregate lettable area of approximately 95,500 square metres.

The France Acquisition was financed through a combination of external borrowings and equity fund raising. The equity fund raising comprised a placement (the "Placement") of new Units to an investor and a pro rata non- renounceable preferential offering (the "Preferential Offer") of new units ("Units") in IREIT to existing unitholders

("Unitholders").

IREIT is managed by IREIT Global Group Pte. Ltd. (the "Manager").

Basis of preparation

The condensed interim financial information for the half year from 1 January 2022 to 30 June 2022 has been prepared in accordance with International Accounting Standards (IAS) 34 Interim Financial Reporting issued by the International Accounting Standards Board, and are drawn up in accordance with the relevant provisions of the trust deed entered into on 1 November 2013 and as amended and restated by an amending and restating deed dated 14 July 2014, supplemented by the first supplemental deed dated 6 November 2015, second supplemental deed dated 9 May 2018 and third supplemental deed dated 30 March 2020 and the relevant requirements of the Code on Collective Investment Schemes issued by the Monetary Authority of Singapore. The condensed interim financial information do not include all the information required for a complete set of financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the financial position and performance of IREIT and its subsidiaries (the "Group") since the last annual financial statements for the year ended 31 December 2021.

1

IREIT GLOBAL

CONDENSED INTERIM FINANCIAL INFORMATION AND DISTRIBUTION ANNOUNCEMENT FOR THE HALF YEAR FROM 1 JANUARY 2022 TO 30 JUNE 2022

Distribution policy

IREIT's current distribution policy is to distribute at least 90% of its annual distributable income for each financial

year, with distributions being made to the Unitholders on a semi-annual basis. The actual level of distribution will be determined at the Manager's discretion, having regard to funding requirements, other capital management

considerations and ensuring the overall stability of distributions.

SUMMARY OF CONSOLIDATED RESULTS OF IREIT GLOBAL

€'000	1H 2022	1H 2021	Variance (%)
Gross revenue	30,070	23,646	27.2
Net property income	24,435	19,327	26.4
Income available for	18,233	15,149	20.4
	distribution
Less: Income retained	(1,823)	(1,515)	20.4
Income to be distributed to	16,410	13,634	20.4
	Unitholders
Total distribution per Unit
		1H 2022	1H 2021	Variance (%)
Before retention
-	€ cents	1.57	1.59(1)	(1.3)
After retention
-	€ cents	1.41	1.43(1)	(1.4)

Footnotes:

1. On 30 June 2021, IREIT issued 11,372,868 new Units ("the Placement Units") to an investor pursuant to the Placement. Out of the distribution for 1H2021 of 1.43€ cents per Unit, an advanced distribution
   (the "Advanced Distribution") of 1.42€ cents per Unit for the period from 1 January 2021 to 29 June
   2021, being the day immediately prior to the date on which the Placement Units were issued, was declared on 6 August 2021. The distribution following the Advanced Distribution comprising income distributed to Unitholders from 30 June 2021 to 31 December 2021 was declared on 25 February 2022.

2

IREIT GLOBAL

CONDENSED INTERIM FINANCIAL INFORMATION AND DISTRIBUTION ANNOUNCEMENT FOR THE HALF YEAR FROM 1 JANUARY 2022 TO 30 JUNE 2022

1(a)(i) Unaudited Consolidated Statement of Profit or Loss and Other Comprehensive Income

	Note	1H	1H	Variance
		2022	2021
		(€'000)	(€'000)	(%)
Gross revenue	1	30,070	23,646	27.2
Property operating expenses		(5,635)	(4,319)	30.5
Net property income	1	24,435	19,327	26.4
Finance costs	2	(2,921)	(2,227)	31.2
Management fees	3	(1,823)	(1,595)	14.3
Trustee's fees		(105)	(76)	38.2
Administrative costs and other trust	4	(1,791)	(1,106)	61.9
expenses
Net change in fair value of financial	5	19,476	2,948	560.7
derivatives
Net change in fair value of investment	6	27,518	27,605	0.3
properties
Profit before tax		64,789	44,876	44.4
Income tax expense	7	(8,752)	(5,981)	46.3
Profit for the period, before		56,037	38,895	44.1
transactions with Unitholders
Distribution to Unitholders		(16,410)	(13,634)	20.4
Profit for the period, after transactions		39,627	25,261	56.9
with Unitholders
Distribution Statement
Profit for the period, before transactions		56,037	38,895	44.1
with Unitholders
Distribution adjustments	9	(37,804)	(23,746)	59.2
Amount available for distribution to		18,233	15,149	20.4
Unitholders
Earnings per unit (€ cents)
Basic and diluted	8	4.85	4.07	19.2

Notes to Unaudited Consolidated Statement of Profit or Loss and Other Comprehensive Income

1. Gross revenue for 1H 2022 registered an increase of €6,424,000 or 27.2% compared to that of 1H 2021, contributing to the increase in net property income of €5,108,000 or 26.4% over the same period. These were due mainly to the contribution from the acquisition of the French Portfolio and Parc Cugat in 3Q

2021. Included as part of gross revenue were the following:

	1H 2022	1H 2021
	(€'000)	(€'000)
Rental income	23,874	18,795
Service charge income	4,262	3,319
Carpark income	1,782	1,513
Other income	152	19
Gross revenue total	30,070	23,646

