• Weaker 1H2025 earnings: IREIT Global’s (“IREIT”) distribution per unit (“DPU”), softened due to Berlin Campus vacancy and the absence of prior-year dilapidation income and higher tax provisions.
• Berlin Campus is the key; the rest of the portfolio is resilient: Redevelopment is on track, with potential office lease commitments by 1Q2026.
• Refinancing completed; leverage is higher but manageable. Gross borrowings rose to €409 million after the 10 October 2025 German refinancing. Maturities are staggered from December 2026 to July 2029, with coverage still adequate.
• Liquidity tight; default risk low: 1H2025 Operating cash flow (“OCF”) fell 74% YoY to €7.8 million. Unrestricted cash of €53.6 million does not fully cover near-term maturities, but the extension of its €68.6 million 2026 secured facility should mitigate.
• Credit View: We expect stabilisation as Berlin re-lets and extension of secured facility reduces near-term maturity risk; we continue to prefer the 2028 notes.
Business Overview
IREIT Global (“IREIT”) is a pure play Western Europe-focused REIT with properties located in Germany (62% of portfolio value), France (23% of portfolio value), and Spain (15% of portfolio value). As of 30 September 2025 (“3Q2025”), the REIT’s portfolio includes office properties located in Germany and Spain, while its French real estate consists of retail properties (anchored by Decathlon and B&M, a leading discount retailer). The REIT is managed by IREIT Global Group Pte. Ltd., which is jointly owned by City Developments Limited and Tikehau Capital.
Financial Recap
As of 30 June 2025 (“1H2025”) IREIT reported weaker gross revenue and earnings before interest and tax (“EBIT”) of €26.6 million and €14.8 million, down 27.5% YoY and 37.0% YoY, respectively. This reflected full vacancy at its Berlin Campus after the main tenant’s lease expired on 31 December 2024, and the absence of the non-recurring dilapidation income booked in 1H2024. (Dilapidation income is a one-time payment made at the end of a lease to ‘reimburse’ the landlord for restoring the property post-lease).
While headline earnings softened, we view this as a project-specific (Berlin Campus) and temporary, with no evidence of material operating weakness across the wider portfolio.
Chart 1 (below) shows gross revenue and estimated EBITDA, peaking in 2024 before declining sharply in 1H2025, in line with the loss of income from Berlin Campus and one-off dilapidation fees.
Chart 1: Total Gross Revenue and EBITDA
Excluding its German portfolio, the rest of IREIT’s European properties remain resilient, with gross revenue of €14.8 million (from €15.1 million in 1H2024). Fair value losses on investment properties narrowed to €4.8 million from €19.4 million a year earlier.
However, higher tax provisions for its German and French properties pushed distributable income down 26% YoY to €9.5 million, with 1H2025 DPU for 1H2025 at €0.71 per unit (vs €0.96 for 1H2024).
1. Operating metrics underscore a resilient property portfolio
As at 3Q2025, IREIT’s portfolio occupancy was stable at 89.0%, broadly in line with the post-Covid FY2022-2024 average of 89.1%, supported by stable anchors such as Decathlon, Deutsche Telekom, and B&M which makes up a significant rental income contribution.
IREIT’s WALE (weighted average lease expiry) of 5.6 years, which is broadly in line with average annual WALE since FY2022 provides comfortable rental income visibility relative to the May 2028 notes. Additionally, majority of contractual lease expiries are in 2029 and beyond (87.9 of gross rental revenue ), which reduces renewal risk in the near-term. That said, IREIT reported a slightly larger lease break in 2027, attributing this to Decathlon which the management is currently in discussions to extend its leases.
In 3Q2025, IREIT also secured new leases with an average remaining lease term of 6.2 years and achieved a 4.0% rental escalation YTD on its existing portfolio, with rental collection coming in at 99.9%, underscoring the quality of its tenant base.
Within the portfolio, Berlin Campus continues to be the key priority, with encouraging progress on its repositioning strategy. Management aims to secure lease agreements for a significant share of the office space by 1Q2026, helping to mitigate vacancy risk and strengthen asset valuation. This follows the hospitality leases signed in 4Q2024 with Premier Inn and Stayery, which will account for 24% of the total lettable area and are expected to generate approximately 45% of Berlin Campus’s original annual rental income. Although related rental revenues are projected to be generated only from 1H2027 onwards, they provide greater visibility into income recovery and should help underpin IREIT’s path toward normalisation.
For bondholders of IREGLB 6.000% 22May2028 Corp (SGD), this means that debt service through 2026 will be supported primarily by cash flows from the existing portfolio (ex-Berlin campus). From 2027 onwards, Berlin Campus is expected to begin contributing rental income, which should support cash flow stability heading into the May 2028 maturity. All in all, ex-Berlin rental revenue is broadly stable, supported by strong operating metrics (high rent collection, long WALE and contractual escalations) and a resilient, blue-chip tenant base.
2. Cash flows from operations have moderated but remain positive
Chart 2: Despite softer earnings, operating cash flow remains positive
Operating cash flow (“OCF”) fell 74% YoY to €7.8 million in 1H2025, largely due to the lack of contribution from the Berlin Campus. Excluding working capital changes, which can be volatile for IREIT, operating cash flows came in at €15.08 million (-35.2% YoY), which highlights its ability to generate cash from operations without contribution from its Berlin campus.
From FY2020 to FY2024, OCF for IREIT have come in positive, averaging €37.6 million annually. Barring unforeseen circumstances and assuming successful leasing at Berlin Campus (with income contribution from FY2027 onwards), we remain optimistic on IREIT’s ability to improve and stabilise OCF moving forward.
The track record of positive OCF (Chart 2) further reinforces our view.
