While 4Q18 results did not spring any major surprises, I noticed several salient points regarding IREIT Global (IREIT). Please refer to my initial piece here.
Gearing continues its gradual slide on upward revaluation of assets. As per the quarterly presentation, IREIT’s upward revaluation of its buildings accounted for the reduction of gearing. This is not surprising as rising rental rates in the office market and declining capitalisation rates (cap rate) in Germany has led to higher asset values. While its high gearing levels was always cited as a concern, I believe that the current level (36%) provides the REIT with some breathing room.Loan has been refinanced at a lower rate, though borrowing sum has increased marginally. IREIT refinanced its outstanding loan of EUR 193.5 million with an 2.0% interest rate successfully with a new loan of EUR 200.8 million with a 1.7% effective interest rate. This lower interest rates will reduce...