IREIT Global ($0.635, unchanged), is pleased to announce that Sadena Real Estate, S.L.U., a wholly-owned subsidiary of IREIT, has on 23 September 2021 entered into a public deed of sale with Inmobiliaria Colonial, to acquire an office building known as “Parc Cugat” located in Sant Cugat del Vallès, Barcelona, Spain and completed the Acquisition on the same day.
Parc Cugat is a modern Grade A freehold office building with a gross le able area of approximately 15,510 sqm and is located within a business park in Sant Cugat del Vallès. Currently leased to five large blue-chip companies, the Property has a committed occupancy rate of 64.0%, a WALE by gross rental income (“GRI”) of approximately 6.8 years and generates an annual GRI of approximately €1.5 million as at 23 September 2021.Pursuant to the terms of the Deed of Sale, the seller will provide rental guarantee for the vacant space on the ground floor for a period of approximately 15 months. The purchase consideration payable for Parc Cugat is €27.2million. This represents a discount of approximately 4.5% to the independent valuation of the Property with rental guarantee.
The Property has also enjoyed high occupancy rates historically un l the ground floor became vacant in May 2020. With active asset management initiatives, the Manager believes there is room for potential upside by filling up and optimising the use of the vacant spaces. Furthermore, there is opportunity for positive rental reversions by bringing some of the under-rented contracts to market levels. Since the acquisition of the four existing office properties in Spain in December 2019, the Manager has demonstrated that it has been able to increase the office occupancy rate of the Spanish portfolio from 89.2% to 93.5% as at 30 June 2021 and secure several lease extensions to uphold the stability of the Spanish por olio, notwithstanding the challenging economic backdrop.
The total cost of the Acquisition is estimated to be approximately €29.1 million, comprising the purchase consideration, acquisition fee, estimated debt financing costs and professional and other fees and expenses. The Manager intends to finance the Total Acquisition Cost through a combination of external bank borrowings and internal cash resources. With the completion of the Acquisition, IREIT’s portfolio now comprises five freehold office properties in Germany, five freehold office properties in Spain and 27 freehold retail properties in France, with a por olio valuation of €889.7 million (approximately S$1,408.4 million).
IREIT Global’s market cap stands at S$732mln and currently trades at 25x forward PE and 0.8x PB with a dividend yield of 7%. Consensus share price stands at S$0.74, representing 16% upside from current share price.