3. Secured Berlin Campus capex facility strengthens liquidity
Chart 3: Cash vs Borrowings
As of 30 June 2025, IREIT held €110.5 million in cash and cash equivalents. Excluding €56.9 million earmarked for Berlin Campus capex, the REIT has an unrestricted cash position at €53.6 million. Chart 3 (above) shows that cash as a percentage of gross borrowings has typically ranged from the low to mid-teens, with 1H2025 at 13.1%. While cash as a percentage of borrowings appears low, this is not unusual for REITs, which typically operate with lean on-balance-sheet cash given their distribution-focused structure.
Additionally, IREIT has an undrawn €20 million capex facility to buffer for further capex financing requirements for the Berlin Campus conversion works. This is a committed loan line that can be drawn specifically to fund to property capital expenditure such as upgrading, redevelopment or maintaining a property. Having this capex facility further strengthens IREIT’s liquidity profile, reducing the need to use its cash balance for the conversion of the Berlin campus.
4. Debt higher, but still manageable; maturities extended
Table 1: Key leverage and coverage metrics
| Key Metrics | End-Dec'20 (FY2020) | End-Dec'21 (FY2021) | End-Dec'22 (FY2022) | End-Dec'23 (FY2023) | End-Dec'24 (FY2024) | End-Jun'25 (1H2025) | End-Sep'25 (3Q2025) |
| Aggregate Leverage | 34.8% | 32.1% | 32.0% | 37.9% | 37.2% | 41.1% | 41.3% |
| Interest Coverage Ratio | 7.7x | 7.4x | 7.9x | 7.6x | 7.4x | 6.0x | 4.0x |
Source: Bondsupermart, iFAST compilations. Data as of 24 Dec 2025.
Post-refinancing, gross borrowings rose by €56.1 million to €410.2 million (as of 30 September 2025). This increase in gross borrowings translated into aggregate leverage rising to 41.3% (from 37.7% as of 31 December 2024) which was mainly due to its S$85 million green notes issuance in May 2025 (Table 1). We remain comfortable with this increase in leverage as it is broadly in line with the 40% average for aggregate leverage ratios of S-REITs, with European commercial/retail asset portfolios.
Debt maturity has also lengthened post-refinancing (Chart 4 below).
IREIT’s well-staged maturities between 2026 and 2028, with the largest maturity being the €200.8 million German facility, which is not due until 2029 (Chart 4 below). Importantly for holders of the 2028 notes, only €120.0 million of the secured facilities fall due before the notes mature.
Following the refinancing, IREIT’s weighted average debt maturity, as of 30 September 2025, improved to 2.9 years, from 1.2 years pre-financing. This lengthening of the debt maturity profile provides more breathing space for IREIT on upcoming debt obligations.
In the near-term, IREIT’s key maturity is the €68.6 million Spanish-secured credit facility due December 2026. While unrestricted cash (€53.59 million), is not sufficient to fully repay this facility, management is already in discussions to refinance it ahead of maturity. Beyond 2026, IREIT’s next large maturity is the €51.4 million facility due in July 2027, secured by its French (Decathlon) portfolio. We see limited difficulty addressing this upcoming maturity, given 1) the available headroom under IREIT’s US$1.0 billion EMTN Programme, which provides flexibility to refinance opportunistically should funding conditions remain supportive as interest rates fall, 2) expected stabilisation in underlying operating cash flows (ex-Berlin portfolio), and 3) potential for capital recycling to enhance its liquidity position through asset disposal if needed (see chart 4 above for the maturity profile).
For bondholders of the 2028 notes, we believe IREIT’s remaining maturities are reasonably staggered, with only €120.0 million of facilities coming due before the notes mature.
Chart 4: Debt Maturity Profile- €120 million due before loan maturity
5. Interest coverage remains adequate post-debt issuance
Table 1: Key leverage and coverage metrics
| Key Metrics | End-Dec'20 (FY2020) | End-Dec'21 (FY2021) | End-Dec'22 (FY2022) | End-Dec'23 (FY2023) | End-Dec'24 (FY2024) | End-Jun'25 (1H2025) | End-Sep'25 (3Q2025) |
| Aggregate Leverage | 34.8% | 32.1% | 32.0% | 37.9% | 37.2% | 41.1% | 41.3% |
| Interest Coverage Ratio | 7.7x | 7.4x | 7.9x | 7.6x | 7.4x | 6.0x | 4.0x |
Source: Company data, iFAST compilations. Data as of 30 Sep 2025.
Table 2: Recommendations
|
Issues |
Issuer |
Ask Price |
Yield to Worst |
Years to Maturity |
|
IREIT Global |
103.300 |
4.535% |
2.410 |
|
|
FLCT Treasury Pte. Ltd. |
100.492 |
1.983% |
2.588 |
|
|
CapitaLand China Trust |
100.270 |
2.289% |
2.514 |
|
|
CMT MTN Pte Ltd |
100.500 |
1.867% |
2.204 |
|
|
Ascott REIT MTN Pte Ltd |
105.715 |
2.013% |
2.703 |
|
|
Starhill Global REIT MTN Pte. Ltd. |
100.466 |
2.052% |
2.722 |
Source: Bondsupermart, iFAST compilations. Data as of 24 Dec 2025.
Overall, IREIT’s credit profile has weakened on softer earnings and weaker credit metrics. We remain comfortable with the issuer and expect the credit profile to stabilise gradually, IREGLB 6.000% 22May2028 Corp (SGD) offers a yield-to-worst of 4.535%, which represents roughly 220-260 bps of yield pickup compared to other SGD REIT and issuances of similar tenor (Table 2). This spread compensates investors for IREIT’s higher leverage, Berlin Campus execution risk and tighter liquidity.