3

IREIT GLOBAL

CONDENSED INTERIM FINANCIAL INFORMATION AND DISTRIBUTION ANNOUNCEMENT FOR THE HALF YEAR FROM 1 JANUARY 2022 TO 30 JUNE 2022

1(a)(i) Unaudited Consolidated Statement of Profit or Loss and Other Comprehensive Income (continued)

Notes to Unaudited Consolidated Statement of Profit or Loss and Other Comprehensive Income (continued)

1. Finance costs comprise interest expense on loans and interest rate swaps, amortisation of interest cap premiums and upfront debt transaction costs. The increase of €694,000 or 31.2% compared to that of 1H 2021 was mainly due to the finance costs incurred for the term loan facility entered into for the acquisition of the French Portfolio and Parc Cugat in 3Q2021.
2. Management fees are determined based on 10.0% per annum of the annual distributable income of IREIT. The increase in management fees was in line with the increase in distributable income for 1H 2022 compared to that of 1H 2021. The management fees for 1H 2022 are payable 100% in cash, while the management fees for 1H 2021 were paid 50% in cash and 50% in Units.
3. Administrative costs and other trust expenses for 1H 2022 were 61.9% higher compared to that of 1H 2021. Included in other trust expenses was a foreign exchange gain of €8,000 (1H 2021: foreign exchange loss of €39,000) arising mainly from the translation of Singapore dollar denominated cash
   balances as at 30 June 2022. Excluding this foreign exchange gain, administrative costs and other trust expenses were €1,799,000 (1H 2021: €1,067,000). The increase of €732,000 in administrative costs and other trust expenses were mainly due to the professional fees and other expenses incurred in relation to the establishment of the Multicurrency Debt Issuance Programme as announced on 17 May 2022 and administrative expenses from the French Portfolio and Parc Cugat, following the completion of the acquisition of these assets in 3Q2021.
4. The net change in fair value of financial derivatives for 1H2022 arose from the revaluation of interest rate swaps and interest rate caps entered into to hedge the interest rate risk on borrowings. For 1H2021, the
   net change in fair value of financial derivatives also include the forward foreign currency exchange contracts entered into to hedge the currency risk for distribution to Unitholders. IREIT's distribution currency has been changed from S$ to € starting with the distribution for the period from 30 June 2021
   to 31 December 2021 onwards. Accordingly, there is no longer a need to enter into forward foreign currency exchange contracts for the hedging of IREIT's distributions to Unitholders.
5. This relates to the difference between the carrying value and the fair value of the investment properties as at the end of each respective reporting period.
6. Income tax expense comprises current and deferred tax expenses. The increase for 1H 2022 was mainly due to the higher deferred tax liability provided on the temporary differences arising from the net change in fair value of financial derivatives as compared to the corresponding reporting period last year.
7. Please refer to Section 6 for details.
8. Distribution adjustments

	1H 2022	1H 2021
	(€'000)	(€'000)
Distribution adjustments
- Difference between accounting and actual finance costs paid	409	222
- Management fees payable in Units	-	797
- Foreign exchange (gain) / loss	(8)	39
- Effects of recognising rental income on a straight line basis	639	307
over the lease term
- Net change in fair value of financial derivatives	(19,476)	(2,948)
- Net change in fair value of investment properties	(27,518)	(27,605)
- Deferred tax expense	8,150	5,442
Net distribution adjustments	(37,804)	(23,746)

4

IREIT GLOBAL

CONDENSED INTERIM FINANCIAL INFORMATION AND DISTRIBUTION ANNOUNCEMENT FOR THE HALF YEAR FROM 1 JANUARY 2022 TO 30 JUNE 2022

1(b)(i) Unaudited Statements of Financial Position
		Group	Trust
		(€'000)	(€'000)
	Note	30 Jun 2022	31 Dec 2021	30 Jun 2022	31 Dec 2021
Current assets
Cash and cash equivalents	1	51,929	51,669	4,453	2,981
Trade and other receivables	2	5,689	3,990	12,076	9,720
Financial derivatives	3	786	8	-	-
		58,404	55,667	16,529	12,701
Non-current assets
Investment properties	4	1,002,770	974,870	-	-
Investment in subsidiaries	5	-	-	392,476	400,948
Other receivables		1,643	1,539	-	-
Financial derivatives	3	16,500	2,319	-	-
Loans to subsidiary	6	-	-	37,800	37,800
Deferred tax assets		456	1,104	-	-
		1,021,369	979,832	430,276	438,748
Total assets		1,079,773	1,035,499	446,805	451,449
Current liabilities
Trade and other payables		9,857	7,505	1,690	1,168
Distribution payable		16,579	17,600	16,579	17,600
Financial derivatives	3	-	1,981	-	-
Income tax payable	8	1,197	769	193	-
		27,633	27,855	18,462	18,768
Non-current liabilities
Borrowings	7	329,314	328,922	-	-
Other payables		1,786	2,315	77,021	77,021
Financial derivatives	3	-	2,496	-	-
Deferred tax liabilities	9	61,967	54,465	-	-
		393,067	388,198	77,021	77,021
Total liabilities		420,700	416,053	95,483	95,789
Net assets attributable to
Unitholders		659,073	619,446	351,322	355,660

5