IREIT’s property valuations as at 31 December 2014
improved by €6.5 million as compared with that as at
31 March 2014. The net asset value per Unit as at 31
December 2014 was €0.48
1
.
Investing in our future
We are committed to grow IREIT further as well as
improve our distribution yield and to achieve greater
synergies through actively pursuing acquisition
opportunities. Our key prioritymarket remains Germany.
In evaluating a property for acquisition, wewill take into
consideration the location of the property, lease terms
and conditions, tenant profile, marketability of the space
and other relevant factors.
Asset management initiatives
We are continuing to maintain and enhance our strong
relationships with our tenants, as tenant retention and
organic growth is important to us.
In our pursuit to be the preferred real estate partner
to our tenants, we are in discussions with our existing
tenants to explore how we can assist them to expand
their space requirements within our existing portfolio.
To this end, we have reached a good understanding
with several tenants at Concor Park andwe are working
closely with them to achieve their expansion plans over
the next few quarters in 2015.
Market conditions
Currently, Germany is IREIT’s key priority market. The
German economy has remained buoyant in 2014. The
main contributing factors were lower unemployment
rate, business growth and lower interest rates. This has
lent support to the property market, as businesses are
expanding which translates to higher demand for office
space. This is the case with some of our tenants.
In terms of the investment market, we are seeing more
competitors from Europe as well as from Asia entering
the market. We also observed an increase in acquisition
transactions; however we believe that our “ABBA”
investment strategy continues to be relevant, resilient
and gives us our edge in this market. By applying this
strategy in our pursuit for growth, we can source yield
accretive assets which fit IREIT’s overall investment
profile. We are confident that our “ABBA” strategy will
enable us to deliver beneficial growth to Unitholders.
Market outlook for 2015
Despite the economic uncertainties and political
instability currently in Europe, Germany has retained
its status as a relatively safe haven for investments
and businesses. According to the German Institute for
Economic Research (DIW Berlin), Germany’s projected
real gross domestic products is estimated to grow by
1.4% in 2015.
2
While the economic growth in Europe
continues to strengthen, throughout 2015, it is expected
to be weighed down by the lingering predicaments such
as the tensions in Ukraine and Russia, the deteriorating
economic situation in Greece, weakened oil prices and
fears of deflation.
However, the office space demand is projected to rise
while the European economy gently recovers. Rents
are expected to increase in all key German cities on
an average rate of 1.5%.
3
Although the recovery in the
European markets is expected to be slow at the start of
1
The net asset value per Unit is computed based on the Units in issue and to be issued as at 31 December 2014 of 420,501,706.
2
Press release by the German Institute for Economic Research (DIWBerlin), December 2014.
3
Research publication by DG HYP, October 2014.
IREIT Global
annual report 2014
Chairman & CEO
Letter to Unitholders
